Notre Dame University Bangladesh

Report on: Financial analysis and banking performance

Submitted To:

Md . Kamrul Islam

Lecturer of Business Administration,

Notre Dame university , Bangladesh

Submitted By:

Romario Joydhor

ID : 516010102

Department : Business Administration

Sec : BBA 5A

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Contents
Letter of Transmittal ..................................................................................................................................... 3
Acknowledgement ........................................................................................................................................ 4
Executive Summary ...................................................................................................................................... 5
Chapter 1 ....................................................................................................................................................... 6
Introduction ............................................................................................................................................... 6
Objective of the report: ............................................................................................................................. 6
Methodology: ............................................................................................................................................ 6
Chapter 2....................................................................................................................................................... 7
Internal : .................................................................................................................................................... 7
Company Profile ................................................................................................................................... 7
External ......................................................................................................................................................... 8
Company Analysis: ................................................................................................................................... 8
Public confidence: ............................................................................................................................... 9
Public image: ....................................................................................................................................... 9
Deposit: ...................................................................................................................................................... 10
Financial Analysis:.................................................................................................................................. 13
Chapter 3 ..................................................................................................................................................... 22
Findings: ................................................................................................................................................. 22
Limitations: ................................................................................................................................................. 22
Conclusion .............................................................................................................................................. 23
Reference ................................................................................................................................................ 23

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Letter of Transmittal

18/7/2018
Md. Kamrul Islam
Lecturer,
Business Administration
Notre Dame University, Bangladesh
Subject: Submission report on IFIC bank Limited.

Dear Sir,

This is to inform you that I have completed the report on International Finance Invest and
Commerce Bank (IFIC Bank). This report shows the whole picture of the bank’s general history,
financial analysis, activities and performance. Therefore, I tried my level best to conduct this
report and follow yours giving instruction.

I have given my best effort to give this report a presentable shape and make it as informative and
precise as possible. I thank you for providing me with this opportunity.

Sincerely yours
Romario Joydhor
5-16010102

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Acknowledgement

I am really grateful to make this report because I have really learned something which will be
effective to my professional background.

My greatest thanks to our honorable faculty Md. kamrul Islam and correcting our project with
great attention and care. When I have faced problems in this report he always helped me.
Without his help it was too impossible to complete my report.

Some articles and websites are needed by conducting this report. I would also thank to my all
students of others group. They were really helpful to complete my report.

At last I am giving thanks to all of friends who helped me for conducting the report.

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Executive Summary

IFIC was initially set up as a private investment company in October 1976 with the name
'International Finance and Investment Company'. At the outset, the company was involved in
investment and financing solely and jointly in the countries of Middle East. On 24 June, 1983 it
started operation commercial banking in Bangladesh as the International Finance Investment and
Commerce Bank Limited with an approved capital of 100 million divided into one million
ordinary shares of Tk 100 each.

I made this report based on the secondary data and the biggest source of secondary is IFIC
bank’s website. For collection of data for this report I have used primary data. And specifically
they are annual report, balance sheet, financial statement etc. I collect information from the web
site of IFIC bank ltd, and authentic site where information is available.

The second part of the report is about overview of IFIC Bank and the mission and Vision of IFIC
Bank. Part two is about the job description. The third part is regarding the ratio analysis of the
bank from 2012 to 2016 and the general banking activities carried out by the bank.

Last part of the report is shown the findings of what I literally learn from this report and also I
include the conclusion and reference.

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Chapter 1

Introduction
I make the report on International Finance Investment and Commerce Bank Limited (IFIC Bank
Limited). IFIC was initially set up as a private investment company in October 1976 with the
name 'International Finance and Investment Company'. At the outset, the company was involved
in investment and financing solely and jointly in the countries of Middle East. On 24 June, 1983
it started operation commercial banking in Bangladesh as the International Finance Investment
and Commerce Bank Limited with an approved capital of 100 million divided into one million
ordinary shares of Tk 100 each. At the beginning, the paid up capital of the bank was Tk 71.5
million, which rose to Tk 80 million by 1986. 60% of the total shares of the bank were included
in A-group. General shareholders and entrepreneurs paid up the full prices of those shares. The
remaining of 40% shares belong to B-group was allotted to the government of Bangladesh and
the government paid up the prices of those share.

After conducting this report, I have known the concept of banking and how bank works and deal
with. Banks have faced many internal and external problems and I have learnt how they handle
those problems. I Bank always publish their annual report where includes the bank’s evaluation,
mission, vision and financial analysis. I also analyzed the financial statement for recent 5years
and also make ratio over it. It helps me for future or professional work.

Objective of the report:

1. To know about the banking system of BD
2. To know the performance of private bank
3. To know what services bank provides to their client
4. To know the financial analysis of ICIF bank
5. To learn about private banking rules and regulation

Methodology:
I have prepared the report totally based on the secondary data. I collected the annual report of
IFIC bank in 2012 to 2016. I made financial analysis totally based on the annual report of this
bank. I used Google and some article for collecting information. I also took information from the
website of IFIC bank. And I prepared the whole report by Microsoft word and Microsoft excel.

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Chapter 2

Internal :

Company Profile

IFIC Profile:

International Finance Investment and Commerce Bank Limited (IFIC Bank) is banking company
incorporated in the People’s Republic of Bangladesh with limited liability. It was set up at the
instance of the Government in 1976 as a joint venture between the Government of Bangladesh
and sponsors in the private sector with the objective of working as a finance company within the
country and setting up joint venture banks/financial institutions aboard. In 1983 when the
Government allowed banks in the private sector, IFIC was converted into a full fledged
commercial bank. The Government of the People’s Republic of Bangladesh now holds 32.75%
of the share capital of the Bank. Directors and Sponsors having vast experience in the field of
trade and commerce own 11.31% of the share capital and the rest is held by the general public.

Mission:

Our Mission is to provide service to our clients with the help of a skilled and dedicated
workforce whose creative talents, innovative actions and competitive edge make our position
unique in giving quality service to all institutions and individuals that we care for.

We are committed to the welfare and economic prosperity of the people and the community, for
we derive from them our inspiration and drive for onward progress to prosperity.

We want to be the leader among banks in Bangladesh and make our indelible mark as an active
partner in regional banking operating beyond the national boundary.

In an intensely competitive and complex financial and business environment, we particularly

focus on growth and profitability of all concerned

Vision :

At IFIC, we want to be the preferred financial service provider through innovative, sustainable
and inclusive growth and deliver the best in class value to all stakeholders.

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Core Values :

integrity : Upholding integrity in all that we do, always, everywhere.

Fairness : Striving to offer the best to our customers equitably with transparency.

Innovation : Encouraging and nurturing creativity.

Commitment : Committed to excellence in customer service and maximization of stakeholders’

value through teamwork.

External

Company Analysis:

Strategic priority:
1. To strive for sound business growth by ensuring customer satisfaction through quality and
timely services

2. To manage and operate the Bank in the most efficient manner to ensure achievement of goals

3. To maintain adequate capital flow to support further growth

4. To ensure effective and efficient risk management for sustainable business growth

5. To diversify loan portfolio through structured finance and expansion of Corporate, SME, Agri
and Retail businesses

6. To mount state-of-the-art technologies and adopt innovative ideas for financial inclusion

7. To groom human resources for serving customers efficiently

8. To increase brand visibility by creating positive image of the Bank

9. To be a trend-setter in serving the society and remain responsive to the environment

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10. To ensure sound corporate governance practices

11. To facilitate mobility in banking by up-gradation of Internet and Mobile Banking

12. To add value for all stakeholders.

Technology

IFIC bank limited gives almost all kind of technical support and advantage to the client of them.

Credit card:

IFIC gives the opportunity of using credit card. For that money transaction is becoming very
easy.

Debit card:

IFIC also gives debit card service. This also helps to easy money transaction.

Internet Banking:

Now a days IFIC is very advanced in internet banking .For that client can do their financial job
very easily.

Online banking:

IFIC also using online banking. So transferring money to anywhere is very easy and secured

Automated teller machine (ATM):

IFIC has ATM service and they setup their booth in many place which helps their client to pick
up money easily.

Public confidence:

Public confidence of IFIC bank ltd is so strong .Because they always try to provide best services.
They always maintain the agreement what they do. Their borrowing rate and deposit rate
reasonable and satisfied .And their others service is very satisfied and well. Their customer
service is very gentle and well behavior.

Public image:

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Public image of this company is good. The reputation of IFIC is high. They always deal with
their customer very professionally. They maintain all their activities very carefully and
transparently. And many years they run their business with good name and fame.

Deposit:

Which deposit is reserved by the client it should be fully saved. This bank never break consumer
believe and contract. You should be ensured which money is deposited by you it will return by
bank properly. Because this bank is always concern about their client advantage and their
reputation.

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Industry Analysis

The financial system in Bangladesh is relatively small and less developed than in most countries
in South and East Asia. The sector’s contribution to GDP has remained static at 1.5 percent
during 1999-2000 periods. Commercial banks are at the heart of this financial sector by
contributing 80% of the total. The depth of the financial system, as measured by the ratio of the
broad money supply to GDP, has been growing slowly and was low at around 32% in 1999-
2000.

1. Market Segment: The banking industry of Bangladesh is mainly divided into two sectors,
such as Specialized Banks (SBs) and Commercial Banks (CBs). The Specialized Banks are those
banks that deal with specific sectors or industry of an economy. For instance, Bangladesh Krishi
Bank (BKB) only deals with the agricultural sector of the economy; Bangladesh Shilpa Bank (BSB)
only deals with the industrial sector of the economy, etc.

On the other hand, Commercial Banks are Scheduled Banks that are operating in the
country under the rules and regulations of the Central Bank. Commercial banks in turn
can be grouped as Nationalized Commercial Banks (NCBs); Foreign Commercial Banks
(FCBs) and Private Commercial Banks (PCBs) with three different segments, such as
1st Generation Private Commercial Banks, 2ndGeneration Private Commercial Banks, and
3rd Generation Private Commercial Banks.

2. Current Status of BD Banking: The Banking Industry of Bangladesh at present is in the

growth stage. Almost every year new private banks are coming up, new branches are
opening within two to three months, new customers are coming to open an account in
different banks. As a result, according to July 30, 2001 there are 4 nationalized
commercial banks, 5 specialized banks, 30 local private commercial banks and 12 foreign
commercial banks operating in this country. Moreover, as on July 30, 2001 there are
27,881,322 numbers of deposit accounts and 7,462,785 numbers of advance accounts in
the banks.

3. Regulatory of Banking Industry: Bangladesh Bank, being the central bank exerts
supervisory controls over the banking sector. BB requires that banks have a minimum
paid up capital and reserve funds and that no person, family or company own more than
10% of bank share personally, jointly or both. Bangladesh Bank may with prior
Government approval at any time change the policy regarding the reservation of risk-
based capital of assets. BB may determine policy to control advances by banking
companies. BB has direct authority to appoint any new Managing Director, General
Manager, or CEO and BB can dismiss none so appointed without prior approval. BB also
has the power to supersede the Board of Directors of a banking company. BB is also the
official liquidator and has the power to give directions to a banking company and also

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 remove directors when it feels that this may be in public interest. Banking companies in
Bangladesh are not allowed to form subsidiaries, although this rule may be amended
soon.

4. Market Entry and Exit: Bangladesh Bank (BB), the central bank of Bangladesh, has the
authority to determine the entry and exit rules of all the banks operating in Bangladesh.
BB performs the traditional central banking roles of note issue and banker to the
government and banks. It formulates and implements monetary policies, manages foreign
exchange reserves and supervises banks and non-bank

However, if the aforementioned problems are addressed and tackled well, new
opportunities from the banking sector can arise. Acceleration of expansion due to a high number
of population, ability to meet global standards in terms of product quality, prospects for new
global banks to start operation in Bangladesh, opportunity for the banking sector to become a
major contributor in the national economy are some of the benefits that can be reaped, if
opportunities are reaped strategically and problems handled tactfully.

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Financial Analysis:

Total Assets (million taka)

250,000

200,000
197,051
150,000 170,334
156,339
132,062
100,000 114,729

50,000

0
2012 2013 2014 2015 2016

Comment: Here total assets in millions of dollars are gradually increasing every year. We see
that, in 2016 total assets highest at 197051 dollars. The range of assets lower in 2012. The assets
IFIC bank has been increasing every year. And now the total assets are 197051 million dollar.

Net interest income(million taka)

5,000

4,000 4,375
3,746
3,000 3,392
2,806 2,617
2,000

1,000

0
2012 2013 2014 2015 2016

Comment : we see that the net income of IFIC bank is increasing. Though the lowest net interest
income was in the 2013. But the condition of the bank’s income is good. In 2016 it made the
highest range of income .

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 Profit after tax ( million taka)
1,800
1,600
1,400 1,545
1,200 1,346
1,214
1,000 1,105
800 887
600
400
200
0
2012 2013 2014 2015 2016

Comments: The chart shows the profit after deducting tax in five years (2012 to 2016). The
profit bar was ups and downs that means bank has created money by gradually in 2012 tr0 2014.
Then the profit was fall in 2015 and it was the lowest profit year. And IFIC bank has created a
biggest profit in 2014 it is 1545 million dollars.

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 Return on Average Assets
1.20%
1.07% 1.09% 1.07%
1.00%

0.80%
0.65%
0.60%
0.53%
0.40%

0.20%

0.00%
2012 2013 2014 2015 2016

Comments: Here return on average for 5years charts, we see the highest percentage of return on
average is 1.09% in 2014. And the lowest percentage is 0.53% in 2016. We see the percentage of
2012 to 2013 years are going smoothly then its fall in 2014 and again increasing in 2016.

Loans and advances (million taka)

160,000
140,000
120,000 137,118
123,269
100,000
102,282
80,000
84,110
60,000 77,160
40,000
20,000
0
2012 2013 2014 2015 2016

Comments: Here we see the bar chart of Loan of advances in 5 years. The amounts of providing
loans are increasing gradually in every year. The highest amount of proving loans are 137118
million taka in 2016.
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 Deposits (million taka)
180,000
160,000
140,000 160,155
146,820
120,000 129,746
100,000 110,464
80,000 92,433
60,000
40,000
20,000
0
2012 2013 2014 2015 2016

Comments: Here the bar chart shows the amount of deposits in every year. The amount of
deposits are gradually increasing, the lowest amount of deposits was in 2012 is at 92433 million
taka. And now the amount is 160155 million taka in 2016.

Earning per share (million taka)

4
3
3 3
3 3

2
2
2
2
1
1
0
2012 2013 2014 2015 2016

Comments: From this earnings per share chart with five years’ the percent was increasing from
2012 to 2014. The percentage of earning share was 2.90 in 2012 and 3.07 in 2013 and its remain
constant in 2014. The percentage was fallen in 2014 it was 1.57 and then it also increased in
2016 at 2.15.

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 Total debt to asset ratio
Total debt to asset ratio: Total debt/ total asset

2012 106975/114729 0.932

2013 122919/132062 0.934
2014 145711/156339 0.934
2015 166680/178334 0.935
2016 137118/197051 0.695

Total debt to asset ratio

2012 2013 2014 2015 2016

0.932 0.934 0.934 0.935

0.695

2012 2013 2014 2015 2016

Comments : We make the ratio based on past five years and they are 2012 to2016. From here
we can see that the values of the ratio of total debt to asset are decreasing gradually in first four
years but it was decreased in the last year of 2016.

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 Return on asset ratio
Return on asset ratio: Net income/total asset

2012 2806/114792 0..024

2013 2617/132062 0.020
2014 3392/156339 0.022
2015 3746/178334 0.021
2016 4375/197051 0.022

Return on asset ratio

2012 2013 2014 2015 2016

0.024

0.022 0.022

0.021

0.02

2012 2013 2014 2015 2016

Comments: Here we see the Return on asset ratio of five years 2012 to 2016. The highest pick
of the curve shows in 2012 and the lowest return of asset is 2013. Then it was increased in 2014
and then again fall. And the last year it was increased.

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 Net Profit Margin Ratio
Net profit margin: Net profit after tax/Net interest income

2012 1105/10443 0.106

2013 1346/11111 0.121
2014 1545/11858 0.130
2015 887/12653 0.070
2016 1214/12483 0.097

Net Profit Margin Ratio

2012 2013 2014 2015 2016

0.13
0.121
0.106
0.097

0.07

2012 2013 2014 2015 2016

Comments: We make the ratio based on past five years and they are 2012 to 2016. We can see
from here from three years the ratio were increasing but it was fallen in 2015. And it again
raised by 0.097 to 0.007 in 2016.

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 Cash Reserve ratio

Cash Reserve Ratio(CRR)

2012 2013 2014 2015 2016

6.58% 6.56%
6.44%

6.15%

6.00%

2012 2013 2014 2015 2016

Comments: The Cash reserve ratio of last five years is ups and downs. The first two years it was
so low then its increasing to 6.38% from 6.00%, The highest cash reserve ratio was in 6.58%.

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 Equity to debt ratio

Equity to debt ratio

2012 2013 2014 2015 2016

57.54%
53.17%
46.20%

25.92%

16.02%

2012 2013 2014 2015 2016

Comments: We make the ratio based on past five years and they are 2012 to 2016. We can see
the ratio of first four year is increasing gradually. And its decreased in 2016 at 53.17%.

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Chapter 3
Findings:

1. I got the idea of private banking system ;

2. I have known how IFIC bank operates;
3. I analyzed the annual report of IFIC bank and got many information;
4. I also can know the rules and regulation of IFIC bank;
5. I have also known that the service and environment of this bank is so good ;

Limitations:

1. Limitations of sources
2. Gathering information was tough
3. I didn’t do this types of analytical report before
4. lack of experience for analyzing data

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Conclusion

It was great pleasure to make a report on financial analysis and banking performance. All the
information I collected from the IFIC bank’s website. I tried a lot to do my best work on this
report. I analyzed the secondary data from the financial annual statements. I also learned the
rules and regulation of IFIC bank And evaluating the performance. I know this effort will help
me for my professional sectors

Reference

1. Annual report of 2012

2. Annual report of 2013
3. Annual report of 2014
4. Annual report of 2015
5. Annual report of 2016

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