Investment Activities of Islami Bank Bangladesh Limited. All information may not be correct!!

3. Introduction
Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company which is
performing its business in commercial banking business focusing on Islamic Shari'ah with
63.09% foreign shareholding. It has the largest branch network (total 332 branches) among
the private sector Banks in Bangladesh. It was established on the 13th of March, 1983 as the
first Islamic Bank in the South East Asia with its first Branch named “Local Office” situated
at Motijheel, Dhaka (inaugurated on March 30, 1983). It became incorporated as a public
limited company under the Companies Act 1913.

4. Objectives
The main objective of the study is to scrutinize the “Investment Activities of Islami Bank
Bangladesh Limited (2016 to 2020)” and evaluate this performance.
 The other objectives of this study are:
• To describe investment schemes of Islami Bank Bangladesh Limited.
• To show investment approval process of Islami Bank Bangladesh Limited.
• To determine investment performance of Islami Bank Bangladesh Limited.
• To illustrate sector wise investment of Islami Bank Bangladesh Limited.
• To derive few findings on analysis and to suggest few recommendations accordingly.

5. Analysis
Year Wise Investment & Growth Rate of IBBL:
The chart shows that the investment in during the year is increased. In the year from 2015 to 2020, the
investment of IBBL has rapidly increased from million 134116 to TK 300617 million. IBBL keeps an all-
around differentiated portfolio to stay away from the danger of a single-industry focus.
2015 2016 2017 2018 2019 2020
134116
174196
210045
238654
264268
300617
Year Wise Investment
Series1 Series2 Series3
30%
20%
13%
10%
13%
2016 2017 2018 2019 2020
Growth Rate of Investment (2016-2020)

6. Analysis
Year Wise Investment to Deposit Ratio Analysis:
The above figure shows that in Investment to Deposit Ratio of IBBL is increasing over the years. In 2020
it was highest than any other year. So it can be said that IBBL was more efficient in converting their
deposits in investment in 2020,but investment to deposit ratio is fluctuated from 2016 to 2020 (91% to
93%). The ideal range of investment -to-deposit ratio is 80% to 90%.
Year 2016 2017 2018 2019 2020
Total
Investment
174196 210045 238654 264268 300617
Total Deposit 190564 228798 248324 287936 322383
Investment to
Deposit Ratio
91% 91% 96% 91% 93%
190564
228798 248324
287936
322383
91% 91% 96% 91% 93%
2016 2017 2018 2019 2020
Investment to Deposit Ratio
Total Deposit Investment to Deposit Ratio

7. Analysis
Sub Standard Investment of IBbL:
From the table it is identified that in 2017 their substandard investment growth rate was 152%.Unfortunately in the year 2019
their growth rate is gone to be decreases the rate is (-51%) because of Covid-19 pandemic. which is very unlucky to the IBBL,
so the last years of 2020 are respectably ratio of sub standard rate is increases where the rate is 477%.
Year 2016 2017 2018 2019 2020
Total Investment 174196 210045 238654 264268 300617
Amount of Sub standard 122 308 640 313 1805
Growth Rate 152% 108% -51% 477%
122 308
640
313
1805
152% 108% -51% 477%
2016 2017 2018 2019 2020
Sub Standard
Amount of Sub standard Growth Rate

8. Analysis
Doubtful Investment of IIBL:
The chart shows that the doubtful investment of IBBL
In 2018 their doubtful of growth rate is (-95%) which is comparatively lower than the other years. Their ratio of doubtful
investment is 85% in 2017 which was highest ratio of doubtful investment. But ,final years their growth rate gone to decreases
to 5% which is second lowest.
Year 2016 2017 2018 2019 2020
Total Investment 174196 210045 238654 264268 300617
Amount of Doubtful 859 1793 92 1,354 1419
Growth Rate 109% -95% 1372% 5%
859
1793
92
1354 1419
109% -95% 1372% 5%
2016 2017 2018 2019 2020
Doubtful
Amount of Doubtful Growth Rate

9. Analysis
Bad & loss Investment of IBBL:
The graph shows that overall Bad/loss and it’s growth rate was increasing. In 2019 it was 36% and that is lowest. Average
growth rate is not satisfactory. In 2020 the amount of Bad loss is increased & it is not good for the bank.
Year 2016 2017 2018 2019 2020
Total Investment 174196 210045 238654 264268 300617
Amount of Bad & loss 3610 2818 4415 6017 13939
Growth Rate -22% 57% 36% 132%
2016 2017 2018 2019 2020
3610 2818
4415
6017
13939
-22%
57%
36%
132%
1 2 3 4 5
Bad & loss
Year Amount of Bad & loss Growth Rate

10. Findings
To be Continued
 Total investment gradually increased which was 300617 million. In 2020 investment increased by 13% from 2019.
 From 2017 to 2018 sub-standard loan was increased by 44%.
 The standard investment Growth Rate was 477% in 2020. In year 2018 it was 108%.
 The doubt full investment is also fluctuating. In the year 2018, it was the lowest but in 2019 it was the highest
which was 137.2%.
 The bad loss is increasing every year which may lead to default. In 2016 it was the lowest.

11. Findings
 IBBL invested tk 63,085 million in the Commercial Lending sector. They invested 1% in
Pharmaceutical Industries, 1% in Transport and 1.5% in Communication Industries. They invest 1% in
Agricultural Industries, which is comparatively low.
 Investment to Deposit Ratio of IBBL in 2020 is 93% which is good. An ideal Investment to Deposit Ratio is
between 80%-90%.

12. Recommendation
 Although the amount of deposit increased, its growth rate decreased in the last four years compared to
previous year of analysis. Therefore, the bank should focus on increasing the rate of growth of deposits by
creating new schemes, opening branches or sub-branches and developing relationships with customers so that
more funds can be made available for investment.
 The amount of classified investment has risen. That happens due to an increasing amount of sub-standard,
doubt full and bad or loss investment. The bank should be conscious about investing in classified investment
window. The bank should develop a strong monitoring and evaluation cell so that risk can be minimized and
the highest return can be achieved.
 Islami Bank Bangladesh Limited should focus on Pharmaceutical Industries, Transport and
Communication Industries and Agricultural Industries.

13. Thank You!!!