I certify that this report titled “Financial Performance Analysis of Agrani Bank Limited is a bona fide work in the name of the student, who has carried out the research under my supervision. This report "Financial Performance Analysis of "Agrani Bank Limited" is the result of the BBA internship program.
Introduction
Objective of the study
- Broad Objective
1.2. 2 Specific Objective
Strategic Objectives of Agrani Bank Limited
Significance of the Study
Methodology
- Data Collection
To prepare the report and identify the problem, all the required data was collected from two sources, but most of the secondary data was used for the analysis purposes of the report.
Secondary sources
Data Analysis
Scope & Limitations of the Study
Scope
Limitations
Due to COVID-19 situation whole country gone through lockdown that`s because I can‟t go out of home and cannot go in bank go collect primary data from Agrani bank
Chapter -2
Profile of Agrani Bank
Agrani Bank Limited is governed by a Board of Directors consisting of 10 members headed by the Chairman. Agrani Bank Limited is the first state-owned commercial bank in Bangladesh to introduce agent banking.
Capital Structure
Vision, Mission, Qualities, Motto of Agrani Bank Limited
- Vision
- Mission
- Qualities
- Motto of the bank
SWOT Analysis of Agrani Bank Limited
Strength
Weakness
Opportunity
Threats
Products & Services of Agrani Bank Limited
- Products of Agrani Bank Limited
Deposit Product
- Organizational Overview
- Chain of command of Agrani Bank
- Corporate Culture of ABL
- Strategies of the Agrani Bank Limited
- Core values
Increase direct contact with customers to nurture a closer relationship between the bank and customers. The values would help the bank perceive its employees as a team to fulfill the assigned tasks and responsibilities to achieve the desired goals.
Core Values
Ethics
Objectivity
Integrity
Excellence
Innovation
Commitment
Self-Reliance
Transparency
Accountability
Management
Agrani Bank Ltd., the only commercial bank was founded by a group of successful local entrepreneurs conceiving the idea of creating a model banking institution with diverse perspectives to offer its valued customers, a complete range of financial services and innovative products for sustainable mutual growth and prosperity. The bank is managed and operated by a group of highly educated and professional teams with diverse experience in finance and banking. The scenario of banking business is changing day by day, so it is the responsibility of the bank to equip strategy and new products to face the changing environment.
The bank is already ranked as one of the quality service providers and known for its reputation.
Duties performed in the general Banking
- General Banking
- Foreign Remittance
- Loans and Advances
To open a new account I collected some documents from the client because it was bank required formalities. If a client needs a checkbook, I put his/her account name and account number with the cell phone number in the register book. To clear the check, I entered the check data into the bank's computer software sent to me from the accounts section.
When remittance money or any other money comes from the different countries, I provide some forms for the client's agent to complete. After completing the form, I send it to the bank's second head to check and sign for providing the customers expected money. To assist the officer in determining installment of loan with interest and principal Verification of the primary document and loan proposal with the guidance of officer Follow up the collection of loan and advances.
Calling over the phone to various customers who were defaulting to pay loans for their updates.
Chapter -3
Theoretical Background
Loans & Advances
- Principles of General Advances
- Classification of General Advances
Agrani Bank Limited, being one of the largest commercial banks, had some biases to finance directly on a priority basis the Agriculture, Industry and Trade sector for strengthening the economic base of the country. So, it is clear that Agrani Bank Limited plays the main role to oil the economic wheel of the country. In addition, Agrani Bank Limited has maintained all government policies to maintain its pioneering position in providing loans to government bodies, sectoral corporations and private enterprises. Agrani bank Limited continued to expand its lending activity in productive and priority sectors, both public and private, covering agriculture, industry, trade and commerce.
A wise and prudent regarding Advance is therefore considered as an important sector that inspires confidence in the depositors and customers of a Bank. The accepted standards are related to safety, liquidity and profitability of the advance where the dynamic factors are related to aspects such as the nature and scope or risk. To sanction credit to customers and others from the funds at its disposal is one of the main services of a modern Bank.
Advances made in Agrani bank Limited in different natures, such as cash loans (CC), overdraft, small loans, demand loans, bills purchased and discounted, house construction loans and personnel loans etc.
Total Credit Line
Loan Sanction procedure
- Selection of the Borrower
- Verification of the Cultural A Security
- Requirements of Loan Proposal
- Sanction of Loan
- Cash Credit (CC)
A prudent banker must always see the background, character, capital, capacity and purpose of the borrowers/entrepreneurs. A branch manager should always observe the verification of the collateral securities approved by Bank to the borrower. Force sale value of the security as if the bank can the security when the borrower fails to repay.
Loan disbursement must take place after completion documentation and compliance with the sanction conditions for the sponsor's equity increase as stipulated. Each phase of the loan Disbursement to be monitored by the bank official so that the borrower is given the opportunity to redirect funds to any place tending to purposes other than the project and phase of the implementation of the project is effective, and borrowers are persuaded to complete or project on time. It should be seen by him that the Advance is not against and law directed by Bangladesh Bank or Bank's landing policy.
The balance of the account remains very close or goes beyond the draw limit or there is no good turnover.
Hypothecation
Pledge
Theory of Financial Ratios
Financial Ratio’s users
Types of Financial Ratios
Common Size Analysis
A balance sheet summarizes a company's property (the things it owns that have value), its liabilities, which means the amounts owed to others, and its equity, which means the owners' financing of the business. An income statement shows the company's revenue means the amount of cash it has made through promoting its goods and services and its prices means the amount of cash it has spent to earn its income. her.
Trend Analysis
Chapter-4
Performance Analysis
Loans and Advance position of Agrani Bank
Sector
Core TK
- Table: showing classified loan
- Table: showing Provision for classified loan
- Table: showing provision for unclassified loan
- Table: showing provision for NPLS to Total Loan and advances
- Ratio Analysis of Agrani Bank Limited
- Liquidity Ratio
- Current Ratio: Current ratio shows the capacity of a firm to pay its present liabilities by its current asset. This ratio tells financial specialists and examiners how an organization can
This report shows financial specialists and examiners how an organization can add current assets to its accounting report to meet current debt and other payables. In any case, if an organization has a high current ratio in contrast to the collection of their companions, it indicates that the administration may not be efficiently utilizing its assets.
Current Ratio
Cash Ratio
Leverage Ratio
The report shows that the company keeps itself in a dangerous place as its interest rate can rise unexpectedly. So an organization finances a lot of its advantages with debt, at that point the debt ratio will be higher. Tenants see organizations with high debt ratios as less safe borrowers, given the fact that the organization must offer a greater amount of its assets to pay off its liquidity in liquidations.
Debt Ratio
So the company should maintain this ratio so that the ratio does not increase so high.
Debt to Equity Ratio
Asset Activity Ratio
The ratio of total asset turnover, the more efficiently the company uses its own assets to generate sales. On the other hand, if an organization has a low total asset turnover ratio, it indicates that it is not using its assets effectively to generate business. If a bank wants to increase its asset turnover rate, it must properly predict that it can generate sales.
Total Asset Turnover (TAT)
If a bank wants to increase its asset turnover rate, it must properly predict that it can generate sales. 0.0024. Higher turnover with fixed assets additionally indicates that the administration uses fixed assets all the more effectively. Then again, banks use this ratio to discover that the organization can generate enough income from another piece of hardware to repay the loan they used to purchase it.
Fixed Asset Turnover
- Credit Risk Ratio
- Equity to Net Loan Ratio: Equity to net loan is a ratio that refers to how much net loans are financed by the equity the bank occupies. It is used to determine how much
- Profitability Ratio
- Net Profit Margin: Net profit margin alludes the level of income staying in the wake of giving all costs, for example, interest, taxes and favour stock profit to the investors from
- Return on Asset (ROA): Return on asset quantifies how proficiently an organization can deal with its asset to create profits. The higher ratio is increasingly positive for
- Return on Equity (ROE): Return on Equity measures the ability of a company to generate profits from its shareholder‟s investments in the company
It is used to determine how many loans are financed with the bank's equity capital. Net profit rate suggests the level of income that remains in light of giving all expenses, for example, interest, taxes, and giving preference to stock profits to investors from giving all expenses, for example, interest, taxes, and giving preference to stock profits to investors from the organization absolute income. The net profit margin was low, even in 2016 it turned negative, which is not beneficial for the bank.
Asset return determines how efficiently an organization can deal with its asset to generate profits. Return on assets ratio is in fluctuating condition and in 2016 it became negative which is not beneficial for the bank. In this opinion, it is by all accounts that the bank is not bringing in money from the use of its assets.
Return on Assets (ROA) . III) Return on Equity (ROE): Return on Equity measures a company's ability to generate profits from its shareholders' investments in the company.
Return on Equity (ROE)
Equity to Net Loan Ratio
Common Size Analysis of Agrani Bank Limited
Common Size of Balance Sheet
Compared to total assets, cash and cash proportional thing show a little change from 2014 to 2018 polluting it reduced from 6.10% to 4.70%. Comparison with total liabilities, current deposits and different records indicates a tremendous change from 2014 to 2018 by expanding 8.42% to 21.01%.
Common Analysis of Income Statement
Investment income shows growth except in 2018 as investment income in 2018 does not increase by 37.23% than in other years.
Chapter -5
Findings, Recommendations and Conclusion
Findings of the Report
Agrani Bank Limited's cash ratio declined between 2014 and 2018, implying that the bank is facing a cash emergency in 2018. As in 2018, the ratio was 17.9764, which is higher than in several years, implying that the bank is using more debt to support its operations instead of using equity. If the bank neglects to use their activities properly, at that point they will stop contributing.
The solvency ratio in relation to assets was decreasing, with the exception that the bank uses more debt to buy assets than equity. As the debt ratio grew year on year, it means that the bank's dependence on creditors has expanded, which is not helpful for the bank. Since debt to equity grew, it means that the bank is using more debt to finance its exercises as opposed to using equity.
The net profit margin (NPM) of Agrani Bank Limited was extremely low even though it turned negative which is not helpful for the bank.
Conclusion
