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					Return on Equity:

             50.00%
             40.00%
                                                                          DBBL
             30.00%
                                                                          NBL
             20.00%
                                                                          Prime Bank
             10.00%
                                                                          Southeast Bank
              0.00%
                   2008              2009                    2010


                                     Figure 1: Return on Equity

                                Return On Equity
      Bank             2008               2009                       2010          Average   Industry Average
      DBBL            25.972%            26.143%                    42.892%        31.669%
       NBL            24.77%             23.22%                     35.91%         27.966%        23.633%
   Prime Bank         18.394%            23.705%                    17.908%        20.002%
 Southeast Bank       12.059%            16.508%                    16.116%        14.894%


Interpretation:

      DBBL: In 2010 shareholder earn 42.892 taka on the investment of 100 taka. From 2008
      to 2010, ROE of DBBL has increased. This is due to increase in the net income compared
      to the gradually increasing amount of equity.
      NBL: In the year 2010, common shareholders earn net income of TK 35.91 in TK 100
      investment for National Bank. From 2008 to 2009, relative increase in net income is lower
      than relative increase in total equity for which ROE drops from 24.77 % to 23.22% but
      then increases to 35.91% as net income increases at a higher rate than increase in equity
      for National Bank.
      Prime Bank: In 2010 shareholder earn 17.908 taka on the investment of 100 taka we can
      see that the ROE was taking ups and downs but from 2009 to 2010 it has decreased.
      Southeast Bank: In the year 2008, common shareholders earn net income of TK 12.059
      in TK 100 investment for Southeast Bank. From 2008 to 2010, relative increase in net
      income is greater than relative increase in total equity for which ROE increases steadily
      from 12.059% % to 16.116% for Southeast Bank.
   Summary:

   Analyzing all the data, we can conclude that DBBL is in better position in terms of ROE. The
   money DBBL generates return from every 100 taka of equity is more than return of NBL,
   Prime Bank and Southeast Bank.




Return on Assets:
             6.00%

             4.00%                                                           DBBL
                                                                             NBL
             2.00%
                                                                             Prime Bank
             0.00%                                                           Southeast bank
                 2007.5 2008 2008.5 2009 2009.5 2010 2010.5


                                       Figure 2: Return On Assets

                                 Return On Assets
     Bank               2008                 2009                    2010            Average   Industry Average
      DBBL             1.355%               1.396%                  2.968%           1.907%
       NBL              2.10%               2.25%                   5.18%            3.177%        2.469%
   Prime Bank          2.231%               3.677%                  3.624%           3.177%
 Southeast bank        1.093%               1.660%                  2.094%           1.616%


Interpretation:

      DBBL:   In the year 2010, every TK 100 asset earns a net income of TK 2.968 for DBBL.
      From 2008 to 2010, relative increase in net income is greater than relative increase in
      total asset for which ROA increases steadily from 1.355 % to 2.968% forDBBL.
      NBL:   In the year 2010, every TK 100 asset earns a net income of TK 5.18 for National
      Bank. From 2008 to 2010, relative increase in net income is greater than relative increase
      in total asset for which ROA increases steadily from 2.10 % to 5.18% for National Bank.
      Prime Bank: In the year 2008, every TK 100 asset earns a net income of TK 2.23 for
      Prime Bank. In 2009, it is increased to 3.67%. In 2010, it decreased to 3.624% because
      relative increase in net income is less than relative increase in total asset.
      Southeast Bank: In the year 2008, every TK 100 asset earns a net income of TK 1.093 for
      Southeast Bank. From 2008 to 2010, relative increase in net income is greater than
      relative increase in total asset for which ROA increases steadily from 1.093 % to 2.094%
      for Southeast Bank.

Summary:

   In 2008, 2009 and as well as 2010, ROA of NBL is much higher than DBBL and Southeast
   Bank but equal to Prime Bank. But consistent upward trend attract investors to buy the stock
   of NBL.

Net Interest Margin:


       5.00%

       4.00%
                                                                               DBBL
       3.00%
                                                                               NBL
       2.00%
                                                                               Prime Bank
       1.00%                                                                   Southeast Bank
       0.00%
           2007.5   2008    2008.5   2009     2009.5      2010       2010.5


                                     Figure 3: Net Interest Margin

                                Net Interest Margin
     Bank               2008                 2009                      2010          Average    Industry Average
      DBBL             2.999%               2.537%                    4.184%         3.240%
       NBL              3.88%               3.64%                     4.13%          3.884%         2.708%
   Prime Bank          1.783%               1.927%                    2.771%         2.160%
 Southeast Bank        1.626%               0.993%                    2.028%         1.549%


Interpretation:

      DBBL: In 2010, DBBL has a net interest margin of 4.18%. This tells us that every TK
      100 asset generates a net interest margin of 4.18%. The net interest margin is showing a
      gradually increasing trend except in the year 2009. It means that the spread between the
      interest income and the interest expenses has been increasing as well compared to the
     total assets of the bank. This is a satisfactory sign for the bank as interest income is the
     main source of revenue for the bank.
     NBL: From 2008 to 2009, net interest margin for National Bank decreases from 3.88% to
     3.64% because relative increase in net interest margin is lower due to decrease in interest
     income by debentures and reverse Repo than relative increase in total asset but then in
     2010, net interest income increases rapidly in 2010 to 4.13% because relative change in
     interest income is greater than relative increase in assets.
     Prime Bank: From 2008 to 2010, Prime Bank experiences an increasing trend in net
     interest margin. Thus the management has been able to generate funds from the cheapest
     sources.
     Southeast Bank: Variations could be seen in Southeast bank’s net interest margin. From
     2008 to 2009, net interest margin for Southeast Bank decreases steadily from 1.626% to
     0.993 % because relative change in net interest income is less than relative increase in
     total assets. In 2010, it increased to 2.028%.

  Summary:

  Analyzing the overall data we can say that in terms of net interest margin for DBBL has the
  highest position rather than other three banks. But Prime bank has steady increasing position
  thus they are able to generate funds from the cheapest sources. Because interest income is the
  revenue for any bank.

Net Non-Interest Margin:

       6.00%

       4.00%
                                                                            DBBL
       2.00%                                                                NBL

        0.00%                                                               Prime Bank
            2007.5   2008   2008.5   2009     2009.5     2010     2010.5    Southeast Bank
       -2.00%

       -4.00%

                                  Figure 4: Net Non- interest Margin
                             Net Non-Interest Margin
     Bank                2008                   2009             2010            Average       Industry Average
      DBBL              3.005%                 3.377%           5.384%            3.922%
       NBL              -2.96%                 -2.58%            .37%            -1.722%            1.674%
   Prime Bank           1.700%                 2.310%           1.207%            1.739%
 Southeast Bank         2.085%                 3.102%           3.091%            2.760%


Interpretation:

      DBBL: Net-non interest margin to total assets is becoming an important ratio because the
      commercial banks are trying to diversify their sources of revenue from traditional interest
      income. From 2008 to 2010, DBBL experiences an increasing trend in net non interest
      margin. It means the fee incomes are successful enough of outstripping the non-interest
      costs for DBBL.
       NBL: From 2008 to 2009, National Bank experiences a negative non interest margin of -2.96 in
      2008 and -2.58 in 2009 but non interest margin continues to grow for National Bank and in 2010,
      it has a positive margin of 0.37%.
      Prime Bank: For Prime Bank, we are observing a mixed trend in the net non-interest
      margin. The ratio picked up in the year 2009 because the spread between non-interest
      revenues and non interest expenses grew larger. But dropped in 2010.
      Southeast Bank: From 2008 to 2010, Southeast Bank experiences an increasing trend in
      net non interest margin. That means their non interest income increasing relatively higher
      than relative increase in total asset.

   Summary:

   From 2008 to 2010 DBBL has free successful income rather than non interest costs. But
   other banks they are unable to spread their non-interest income relatively increasing their
   total assets. Therefore NBL is trying to diversify its sources of revenue from traditional
   income.
Net Operating Margin:

       7.00%
       6.00%
       5.00%                                                                       DBBL
       4.00%
                                                                                   NBL
       3.00%
                                                                                   Prime bank
       2.00%
                                                                                   Southeast Bank
       1.00%
       0.00%
           2007.5    2008       2008.5    2009     2009.5     2010        2010.5


                                         Figure 5: Net operating margin

                                 Net Operating Margin
     Bank                    2008                 2009                     2010          Average    Industry Average
      DBBL                  3.194%               3.308%                   6.007%         4.170%
      NBL                    3.92%               3.46%                    6.57%          4.649%         4.257%
   Prime bank               3.483%               4.238%                   3.978%         3.900%
 Southeast Bank             3.711%               4.095%                   5.120%         4.309%


Interpretation:

      DBBL: The net bank operating margin combines the components of both net interest
      margin and net non-interest margin and since the net interest margin and net non-interest
      margin improved over the period; so this ratio for DBBL also enjoyed an upward trend.
      NBL: From 2008 to 2009, net operating margin for National Bank decreases from 3.92 % to
      3.46% but then increases rapidly to 6.57% in 2010. This tells us that in 2010 the relative spread in
      operating revenue and operating expense increased by a larger amount than relative increase in
      total assets so there is adequate operating revenue to cover the operating cost and management is
      doing a better job.
      Prime Bank: From 2008 to 2009, net operating margin for Prime Bank increases from 3.483 %
      to 4.238% but then decreases rapidly to 3.978% in 2010.
      Southeast Bank: From 2008 to 2010, net operating margin for Southeast Bank increases
      steadily from 3.711% to 5.12% indicating that relative spread in operating revenue and
      operating expense is more than relative increase in asset so there is a higher margin.
Summary:

Analyzing the trend we can see that DBBL and NBL as well as Southeast bank are indicating
that they are operating expense and operating revenue relatively increasing their asset so they
must cover their operating cost. In 2010 Prime bank indicates their operating expense is lower
than in asset so there is a lowest margin.

Net Profit margin:

         40.00%
         35.00%
         30.00%
         25.00%                                                                  DBBL

         20.00%                                                                  NBL
         15.00%                                                                  Prime bank
         10.00%                                                                  Southeast bank
          5.00%
          0.00%
              2007.5   2008    2008.5   2009     2009.5     2010      2010.5


                                        Figure 6: Net profit margin

                                  Net Profit margin
      Bank               2008                 2009                      2010           Average    Industry Average
      DBBL              11.293%              12.763%                   17.188%         13.748%
      NBL               17.07%               18.85%                    37.15%          24.356%        16.441%
   Prime bank           9.546%               16.750%                   17.188%         14.495%
 Southeast bank         8.656%               13.649%                   17.193%         13.166%


Interpretation:

       DBBL: In 2008 it generates 11.293 taka profit from every 100 taka of operating revenue.
       The NPM ratio is showing an increasing trend. So we can deduce that the bank is not at
       all struggling to generate a consistent net income from its operating revenue, rather they
       are very smooth.
       NBL: From 2008 to 2010, net profit margin for National Bank increased rapidly from
       17.07% to 37.15 % because relative increase in net profit was more than relative increase
       in operating revenue.
       Prime Bank: From 2008 to 2010, net profit margin for Prime bank increased steadily
       from 9.54% to 17.18% because relative increase in net profit was more than relative
       increase in operating revenue.
       Southeast Bank: For Southeast bank from 2008 to 2010, net profit margin increased
       steadily from 8.656% to 17.193 % because relative increase in net profit was more than
       relative increase in operating revenue.

Summary:

After analyzing the 3 years ratios, we can see that NBL Profit margin ratios are well above from
the ratios of DBBL, Prime Bank and Southeast Bank. NBL ratio is high because their costs are
relatively lower than their income in compared with other banks.

Earnings per Share (EPS):

        120
        100
         80                                                              DBBL

         60                                                              NBL

         40                                                              Prime bank
         20                                                              Southeast Bank
          0
          2007.5    2008   2008.5    2009    2009.5   2010   2010.5


                             Earnings per Share (EPS)
      Bank               2008                2009               2010           Average    Industry Average
      DBBL              82.167              75.147            100.116           86.043
      NBL               53.31                4.69              15.55            24.517          48.43
   Prime bank           34.654              54.366             56.900           48.640
 Southeast Bank         25.923              32.438             45.198           34.520


Interpretation:

       DBBL: In 2010, for every share of DBBL common shareholder holds, they earn a profit
       of TK 100.116. From 2008 to 2009 for DBBL, EPS decreases from TK 82.167 per share
       to TK 75.147 TK per share and EPS in 2010 increases to TK 100.116 per share.
       NBL: From 2008 to 2009 for National Bank, EPS decreases from TK 53.31per share to
      TK 4.69 TK per share and EPS in 2010 increases to TK15.55 per share.
      Prime Bank: In 2010, for every share of Prime Bank common shareholder holds, they
      earn a profit of TK 56.9. From 2008 to 2010, upward trend continued for Prime Bank in
      EPS.
      Southeast Bank: In 2010, for every share of Southeast Bank common shareholder holds,
      they earn a profit of TK 45.2. From 2008 to 2009 for Southeast Bank, EPS increases from
      TK 25.92 per share to TK 32.44 per share and EPS in 2010 increases to TK 45.20 per
      share.

   Summary:

   In 2010 DBBL has the highest EPS rather than the other banks. But 2008 to 2009 the EPS of
   DBBL and NBL took down then ups in 2010. Prime bank and Southeast bank did steady well
   from 2008 to 2010.

Price to earnings ratio:

       60
       50
                                                                       DBBL
       40
       30                                                              NBL
       20                                                              Prime bank
       10                                                              Southeast Bank
        0
        2007.5    2008     2008.5   2009   2009.5   2010   2010.5


                              Price to earnings ratio
      Bank                2008              2009             2010            Average    Industry Average
      DBBL               52.467            25.812           22.901            33.727
      NBL                19.03             13.71            12.32             15.019           16.658
   Prime bank            5.690             7.830            4.330              5.95
 Southeast Bank          12.267            10.266           13.280            11.938


Interpretation:

      DBBL: In 2010, the shareholders were willing to pay TK 12.32 for every TK 1 of
      reported earnings for DBBL. P/E ratio for DBBL decreased drastically from 52.467 in
       2008 to 22.901 in 2010 because relative change in market price per share is less than
       relative change in earnings per share.
       NBL: P/E ratio for National Bank decreased gradually from 19.03 in 2008 to 12.32 in
       2010 because relative change in market price per share is less than relative change in
       earnings per share.
       Prime Bank: The price earnings ratio of Prime Bank is taking ups and down. But in the
       year 2009, the company’s ratio went up which shows that the company’s growth
       prospects are getting better. But in the year of 2010, the ratio went down again.
       Southeast Bank: In 2010, the shareholders were willing to pay TK 13.28 for every TK 1
       of reported earnings for Southeast Bank. The price earning ratio shows an upward trend
       despite a fall in the year 2009.

Summary:

The P/E ratio for DBBL is higher than the other three banks but the unstable condition of the
ratio has made it risky. So investors need to keep it in their mind when they decide to invest.



Dividend per Share:

       60
       50
                                                                             DBBL
       40
       30                                                                    NBL
       20                                                                    Prime Bank
       10
                                                                             Southeast Bank
        0
        2007.5     2008      2008.5   2009    2009.5   2010    2010.5


                                  Dividend Per Share
      Bank                2008                2009               2010           Average       Industry Average
      DBBL                 50                33.3333              30             37.778
       NBL                43.21               3.35               7.54            18.036           19.678
   Prime Bank             6.400                 -               6.736            8.869
 Southeast Bank            10                 12.50             19.595           14.032
Interpretation:

      DBBL: DPS is a ratio of interest to the shareholders as the shareholders want a return for
      holding the ownership of the firm’s share. The dividend trend was a downward one with
      the highest dividend paid was 50tk per share.
       NBL: From 2008 to 2009 for National Bank, DPS decreases drastically from TK
      43.21per share to TK 3.35 TK per share and DPS in 2010 increases slightly to TK 7.54
      per share.
      Prime Bank: Prime Bank shows a gradual increasing trend for DPS. But they don’t paid
      any dividend in 2009.
      Southeast Bank: In 2008, for every share of Southeast Bank common shareholder holds,
      they receive a dividend of TK 10. Southeast Bank shows a gradual increasing trend for
      DPS. From 2008 to 2009 for Southeast, DPS increases from TK 10 per share to TK 12.5
      per share and in 2010 increases to TK 19.595 per share.

   Summary:

   In this case, the shareholders earned highest 50 taka and 43.21 taka per share of DBBL and
   NBL in 2008. But it was gradually decreasing from 2009 to 2010. Shareholders of Southeast
   bank holds their ownership of the firms share.




Cash Position Indicator:




             25.00%
             20.00%
                                                                    DBBL
             15.00%
                                                                    NBL
             10.00%
                                                                    Prime Bank
              5.00%                                                 Southeast Bank
              0.00%
                  2007.5 2008 2008.5 2009 2009.5 2010 2010.5
                                 Cash Position Indicator
        Bank             2008               2009                2010             Average     Industry
                                                                                             Average
         DBBL          11.594%            20.702%             12.567%            14.954%
          NBL          13.414%            11.635%             9.380%             11.477%     10.317%
      Prime Bank       8.330%             8.789%              6.946%             8.022%
       Southeast       5.729%             6.507%              8.213%             6.816%
         Bank



Interpretation:

      DBBL: This ratio indicates the ability of the firm to meet immediate cash needs. In year
      2008 to 2009 cash position indicator for DBBL has increased rapidly from .1159 to .207 due to
      relative increase in cash and deposit due from institution is more than relative increase in
      asset. But again in 2010 it dropped to .1256, it implies warning sign for DBBL.
      NBL: From year 2008 to 2010, the cash position indicator for NBL has decreased
      gradually from 0.1341 to 0.0938. This tells us that bank is becoming weaker to handle its
      immediate cash needs as the cash is the first line of defense against the deposit
      withdrawals and cash demands.
      Prime Bank: In the year 2008 to 2009, cash increased by 18% which not only led to the
      improvement in the ratio but also made the company more liquid. The ratio deteriorated
      in the year 2010 and the increase in the cash was just 0.82%. The management needs to
      maintain the increase in the cash assets to make it liquid.
      Southeast Bank: From 2008 to 2010, the cash position indicator for Southeast Bank
      shows a steady upward increase from 0.0573 to 0.0821. This is because relative increase
      in cash and deposit due from institution is more than relative increase in asset which
      gives a positive signal to Southeast Bank.

   Summary:

   Most of the banks from 2008 to 2010 their cash position are very weak that means they are
   becoming weaker to handle their immediate cash against the deposit withdrawals and cash
   demands. But Southeast bank in 2010 their cash position increased that gives a positive
   signal to this bank.
Liquid Securities Indicator:


      20.00%

      15.00%                                                                DBBL

      10.00%                                                                NBL
                                                                            Prime Bank
       5.00%
                                                                            Southeast Bank
       0.00%
           2007.5    2008    2008.5   2009   2009.5   2010    2010.5




                            Liquid Securities Indicator
      Bank              2008              2009                2010            Average        Industry Average
      DBBL             8.749%            11.868%             9.625%           10.080%
       NBL             9.186%            9.345%              11.334%          9.955%             12.468%
   Prime Bank          18.841%           15.237%             12.676%          15.585%
 Southeast Bank        12.953%           17.224%             12.584%          14.254%


Interpretation:

      DBBL: From 2008 to 2009, liquidity position of Premier Bank increased from 0.087 to
      0.118 due to relative increase in government securities than relative increase in asset and
      then dropped to 0.096 in 2010, because relative change in asset is larger than that of
      government securities.
      NBL: From 2008 to 2010, the liquidity positions of National Bank show a steady increase
      from 0.092 to 0.113 because relative increase in government securities is more than
      relative increase in asset.
      Prime Bank: In the year 2009, there was decline in the ratio mainly due to the 8% fall in
      the value of cash assets and an increase in total assets by 13%. The downward trend
      continued in the year 2010 and this might signal the market that the bank would soon be
      liquidity crisis. So it is high time, the bank management takes step to improve its position
      in securities, since security is the second line of defense for liquidity.
      Southeast Bank: In 2008, bank liquidity securities indicator was .1295. In 2009,
      Southeast Bank increased its government securities so that the ratio jumped to 0.1722
      from 0.1295. But in 2010, its ratio is decreased to .1258.
   Summary:




Capacity Ratio:

      80.00%

      60.00%                                                                  DBBL

      40.00%                                                                  NBL
                                                                              Prime Bank
      20.00%
                                                                              Southeast Bank
       0.00%
           2007.5    2008   2008.5     2009   2009.5    2010    2010.5




                                     Capacity Ratio
      Bank              2008               2009                 2010             Average       Industry Average
      DBBL             59.414%            68.716%              67.132%           65.087%
       NBL             70.168%            70.679%              67.561%           69.469%           66.50%
   Prime Bank          64.966%            68.764%              56.167%           63.299%
 Southeast Bank        71.195%            66.211%              67.085%           68.164%


Interpretation:

      DBBL: The capacity ratio is a negative liquidity ratio. DBBL has been successfully
      managed its Capacity ratio to increase at the end. But this increasing trend indicates that
      it is issuing more loans thus decreasing its liquid portion and at the same time increasing
      its liquid requirement. This is an alarming indicator for the bank as the liquidity is
      decreasing.
      NBL: From 2008 to 2009, the capacity ratio of National Bank increased slightly from
      0.702 to 0.707 because relative increase in net loans and leases is slightly greater than
      relative increase in asset but then in 2010, capacity ratio dropped significantly to 0.676
      because relative increase in net loans and leases is less than relative increase in asset.
      Prime Bank: For Prime bank, the ratio increased in the year 2009 mainly because of
      19% increase in net loans and leases, which implies that more assets are stuck in this least
      liquid resource compared to last year. But it dropped in 2010.
      Southeast Bank: In 2008, the capacity ratio was 71.19%. Then in 2009 it decreased to
      66.21% and in 2010 it increased to 67.08% due to increase in net loans and leases.

   Summary:

   From 2008 to 2010 most of the banks indicate that their net loans and leases increased
   relatively higher than increased in net assets. But in 2010 all banks are in a positive sign and
   prime bank is relatively well than other banks.



Deposit Composition Ratio:

       50.00%

       40.00%
                                                                             DBBL
       30.00%
                                                                             NBL
       20.00%
                                                                             Prime Bank
       10.00%                                                                Southeast Bank
        0.00%
            2007.5   2008    2008.5   2009    2009.5   2010    2010.5


                            Deposit Composition Ratio
      Bank              2008                2009                2010            Average       Industry Average
      DBBL             26.459%             34.691%             41.148%          34.099%
       NBL             23.789%             21.338%             20.957%          22.028%               16.58%
   Prime Bank          17.424%             20.421%             25.332%          21.069%
 Southeast Bank        8.852%              7.539%              11.096%          9.162%




Interpretation:

      DBBL: In 2010, DBBL has a deposit composition ratio of 0.41 which tells us that demand
      deposits that are subject to immediate withdrawal via check writing are 0.41 of time
   deposits that have fixed maturities with penalties for early withdrawal. For DBBL it
   increased throughout three years. It means liquidity requirement go up.
   NBL: For NBL, from 2008 to 2010, the deposit composition ratio decreased gradually
   from 0.238 to 0.21 because relative increase in demand or current deposit is lower than
   relative increase in time or term deposits.
   Prime Bank: The ratio increased in the year 2009, implying a need for increase in
   liquidity because the proportionate increase in demand deposits has been more than the
   proportionate increase in time deposits, more precisely 77% and 13%. The relative
   increase in demand deposits was more in 2010 too and therefore the management needed
   to prepare well enough to meet the increased liquidity requirement.
   Southeast Bank: Southeast Bank’s deposit composition ratio decreased from 8.85% in
   2008 to 7.54% in 2009.This tells us that relative increase in demand deposit was higher
   than relative increase in time deposit from 2008 to 2009 but in 2010 time deposit
   increased by a larger amount than increase in demand deposit.

Summary:

Ins terms of deposit composition ratio most of the bank are relatively well but NBL from
2008 to 2010 deposit composition ratio decreased gradually that means their current deposit
is lower than relative increase in time or term deposit.

				
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posted:2/7/2013
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Description: Ratio analysis on banks which indicates the financial performance of banks. All kinds of ratios are analyzed here.