1. i
Department of Business Administration
Stamford University Bangladesh
(Siddeswari Campus)
A Thesis Paper on “The Measurement of Performance
Evaluation of Private Commercial Banks Operating in
Bangladesh”
Prepared By
Md. AsaduzzamaMd. AsaduzzamaMd. AsaduzzamaMd. Asaduzzamannnn
ID: MBA 04111 302
Major in Finance
Department of Business Administration
Stamford University Bangladesh
Prepared For
Syed Monirul HossainSyed Monirul HossainSyed Monirul HossainSyed Monirul Hossain
B.B.A. MIB
University of Wollongong (Australia)
Assistant Professor
Department of Business Administration
Stamford University Bangladesh
Date of Submission: 02 July, 2011

2. ii
Department of Business Administration
Stamford University Bangladesh
Letter of TransmittalLetter of TransmittalLetter of TransmittalLetter of Transmittal
Syed Monirul Hossain
Assistant Professor
Department of Business Administration
Stamford University Bangladesh
Subject: Acceptance for the Thesis Report
Dear Sir,
I am very much pleased to submit the thesis report on “A Thesis Paper on the
Measurement of Performance Evaluation of Private Commercial Banks Operating in
Bangladesh”. All the accessible here is done with utmost sincerity and honesty. I have
tried my best to make this report holistic and informative enough.
Definitely, it was a great privilege and pleasure to be assigned with such a Thesis Report.
During going through this work, undoubtedly I have earned adequate empirical
knowledge that will certainly guide me and pave the way to upcoming journey.
Md. Asaduzzaman
ID: MBA 04111 302
Major in Finance
Department of Business Administration
Stamford University Bangladesh

3. iii
Department of Business Administration
Stamford University Bangladesh
DeclarationDeclarationDeclarationDeclaration
I hereby declare that the enclosure of the financial information of private commercial
banks is collected from Annual Reports of those banks. The specific data are to the fact
and observation that these are used for ratio calculations, analysis and comparison to
make a reasonable judgment for the effectiveness of respective banks. This will not be
submitted or copied elsewhere for any purpose except the prior permission of the
University.
Md. Asaduzzaman
ID: MBA 04111 302
Major in Finance
Department of Business Administration
Stamford University Bangladesh

4. iv
Department of Business Administration
Stamford University Bangladesh
CertificateCertificateCertificateCertificate
This is to certify that the Thesis Paper on “The Measurement of Performance Evaluation
of Private Commercial Banks Operating in Bangladesh” submitted for the award of
degree of Masters of Business Administration major in Finance to the Stamford
University Bangladesh is a record of bona fide research carried out by Md.
Asaduzzaman under my supervision. As far as my knowledge is concerned, no part of
the Thesis report has been submitted for any degree, diploma, title or recognition before.
He is permitted to submit the Thesis Report.
Syed Monirul Hossain
Assistant Professor
Department of Business Administration
Stamford University Bangladesh

5. v
Department of Business Administration
Stamford University Bangladesh
AcknowledgementAcknowledgementAcknowledgementAcknowledgement
At first we must show our gratitude to omnipotent Allah for giving us energy and
capabilities for preparing this report.
No work can complete by one or individual without the help of others. In every step of
this study many individual and sources supported me. It gives me an immense pleasure to
acknowledge theme with my gratitude.
Then I would like to express our sincere gratitude and thanks to my instructor Mr. Syed
Monirul Hossain faculty of Business Administration, Stamford University Bangladesh.
His brilliant and excellent guidance assist to complete this report.
Also thanks to him for giving us the opportunity to word on this topic, where I had the
opportunity to learn and get the information about Bank performance.
I have so far given our best effort to prepare and represent the report according to
instruction of our honorable teacher. I hope our endeavor will be beneficial to the
audience and urge for exonerate eye for any mistake or error found in the report.
Thanks also to staffs of the Stamford University library for cooperative.

6. vi
Department of Business Administration
Stamford University Bangladesh
Executive SummaryExecutive SummaryExecutive SummaryExecutive Summary
The evaluation of bank performance is a complex process involving interaction between
the environment internal operation & external activities. The ultimate objective of
management is to maximize the value of the bank’s equity shares by attaining the optimal
mix of return and risks. In a developing country like Bangladesh the banking system as a
whole play a vital role in the progress of economic development. In this paper it has been
strived to analyze the performance and growth of Selected Private Commercial Banks of
Bangladesh. It is observed that all the selected private commercial banks are able to
achieve a stable growth of branches, employees, deposits, loans and advances, net
income, earnings per share during the period of 2008 and 2009. Eight trend equations
have been tested for different activities of the private commercial banks. Among them the
trend value of branches, employees, deposits and net income are positive incase of all the
selected banks. It indicates the prospect of private commercial banks in Bangladesh is
very bright.
In this respect bank management needs to develop a comprehensive plan in order to
identify objectives, goals, budgets and strategies that will consistent with the
maximization of share values. Planning should encompass both internal & external
performance dimensions. The primary method of evaluating internal performance is by
analyzing accounting statements. Financial ratio of accounting items permit and historical
sketch of bank returns and risks. External performance is the best or measured by
evaluating the banks market shares regulatory compliance & public confidence.

7. vii
Department of Business Administration
Stamford University Bangladesh
AcronymsAcronymsAcronymsAcronyms
AB Bank Arab Bangladesh Bank Ltd.
BB Bangladesh Bank
CRAB Credit Rating Agency of Bangladesh Ltd.
CRISL Credit Rating Service and Information Ltd.
DBBL Dutch Bangla Bank Ltd.
EPR Employee Productivity Ratio
EPS Earning Per Share
LR Loan Ration
MTBL Mutual Trust Bank Ltd.
NCC Bank National Credit and Commerce Bank Ltd.
NIM Net Interest Margin
OER Operating Efficiency Ratio
PLR Provision for Loan Ratio
ROA Return on Assets
ROE Return on Equity
UCBL United Commercial Bank Ltd.

8. viii
Department of Business Administration
Stamford University Bangladesh
Table of Contents
Title Page i
Letter of Transmittal ii
Declaration iii
Certificate iv
Acknowledgement v
Executive Summary vi
Acronyms vii
Table of Contents viii
List of Table ix
List of Figure x
1. Introduction 1
2. Objectives of the Study 1
3. Scope & Methodology of the study 2
4. Function of Bangladesh Bank (BB) 3
5. An overview of selected private commercial banks in Bangladesh 3
6. Performance Evaluation of Selected Private Commercial Banks 8
6.1. Profit Ratios 8
6.1.1. Return on Equity 8
6.1.2. Return on Assets 14
6.1.3. Net Interest Margin 21
6.1.4. Earning per Share of Stocks (EPS) 27
6.2. Risk Ratios 34
6.2.1. Provision for Loss Ratio 34
6.2.2. Loan Ratio 40

9. ix
6.3. Efficiency Ratio 47
6.3.1. Operating Efficiency Ratio 47
6.3.2. Employee Productivity Ratio 53
7. Credit Rating of the Selected Banks by CRAB and CRISL 60
7.1. Credit Rating agency of Bangladesh Ltd. (CRAB) 60
7.2. Credit Rating Information and Service Ltd. (CRISL) 62
8. Recommendation and Findings 65
9. Conclusion 67
Bibliography 68
Appendices 69
List of Table
Table 1: Data for Return on Equity 8
Table 2: Data for Return on Assets 15
Table 3: Data for Net Interest Margin 21
Table 4: Data for EPS 28
Table 5: Data for Provision for Loss Ratio 34
Table 6: Data for Loan Ratio 41
Table 7: Data for Operating Efficiency Ratio 47
Table 8: Data for Employee Productivity Ratio 54
Table 9: Credit Rating Grade of the Selected Banks 64
Table 10: At the measuring parameter high performer banks 65
Table 11: At the measuring parameter low performer banks 65

10. x
List of Figure
Figure 1: Return on Equity 8
Figure 2: Return on Assets 15
Figure 3: Net Interest Margin 21
Figure 4: Earning per Share (EPS) 28
Figure 5: Provision for Loss Ratio 34
Figure 6: Loan Ratio 41
Figure 7: Operating efficiency Ratio 47
Figure 8: Employee productivity Ratio 54