It is my great pleasure to submit my internship report on "Financial Performance Analysis of Bank Asia Limited". 34;Financial Performance Analysis of Bank Asia Limited" prepared under the direct supervision of Nusrat Nargis mam, Assistant Professor, Department of Business Administration, Daffodil International University. I have also calculated the growth an analysis of the last 5 years income statement and balance sheet of the bank Asia.
Introduction
CHAPTER 1
- Background of the study
- Objectives of the study
- Methodology
- Data Source
- Time Frame
- Data analysis
- Scope of Report
- Limitation of the study
- About Bank Asia
Most of this study is based on the annual reports of Bank Asia and the Dhaka Stock Exchange. To prepare the report I have taken the data set of previous 4-5 years of Bank Asia Ltd data. This research is based on my observations and studies during my internship at Bank Asia Limited branch post office in Palton.
CHAPTER 2
- Vision
- Mission
- Core Values
- Corporate Structure
- Corporate Organogram
- Salient Features of Bank Asia Ltd
- Product and Services
- TREASURY PRODUCTS &
- Financial Activities of Bank Asia Ltd
- Investment Activities of Bank Asia Limited
Bank Asia Ltd was established in 1999 by a group of successful businessmen with a solid reputation in the community. Bank Asia participated in the local money market and also in the international currency market without putting the bank in risky situations. Bank Asia Limited started its business with the objective of providing customers with modern and innovative banking products and services at a reasonable price.
CHAPTER 3
- Conventional and Islamic banking
- Modes of Investment
- Financing Activities of Bank Asia Ltd .1 Issuance of Share
- Issuance of Bond
- Operating Activities of Bank Asia Ltd
- Ratio Analysis of Bank Asia
- Profitability ratio, which shows how much money a company generates compared to how much it spends
- Solvency ratio is a metric that assesses a company's capacity to pay down long-term debts
- The market ratio refers to a company's propensity to exceed intended market expectations
- The efficiency ratio is used to assess how successfully a company manages its assets in order to make profits
- Liquidity ratios show how quickly a financial asset can be converted into money
In general, the activities of a conventional bank are to collect deposits from customers at low interest rates and lend to borrowers at high interest rates. Bank Asia not only proves conventional banking services but also provides Islamic banking services, offshore banking services and agent banking services. Financing activities: Cash flows from financing activities are cash transactions related to the bank raising funds from debt or equity or repaying this debt.
At cost (provision is made for any shortages arising due to the reduction in market price compared to cost). Bangladesh Bank Gov.t Investment Sukuk b. Bangladesh Bank Islamic bond .. c. 2 years Government Bonds of Bangladesh d. 5 Years Government Bonds of Bangladesh Government e. 10 years government bonds of Bangladesh government f. 15 years government bonds of Bangladesh government g. 20 years government bonds from the government of Bangladesh. Through its many investment solutions, Bank Asia Islamic Banking enables its clients to run and build their businesses in a Sharia-compliant manner.
In this approach, the bank buys items that its customer has indented and sells them to him at a profit. The Bank went for public issue of its shares on 23 September 2003 and its shares were listed on Dhaka Stock Exchange Limited and Chittagong Stock Exchange Limited. 3,000 million 7-year non-convertible subordinated bonds .Bank Asia's board of directors agreed to raise Take 5.0 billion through the issuance of perpetual bonds to strengthen the bank's capital base.
The bank said in a filing with the Dhaka Stock Exchange (DSE) on Sunday that it will offer the bond through private placement to raise money as additional Tier-1 capital to support the bank's BASEL-III compliance, in in accordance with the Bangladesh Bank rules on risks. -based capital adequacy.
Profitability ratio, which shows how much money a company generates in relation to how much it spends. The efficiency ratio is used to assess how successfully a company manages its assets to make a profit.
CHAPTER 4
Profitability Ratio of Bank Asia
Return on assets, return on equity, earnings per share & dividend payout ratio will determine the profitability of Bank Asia Ltd. I calculated return on assets for Bank Asia as: ROA= Net income of bank Asia/ Total assets of bank Asia. Bank Asia's return on assets was the best in 2017 because that year Bank Asia increased its profit margin to 0.73%.
We can see that return on asset for Bank Asia is decreasing for the past 3 years, which means they are making lower profit on assets. I calculated Return on Equity of Bank Asia as: ROE= Net Income of Bank Asia/ Total Equity of Bank Asia. I calculated Earnings per Share of Bank Asia as: Net Income of Bank Asia/Number of shares outstanding of Bank Asia.
Earnings per Share
Dividend Payout Ratio
I have calculated the dividend payout ratio of Bank Asia as: Dividend per share of Bank Asia / Earnings per share of Bank Asia.
Dividend Payout Ratio
Solvency Ratio of Bank Asia
Solvency analysis – examines a company's capital structure in terms of the debt financing sources it uses and its ability to meet long-term debt and investment obligations. Bank Asia's debt-to-total asset ratio is higher, indicating that it uses more leverage. The debt-to-total asset ratio, debt-to-equity ratio, capital adequacy and net interest margin rates will be used to determine Bank Asia's solvency.
I calculated the debt to total assets ratio of Bank Asia as: D/A = Total Liabilities of Bank Asia/. I calculated Bank Asia's debt to total equity ratio as: D/E = Total long-term debt of Bank Asia / Total equity of Bank Asia.
DEBT TO EQUITY RATIO
Capital Adequacy Ratio
I calculated Bank Asia's capital adequacy ratio as: CAR = (Tier I Capital + Tier II Capital)/Risk Awaited Assets of Bank Asia. I calculated Bank Asia's net interest margin ratio as: NIM = Bank Asia's net interest income / Bank Asia's average total assets.
Net Interest Margin Ratio
- Market Ratio of Bank Asia
- Liquidity Ratio of Bank Asia
- Efficiency Ratio of Bank Asia
- Total Asset Turnover Ratio
I calculated Bank Asia's price-to-earnings ratio as: P/E = current share price of Bank Asia/. I calculated the current ratio of Bank Asia as: CR = Current assets of Bank Asia/ Current liability of Bank Asia. Year by Year: If we look at 2016, we can see that the current ratio is 2.22 times means paying 1 taka liabilities Bank Asia had 2.22 taka current assets.
I have calculated the Total Asset Turnover Ratio of Bank Asia as: TAT = Net Interest Income of Bank Asia / Total Asset of Bank Asia.
Total Asset Turnover
I calculated Current Asset Turnover Ratio of Bank Asia as: CAT = Net Interest Income of Bank Asia/ Total Flow of Bank Asia. I calculated Fixed Asset Turnover Ratio of Bank Asia as: CAT = Net Interest Income of Bank Asia/ Total Fixed Asset of Bank Asia. I calculated the Equity Turnover Ratio of Bank Asia as: ET = Net Interest Income of Bank Asia/.
Equity Turnover
Growth Analysis of Bank Asia
- Growth Analysis of Total Asset
Growth analysis can be used to assess the operational and financial success of Bank Asia Limited over the past five years. We can detect financial growth of Bank Asia Ltd over the past five years by using growth analysis of total assets, long-term liabilities and deposits, equity, net interest income, operating income, operating expenses, net profit after tax and net asset value per share. stock.
Growth Analysis of Long Term Liabilities
- Growth Analysis of Term Deposit of Balance
- Growth Analysis of Shareholder’s Equity
- Growth Analysis of Net Interest Income
- Growth Analysis of Total Operational Income
- Growth Analysis of Total Operational Expense
- Growth Analysis of Net Profit after Tax
- Growth Analysis of Net Asset per Value
- Trend Analysis of Bank Asia Ltd
Here in the chart we can see that in 2016, Bank Asia Balance Term Deposit was 191573 million Taka. Here in the Chart we can see that in 2016 Total Shareholder Capital of Bank Azi was 18863 million Taka. Here in the Chart we can see that the net interest income of Bank Asia in 2016 was 4188 million Taka.
Here in the graph we can see that in 2016 the total operating income of Bank Asia was 11040 million Taka. This total operating income of Bank Asia increased to 11.92% in 2017 and in 2018 it increased more than the previous year which was 16.60% but in 2019 total operating income increased after decreasing rate of 13.50% lower than in 2018 and 2017, but in 2020 Bank Asia's Total Operating Income finally decreased for the first time in the last 5 years and reached negative 618.05%. This means that Bank Asia had a total operating income loss in 2020. Here in the graph we can see that in 2016 total operating expenses of Bank Asia was 4852 million Taka.
This total operating expenses of Bank Asia increased to 11.76% in 2017 and in 2018 it increased more than the previous year which was 14.75% but in 2019 the total operating expenses increased after decreasing rate by 11.23% less than in 2018 and 2017, but in 2020 total operating costs. Bank Asia increased at a decreasing rate and reached 5.35%. This means that in 2018, Bank Asia had the highest operating expenses in these five years. This means that Bank Asia had lower operating costs in 2020. Here in the graph we can see that in 2016 Bank Asia net profit after tax was 1644 million Taka. This means that in 2019, Asia faced a tough time because it has a negative net profit after tax.
But in 2020, the net profit after tax of Bank Asia increased and reached to 3.41%. This means that in 2017, Bank Asia had the most net profit after tax in these five years. This means that Bank Asia started to recover immediately in 2020.
Bank Asia Ltd
Interpretation
Common Size Analysis of Bank Asia Ltd
Income Statement
A financial statement that is created as a percentage of a single common number is known as a common-size financial statement. Now if we look at the shareholders' equity we can see that the paid up capital is 47% of the total shareholders' equity and it remains the same in 2017. Now if we look at the Income Statement of Bank Asia Ltd we can see that the net income from interest is 28% of income in 2016. It has decreased to 18% in the last 5 years.
Even though it has decreased in the last 5 years, it is the highest figure in the income statement. If Asia is able to reduce the cost of salary and allowance and other costs, total operating expenses will decrease and the revenue margin will increase.
FINDINGS, RECOMMENDATIONS AND CONCLUSIONS
Findings
CHAPTER 5
- Recommendations
- Conclusions
Another worrying factor is that the debt-to-GDP ratio has been steadily increasing, implying that Bank Asia is heavily dependent on risky debt. Bank Asia's price-to-earnings ratios have risen steadily over the past five years, indicating it is less risky. Bank Asia should focus on return on assets (ROA) as higher ROA indicates greater asset efficiency.
Over the past five years, Bank Asia's ROA has decreased, which means that the bank is using more resources in terms of profitability. Bank Asia should pay attention to the dividend payout ratio as it has not increased in the last two years but has fallen compared to previous years. Bank Asia should pay attention to the ratio of debt to total assets because an increasing trend means that the bank will not be able to repay its loan if it incurs any losses.
Bank Asia must pay particular attention to its capital adequacy ratio, as a high capital adequacy ratio is considered safe and indicates that the bank will be able to meet its financial obligations. Shareholders who wish to purchase Bank Asia shares will be able to do so without difficulty. Based on this ratio, Bank Asia's profitability is expected to increase in the long term.
Bank Asia's overall output is average, but its financial performance needs to improve.
Balance Sheet Statement
As on December 31, from 2016 to 2020
