Primeasia University

a mission with a vision

Internship Report On
"Financial Performance Analysis of National Bank Limited”
(2015 - 2019)

An internship report presented to the School of Business of Primeasia

University. In partial fulfillment of the requirement for the Degree of
Bachelor of Business Administration.

Supervised By:
Mst. Afroja Aktar
Assistant Professor
School Of Business
Primeasia University

Submitted By:
Md. Ashaduzzaman Milon
ID - 162-025-045
Department of Business Administration
Primeasia University

Date of Submission: Monday 1st March 2021

 Primeasia University
a mission with a vision

Internship Report On
"Financial Performance Analysis of National Bank Limited”
(2015 - 2019)

An internship report presented to the School of Business of Primeasia University. In partial

fulfillment of the requirement for the Degree of Bachelor of Business Administration.

Supervised By:
Mst. Afroja Aktar
Assistant Professor
School Of Business
Primeasia University

Submitted By:
Md. Ashaduzzaman Milon
ID - 162-025-045
Department of Business Administration
Primeasia University

Date of Submission: Monday 1st March 2021

 Internship Report
On
"Financial Performance Analysis Of National Bank Limited”
(2015 - 2019)
 Letter of
Letter of Transmittal
Transmittal
01/03/2021
To
Mst. Afroja Aktar
Assistant Professor
School of Business
Primeasia University
17, Banani C/A, Dhaka- 1213, Bangladesh.

Subject: Submission of internship report

Dear Ma’am,
Assalamualaikum… It is indeed a great honor to be able to hand over my internship report on
"Financial Performance Analysis of National Bank Limited” (An overview of National Bank
Limited)". I have successfully completed my internship program in National Bank Limited at
Imamganj Branch, Moulvi Bazar, Dhaka - 1100. I worked there as an intern for three months.
Working on this report was a great learning experience for me as I got to learn the differences
between practical and theoretical work. I have attempted my best to finish the report with the
essential data and recommended proposition in a significant compact and comprehensive manner
as possible. The information and data used in this report are mainly based on secondary
resources like annual reports and some research reports previously done by various authors.

While working on this report, I have gained much knowledge about the bank's current state as
well as the importance of Financial Performance in a firm. I trust that this report will meet the
desires.

I would like to take this opportunity to thank you for all the support and guidelines that you have
provided, which I hope to continue getting in the future.

Thank You Ma’am

Sincerely yours,

______________________
Md. Ashaduzzaman Milon
ID: 162-025-045
Department of Business Administration
School Of Business
Primeasia University
Dhaka, Bangladesh

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 Letter of Endorsements by the Supervisor
This is to certify that the internship report on "Financial Performance Analysis of National Bank
Limited” in Bangladesh.” as a requirement of Bachelor of Business Administration (BBA
Program) major in Accounting, from Primeasia University carried out by Md. Ashaduzzaman
Milon, student ID: 162-025-045. I have studied the report and believe that it meets the standard
of BBA internship report. He has completed the report as per instructions under my supervision.
I wish his all the best in his future endeavors.

_________________
Mst. Afroja Aktar
Assistant Professor
School of Business
Primeasia University
Dhaka, Bangladesh

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 Student Declaration

I, Md. Ashaduzzaman Milon. My student ID: 162-025-045 hereby declare that the work
presented report of internship titled "Financial Performance Analysis of National Bank
Limited” work in National Bank Limited, at Imamganj Branch, Moulvi Bazar, Dhaka-1100.
under the supervision of Mst. Afroja Aktar, Assistant Professor, School of Business, Primeasia
University, Banani, Dhaka-1213, Bangladesh.

I also confirm that is my original work and due acknowledgements have been made to materials
used in the report.

_______________________
Md. Ashaduzzaman Milon
ID: 162-025-045
Department of Business Administration
School Of Business
Primeasia University
Dhaka, Bangladesh.

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 Acknowledgement

It is a great opportunity for me to write about the “Financial Performance Analysis of National
Bank Limited”. At the time of preparing this report, I have gone through different research
papers and books which helped me understand the topic more effectively.

Firstly, this is an exclusive instance of professional life I passed and enjoyed in the time of my
internship, which helped me to prepare this report. At first I would like to unlimited thanks to the
Almighty Allah. And my parents and others members of my family who helped me to reach at
this stage of life. Then I would like to express my sincere gratitude and cordial thanks to some
specific persons who helped me to organize this report and for their kind opinion, suggestions,
instructions, support and appropriate guidelines for this.

Then, I acknowledge with gratitude to my respectable supervisor Mst. Afroja Aktar, Assistant
Professor, School of Business, Primeasia University, who has always been sincere and helpful
towards me achieving the completion of this report. She also helped me to understand the need a
“Financial Performance Analysis” in a firm in Bangladesh and where it lacks. Without her
immense knowledge and advice, it would not have been possible for me to complete this report. I
am thankful to her for her continuous support throughout this internship period.

I would also like to express my heartfelt gratitude to Md. Sabir Ahmed, VP & Manager, for his
advice and knowledgeable thoughts. Under the supervision of Md. Golam Sarwar Qureshi,
Senior Assistant Vice President (Second Manager) of Imamganj Branch, National Bank Limited.
Who provided me the supreme support for preparing the report as my supervisor at host
organization. I would also like to take this opportunity to thanks Mr. Subal Chandro Roy, Senior
Assistant Vice President & all officers and stuffs of Imamganj Branch, National Bank Limited
for lending their helping hands whenever necessary. Without their valuable advice and guidance
my internship program would not be so propitious. I could learn how they manage and deal with
213 branches of National Bank Limited throughout the country. I am extremely thankful to them
for their immense support and guidance.

I would also like to express my heartiest thanks to my uncle Md. Rabiul Hoque, Officer General
of Imamganj Branch, National Bank Limited. Without his valuable advice and guidance my
internship program would not be so propitious.

Finally, I would also like to thanks to the authority of School of Business, Primeasia University
for their kind co-operation. Thank you all from the core of my heart. And again I’m so much
appreciative to almighty Allah.

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 Executive Summary

The Internship report is prepared as requirement of BBA program of Primeasia University. This
report is on “Financial Performance Analysis of National Bank Limited”. This report is
intended to assist the reader in detailed understanding the financial performance of a Bank in the
Bangladesh. The purpose of this report is to have an idea about the “Financial Performance of
Bank in the Bangladesh.

This internship report was prepared on the basis of financial performance from 2015 to 2019 of
National Bank Limited. National Bank started its journey on 23rd March of 1983 Recognized as
the first private sector bank entirely owned by native entrepreneurs, NBL has been booming as
the prime private sector bank after encountering much pressure. The study is based on annual
report of 2015-2019 year by using the updated data about their business era.

First chapter is the introduction chapter. I discussed the Background of the study, Statement of
the problems, Scope, Objectives, Research questions, Hypothesis and Significance of the study.
The main objective of the report is to know the Financial Performance Analysis of National
Bank Limited

In chapter second, is about the company overview and details information about National Bank
Limited. It covers the mission, vision, culture, core values and activities of the company.

In chapter three, literature review & methodology of the study is discussed very elaborately and
details such as the methods used in data collection, sources of data (primary or secondary), in
this chapter I discussed the concept of Financial Performance Analysis.

In chapter four about is Analysis and interpretation of the data. Data analysis and evaluation
which is discussed and shown through chart specifically. In this chapter I discussed the Financial
Performance analysis, which is I collect from annual report of National Bank Limited

Finally, in this chapter I explained about the Findings of study, Contribution & recommendation,
Limitation of the study, Conclusion, References: Appendix (Examples, calculations, tables) Data
analysis and evaluation which is explained and shown through chart specifically.

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 Table of Content

Prefatory Part
Content Page No:
Letter of Transmittal i
Letter of Endorsements by the Supervisor ii
Student Declaration iii
Acknowledgement iv
Executive Summary v
Table of Content vi
List of Tables vii
List of Tables viii

Chapter: One
Introduction to the Report
Sl. No: Content Page No:
1.1 Background of the study 2
1.2 Statement of the problems 2
1.3 Scope of the study 3
1.4 Objectives of the study 3
1.5 Research questions of the study 4
1.6 Hypothesis of the study 5
1.7 Significance of the study 5

Chapter: Two
Profile of the organization
Sl. No: Content Page No:
2.1 Organization overview Of National Bank Limited 7
2.2 History & Heritage of NBL 7
2.3 Profile of National Bank Limited 10
2.4 Corporate Information 11
2.5 Status of the Bank 12
2.6 Principal activities 12
2.7 Mission 12

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 2.8 Vision 12
2.9 Motto of the Bank 12
2.10 Objectives of the Bank 13
2.11 Core Values 13
2.12 General Banking of NBL 14
2.13 Products and Account Services 15
2.14 Corporate Strategies of NBL 18
2.15 Green Banking 19
2.16 Offshore Banking Unit 20
2.17 Shareholders’ Equity 20
2.18 Assets 20
2.19 Awards & Recognitions 20
2.20 Management Structure of NBL 21
2.21 Organizational Structure of NBL Branch 22
2.22 Internship experience & learning 23

Chapter: Three
Review of related literature
Sl. No: Content Page No:
3.1 3.1. Definition Financial Analysis 25
3.2 Review of Related Literature 25
3.3 Methodology of the study 27
3.3.1 Primary Sources of Data 27
3.3.2 Secondary Sources of Data 27

Chapter: Four
Analysis and interpretation of the data
Sl. No: Content Page No:
4.0 Analysis and Interpretation of the Data 29
4.1 Leverage Position 30
4.1.1 Debt to Equity Ratio (Leverage ratio) 30
4.2 Liquidity Ratio 31 - 35
4.2.1 Current Ratio 31
4.2.2 Net assets value per share 32
4.2.3 Percentage of Non-performing loan 33
4.2.4 Advance Deposit Ratio (ADR) 34
4.2.5 Yield on Loans and Advances 35
4.3 Profitability Ratio 36 - 40

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 4.3.1 Price Earnings Ratio 36
4.3.2 Return on Assets (ROA) 37
4.3.3 Return on Equity (ROE) 38
4.3.4 Earnings Per Share (EPS) 39
4.3.5 Net Profit Margin Ratio 40
4.4 Activity (Efficiency) Ratio 41
4.4.1 Cost Income Ratio 41
4.5 Adequacy Ratio 42
4.5.1 Capital Adequacy Ratio 42

Chapter: Five
Findings, Recommendation, Conclusion
Sl. No: Content Page No:
5.1 Findings of study 44
5.2 Contribution & Recommendation 46
5.3 Limitation of the study 47
5.4 Conclusion 48
5.5 References 49
5.6 Appendix 51 - 59

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 Chapter - 1
Introduction to the Report

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 1.1. Background of the study

The internship program is an essential part of to obtain a Bachelor of Business Administration

(BBA) from Primeasia University. Each student must meet the required credit hours, then they
are placed for observing a specific situation in a real workplace and to guide him to prepare their
internship report, an honourable supervisor always guides the students to prepare their report
well. I feel myself lucky that I got an opportunity to work in a renowned firm, National Bank
Limited as an intern. While working inside the bank, I decided to prepare my internship report on
the “Financial Performance Analysis of National Bank Limited”.

Banking scheme has transformed and nowadays banks are obligated to contest in the market with
native associations as well as overseas ones. Surviving in such a competitive banking
atmosphere, two vital necessities are enhancement of suitable monetary infrastructure by the
Central bank and Enhancement of proficiency such that of emerging a proper workforce
construction and its proficiency and experience. The fact that it is vital for the bank to have
Enhanced management and a well-trained workforce in the vigorous international market is
inevitable. Bangladesh is not an exception of this trend. Banking in Bangladesh is meeting
complications from many ways via its prospect is upbeat in the long run.

1.2. Statement of the problems

Analyzing financial performance is the process of evaluating the common parts of financial
statements to obtain a better understanding of firm’s position and performance. Financial
performance analysis enables the investors and creditors evaluate past and current performance
and financial position, and to predict future performance.
Financial statement is used to judge the profitability and financial soundness of a firm. In this
study, an attempt is made to identify the financial strength and weakness of the firm by properly
establishing relationship between the items in the balance sheet and profit and loss account of
National Bank Limited.

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 1.3. Scope of the study

I have tried to evaluate the financial performance of National Bank Limited. The evaluation is
based on last five years (2015-2019) financial performance of the bank. The report contains the
analysis of bank’s Capital adequacy, Asset quality, Management efficiency, Earnings ability and
Liquidity. I have also compared its performance on last five years from 2015 to 2019.
 Information availability.
 Good communication system.
 Have a wide area of gaining knowledge.
 Good working environment.

1.4. Objectives of the study

This paper has been arranged via broad conversations with personnel of the bank and with the
clienteles.
The objectives of the study are as follows:

 To give an overall view of National Bank Limited.

 To evaluate the performance of National Bank Limited.
 To compare the bank’s financial performance on last five years.
 To suggest remedial measures for the development of National Bank Limited.
 To classify the pattern of the several categories of loan schemes.
 Loan features and Advance systems of some loan schemes with introduction of some new
schemes with special elements.
 To appraise the contribution of Scheme deposits in overall collection of loan.
 Critically examine the utilities & the processes of each level of the organization of the
National Bank Ltd.

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 1.5. Research questions of the study

Financial performance refers to the achievement of financial objectives and is an important

aspect of financial performance. It is the process of monetary measurement of the results of a
company's policies and operations. It is used to measure the overall financial health of the
business over a given period and can also be used to compare similar businesses in the same
sector or to compare industries or sectors. Try to answer important questions such as:
 What is the financial position of the National Bank Limited?
 What is the financial performance of the National Bank Limited over a given period?
 What is the financial performance of last five years of the National Bank Limited?
 Compare of financial performance on last five years (2015-2019) of the National Bank
Limited?

These queries can be solved using a financial analysis of a company. Financial analysis involves
the use of financial statements. A financial statement is a collection of data organized according
to logical and consistent accounting procedures. Its purpose is to understand certain financial
aspects of a commercial enterprise. It is possible to visualize a position during a given period, as
in the case of a balance sheet, or to reveal a series of activities for a certain period, as in the case
of an income statement. As a result, the term "balance sheet" generally refers to two
fundamentals: the balance sheet and the income statement.
The financial balance sheet indicates the financial condition (condition) of the company at a
given time. Provides a snapshot that can be considered a static image. "The financial statements
are a summary of a company's financial position at a given date, showing total assets = total
liabilities + owner's capital". The income reflects the performance of the company over a given
period. "The income statement is a summary of the income and expenses of the business in a
given period, which ends with the net profit or loss of the period." Anyways, financial statements
do not reveal all the information about a company's financial transactions, but they provide
extremely useful information that highlights two important factors: profitability and financial
strength.

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 1.6. Hypothesis of the study

Bangladesh is one of the underdeveloped country in the world. Her socio-economic development
hinges upon rural development, 85% of its total population being dispersed in 88,000 villages
and about 50% living below the poverty line. The literacy rate in the republic is very minimal;
thereby the expertise of the workforce is also near to the ground. So entrepreneurship is vital for
Bangladesh and also important for productive investment, which in return contributes to capital
formation. It is a strategy element between productive investment and capital formation.
Government of Bangladesh the Central Bank have commenced several loan agendas for the
progress of small-scale industries. National Bank Limited provides loan to those countryside
folks who are socially, economically and governmentally diffident and in desperate need of
having credit and who normally linger outside the circle of the customary Banking systems. The
current analysis has been undertaken with a scenario to general events of National Bank Limited
particularly in “General Banking Events and loan and advance of National Bank Limited.”

1.7. Significance of the study

The significance of this report is so much because it’s a first real world experience of a student
for future reference. It will include the analysis of Bangladesh Banking Industry, Financial
performance analysis of National Bank Limited and my personal internship experience. It will
also include some recommendations for National Bank Limited and some for my self-
improvement. Again, through this report I want to see my own performance what I have
knowledgeable and to present that in my report. This report has another significance that to have
a great knowledge through study during preparation of the report. As a whole, this report is very
important. Another thing is by the help of this report the author will get an chance to bring his
opinion in front of the reader and also get a feedback whether the presentation of the information
was good or not. There is also another significance of the report which is to give a sound
knowledge about the banking industry, National Bank Limited and internship experience of the
author to the reader. The main thing is when the reader would see the topic he can meet some
sound knowledge of that particular topic from the beginning of the report till the end. This report
will present the entire situation from the view point of the author. So this report is also
significant because of the readers.

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 Chapter - 2
Profile of the organization

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 2.1. Organization overview Of National Bank Limited

2.2. History & Heritage of NBL

National Bank Limited has its prosperous past, glorious present, prospective future and under
processing projects and activities. Established as the first private sector bank fully owned by
Bangladeshi entrepreneurs, NBL has been flourishing as the largest private sector Bank with the
passage of time after facing many stress and strain. The members of the board of directors are
creative businessmen and leading industrialists of the country. To keep pace with time and in
harmony with national and international economic activities and for rendering all modern
services, NBL, as a financial institution, automated all its branches with computer networks in
accordance with the competitive commercial demand of time. Moreover, considering its forth-
coming future, the infrastructure of the Bank has been rearranging. The expectation of all class
businessmen, entrepreneurs, and the general public is much more to NBL. At present, we have
213 branches and 14 sub branches. In addition, our effective and diversified approach to seize
the market opportunities is going on a continuous process to accommodate new customers by
developing and expanding rural, SME financing and offshore banking facilities.

The emergence of National Bank Limited in the private sector was an important event in the
Banking arena of Bangladesh. When the nation was in the grip of severe recession, the
government took the farsighted decision to allow the private sector to revive the economy of the
country. Several dynamic entrepreneurs came forward for establishing a bank with a motto to
revitalize the economy of the country.

National Bank Limited was born as the first hundred percent Bangladeshi owned Bank in the
private sector. From the very inception, it was the firm determination of National Bank Limited
playing a vital role in the national economy. We are determined to bring back the long forgotten
taste of banking services and flavors. We want to serve each one promptly and with a sense of
dedication and dignity.

The then President of the People's Republic of Bangladesh Justice Ahsanuddin Chowdhury
inaugurated the bank formally on March 28, 1983, but the first branch at 48, Dilkusha

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Commercial Area, Dhaka started commercial operation on March 23, 1983. The 2nd Branch was
opened on 11th May 1983 at Khatungonj, Chittagong.

At present, NBL has been carrying on business through its 213 branches & 14 sub branches
spread all over the country. Since the very beginning, the bank has exerted much emphasis on
overseas operations and handled a sizable quantum of homebound foreign remittance. It has
drawing arrangements with 415 correspondents in 75 countries of the world, as well as with 37
overseas Exchange Companies located in 13 countries. NBL was the first domestic bank to
establish agency arrangements with the world famous Western Union in order to facilitate quick
and safe remittance of the valuable foreign exchanges earned by the expatriate Bangladeshi
nationals. This has meant that the expatriates can remit their hard-earned money to the country
with much ease, confidence, safety and speed.

NBL was also the first among domestic banks to introduce international Master Card in
Bangladesh. In the meantime, NBL has also introduced the Visa Card and Power Card. The Bank
has in its use the latest information technology services of SWIFT and REUTERS. NBL has
been continuing its small credit program for disbursement of collateral free agricultural loans
among the poor farmers of Barindra area in Rajshahi district for improving their livelihood.

NBL focused on all key areas covering capital adequacy, maintaining good asset quality, sound
management, satisfactory earnings, and liquidity. As a consequence, it was possible to a record
growth of 175.51 percent with Tk. 8,809.40 million pre-tax profit in the year under review over
the preceding year. The net profit after tax and provision stood at Tk. 6,860.34 million which
was Tk. 2,070.47 million in the previous year registering a 231.34 percent rise. The total deposits
increased to Tk. 102,471.83 million being 33.37 percent increase over the preceding year. Loans
and advances stood at Tk.92,003.56 million in the year under report which was Tk. 65,129.289
million representing 41.26 percent rise over the preceding year. Foreign trade stood at Tk.
144,255.00 million in 2010 compared to Tk. 115,939.00 million, increased by 24.42 percent
compared to that of the previous year. During 2010, the bank handled inward remittance of Tk.
49,145.30 million, 10.73 percent higher than that of the previous year. Return on Equity (ROE)
registered a 77.84 percent rise over the preceding year.

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National Bank, has now acquired strength and expertise to support the banking needs of the
foreign investors. NBL stepped into a new arena of business and opened its Off Shore Banking
Unit at Mohakhali to serve the wage earners and the foreign investors better than before.

Since its inception, the bank was aware of complying with Corporate Social Responsibility. In
this direction, we have remained associated with the development of education, healthcare and
have sponsored sporting and cultural activities. During times of natural disasters like floods,
cyclones, landslides, we have extended our hand to mitigate the sufferings of victims. It
established the National Bank Foundation in 1989 to remain involved with social welfare
activities. The foundation runs the NBL Public School & College at West Dhanmondi where
present enrolment is 1140. Besides awarding the scholarship to the meritorious children of the
employees, the bank has also extended financial support for their education. It also provided
financial assistance to the Asiatic Society of Bangladesh at the time of their publication of
Banglapedia and observance of 400 years of Dhaka City.

The Transparency and accountability of a financial institution are reflected in its Annual Report
containing its Balance Sheet and Profit & Loss Account. In recognition of this, NBL was
awarded Crest in 1999 and 2000, and Certificate of Appreciation in 2001 by the Institute of
Chartered Accountants of Bangladesh.

The bank has a strong team of highly qualified and experienced professionals, together with an
efficient Board of Directors who play a vital role in formulating and implementing policies.

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 2.3 Profile of National Bank Limited

Name National Bank Limited

Logo

Established March 23, 1983

National Bank Limited

116/1, Kazi Nazrul Islam Avenue, Banglamotor
Dhaka, Bangladesh
Address Phone: +88-02-41032461-63
Fax : +88-02-41032460
SWIFT : NBLBBDDH
Email: [email protected]
www.nblbd.com
Chairmen Mr. Zainul Haque Sikder
Managing Director & CEO Mr. Choudhury Moshtaq Ahmed

Number of the branch 213 branches and 14 sub branches

Authorized capital as a 2019 BDT 30,000.00 million

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 2.4. Corporate Information

1 Incorporation of the Bank.

Certificate of commencement of Business.
15.03.1983
20.03.1983
9 Licensed issued by Bangladesh Bank. 22.02.1983
Licensed issued for opening the first branch, Dilkusha Branch 22.03.1983
8 Formal launching of the Bank. 23.03.1983
3 Commencement of Business of Dilkusha Branch. 23.03.1983
Listed with Dhaka Stock Exchange Ltd. 20.12.1984
1984
Publication of Prospectus. 30.12.1984

Initial Public Ofering (IPO) of shares. 14.01.1985

1985 Trading of shares in DSE. 21.04.1985
Association with Gulf Overseas Exchange Co Pte Ltd. 26.11.1985

1995 Listed with Chittagong Stock Exchange Ltd. 06.11.1995

Trading of shares in CSE. 06.11.1995

08.07.2007
Registration as DSE Stock Broker. 24.10.2007

Registration as DSE Stock Dealer. 13.03.2008

2009 Inauguration of NBL Money Transfer Sdn Bhd, Malaysi. 04.10.2009

Primary Dealer for trading of Government Securities. 01.01.2010

2010 Incorporation of NBL Securities Limited. 01.02.2010
Incorporation of NBL Capital & Equity Management Limited. 01.02.2010

2011 Inauguration of NBL Money Transfer (Maldives) Pvt. Ltd. 23.12.2011

Inauguration of NBL Money Transfer Payment Foundation S.A., Greece. 15.06.2012

2014 Inauguration of NBL Money Transfer INC., USA. 04.10.2009
02.07.2014

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2.5. Status of the Bank
National Bank Ltd (NBL / the Bank) is incorporated in Bangladesh as a public limited company
on 15 March 1983 under the Companies Act 1913. It obtained license from Bangladesh Bank to
carry out banking business on 22 March 1983. The Bank has been engaged in banking activities
through its 213 branches including sixteen (16) SME/Agri-branches throughout the country. The
Bank is has opened 10 banking booth during the period for extending banking service at root
level. The Bank is listed with both Dhaka Stock Exchange Ltd and Chittagong Stock Exchange
Ltd

2.6. Principal activities

The principal activities of NBL are to provide a comprehensive range of financial services,
personal and commercial banking, trade service, cash management, treasury, security and
custodian services.

2.7. Mission
Efforts for expansion of NBL activities by adding new dimensions to their banking services are
being continued unabated. Alongside, they are also putting highest priority in ensuring
transparency, accountability, and improved clientele service as well as to their commitment to
serve the society, through which they want to get closer and closer to the people of all strata.
Winning an everlasting place in the hearts of the people as a caring companion in uplifting the
national economic standard through continuous upgradation and diversification of NBL clientele
services in line with national and international requirements is the desired goal they want to
reach.

2.8. Vision
Ensuring highest standard of clientele services through best application of latest information
technology, making due contribution to the national economy and establishing themselves firmly
at home and abroad as a front ranking bank.

2.9. Motto of the Bank

A Bank Performance with potential

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2.10. Objectives of the Bank
The aims of National Bank are stated below:

 Providing swift and enhanced clientele services via application of modern IT.
 Enhanced bank-clientele affiliation.
 Guaranteeing utmost possible dividend to the esteemed stockholders by making greatest
usage of their equity.
 Enforcing the policy of fostering stable development of the bank in all divisions.
 Consolidating the position in the competitive market by announcing innovative services.
 Guaranteeing uppermost professional brilliance for the personnel via heightening of their
productivity, discipline and technical knowledge.
 Intensifying the bank’s possibilities of investment by participating in big loan-financing.
 Increase in finances to small/medium enterprises.
 Preserving the reputation of the bank locally and internationally by pushing dynamic and
time-saving banking events.
 The Bank Asset Liability Committee (ALCO) is to monitor and avert significant
volatility in Net Interest Income (NII), return on assets, investment value and exchange
earnings
 The Company is to operate money remittance and money exchange businesses

2.11. Core Values

NBL’s Core Values consist of 6 key elements. These values bind our people together with an
emphasis that our people are essential to everything being in the Bank.

I. Performance Driven
In NBL, customers and employees are judged in terms of their performance.

II. Open Communication

NBL builds customer relationships based on integrity and respect.
NBL offers a full line of products and excellent service.
NBL is committed to the prosperity of the customers and shareholders.

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III. Integrity
NBL protects and safeguards all customer information.
NBL treats everyone in an equitable and consistent manner.
NBL creates an environment which earns and customer trust.

IV. Continuous Self Improvement

Continuous learning self-challenge and strive make ways for self-improvement of
workforce at NBL.

V. Quality
NBL offers hassle free better service timely. NBL builds-up quality assets in the
portfolio.

VI. Teamwork
Interaction, open communication and maintaining a positive attitude reflect NBL’s
commitment to a supportive environment based on teamwork.

2.12. General Banking of NBL

Banking in general have definite aims. Uninterruptedly, they endeavor to satisfy their aims. Each
area of the division is interconnected with another. Thereby, there is no analytical pressure other
than that section which has something inaccurately placed and must be taken care of by the
respective section. Moreover, all sectors are ready to assist each other to implement their
exercises.
General Banking involves of miscellaneous sections in the branch. They are categorized as:
Client Service:
 A/C Opening/Closing
 A/C Department
 Cash Department
 Remittance
 Department of Deposits
 Locker Service

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2.13. Products and Account Services

2.13.1. Deposit Products

There are several sorts of items offered for the deposits:
Deposit Items:
 Savings Deposit
 Current Deposit:
 Term Deposit
 Scheme Deposit
 Other Demand Deposit
 Foreign Currency Deposit

2.13.2. Current deposit

This bank provides its clientele bases current deposit to ordinary business interchanges with no
containment.
Types:
1. Current Deposit A/C (Personal)
2. Current Deposit A/C (Sole Trader/Ownership)
3. Current Deposit A/C (Limited Liability Company)
4. Current Deposit A/C (Association /Society/Trust Fund)
5. NBL Amar Account

2.13.3. Term Deposit

Term Deposit is categorized along Six different types:
1. Fixed Deposit
2. Double Benefit Scheme (DBS)
3. Double Benefit Account (DBA)
4. Century Deposit Scheme (CDS)
5. Sonar Bangla Amanot (SBA)
6. Fixed Deposit Receipt (FDR)

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2.13.4. Scheme Deposit
Scheme Deposit is categorized along Ten different types:
1. NBL Monthly Deposit (NMS)
2. Apon Thikana Shanchoy Prakalpa (ATSP)
3. Luxury Savings Deposit Scheme (LSDS)
4. Millionaire Deposit Scheme (MDS)
5. Shwapno
6. NBL Monthly Savings Scheme (NMS)
7. Monthly Earning Scheme (MES)
8. Shadhinota: Bi-Monthly Income Scheme
9. Higher Education Deposit Scheme (HED)
10. Preferred Service Account (PSA)

2.13.5. Other Demand Deposit

Other Demand Deposit is categorized along two different types:
1. Savings Bank Deposit (SBD)
2. Special Notice Deposit (SND)

2.13.6. Foreign Currency Deposit

Foreign Currency Deposit are categorized along Two different types:
1. Resident Foreign Currency (RFC) Deposit
2. Non-Resident Foreign Currency (NFC) Deposit

Resident Foreign Currency (RFC) Deposit

National Bank limited the facility open foreign currency a/c via its Authorized Dealer Divisions.
Citizens of the country living abroad or Foreigners living in Bangladesh and overseas firms in
Bangladesh or overseas or their ignored councils.

Non-Resident Foreign Currency (NFC) Deposit

All noncitizens as well as people of Bangladesh containing those who have more than one
nationality, usually residing overseas may bear an NFCD A/C.

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2.13.7. Credit Items
Credit items are characterized as:
1. Lease Financing
2. House Building Finance
3. Small Medium Enterprise (SME) Finance
4. Retail Credit
5. Trade Finance
6. Agriculture finance
7. Working Capital Finance
8. Work Order Finance
9. Project Finance
10. Loan Syndication
11. Overdraft

2.13.8. Account Services

1. Savings Bank Account
2. Special Notice Deposit (SND) Account
3. Current Deposit (CD) Account
4. Foreign Currency Deposit
5. Resident Foreign Currency Deposit (RFCD)
6. Non-Resident Foreign Currency Deposit (NFCD)
7. Internet Banking

2.13.9. Locker Service

Safe management is not available in Dilkusha division of National Bank (NBL). Nevertheless,
other divisions of NBL are providing offices locker-support considering protection of the chief
assets of clienteles. The individual/company that has any past records in database should
communicate to this management. They store their important resources in banker’s safe.
Clienteles have the right to check with a key of their own safe provided by the bank. NBL
maintains the additional categories of lockers:
 Large locker.
 Average locker.
 Minor locker.
For this, clienteles must give yearly fee of BDT 2500, 2000 & 1500 for respectively.

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2.13.10. Cards of NBL
Debit Card
National Bank Limited introduced EMV Chip Visa Debit Card in 2016 to provide 24/7 Banking
services to its nationwide large customer base provided by ATM facilities with selective
branches emphasizing customers’ demand and business importance.

Credit Card
National Bank Limited introduced Credit Card and Acquiring card transactions first ever in
Bangladesh in 1997 among the local banks as a principal member of MasterCard International.
Thereafter in 2003 National Bank Limited obtained principal membership of Visa Worldwide
and introduced Visa Credit Card in the country with Acquiring of Visa card transaction.

Credit Card Products

MasterCard VISA
Platinum Dual Platinum Dual
Gold Dual Gold Dual

Classic Dual Classic Dual

2.14. Corporate Strategies of NBL

Customer relationships are key to strategy and important for all businesses of NBL. The
significant differences across the divisions/businesses means financial and non-financial strategic
indicators for the development of customer relationships are tracked at a divisional level and
commentary is included in the specific divisional commentaries.
NBL corporate strategy supports the Bank’s vision of being making due contribution to the
national economy and establishing own selves firmly at home and abroad as front ranking bank
through providing best financial services. The strategy is focused on being a more conservative,
‘through the cycle’ relationship based business. NBL is a well-diversified financial services
company and have largest branch network and to provide Banking services among the corporate,
retail & SME sectors. We have leading positions in many of the markets in which NBL
participate specially SME and Agro Sector, a market leading distribution capability, well
recognized brands and a large customer base are the main drivers. The scale of the organization

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provides us with the opportunity to further invest in products and services, systems and training
that combined will offer unparalleled choice and service to NBL customers. NBL corporate
strategy is focused on developing strong customer franchises that are based on deep customer
relationships.
The entire Bank dose business through there some strategies. Most of the time profit depends on
their professional and market oriented strategy. In this context National Bank has some strategies
are below:

Strategic Focus

Business Focus

NBL Aim

Strategic Priorities

2.15. Green Banking

NBl is aware that global warming is an issue that calls for a concerted global response. The rapid
change in climate will be too great to allow many eco-systems to suitably adapt, since the change
have direct impact on biodiversity, agriculture, forestry, dry land, water resources and human
health. Due to unusual weather pattern, rising greenhouse gas, declining air quality etc. society
demands that business also take responsibility in safeguarding the planet. Green finance as a part
of Green Banking makes great contribution to the transition to resource-efficient and low carbon
industries i.e. green industry and green economy in general. Green banking is a component of
the global initiative by a group of stakeholders to save environment. The state of environment in
Bangladesh is rapidly deteriorating. The key areas of environmental degradation cover air
pollution, water pollution and scarcity, encroachment of rivers, improper disposal of industrial
medical and house-hold waste, deforestation, loss of open space and loss of biodiversity.
Bangladesh is one of the most vulnerable countries to climate change. In line with global
development and response to the environmental degradation, financial sector in Bangladesh
should play important roles as one of the key stake holders.

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2.16. Offshore Banking Unit
Offshore Banking is a unique solution for banks across the globe to carry out international banking
business involving non-resident foreign currency denominated assets and liabilities taking the
advantages of low or nonexistent taxes/levies and higher return on investment. In 2008 NBL opened
its Offshore Banking Unit (OBU) at Mohakhali Branch, Dhaka and Dilkusha Branch started Offshore
Banking Unit (OBU) November 02, 2016.This venture added a new dimension in its innovative
and customer friendly business activities to the foreign investors and local entrepreneurs invested
in 100 percent export based industries.

2.17. Shareholders’ Equity

In accordance with the prudent capital structure plan, the Bank has a consistent dividend policy.
In this direction NBL declared high stock dividend as and when possible to strengthen the capital
base. The Bank was able to build up shareholders’ funds of BDT 49,037.56 million as at 31
December 2019, which is considered to be the highest among local private Banks.

2.18. Assets
With the expansion of business, asset profile of the Bank has also increased. Total assets of
the Bank grew up by 13.84% to BDT 463,574.78 million as at December 31, 2019 as against BDT
407,227.40 million of December 31, 2018. The significant increase in assets was mainly
achieved due to rise in loans and advances, investments, cash and balances with other banks and
financial institutions.

2.19. Awards & Recognitions

NBL has been rewarded on several occasions for its transparency and accountability in providing
banking services. In recognition of framework of financial Information, Core Risk Management,
Annual Report Review, Corporate Governance, Human Resource Management and Corporate
Social Responsibility, NBL won the Best Corporate Award from the Institute of Cost &
Management Accountants of Bangladesh (ICMAB) and Certificate of Merit from The Institute of
Chartered Accountants of Bangladesh (ICAB) for best published accounts and reports in
different years. All these testify that we always care about disclosing all relevant information to
investors and shareholders with clarity for making prudent decisions.

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 2.20. Management Structure of NBL

During 2001, National Bank Limited made excellent progress in all business sectors for instance,
stakes, credit, support administration, venture, remote settlement, Visa and international trade
related business. The firm has extended authoritative capacities as holding previously and
parallel by expanding its venture exercises. The administration systems are as per the following:

Figure: 2.1. Management Structure of NBL

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 2.21. Organizational Structure of NBL Branch

Head of Branch (Manager)

Vice President (VP)

Senior Assistant Vice President (SAVP)

Assistant Vice President (AVP)

Senior Principal Officer (SPO)

Principal Officer (PO)

Senior Executive Officer (SEO)

Executive Officer (EO)

First Executive Officer (FEO)

Junior Officer

Computer Operator

Peon

Security Guard

Tea Boy

Cleaner

Cook

Figure: 2.2. Organizational Structure of NBL Branch

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 2.22. Internship experience & learning
All through my internship period, I got the opportunity to learn so many things and experienced
this large organization. The things that I experienced and learned from my internship at National
Bank Limited are presented below:

2.22.1. Personal Skills & Development

I got the opportunity to implement my own skills such as analytical ability, patience, punctuality,
teamwork ability, leadership, hard work, dedication and so on at National Bank Limited while I
work on any tasks. As a consequence, I was able to identify my lacking and work on it to give a
better shape of myself.

2.22.2. Cooperation
In my internship period at National Bank Limited, I worked for the Branch Financial
Performance where its main objective is to cooperate the branches and associated departments
for any issues. I experienced how cooperation played an important role to solve and accelerate
any operation. I learned from my internship how to cooperate with others for any particular
issues to accomplish something.

2.22.3. Dealing with Customers

During my internship period, I was involved in the account opened service, Account, Deposit,
Clearing, Loan & Advanced, Foreign Exchange, And Cash Department. I was also involved in
the Real Time Gross Settlement (RTGS) and Bangladesh Automated Clearing House (BACH)
project, where I dealt with so many customers. It was very challenging for me at the beginning,
but later I found it really interesting, and successfully, I have done the project.

2.22.4. Communication Skills

Throughout my internship period, I communicated with so many stakeholders of National Bank
Limited. That really helps me to improve my communication skills. And I believe this thing will
be a favorable me in further.

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 Chapter - 3
Review of related literature

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3.1. Definition Financial Analysis
Financial analysis is structural and logical way to present overall financial performance of a
financial institution. It’s also help to evaluate and decision making for business operation. In
financial analysis process ratio analysis is the most dominant and logical structure to help
business related stakeholder. Under the financial ratio analysis process there are few categories
to identical area of financial institution. So business stakeholders try to concentrate to get overall
business overview from profitability, liquidity, assets management and solvency ratio analysis.
These ratios not only help to decision making process also emphasized on risk avoiding and
profit raising related factors. To calculate this ratio need to take quantitative data from bank
trading activity and other sources.

3.2. Review of Related Literature

There are number of indicators for evaluating financial performance of banks on the basis of the
financial measures. Usually the financial performance of the institutions has been measured by
using a combination ratio analysis, benchmarking, and measure performance against budget or a
mix of these methods (Avkiran 1995).

The easiest way to evaluate the performance of a firm is to compare its present ratio with the past
ratio. It gives an indicator of the direction of change and reflects whether the firm’s financial
performance has improved, deteriorated or remained constant over time.(Pandey, 2004)

Deposits are key factor of banks that affects the return of banks. On the one hand deposits are the
chief source of funds by which bank are able to operate their business, enable to lend more and
get profit and on the other hand banks have to pay interest on deposits. Advances and investment
are other major source for earning revenues.

The operating efficiency has an effect on the size of the bank. According to the Pilloff and
Rahodes (2002) there exist a positive relation between profitability and bank size.

According to the sufian (2009), Molyneux and Seth (1998) Ramlall (2009) found an affirmative
relation of bank size and examine small banks are less profitable than the larger bank. On the
other hand Koasmidou (2008), Spathis and Doumpous (2002) found empirically a negative

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relation between bank size and profitability. Raza, Farhan and Akram (2011) classified the
investment banks by using return on assets, return on owner’s equity and total assets.

The empirical study of Tarawneh (2006) showed that a company having better efficiency does
not mean it will show better effectiveness. Elizabeth and Elliot (2004) explained that all financial
measure such as ROA, Capital Adequacy interest margin is calculated positively with score of
customer service quality. Many researchers have been focusing on liability and assets
management in banking sector Ruth 2001, Caddy 2000, and Richard & James 2003. Tektas and
Gunay (2005) argued that maximizing bank profit, lowering and controlling various risks are
obligatory for assets and liability management.

Munawar Iqbal (2001 and 2004) compares Islamic and conventional baking in the Nineties and
included 12 banks into his study sample. He calculated the development of Islamic banking
industry during 1990-98. and found that capital assets ratio, liquidity ratio, deployment ratio,
cost/income ratio, profitability ratio, return on asset and return on equity ratio and concluded that
both return on assets (ROA) and return on equity (ROE) for the Islamic banks are substantially
higher than the conventional banks

Van Horne & Wachowicz Jr(2005)stated that to evaluate a firm’s financial condition and
performance the financial analyst need to perform “checkups” on various aspects of a firm’s
financial health. A tool frequently used these checkup is a financial ratio.

One can employ financial ratios to determine a firm’s liquidity, profitability, solvency, and
adequacy used financial ratios to show the financial position and performance analysis of
Bank.(Qamruzzaman, 2014)

Chowdhury & Ahmed (2009) observed that all the selected private commercial banks are able to
achieve a stable growth of branches, employee, deposit, loans and advances, net income, earning
per share during the period of 2002-2006. They indicate that the prospect of private commercial
banks in Bangladesh is very bright.

Evaluation of bank’s performance from time to time helps them to know how well they
are actually satisfying their customers and becoming successful. The performance
evaluation of banks has thus taken high priority in the context of Bangladesh (Siddique&
Islam, 2001).

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If efficiency is gained in the banking sector, it will make the country domestically and
internationally more competitive and capable of generating more income and employment
opportunities. An appropriate evaluation of performance of selected banks requires a range
of financial, operational and economic indicators to be applied (Chowdhury, 2002).

3.3. Methodology of the study

This study is based on systematic procedure from the collection of raw data to the preparation of
final report. For the execution of study, the sources are identified and collected with maintaining
the rules and regulations of banking act. Then, the work of classification, analysis, systematic
organization has been made. The overall process of methodology has been given as below:

Selection of the data: The information was collected properly to organize this report are both
from primary and secondary sources.

3.3.1. Primary Sources of Data

 Oral conversation with employees and officers of the banks.
 Practical and manual experience gained by working different desks during internship
period.
 Oral conversation with the new and prospective clients.
 Interview.

3.3.2. Secondary Sources of Data

 Five years Annual Reports of National Bank Limited.
 Official Records of National Bank Limited.
 Official website of National Bank Limited.
 Official website of Central Bank of Bangladesh.
 Collections Prior research reports.
 Different text book and journals.
 Various reports and articles related to study.
 Some of my course elements as related to this report.
 Several financial books on financial performance analysis.
Data sources identification: Both primary and secondary data sources were identified that are
needed to carry on the study and complete this report.

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 Chapter - 4
Analysis and interpretation of the data

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4.0. Analysis and Interpretation of the Data
To present the financial performance of a financial institution financial ratio is the most
important and logical way to take decision. This ratio not only used for the decision making
process but also evaluating the present situation of institution. It also helps to take risk avoiding
decision and profit raising factor.
In this report I analyzed the Financial Performance of National Bank Limited in terms of:-

Leverage Position
 Debt to Equity Ratio (Leverage ratio)

Liquidity Ratio
 Current Ratio
 Net assets value per share Ratio
 Percentage of Non-performing loan
 Advance Deposit Ratio (ADR)
 Yield on Loans and Advances Ratio

Profitability Ratio
 Price Earnings Ratio
 Return on Assets (ROA)
 Return on Equity (ROE)
 Earnings Per Share (EPS)
 Net Profit Margin Ratio

Activity (Efficiency) Ratio

 Cost Income Ratio

Adequacy Ratio
 Capital Adequacy Ratio (CAR)

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4.1. Leverage Position
The leverage ratio of banks indicates the financial position of the bank in terms of its debt and its
capital or assets.

4.1.1. Debt to Equity Ratio (Leverage ratio)

Debt to equity ratio shows that the percentage of the company financing that comes from the
investors and creditors. Higher debt to equity ratio indicates that the company has more
bank loan against the shareholders.
Formula: Debt to equity ratio = Total debt/ Total equity

Years 2015 2016 2017 2018 2019

Debt equity ratio (times) 7.39 7.44 7.69 8.08 8.45

Table-4.1: Debt equity ratio (times) (2015-2019)

Figure-4.1: Debt equity ratio (times) (2015-2019)

Interpretation: The Bar Chart is representing that the Debt equity ratio of National Bank
Limited. According to the result it shows there is a fluctuations debt to equity ratio from 2015 to
2019. The debt to equity ratio has been increased from 7.39 in the year 2015 to 8.45 in the year
2019 over the five years period. That means their debt is increasing and their equity capitals are
decreasing. It is increasing from the year 2015 to 2019. Debt equity ratio above 5% is deemed to
be an indicator of strong financial footing for a bank.

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4.2. Liquidity Ratio
An adequate liquidity position refers to a situation, where institution can obtain sufficient funds,
either by increasing liabilities or by converting its assets quickly at a reasonable cost. It is,
therefore, generally assessed in terms of overall assets and liability management, as mismatching
gives rise to liquidity risk. An institution is said to have liquidity if it can easily meet its needs
for cash either because it has cash on hand or can otherwise raise or borrow cash.

4.2.1. Current Ratio

The current ratio, also known as the working capital ratio, measures the capability of a business
to meet its short-term obligations that are due within a year. The ratio considers the weight of
total current assets versus total current liabilities. It indicates the financial health of a company
and how it can maximize the liquidity of its current assets to settle debt and payables. The
Current Ratio formula can be used to easily measure a company’s liquidity.
Formula: Current Ratio = Current Assets / Current Liabilities

Years 2015 2016 2017 2018 2019

Current Ratio 2.10% 1.87% 1.94% 1.93% 1.75%

Table-4.2: Current Ratio (2015-2019)

Figure - 4.2: Current Ratio (2015-2019)

Interpretation: The Bar Chart is representing that the current ratio of National Bank Limited of
the year 2019 was slightly lower than the previous four years which was 1.75%. In 2016, the
current ratio of NBL fell down from the year 2015 respectively 2.10% to 1.87%, but somehow it
manages to increase in the year 2017 which was 1.94%. However, the changes of this current
ratio were not very significant. So, it can be said, National Bank Limited is stable to utilize its
current assets in terms of managing its current liabilities.

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4.2.2. Net assets value per share (NAVPS)
This ratio indicates that the portion of a company's profit against each outstanding share of
common stock. The Net assets value per share is one of the important fundamentals used in
valuing an institution because it breaks down its profits on a per share basis. A bank with, high
earnings per share ratio is capable of producing significant dividend for shareholders.
Net asset value per share (NAVPS) = net asset value / number of shares outstanding.

Years 2015 2016 2017 2018 2019

Net assets value per share
19.54 18.33 17.03 16.88 16.79
(In BDT)

Table-4.3: Net assets value per share (2015 - 2019)

Figure - 4.3. Net assets value per share (2015-2019)

Interpretation: The Net assets values per share of National Bank Limited have quite dropped
from BDT 19.54 to 16.79 in respectively 2015 to 2019. As their earning dropped in 2019,
therefore, it has decreased to BDT 16.79 per share from BDT 16.88 per share in 2018. Which
was the better from 2019 Net assets values per share but 2015 was the highest position in five
years of time period.

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4.2.3. Percentage of Non-performing loan
Percentage of Non-Performing Loan (NPL) to total loans and advanced. Banks rely on borrowers
to manage their scheduled loan repayments as a key source of revenue. Percentage of the classified
loans and advanced is the measure of the amount of the non-performing loan in a bank's loan
portfolio to the total amount of outstanding loans that the bank holds. This ratio is the single most
significant ratio (lower the better) for a bank to measure its portfolio health or asset quality. It
measures bank’s effectiveness in receiving repayments of loans.
Percentage of Non-performing loan = Non-performing loan / total amount of outstanding
loans

Years 2015 2016 2017 2018 2019

Percentage Non Performing loan
7.01% 10.35% 10.64% 9.50% 10.98%
and Advanced (In %)

Table-4.4: Percentage Non Performing loan and Advanced (2015-201 9)

Non Performing loan (%)

10.64% 10.98%
10.35%
9.50%

7.01%

Figure - 4.4: Percentage of non-performing loan and Advanced (2015-2019)

Interpretation: The percentage of classified total loans and advanced of the NBL does not
represent a healthy balance in managing repayments of loans. The non-performing loans rose to
10.98% in 2019. Slower business condition throughout the year put downward pressure on
recovery of regular and classified loans. Classified loans of the Bank as a percentage of total loan
portfolios increased to 10.98% at the end of 2019 compared to 9.50% at the end of 2018.
Although it decreased from 10.64% to 9.50% in 2017 to 2018, the graph shows a seemingly
upward trend. It implies that the bank is engaged in high risk lending policies which may harm
for the bank’s efficiency in loan management.

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4.2.4. Advance Deposit Ratio (ADR)
The Advance to Deposit Ratio (ADR) is used to assess a bank's liquidity by comparing a bank's
total loans to its total deposits for the same period. The ADR is expressed as a percentage. If the
ratio is too high, it means that the bank may not have enough liquidity to cover any unforeseen
fund requirements. Conversely, if the ratio is too low, the bank may not be earning as much as it
could be. This ratio measures a bank’s liquidity condition. Total deposits include savings
deposits, demand deposits, term deposits and deposits of other banks. An ideal loan to deposit
ratio is between 80% to 90%.
Advance to deposit = total loans / total deposit

Years 2015 2016 2017 2018 2019

Advance Deposit Ratio 83.82% 84.66% 89.03% 97.49% 95.27%

Table-4.5: Advance Deposit Ratio (2015-2019)

Figure-4.5: Advance Deposit Ratio (2015-2019)

Interpretation: The bank continued to grow and diversify its portfolio till 2018. After in 2019
it’s fell down to 95.27% from 97.49%. The National Bank Limited have to a diversified client
base and portfolio distributed across the sectors to reduce client specific and industry specific
concentration and to reduce overall portfolio risk.

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4.2.5. Yield on Loans and Advances Ratio
The yield on loans and advances ratio gives the average lending rate of the portfolio. High yield
on loans advances is an indication that the entity is into financing riskier assets and may see asset
quality issues. It also indicates whether the pricing of the loan is in line with underlying risk. The
loans to total assets ratio measures the total loans outstanding as a percentage of total assets. The
higher this ratio indicates a bank is loaned up and its liquidity is low. The higher the ratio, the
more risky a bank may be to higher defaults.
Formula for yield on loans and advances = Interest income/Average advances.

Years 2015 2016 2017 2018 2019

Yield on Loans and Advances 11.17% 10.00% 10.80% 11.39% 10.48%

Table - 4.6: Yield on Loans and Advances (2015-2019)

Figure - 4.6: Yield on Loans and Advances (2015-2019)

Interpretation: The ratio shows a stable position of the bank in giving out loans although it’s
fluctuated in a range. It had decreased in 2016 and started to increase from 10.80% in 2017 to
11.39% in 2018. Then again it’s fall down to10.48% in 2019. This decrease in the ratio indicates
a not good sign for the bank although the higher the ratio, the more risky a bank may be to higher
defaults. But because rises ratio as it is earning more profits by increasing lending.

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4.3. Profitability Ratio
Profitability ratios are a class of financial metrics that are used to assess a business's ability to
generate earnings relative to its revenue, operating costs, balance sheet assets, or shareholders'
equity over time, using data from a specific point in time.

4.3.1. Price Earnings Ratio

The price-earnings ratio (P/E ratio) relates a company's share price to its earnings per share. A
high P/E ratio could mean that a company's stock is over-valued, or else that investors are
expecting high growth rates in the future. A low P/E can indicate either that a company may
currently be undervalued or that the company is doing exceptionally well relative to its past
trends. The price to earnings ratio is the ration of share price comparative to the twelve-monthly
net income netted by the firm from each share.
Formula: P/E Ratio = Market Value per Share/ Earnings per Share.

Years 2015 2016 2017 2018 2019

Price-earnings ratio (times) 4.82 3.62 7.34 6.78 5.66

Table-4.7: Price-earnings ratio (2015-2019)

Price earnings ratio (times)

Figure-4.7: Price-earnings ratio (2015-2019)

Interpretation: The price earnings of National Bank Limited have quite fluctuated over the
years. As their earning dropped in 2019, it has decreased to 5.66 price earnings ratio from 6.78
price earnings ratio which was the second highest position and 7.34 in 2017which was highest
price earnings in five years of time period.

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4.3.2. Return on Assets (ROA)
ROA is a measures the profitability of a business in relation to its total assets. This ratio indicates
how well a company is performing by comparing the profit (net income) it’s generating to the
capital it’s invested in assets. The higher the return, the more productive and efficient
management is in utilizing economic resources. A higher ROA is better, but there is no metric
for a good or bad ROA. An ROA depends on the company, the industry and the economic
environment. ROA is based on the book value of assets, which can be starkly different from the
market value of assets.
Return on Asset = Net Income after Tax / Total Asset × 100

Years 2015 2016 2017 2018 2019

Return on Assets (ROA) 1.43% 1.90% 1.43% 1.08% 0.96%

Table-4.8: Return on Assets (ROA) (2015-2019)

Figure-4.8: Return on Assets (ROA) (2015-2019)

Interpretation: Return on Assets (ROA) is the most used profitability ratio. As NBL was a part
of banking industry and its most of the assets come from the debt which was the reasons for its
low net profit as well as poor ROA. As a result the NBL had the lowest ROA in the year of 2019
which is 0.96%. In the year 2019 the net profit of the bank has not increased that much. And
there is in this scenario 1.90% in 2016 which is the highest position in five years of time period.

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4.3.3. Return on Equity (ROE)
Return on equity (ROE) is the amount of net profit after tax returned as a percentage of
shareholder’s equity. It measures bank’s profitability by revealing how much profit the bank
generates with the money shareholders have invested. ROEs of 15% – 20% are generally
considered good.
Return on Equity = Net Income After Tax / Total Equity Capital × 100

Years 2015 2016 2017 2018 2019

Return on Equity 12.74% 15.96% 12.27% 9.63% 8.87%

Table - 4.9: Return on Equity (2015-2019)

Figure - 4.9: Return on Equity (2015-2019)

Interpretation: Return on equity of National Bank Limited in 2016 was 15.96% but its
drastically fell to 8.87% in 2019 which is the lowest in the five year scenario and it’s a cause for
concern. The ratio can be identified to be the highest in 2016. The reason behind this reduction is
the decreased net profit in 2019. Whereas ROEs of 15% – 20% are generally considered good.

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4.3.4. Earnings Per Share (EPS)
This ratio indicates that the portion of a company's profit against each outstanding share of
common stock. The EPS is one of the important fundamentals used in valuing an institution
because it breaks down its profits on a per share basis. A bank with high earnings per share ratio
is capable of producing significant dividend for shareholders.

Earnings per share = Net profit after tax / total number of common shares outstanding

Years 2015 2016 2017 2018 2019

Earnings Per Share (Re-stated)
1.95 2.35 1.77 1.4 1.43
(in million)

Table - 4.10: Earnings Per Share (Re-stated) (2015 - 2019)

Figure-4.10: Earnings per Share (Re-stated) (2015-2019)

Interpretation: The earnings per share of National Bank Limited have quite fluctuated over the
years. As their earnings gradually dropped from 2016 to 2018, respectively BDT 2.35 to BDT
1.40. Although it has decreased but then it rises to BDT 1.43 per share in 2019. There is BDT
2.35 in 2016 which was the highest earning per share in five years of time period.

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4.3.5. Net Profit Margin Ratio
This ratio indicates ability to manage expenditures against generating the revenue and generating
profit against providing loan and advances. High ratio means banks are able to make profit with
proper controlling over its expenses.
Net Profit Margin = Net profit after tax/ Total loans and advances × 100

Years 2015 2016 2017 2018 2019

Net Profit Margin ratio 2.07 2.65 1.88 1.30 1.15

Table - 4.11: Net Profit Margin ratio (2015-2019)

Figure - 4.11: Net Profit Margin ratio (2015-2019)

Interpretation: The net profit margins of the bank sharply fall down over the years. The highest
margin was in 2016. After that, it started decreasing from 2.65% to 1.15% respectively 2016 to
2019, as in this year the net profit after tax has decreased significantly.

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4.4. Activity (Efficiency) Ratio
Activity ratios, also known as Efficiency ratios, are used by analysts to measure the performance
of a company's short-term or current performance. All these ratios use numbers in a company's
current assets or current liabilities, quantifying the operations of the business.

4.4.1. Cost Income Ratio

The “Cost Income Ratio (CIR)” or “cost-to-income ratio” shows the relation between income
and the cost of acquiring that income. The CIR is an important measure of bank performance. As
a rule, the lower a bank’s cost-to-income ratio, the more efficiently a bank operates.
“Cost Income Ratio = Total Operating Expenses / Total Operating Income × 100”.

Years 2015 2016 2017 2018 2019

Cost income Ratio (In %) 36.83% 34.11% 36.02% 41.34% 43.89%

Table-4.12: Cost Income Ratio (2015-2019)

income

Figure - 4.12: Cost Income Ratio (2015-2019)

Interpretation: I know that this ratio measures the operating efficiency of the bank by
measuring the portion if the total operating costs relative to the total operating income of the
bank and the higher the ratio, the lower the operating efficiency. In 2015 the operating cost of
National Bank Limited, is high but after that it sharply decreases in 2016 but again sharply
increases 34.11% to 43.89% respectively 2016 to 2019. So it can be said that the operating
efficiency of the National Bank Limited is in not good position that is they are not able to
minimize their operating cost.

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4.5. Adequacy Ratio
4.5.1 Capital Adequacy Ratio
Capital Adequacy is an indication of the inner strength of a bank which makes it to stand in a
good position during the times of crisis. Capital Adequacy may have an effect on the overall
performance of a bank, such as opening of new branches, fresh lending in high risk but profitable
areas, manpower recruitment and diversification of business through or through specially
designated branches. Realizing the importance of capital adequacy, the Bangladesh Bank issued
directive whereby each banks in Bangladesh was required to meet the capital adequacy standard
of 8%.
Capital adequacy ratio = capital base tier I + tier ii / risk−weighted assets

Years 2015 2016 2017 2018 2019

Total Capital Adequacy Ratio 12.05% 13.19% 13.79% 14.04% 13.38%

Table - 4.13: Total Capital Adequacy Ratio (2015-2019)

Figure - 4.13: Total Capital Adequacy Ratio (2015-2019)

Interpretation: National Bank Limited has been able to maintain a healthy Capital Adequacy
Ratio (CAR) ratio over the years. However, it has started to gradually rising from 12.05 to 14.04
in 2015 to 2018 then its declined from 2018 to 2019 respectively 14.04 to 13.38 which does not
show a very healthy sign. Still, it has been able to manage the ratio above the requirements
specified by Bangladesh Bank which is capital adequacy standard of 8%.

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 Chapter - 5
Findings of study
Contribution & Recommendation
Limitation of the study
Conclusion
References
Appendix

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 5.1. Findings of study
After analysing the financial performance of National Bank Limited. I have got some findings.
These findings are completely from my personal point of view. Those are given below:

 The debt to equity ratio has been increased from 7.39 in the year 2015 to 8.45 in the year
2019. It means their debt is increasing and their equity capitals are decreasing. Its mean
higher debt to equity ratio tends to indicate a company or stock with higher risk to
shareholders. Debt equity ratio above 5% is deemed to be an indicator of strong financial
footing for a bank.
 The current ratio of National Bank Limited of the year 2019 was slightly lower than the
previous four years which was 1.75%. Although its decreases but it can be said, National
Bank Limited is stable to utilize its current assets in terms of managing its current
liabilities. A good current ratio of above 1 indicates that the business has enough money
in the short term to pay its obligations.
 Classified loans of the Bank as a percentage of total non-performing loan portfolios
increased to 10.98% at the end of 2019. This is not a good sign for the bank. It implies
that the bank is engaged in high risk lending policies which may harm the bank’s
efficiency in loan management.
 Advance deposit ratio of bank continued to grow and diversify its portfolio till 2018. In
2019 it’s fallen down from 97.49% to 95.27%. Whereas an ideal loan to deposit ratio is
between 80% to 90%.
 The loans and advances ratio range is fell down from 11.39% to 10.48% in 2018 to 2019.
The higher the ratio, the more risky a bank may be to higher defaults.
 The price earnings ratio of National Bank Limited. As their earning dropped in 2019,
therefore, it has decreased to 5.66 price earnings ratio from 6.78 price earnings ratio. It’s
not a good sign. A low P/E can indicate either that a company may currently be
undervalued or that the company is doing exceptionally well relative to its past trends.
 As a result of the NBL had the lowest Return on Assets in the year of 2019 which is
0.96%. In the year 2019 the net profit of the bank has not increased that much. A higher
ROA is better, but there is no metric for a good or bad ROA. An ROA depends on the
company.

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  Return on equity of NBL in 2016 was 15.96 % but its drastically fell to 8.87% in 2019
which is the lowest in the five year scenario and it’s a cause for concern. The reason
behind this reduction is the decreased net profit in 2019. It’s not good position for the
bank. ROE of 15% – 20% are generally considered good.
 The earnings per share of NBL. As their earning gradually it rises to BDT 1.40 to BDT
1.43 per share respectively 2018 to 2019. A high ratio indicates a potentially worthwhile
investment, depending on the market price of the stock.
 The net profit margin was the lowest margin 1.15% in 2019. As in this year the net profit
after tax has decreased significantly. It’s not a good sign. A low net profit margin means
that a company uses an ineffective cost structure and/or poor pricing strategies.
 Cost income ratio sharply increases 34.11% to 43.89% respectively 2016 to 2019. So it
can be said that the operating efficiency of the NBL is a not in good position. The CIR is
an important measure of bank performance. As a rule, the lower a bank’s cost-to-income
ratio, the more efficiently a bank operates.
 Capital adequacy ratio is declined from 2018 to 2019 respectively 14.04% to 13.38%
which does not show a very healthy sign. Bangladesh Bank issued directive whereby
each banks in Bangladesh was required to meet the capital adequacy standard of 8%. And
the minimum ratio of capital to risk-weighted assets is 8% under Basel II and 10.5%
under Basel III.

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 5.2. Contribution & Recommendation

Through this study I myself gained some practical knowledge. I want to put some suggestion
here which I think if followed would definitely help National Bank Limited to Improve their
performance and there-by its contribution in the whole economy.

Suggestions are-
 To attract more clients to the NBL. should sought new marketing strategy, which will
increase the bank performance.
 Effective and efficient initiative is necessary to recover the default loans.
 They should invent other type of deposit to attract more customers which is different
from other banks.
 NBL had a fair leverage ratio where it used debt to maximize revenue rather than equity.
This may increase the risk of the bank. So, to minimize the risk. I think the NBL should
finance more equity
 The bank should encourage the large scale producers to apply for long-term industrial
loans to fast-track the economy as since the bank can afford it having large deposits.
 Operating efficiency of the National Bank Limited is not in a good position. That is they
are unable to minimize their operating cost. I think NBL should be reduced their
operating costs.
 Capital adequacy does not show a very healthy sign. Still, it has been able to manage the
ratio above the requirements specified by Bangladesh Bank which is capital adequacy
standard of 8%. So I think NBL should be maintain the capital adequacy standard.
 NBL should increase the number of ATM booths and ensure their smooth operations.
 NBL has to increase their branch office. They do not have enough branches in the
country.
 I personally visited at Laksam in Comilla District. Laksam is the most busiest business
center in Comilla but there is no any branch of National Bank Limited. I think NBL
should start a branch in there.

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 5.3. Limitation of the study

Any research work needs high degree of involvement regarding collection of information,
creation of data base, literature review and analysis of data. While doing so, many limitations
arise even though I always put my best effort to avoid them. In conducting the present study, the
following limitation has been faced.

 Time is a big constraint for my research. I had to carry out my day to day job
responsibilities. Therefore, I had less time to spend to work on the report.
 Insufficient data is the main constraint in the development of the report.

 This report did not include all the financial ratios to find out the actual financial position
of National Bank Limited.
 The performance of the bank has been compared with only last five years because of time
constraint.
 Insufficient records and publications have been another limitation in preparation of the
report.
 Non-disclosure of the bank’s policy: An organization cannot reveal all its data and
statistics to public because of its policy of secrecy. So all these secret matters have not
been possible to collect and to incorporate in the report which may consequence in a
lesser amount of acceptability.

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 5.4. Conclusion

National Bank Limited it’s a first private bank in the Bangladesh. It has been a successful
private commercial bank in the banking industry. Over the past years, NBL team has worked
relentlessly towards strengthening the Bank’s and it’s subsidiaries financial statements, and
increasing the Bank’s share of profitable business opportunities. I believe these efforts are
reflected in the core operating profit growth, the substantial increase in provisioning coverage
and the reduction in net NPAs. As Bangladesh continues its journey to become an economically
developed county in the future, NBL will work towards maximizing their share of the
opportunity. Their objective is to grow NBL core operating profit and to reduce the credit costs
to a normalized level, thereby delivering sustainable returns to NBL shareholders.

We also know COVID19 has brought a ravage in the economy; our government is trying to
salvage the overall economy with strong and prudent leadership. We all are now trying to cope
with the pandemic which has created an unprecedented scenario. Strong rapport of the public and
private will help us to get rid of the tottering economy, springing back into our desired growth
trajectory.

Nevertheless, the bank has all the capabilities to recover the damages. They need to pay attention
to their limitations and take measures to improve their current condition. National Bank Limited
has been pioneer in automation. Its strong exposure in different banking areas has also made the
bank trustworthy among their huge number of clients. Therefore, focusing on the areas that they
should improve or upgrade will eventually help them in achieving continuous growth.

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 5.5. References
Annual Reports
 Annual Report of National Bank Limited 2015
 Annual Report of National Bank Limited 2016
 Annual Report of National Bank Limited 2017
 Annual Report of National Bank Limited 2018
 Annual Report of National Bank Limited 2019

Website
 www.nblbd.com
 www.bb.org.bd

Other References
 Daily Statement of NBL
 Statement of Affairs
 Monthly Reports
 Timetables Bank Statistics
 Loans & Advances Manuals
 Guidelines for Loans & Advances
 Transaction Practical participation of NBL
 Different Types of Forms of NBL

References of Journals:

 Pandey, I. M. (2004). “Financial statement analysis (9th edition ed.). New Delhi, India:
Vikas.
 Tarawneh, M (2006) A comparison of financial performance in the banking sector: some
evidence from Omani Commercial banks. International journal of Finance and Economics,
issue 3 (2006)
 Elizabeth D., Greg Elliot (2004),” Efficiency, customer service and financial performance
among Australian financial institutions”, International Journal of Bank marketing,
Vol.22, No.5, pp. 319-342.

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  Ruth F., (2001), “Asset and liability management for banks: A lawyers perspective”
Balance Sheet, Vol. 9, No. 3, pp. 20-23.
 Arzu Tektas, and Gokhan Gunay, (2005),” Asset and liability management in financial
crisis”, The Journal of Risk Finance, Vol. 6, No.2, pp.135-149.
 Van Horne, J. C., & Wachowicz Jr., J. M. (2005). “Financial statement analysis (11th
edition ed.).
 Qamruzzaman, M. (2014). Analysis of Performance and Financial soundness of financial.
Research Journal of Finance and Accounting , 169-186.
 Chowdhury, T. A., & Ahmed, K. (2009). Performance Evaluation of Selected Commercial
Banks in Bangladesh. International Journal of Business and Management, , 86-97.
 S.H. Siddique and A.F.M.M. Islam. “Banking Sector in Bangladesh: Its Contribution and
Performance,” Journal of Business Research, Jahangirnagar University, vol. 3, pp. 16-33,
2001
 A, Chowdhury. “Politics, Society and Financial Sector Reform in Bangladesh,”
International Journal of Social Economies, vol. 4, pp. 963 – 988, 2002

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 5.6. Appendix
Five Years Financial Summary
(NBL and Its Offshore Banking Unit)
(Taka in million)
2015 2016 2017 2018 2019
Income Statement
Interest Income 19,504.69 18,947.93 22,546.17 27,911.30 34,703.59
Interest Expenses 16,571.69 14,872.88 16,107.01 19,407.09 24,247.71
Non-Interest Income 10,143.66 12,235.92 9,606.41 7,213.33 5,200.51
Non-Interest Expenses 4,816.51 5,557.84 5,779.71 6,498.37 6,871.99
Profit before Tax and Provision 8,260.14 10,753.13 10,265.87 9,219.18 8,784.40
Profit after Tax 3,854.03 5,567.87 4,696.01 4,100.31 4,164.35
Balance Sheet
Authorized Capital 17,500.00 30,000.00 30,000.00 30,000.00 30,000.00
Paid-up Capital 17,177.20 19,753.78 23,704.53 26,549.08 29,203.99
Reserve Fund & Surplus 16,380.76 16,449.09 16,666.29 18,260.27 19,833.57
Total Shareholders’ Equity 33,557.96 36,202.87 40,370.82 44,809.35 49,037.56
Deposits 222,112.91 241,329.88 272,771.32 315,206.03 366,298.51
Loans and Advances 186,179.45 209,929.07 248,467.15 314,507.26 360,769.74
Investments 59,658.52 60,665.88 60,338.45 57,869.85 62,877.82
Fixed Assets (including non banking assets) 3,084.08 3,501.52 3,217.85 2,780.98 3,009.46
Total Assets 281,569.21 305,616.76 350,760.83 407,227.40 463,574.78
Off Balance Sheet Exposure 51,470.56 46,987.50 56,641.57 52,836.83 50,404.97
Foreign Exchange Business
Import 85,598.27 69,582.90 88,477.30 90,579.63 99,501.40
Export 67,888.84 50,167.64 42,877.60 50,282.23 54,544.76
Remittance 56,321.08 45,437.58 38,262.10 40,743.36 37,953.98
Regulatory Capital Measures
Total Risk Weighted Assets 259,355.90 283,628.77 345,751.00 364,254.80 408,851.70
Core Capital (Tier I) 27,223.26 32,240.56 39,127.19 41,982.08 45,681.33
Supplementary Capital (Tier II) 4,041.07 5,181.77 8,567.57 9,162.29 9,041.90
Total Capital 31,264.33 37,422.33 47,694.76 51,144.37 54,723.24
Tier I Capital Ratio 10.50% 11.37% 11.32% 11.52% 11.17%
Tier II Capital Ratio 1.55% 1.82% 2.47% 2.52% 2.21%
Total Capital Adequacy Ratio 12.05% 13.19% 13.79% 14.04% 13.38%
Credit Quality
% of NPLs to Total Loans and Advances 7.01% 10.35% 10.64% 9.50% 10.98%
Share Information
No of Shareholders (In actual number) 91,585 85,519 89,483 84,202 78,344
No of Shares Outstanding (million) 1,717.72 1,975.38 2,370.45 2,654.91 2,920.40
Earnings Per Share (Re-stated) 1.95 2.35 1.77 1.40 1.43
Dividend Per Share
Cash - - - - 5%
Stock 15% 20% 12% 10% 5%
Market Capitalization
Market Price Per Share (Taka) 9.40 10.20 13.00 9.50 8.10
Price Earning Ratio (Times) 4.82 3.62 7.34 6.78 5.66
Net Assets Value Per Share (Taka) 19.54 18.33 17.03 16.88 16.79
Operating Performance Ratio
Advance Deposit Ratio 83.82% 84.66% 89.03% 97.49% 95.27%
Cost of Funds 6.92% 5.58% 5.64% 6.53% 7.00%
Cost of Fund with Administrative Costs 8.80% 7.78% 7.63% 8.52% 8.98%
Yield on Loans and Advances 11.17% 10.00% 10.80% 11.39% 10.48%
Return on Assets 1.43% 1.90% 1.43% 1.08% 0.96%
Return on Equity 12.74% 15.96% 12.27% 9.63% 8.87%
Debt/ Equity Ratio (Times) 7.39 7.44 7.69 8.08 8.45
Cost/Income Ratio 36.83% 34.11% 36.02% 41.34% 43.89%
Other Information
Number of Branches and SME Centres 191 191 200 203 209
Number of OBU Branches 1 2 2 2 2
Number of Employees 4,266 4,617 4,602 4,657 4,740
Number of Foreign Correspondents 493 587 567 527 503
Number of Subsidiaries 7 7 7 7 7
Number of associates-Gulf overseas 1 1 1 1 1
Number of exchange company
Wholly or partly owned 5 5 5 5 5
Under agreement 52 49 40 39 39
Ratings:
Long Term AA AA AA AA AA
Short Term ST-2 ST-2 ST-2 ST-2 ST-2

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 Balance Sheet
As at December 31, 2019
In million
Amount in BDT
Particular Notes
s 2019 2018

PROPERTY AND ASSETS

Cash 24,258,474,172 20,656,674,512
In hand (including foreign currencies) 3 4,052,430,849 3,246,695,596
Balance with Bangladesh Bank and its agent bank 4 20,206,043,323 17,409,978,916
(including foreign currencies)

Balance with other banks and financial institutions 5 4,184,674,936 4,525,414,965

In Bangladesh 3,246,661,798 3,775,745,848
Outside Bangladesh 938,013,138 749,669,117

Money at call and on short notice 6 91,300,000 91,300,000

Investments 7 62,877,817,458 57,869,853,468

Government 50,231,204,874 45,182,483,694
Others 12,646,612,584 12,687,369,774

Loans and advances 8 360,769,737,295 314,507,263,171

Loans, cash credits, overdrafts, etc. 355,486,764,281 306,861,227,874
Bills purchased and discounted 5,282,973,014 7,646,035,297

Fixed assets including premises, furniture and fixtures 9 2,709,978,117 2,445,155,936

Other assets 10 8,383,317,066 6,795,921,380
Non-banking assets 11 299,479,400 335,820,241
Total assets 463,574,778,444 407,227,403,673

LIABILITIES AND CAPITAL

Liabilities
Borrowings from other banks, financial institutions and agents 12 8,337,718,474 8,869,136,774

Deposits and other accounts 13 366,298,512,993 315,206,033,967

Current deposit and other accounts 26,805,405,622 25,004,329,794
Bills payable 3,337,258,268 3,557,774,516
Savings bank deposits 51,550,288,418 47,036,369,863
Fixed deposits 140,421,645,700 140,200,871,603
Term deposit 144,183,914,985 99,406,688,191

Subordinated bonds 14 4,000,000,000 4,000,000,000

Other liabilities 15 35,900,988,654 34,342,879,865
Total liabilities 414,537,220,121 362,418,050,606
Shareholders’ equity Total shareholders' equity

Paid-up capital 16.2 49,037,558,323 44,809,353,067

Statutory reserve 17 29,203,987,040 26,549,079,130
Other reserve 19 15,835,709,954 14,380,830,197
Retained earnings 20 965,975,208 902,123,990
3,031,886,121 2,977,319,750

Total liabilities and shareholders' equity 463,574,778,444 407,227,403,673

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 Balance Sheet
As at December 31, 2019

Amount in BDT
Particulars Notes
2019 2018

OFF-BALANCE SHEET ITEMS

Contingent liabilities 49,810,608,861 51,869,443,826
Acceptances and endorsements 14,367,515,122 18,547,717,728

Letters of guarantee 21 10,638,586,888 9,369,024,272

Irrevocable letters of credit
18,349,715,772 17,745,352,737
Bills for collection
Other contingent liabilities 6,454,791,079 6,207,349,089

- -

Other commitments 594,359,000 967,382,900

Lease rental commitments
- -
Documentary credits and short term trade-related transactions
Forward assets purchased and forward deposits placed - -

Undrawn note issuance and revolving underwriting facilities - -

Undrawn formal standby facilities, credit lines and other
- -
commitments
- -
Spot and forward foreign exchange rate contracts 594,359,000 967,382,900
Other exchange contracts
- -

Total off-balance sheet items including contingent liabilities 50,404,967,861 52,836,826,726

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 Profit and Loss Statement
For the year ended December 31, 2019

Amount in BDT
Particulars Notes
2019 2018

Interest income 22 34,703,590,148 27,911,303,982

Less: Interest paid on deposits and borrowings, etc. 23 24,247,709,885 19,407,085,970
Net interest income 10,455,880,263 8,504,218,012

Investment income 24 3,097,038,216 4,668,998,649

Commission, exchange and brokerage 25 1,425,106,973 1,379,704,687
Other operating income 26 678,364,861 1,164,626,685
5,200,510,050 7,213,330,021
Total operating income 15,656,390,313 15,717,548,033

Salaries and allowances 27 3,887,611,628 3,952,728,827

Rent, taxes, insurance, electricity, etc. 28 795,650,537 818,779,512
Legal expenses 29 24,064,367 50,207,993
Postage, stamp, telecommunication, etc. 30 78,540,082 86,440,317
Stationery, printing, advertisement, etc. 31 175,380,834 117,449,940
Managing Director’s salary and allowances 32 10,440,000 9,990,387
Directors’ fees and other benefits 33 2,225,248 3,205,073
Auditors’ fees 34 575,000 575,000
Charges on loan losses 465,571,851 30,332,050
Repairs, maintenance and depreciation 35 679,663,220 664,179,793
Other expenses 36 752,268,763 764,481,083
Total operating expenses 6,871,991,530 6,498,369,975
Profit before provision 8,784,398,783 9,219,178,058
Provision for loans and advances
Specific provision 15.2(a) 1,500,000,000 2,040,000,000
General provision (including off-balance sheet items) 15.2(b) - -
Provision for good borrowers 15.2(d) 10,000,000 -
1,510,000,000 2,040,000,000
Provision for other classified assets 15.4 - -
Total provision 1,510,000,000 2,040,000,000
Total profit before tax 7,274,398,783 7,179,178,058
Provision for taxation
Current tax 15.1 3,100,000,000 3,150,000,000
Deferred tax 10.1.3 10,044,745 (71,132,887)
3,110,044,745 3,078,867,113
Net profit after tax 4,164,354,038 4,100,310,945
Retained earnings brought forward from previous year 2,977,319,750 3,157,388,607
7,141,673,788 7,257,699,552
Appropriations
Statutory reserve 17 (1,454,879,757) (1,435,835,612)
Dividend
Bonus shares 10% for 2018 and 12% for 2017 (2,654,907,910) (2,844,544,190)
(4,109,787,667) (4,280,379,802)
Retained earnings carried forward 3,031,886,121 2,977,319,750
Earnings per share (EPS) restated 39.02 1.43 1.40

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 List of Acronyms
ABBREVIATIO ELABORATIO
N N
NBL National Bank Limited
FE Foreign Exchange
CCI & E Chief Controller Of Import &Export
IRC Import Registration Certificate
UCPDC Uniform Customs & Practices For Documentary Credit
LCAF Letter Of Credit Authorization Letter
ERC Export Registration Certificate
A/C A/C
TFMD Treasury & Fund Management Department
L/C Letter Of Credit
SWIFT Society For Worldwide Inter Bank Financial

Telecommunication

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 TIN Tax Identification Number
FTT Foreign Telegraphic Transfer
FDD Foreign Demand Draft
TC Travelers Cheque
CSR Corporate Social Responsibility
NID National Identification Number
ID Identification Number
ATM Automated Teller Machine
PIN Personal Identification Number
SMS Short Message Service
I-BANKING Internet Banking

5.10. Questionnaire
Financial performance refers to the achievement of financial objectives and is an important
aspect of financial performance. It is the process of monetary measurement of the results of a
company's policies and operations. It is used to measure the overall financial health of the
business over a given period and can also be used to compare similar businesses in the same
sector or to compare industries or sectors. Try to answer important questions such as:

1) What is the financial position of the National Bank Limited?

2) What is the financial performance of the National Bank Limited over a given period?
3) What is the financial performance of last five years of the National Bank Limited?
4) Comparisons of financial performance on last five years (2015-2019) of the National
Bank Limited?

The End

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