Letter of transmittal

1. Letter of Transmittal
1st
July 2022
To
Md. Omar Faruque
Associate Professor,
Department of Finance,
Jagannath University
Subject : Submission of internship report on Financial Performance Analysis of Sonali Bank Limited.
Dear Sir,
I would like to inform you that I h ave been completed my internship report on topic, ‘’ Financial
Performance Analysis of Sonali Bank Limited ‘’ of Bangladesh. I have collected information from all
available sourcesinrealistic way .While preparing report, I have tried to follow your instruction based
on systematic manner.
I am grateful to youfor yourguidance andkindcorporate at everystepof my endeavor on this report. I
shall remain deeply grateful if you kindly take some pan to go through the report and evaluate my
performance.
My effort be reworded only if it adds to the research literature.
Shampa Moni Dey
Id No : M19180203722
MBA 18th
batch
Department of Finance
Jagannath University.

2. Student’s Declaration
I herebydeclare that the report of internship namely ‘’ Financial Performance Analysis of Sonali Bank
Limited ‘’. A study on Bongobondhu Avenue Branch,Dhaka and its implementatiny me after the
completing of three month of internship with Sonali Bank Limited and a comprehensive study of the
existing activities of Sonali Bank Limited and its implementation.
I alsodecla that this paper is my original worked and prepared for academic purpose which is a part of
MBA program and the paper may not use in actual market scenario .
Shanpa Moni Dey
Id No : M19180203722
MBA 18th
batch
Department of Finance
Jagannath University.

3. Supervisor’s Certificate
I hereby declare that the concerned report entitled ‘’ Financial Performance Analysis of Sonali Bank
Limited’’ is an original work by Shampa Moni Dey, Id : M19180203722 Department of Finance,
Jagannath University completed her internship under my supervision and submitted for the partial
fulfillmentof the requirementof the degree of Master of Business Administration ( MBA) at Jagannath
University.
Md. Omar Faruque
Associate Professor
Department of Finance
Jagannath University

4. Acknowledgement
First of all I would like to thank Almighty the merciful, the gracious who has given me the ability,
intelligence and energy to complete my internship report.
I wish to express my deposit gratitude to my supervisor Md Omar Faruque for hos cooperation,
suggestion , guidance and continuous encouragement throughout the course of the study. His
inspiration and careful observation are beneficial to reach at this stage.
I note with great gratitude that the management of Sonali Bank Limited extended all types of
corporationduringmyassignment. Withouttheircontributionitwouldnothave beenpossibleforme to
finish the internship.
In writing the report, I have taken help from different books, journals and other scholastic articles. I
thankall those authors. I am alsoindebtedtomylovingfriendsandsenior brothers for their assistance
in my report preparation.
Finally, I extend my thanks to all of my well- wishers of their cooperation during this important task.

5. Executive summary
Sonali Bank Limited is one of the recognized banks in our country. Banking sector in Bangladesh has
beenpursuingthe policy of expansionand growth of branches. People and government itself are very
much dependent on the service provided by 57 banks in the financial market.
The report isan analysisof financial performance of Sonali Bank Limited for last five year . This report
will provide an assessment of analysis of the profitability, liquidity,leverage position and activity
conditions of the Sonali Bank Limited using figures from the financial statements for the last five
financial year (2016-2020).and
The study is an analysis of financial performance of Sonali Bank Limited. There are obviously some
objectives of this project. This internship report is mainly prepared primarily to fulfill the Master of
BusinessAdministration degree requirement under Jagannath University. Department of finance and
getoverall ideaaboutthe financial performance of Sonali BankLimited.The core objectivesof the study
isto gain practical expousersindifferentfinancial activities, that will be helpful for the courses of MBA
Program tofamiliarwiththe working environment and above all to learn about financial performance
of Sonali Bank Limited.
Key Words : Financial performance , ROA, ROE, ATM,EPS ,Profitability.

6. Chapter– 1
Introduction

7. 1.1 Introduction
Modernbanks provide theirconsumers a wide range of financial service than only traditional banking,
allowingthemtoaccesspreviouslyunreachable services.The bankingindustry’sdevelopingandgrowing
significance has made the more complicated and cutthroat is the banking industry. In order to sustain
and expandthisbusinessthe needof innovation specialization , knowledge and the acceptance of new
technology used . But non of this factors technology, innovation or specialization can help a bank
survive. Unless the services are promoted properly. This bank requires a specialist who will ability to
manage the company even after completing the MBA ( Evening) program, Department of Finance in
JagannathUniversitythree month organizationalattachment is mandatory .In light of this, the creation
and submission of the report is partial requirement for the completion of the degree. The report is
outcome of internship program conduct in Sonali Bank Limited.
1.2 Justification of the study
Internship program is a mandatory program for all students of MBA under all University . Practical
orientation is a positive development in professional area. Recognizing the importance of practical
experience.Departmentof financehaintroduced a one to three months practical exposure as a part of
the curriculum of Master of Business Administration.
For the completionof this internship program I have chosen a bank named ‘’Sonali Bank Limited ‘’ and
my internship report is baesd on ‘’ Financial Performance Analysis of Sonali Bank Limited’’ Ihave
preparedthisreportunderMd Omar Faruque, Associate Professor , Department of Finance, Jagannath
University. In this study period, mainly student gain theoretical knowlwdge but now a day, in the job
marketthere isno alternative of principle workexperience.Therefore,before getting into job ,students
should have some real world experience in the major field of study on the career choice that interest
him/her.
1.3 Scope of the objective
The purpose of thisreport isto examine SonaliBank Ltd's financial performance. The time period is set
to the previousfive calendaryears.Iattemptedtodemonstrate the analysisusing12distinctgraphs and
charts dependingonthe performance overthe years.Basedonthe findings,relevantrecommendations
are given.Some performance variables are taken into account when analyzing performance to reduce
complexity. To depict financial status in relation to overall performance, a quick examination of bank
branch performance is performed.
1.4 Aims and Objectives of the study
1.4.1 Aims
The general objective of this report is know about the financial performance to calculate various
financial ratio of the bank last five years.

8. 1.4.2 Objectives
The major objective of the studyistomake a clear analysisof financial performance Sonali Bank
Limited.There are some specificobjectivesmentionedbellow :
 To usingthe bank's balance sheetsandincome statements,compute various financial ratios for
the last five years.
 To understand some of the roadblocks that prevent the bank from performing better.
 To increase practical knowledge of banking performance, which will be necessary for future
employment.
 Making some recommendations depending on the outcomes of calculations.
 To increase my abilities to write reports. your content in a timely and efficient manner.
1.5 Methodology
The followingtechniquewas used to gather, evaluate, and report data and information for this report.
1.5.1 Research Design
This is a descriptive research , which focuses on ‘’ Financial Performance Analysis of Sonali Bank
Limited’’. Secondary data are mainly used to prepare the report.
1.5.2 Sources of Data
The following sources were used to gather data for this report:
Primary Data Sources:
 Oral interviews with bank personnel and officers.
 Duringthe internship,Ireceivedpractical and physical experience by working at several desks.
 Having an oral discussion with new and prospective clients.
Secondary Data Sources :
 Five years Annual Reports of Sonali Bank Ltd.
 Official Records of Sonali Bank Ltd.
 Web site of the Sonali Bank Ltd.
 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.
1.5.3 Data SourcesIdentification: The studyand itsreportwill require bothprimary and secondary data
sources.

9. 1.6 Limitation Of the Study
 Three months is insufficient for such a thorough investigation.
 It is extremely challenging to gather all of the necessary information in such a short period of
time.
 Due to the bank's constraints and prohibitions, large-scale study was not possible.
 There were insufficient records, and no publications were accessible.
 The data was not arranged in a logical manner.
 There were various limits on having access to the authority's confidential information.
 There was no specific section for loan recovery.
 Althoughbankershave done theirbesttoassist,the nature of theirworkleaves themwith little
time to talk.
 It was extremelydifficulttoobtainaccurate informationbecause he bankpersonnel andofficials
were sometimesverybusywiththeirOccupational activities. Hence it was little bit difficult for
them to help within their tight schedule.

10. CHAPTER -2
ORGANIZATIONAL PROFILE

11. 2.1 Backgroundof Sonali BankLimited
By declaration of the Banks' Nationalization Order 1972 (Presidential Order-26), which liquidated the
then Sonali Bank of Pakistan, Premier Bank, and Bank of Bhwalpur shortly after the country's
independence,SonaliBankemergedasthe country'slargestandleadingNationalizedCommercial Bank.
The bank had been carrying out its nation-building tasks as a completely state-owned institution by
conductinggovernment-entrustedvaried socio-economic programs as well as money market activities
on its own initiative, covering all aspects of the economy.
The bank has beenconvertedtoaPublicLimitedCompanywith100% ownershipof the governmentand
startedfunctioningasSonali BankLimitedfrom November 15 2007 taking over all assets, liabilities and
business of Sonali Bank. After corporatization, the management of the bank has been given required
autonomy to make the bank competitive & to run its business effectively.
The Board of Directors of Sonali Bank Limited is made up of 11 (eleven) members. The Bank is led by a
well-knownbankeranda reputable professional,the ChiefExecutive OfficerandManagingDirector.The
bank'scorporate headquartersare inMotijheel,Dhaka,Bangladesh,whichisthe capital'smainbusiness
district.
2.2 Corporate Information of Sonali Bank Limited
Name of the Company Sonali Bank Limited
Chairman Mr. Ziaul Hasan Siddiqui
CEO and Managing Director Mr. Md. Ataur Rahman Prodhan
Company Secretary Mr. Tauhidul Islam
Legal Status Public Limited Company
Genesis Emerged as Nationalized Commercial Bank in
1972, following the Bangladesh Bank
(Nationalization) Order No. 1972 (PO No. 26 of
1972)
Date of Incorporation 07 June, 2007
Date of Vendor’s Agreement 15 November, 2007
Registered Office 35-42, 44 Motijheel Commercial Area, Dhaka,
Bangladesh
Authorized Capital Taka 6000.00 core
Paid-up Capital Taka 4530.00 core
Number of Employee 18167
Number of Branches 1215
Phone-PABX 9550426-31, 33, 34, 9552924
FAX 88-02-9561410, 9552007
E-mail itd@sonalibank.net.bd
Website www.sonalibank.com.bd

12. 2.3 Vision of Sonali Bank Limited
Socially committed leading banking institution with global presence
2.4 Mission of Sonali Bank Limited
Dedicatedtoextendawhole range of qualityproductsthatsupportdivergentneedsof people aiming at
enriching their lives, creating value for the stakeholders and contributing towards socio-economic
development of the country Slogan “Your trusted partner in innovating banking’’.
2.5 Commitments
In Serving Customers
 Customer-first
 Quality-focus
 Credibility & secrecy
In Serving the Bank
 Loyalty Total commitment & dedication
 Excellence through teamwork
In Carrying Ourselves at Work
 Discipline
 Honesty & Integrity
 Sincerity
 Caring
 Creativity
2.6 Slogan
“Your trusted partner in innovating banking.”
2.7 Objective of Sonali Bank Limited
The objectives of Sonali Bank are varied. Sonali Bank's main goals include the following:
 To gather deposits.
 To reduce poverty
 To secure deposits
 To encourage savings
 To create jobs
 To manage loans

13.  To produce a medium of exchange
 To increase trade and commerce
 To assist in the industrialization of the country
 To increase capital formation .
 To provide service to customers
 To make a profit
 To promote regional growth
There are some more goals that could be pursued if those aren't achieved. The bank is in charge of
delivering all kinds of banking services to people's doorsteps. The bank is involved in a variety of
socioeconomicdevelopmentinitiatives,aswell asthe implementationof numerousgovernmentpolicies
and programs. As the country's largest and most professionally managed state-owned bank.
2.8 Strategic significance of Sonali bank
Sonali Bank has several key duties to clients, management, shareholders, and other businesses as a
commercial bank. The bank is responsible for ensuring that customers are satisfied by providing high-
quality,timely services. This bank, like every other commercial bank, has some common objectives to
achieve. Security is a prominent topic of conversation in today's society when it comes to wealth
preservation. Through a secure banking system, this bank assists clients in securitizing their assets.
Sonali Bank contributes to Bangladesh's regional development by expanding its lending portfolio to
businesses,agriculture,andindustries.SonaliBankis unique in that it works in Bangladesh's advantage
by resolving commercial transactions among commercial banks, a process known as clearing. It has
increaseditsonline services in order to compete with other commercial banks, such as online account
checking,issuingvisaandmastercardsto assistonline transactions,andonline accountsettlement. The
bank provides social services to improve the country's image, such as accepting scraped money and
awardingscholarshipstodeservingstudents.Finally,viainnovation and challenges, the bank is helping
society and becoming more environmentally conscious.
2.9 Function of Sonali Bank Limited
The following are the main functions of Sonali Bank:
Customers' deposits are collected.
 Transactions in cash using the client's current account.
 Attending to customer bills of exchange and drafts.
 Approval of a loan
 Provide clients with online services
 Transfer of funds
 Collecting various fees, interest income, rents, pensions, and so on.
 Serves as a consultant
 They offer food to the government during times of food crisis
 They are involved in urban banking

14.  They organize part-time research for university students
 As a government representative, they pay the salaries of primary school teachers.
 They pay out pensions to retired employees.
 They are in charge of distributing and collecting passport applications
2.10 Management Hierarchy
All the posts of the bank are executive and officer. The management hierarchy of Sonali Bank Limited
has been Shown :
Chairman
Board of Directors
Deputy Managing Director (DGM)
General Manager (GM)
DeputyGeneral Manager(DGM)
ZDeputyGeneral Manager(DGM)
Assistant General Manager (AGM)
Senior Principal Officer (SPO)

15. 2.10. Small and Medium Enterprise (SME)
Sonali Bank Limited emphasizes highest priority on SME financing and for eliminating poverty by
increasing SME loan flow at economically underdeveloped area and people setting priority base SME
credit policy for women and underprivileged entrepreneurs .Sonali Bank is working for the
improvement of their socio economic condition.
2.11.Corporate Social Responsibility (CSR)
To develop CSR engagements and practices the bank has taken up leading programs at lower rate of
interest like :
 Special credit program for freedom fighter.
 Special scholarship brilliant students.
 Special credit program for Government Primary School Teacher.
 Credit program for overseas employment.
 Collateral free group based credit program for the landless and sharecroppers.
 Green Banking program like biogas and solar plants.
2.12. Productsof the Bank
 Deposit product.
 Credit product.
 E- services.
 Rural credit
 Ready cash.
Principal Officer ( P0)
Senior Officer (SO)
Officer
Staff

16. 2.13. Ancillary Services :
The ancillary services are given bellow :
 Gas bills.
 Electricity bills.
 Municipal holding Tax.
 Passport fees, visa fees.
 Sources tax and Vat.
 Jakat fund
 Hajji deposit.
2.14. Payment
 Bangladesh Bank employee’s pension.
 Pension of employees of govt. and other corporate bodies.
 Army pension.
 British pension.
 Scholarship.
 Govt. and non govt. teacher’s salary.
2.15. Social Services :
 Old age allowances.
 Widows, Divorcees and destitute, women’s allowances.
 Freedom Fighter’s allowance.
 Maternal allowances for poor women.
 Rehabilitation allowance for acid survival women.
 Disability allowances.
 Savings certificates.
 Prize bonds.
 Wage Earner’s development bank.
 US dollar premium and investment.
 Lottery tickets of different semi govt. and autonomous bodies.
 Public service commission’s application form.
 Bank ac information on the tax paying client according to demand of NBR.
 Local governance support project.
2.16.Plan of My Internship Program:
(A) Interdiction of Branch
Bank Name Sonali Bank Limited
Branch Name Bongobondhu Avenue Branch
Adress

17. Telephone
Email
(B) Starting and Ending Dates of My Internship
I started my internship on 8th
March2022 in Sonali Bank Limited.
I completed internship 8th
June 2022 in Sonali Bank Limited.
(C) The Name of Department Which I obtained Training with duration :
I workedgeneral bankingdivisionwiththe customerteam veryfirstdayof my joimimg.Generalbanking
divisionmainlyworktosolve the customernecessaryneedandopendifferent bank account. My branch
located at Bongobondhu Avenue Corporate , Dhaka- South. My working hour began at 10AM and
continued4PM. I am briefedbymysupervisoraboutthe general bankingproductsandvariousfeatures
of the banking products and services that are provide by the general banking division. I have enjoyed
every moment in general banking.
2.17. Plan of My Training program:
Duties and Responsibilities performed
Week 1 :
 I was asked to explain why I chose Sonali Bank Limited as my internship location.
 Meet the personnel and have a good time with them.
 One class was held regarding the Sonali Bank Limited (Bangabandhu Avenue Corporate)
Week 2 :
 My coordinator, sir, attended three classes to learn more about the organization and key
sections of the Account Opening Section.He went over the entire process of creating a new
account in detail.I was told to observe and learn how to open accounts such as savings and
deposit skims, as well as how to manage customers.
 One classwas heldwith my coordinator Sir, during which he discussed the documents that are
required to open accounts.
Week 3 :
 My coordinator, sir, gave me some account starting forms and taught me how to fill them out.
 While openinganaccount,he discussedme;some personal documents are also collected from
customers.
Week 4:
 OfficersfromGeneral Banking(GB) attendedatraining session.Theytell usabout their personal
experiences. They discussed the general banking sector.
 I was told to follow our GB department's coordinator Sir's instructions.

18.  This week, we'll be dealing with several customers who want to open accounts.
Week 5 :
 I learnedhowtoentercustomer information into the Sonali Bank Limited system after
my coordinator Sir showed me how to use the software.
 He shared some information about Know Your Customers (KYC). The KYC Software's
main function is to enter client information.
Week 6 :
 My coordinator,Sir,providesinformationonCA (CurrentAccount) and fixed deposit, as well as
deposit rates.
Week 7 :
 In this scenario, my responsibilities included talking with consumers about account facilities,
filling out account forms and getting signatures where needed, collecting all paperwork from
them, and showing the documents to the appropriate officer.
 Aftercompletingall criteria,the accountmustbe approvedbythe branch managerbefore it can
be opened.
 The account holder must make an initial deposit of 500 taka to begin operating the account. I
also fill out customer deposit forms.
Week 8 -12:
 This week, my coordinator, Sir, was informed about the bank's financial performance.
 The credit office gives proper information of the cash section.
 I don't do any direct cash-related work because it's against the rules for an intern employee.
 My coordinator, Sir give me an annual report to analyze financial performance of the bank.
 My coordinator, Sir provide knowledge ratio analysis.

19. CHAPTER -3
STATISTICAL OVERVIEW ( RATIO ANALYSIS)

20. 3.1. Introduction of Ratio Analysis :
Bank performance is similar to that of a regular traditional company..The money a bank earns from
investments,suchasstocksor real estate,isreferredtoas revenue.The costof the cash utilizedtomake
these investments must also be taken into account by banks.Profits are made in the end from the
difference between what banks spend for investments and what they collect from borrowers.Net
interest margin is the most prevalent measure for a bank's earnings.
There are a varietyof metricsusedto evaluate bank performance, with each stakeholder group having
its particular area of interest.The following are some of the most commonly used methods for
evaluating a bank's performance:
 Ratio Analysis.
 Economic Measure of performance.
 Market based measure of performance.
As a technique foranalyzingSonali BankLimited'sfinancial performance, I used Selected Ratio Analysis
and other Market Based Measures in my research.The purpose of this report is to assess the financial
performance of Sonali Bank Limited.So, let's take a look at Sonali Bank Ltd's financial ratios from the
previous year.
Analystsuse thismethodtodefine values and analyze risks by looking at the link between accounting
statistics and their changes over time.Ratio analysis provides analysts with useful information about
developinginsights into the economic characteristics of different industries and different firms in the
same economic additional, different over time in a single firm or between firms due to operation,
financing and investing decisions made by management, as well as external economic factors are
frequently highlighted by common-side statement.
3.2. Assumption of Ratio Analysis :
The ratio formis the mostfrequentwaytosummarize financial statement data.The following are some
of the reasons for reviewing data in ratio form:
 To reduce the impact of size disparities across the bank.
 To improve the data compliance with the assumptions that underpin statistical techniques
 To test a theory in which the variable of interest is a ratio.
 To take use of a previously documented empirical regularity between the estimation of a
financial ratio and the estimation of a variable of interest.
I have divided my overall ratio analysis into five separate section which are given bellow :

21. Calculated Ratios of the Study
Liquidity Analysis  Current Ratio
 Quick Ratio
 Loans to Deposit Ratio
Earning Performance Analysis  Return on Assets (ROA)
 Return on Equity (ROE)
 Earnings Per Share (EPS)
 Net Interest Margin (NIM)
 Net Operating Margin (NOM)
 Return on Loan
 Net Income Per Employee
 Cost to Income Ratio
 Payout Ratio
Capital Adequacy Analysis  Capital Adequacy Analysis
Asset Management Analysis  Earning Assets to Total Assets
 Fixed Assets Trunover
Solvency Analysis  Debt to Total Asstes Ratio
 Times Interest Earned Ratio
3.2.Liquidity Analysis of Sonali Bank Limited (2017-2021) :
Liquidityreferstoan asset'sabilitytobe quicklyconvertedintocash. Liquidityratiosare usedtoassessa
company's capacity to service its short-term debt obligations .In general, the higher the value of the
ratio,the greaterthe company'smarginof safetyforcoveringshort-termloans. The liquidity ratio of an
organization can be calculated using a variety of formulas. They really are :
 Current Ratio
 Quick Ratio
 Loans to Deposit Ratio
CurrentRatio:The currentratio isa liquidityratiothatassessesafirm'scapacityto meetbothshort- and
long-term obligations .The current ratio compares a company's current total assets to its current total
liabilities to determine this ability.
Formula : Current Ratio = Current assets/ Current liabilities
Calculation
Year Current Asset
(In Million)
Current Liabilities
(In Million)
Result
2021 430,681.68 413,955.97 1.04:1
2020 426,636.64 410,503.03 1.04:1
2019 345,385.82 335,978.66 1.03:1
2018 314,186.75 305,702.73 1.03:1
2017 285,730.53 275,583.75 1.04:1

22. (Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Current Ratio
1.042
1.04
1.032
1.03
1.028
1.026
1.024
1.022
2021 2020 2019 2018 2017
Analysis:
The bank can only meet its short-term obligations .It should raise current assets or decrease current
liabilities, even though it is satisfactory. Over time, the Current Ratio has exhibited nearly constant
results.Thisratio'svalue fluctuatedbetween 1.03 and 1.04 over the five-year period, indicating a little
decrease.
Quick Ratio : The quick ratio is a measure of how well a company can meet its short-term financial
liabilities also known as the acid-test ratio.
Formula : Quick Ratio = (Cash + Marketable securities +Account receivable) / (Current liabilities)
Year CurrentAsset
( inmillion)
CurrentLiabilities
(inmillion)
Result
2021 430,681.68 413,955.97 1.04:1
2020 426,636.64 410,503.03 1.04:1
2019 345,385.82 335,978.66 1.03:1
2018 314,186.75 305,702.73 1.03:1
2017 285,730.53 275,583.75 1.04:1
(Source : Annual Reportsof Sonali BankLimited,2017-2021)
1.04 1.04
1.03 1.03
1.04

23. Graphical Presentation:
QuickRatio
1.042
1.04
1.032
1.03
1.028
1.026
1.024
1.022
2021 2020 2019 2018 2017
Analysis:If a firmhas sufficientfastresourcestocoveritsaddup to currentliabilities, the firm will be
able to pay off its commitments without having to offer off any long-term or capital resource. The
speedy proportion of the bank is nice. It ought to maintain the trend.
Loans to Deposit Ratio : Loans to deposit could be a commonly utilized measurement for evaluating a
bank’sliquiditybyisolatingthe banksaddupto loansby itsadd up to stores.Thisnumberisadditionally
known as the LTD proportion, is communicated as a percentage. In credits to stores proportion in the
event that the ratio is tall which means the bank has moo liquidity. Meaning the bank does not have
sufficientliquidity to meet its installment necessity. On the other hand, in the event that the liquidity
proportion is moo meaning the bank has tall liquidity. This circumstance basically happens when the
bank has more liquidity in their hand to meet up all installment prerequisites. The Advances to Store
Proportion is compared to standard 1
Formula : Loans to Deposit = ( Loans )/ ( Deposits) × 100
Year Total Loans
(in million)
Total deposit
(in million)
Result
2021 459,580.05 649,440.78 0.71
2020 403,037.41 641,819.15 0.63
2019 349,861.30 568,911.14 0.61
2018 319,77.41 516,010.74 0.62
2017 285,747.65 478,535.57 0.60
1.04 1.04
1.03 1.03
1.04

24. (Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Loans to Deposit Ratio
0.72
0.7
0.68
0.6
0.66
0.64
0.6
0.58
0.56
0.54
2021 2020 2019 2018 2017
Analysis:The Loanto DepositRatios of Sonali Bank Limited in the last five years (2017-2021) were 0.71,
0.63, o.61, 0.62, 0.6 respectively. There was small fluctuation among the years 2016-2013 but in 2017 it
is increased. The loans to deposit ratio is good. It is below 1 that means the bank relied on its own
deposit to make loans to its customers without any outside borrowing. The bank should maintain its
trend to sustain below 1.
3.3. Earning Performance Analysis of Sonali Bank Limited (2017-2021) :
Profitability is a metric for determining how efficient .Profitability ratios are used to evaluate a
company's capacity to create profits in relation to its spending and other relevant factors over a given
periodof time. Inotherwords,profitability ratios are used to answer questions like "what is the profit
rate?"What is EPS andhow doesitwork ?What is the current investment rate? What is the equity rate
of return? Is the company's profit sufficient? What is the payout ratio of dividends? What is the
retention rate, for example? The profitability ratio is critical for shareholders, creditors, potential
investors, bankers, and the government.
From 2021 to 2017, some of the ratios used to estimate Sonali Bank Limited's profitability are listed
below:
0.71
0.63
0.61
0.62
0.6

25. (i) Return on Asset (ROA):
Return on Assets (ROA) is an indicator of how profitable a company is relative to its total assets. ROA
givesanideaas to how efficient management is at using its assets to generate earnings. Calculated by
dividing a company's annual earnings by its total assets, ROA is displayed as a percentage.
Formula : Return on assets = (Earning available for a common stockholders)/ (Total assets) × 100
Calculation
Year 2021 2020 2019 2018 2017
ROA 0.33% 0.33% 0.70% 0.61% 1.42%
(Source : Annual Reportsof Sonali BankLimited,2017-2021)
Graphical Presentation:
Returnon Asset
2021 2020 2019 2018 2017
Analysis:ReturnonassetsRatioof Sonali Bank Limited it is noticed that there is fluctuations in the last
five year.In 2017, the ratio increased to great level. This was because in that year arnings available for
commonstockholdersincreasedto great level. But after that year there was a decreasing trend in this
ratio because of declining rate of increment in earnings.
(ii) Return on Equity (ROE):
Return on Equity is a ratio that measures a corporation's profitability by revealing how much profit a
companygenerateswiththe moneyshareholdershave invested.ROEisthe most important indicator of
0.33
%
0.33
%
0.70
% 0.61
%
1.42
%

26. a bank’s profitability and growth potential. It is the rate of return to shareholders or the percentage
return on each taka of equity invested in the bank. ROE is expressed as a percentage.
Formula: Returnon Equity=( Earningavailable forcommon stockholder)/ (Common stock equity) ×100
Calculation
Year 2021 2020 2019 2018 2017
ROE 5.23% 5.22% 9.70% 9.66% 30.09%
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Return on Equity
2021 2020 2019 2018 2017
Analysis: The graph shows that Sonali Bank Limited had the greatest ROE ratio in 2017.It was
substantiallyreduced in 2018, and it has been dropping year after year to year. The ROE of Sonali Bank
Limitedislow.Ithas increaseditsprovisionforloansandadvances.Thereforethe return decreased as a
result the return on equity ratio decreased.
(iii) Operating Profit Margin:
Operating margin is a metric that tells analysts how much a company produces on each dollar of sales
(before interest and taxes).When a company's operating margin improves, it earns more money per
dollar of revenue .The larger the profit margin, the better the company.
Formula : Operating Profit Margin = ( Operating profit)/ (Total revenue) ×100
5.23
%
5.22
%
9.70
% 9.66
%
30.09
%

27. Calculation
Year Operating Profit Margin
2021 22.46%
2020 20.19%
2019 24.09%
2018 27.90%
2019 44.43%
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Operating Profit Margin
2021 2020 2019 2018 2017
Analysis: he Operating profit margin of Sonali Bank Limited in the last five years (2021-2017)
were22.46%, 20.19%, 24.09%, 27.90%, 44.43% respectively. It’s almost stable in earning profit . Its
highest operating profit margin was 2017 as it decrease its operating expense .It should sustain the
trend of operating profit margin.
22.46
%
20.19
%
24.0
9%
27.9
0%
44.4
3%

28. (iv) Earning Per Share (EPS) :
The term per share represent the potion of a company’s earnings, net of taxes and preferred stock
dividendsthatisallocatedtoeachshare of commonstock. Itis carefully securitizedmetricthat is often
usedas a barometertogauge a company’sprofitabilityperunitof shareholdersownership.Assuch, EPS
is a key driver of share prices. Though EPS is widely considered to be the most popular method of
quantifying a firm’s profitability. It’s important to remember that earnings themselves can often be
susceptible to manipulation, accounting changes and restatements.
Formula: Earningper share = ( Earning available forcommonstockholders)/( Numberof commonstock
Outstanding)
Calculation
Year 2021 2020 2019 2018 2017
EPS 14.04 13.61 25.12 19.92 86.31
(Source : Annual Reports of Sonali BankLimited ,2017-2021)
Graphical Presentation :
Earning Per Share
2021 2020 2019 2018 2017
14.04 13.6
1
25.1
2 19.9
2
86.31

29. Analysis:
The Earnings per Share of Sonali Bank Limited in the last five years (2017-2013)
were14.04,13.6,25.12,19.92,and 86.31 respectively.It was highest in 2013 as it had lower no. of shares.
(v) Return on Loans:
A bank loan is an agreement between a lender (bank) and a borrower in which the lender (bank)
provides the borrower money and the borrower agrees to repay the money plus interest .The link
betweenloanearningsandthe total amountof loansin a particularyearis representedbythe return on
loans ratio.
Formula : Return on loans = ( Interest earned on loans)/ (Total loans ) × 100
Calculation
Year Return on loans
2021 6.78
2020 7.91
2019 8.76
2018 10.55
2017 12.66
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation:
Return on Loans
2021 2020 2019 2018 2017
6.
78
7.9
1
8.76
10.5
5
12.6
6

30. Analysis:
Sonali Bank Limited's return on loans was 6.78, 7.91, 8.76, 10.55, and 12.66 percent for the last five
years (2017-2013).From 2013, it has been steadily declining .The bank's return on loan position should
be improved.
(vi) Net Income per Employee (NIPE): Net Income per Employee (NIPE) is a ratio that calculates the
revenue generatedbyasingle employee.Thisisametricfora company'shumanresource performance.
It is a measure of a company's employee productivity .It also reveals how effectively a corporation
employs its people resources.
Formula :
Net income per employee = ( Net income after tax )/ (Total Number of employee )
Calculation
year 2021 2020 2019 2018 017
Net Income
Per Employee
0.22 0.20 0.34 o.26 0.62
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Net Income Per Employee
2021 2020 2019 2018 2017
0.22
0.20
0.34
0.26
0.62

31. Analysis:
Netincome peremployee isprimarilycalculated to determine each employee's productivity .Reasons
for changing the net income per employee include:
 The quantity of Net Income may rise or fall.
 Increase or decrease the overall workforce.
Accordingto the NetIncome perEmployee trendforJL,whichisdisplayedin,netincome per employee
improvedin2017 and 2019.Both the numberof employeesandnetincome increasedthroughout these
years,althoughnetincome hada fasterrate of growth. However,there isa sharp decline in net income
per employee after 2019.Net income had a sharp decline in 202O..
( vii) Payout Ratio:
The payout ratio,alsoknownas the dividendlayoutratio,isthe proportionof acompany'searnings that
are distributed to investors as cash dividends. Companies occasionally distribute dividends for each
share ownedat the conclusionof a certaintime period.These dividendpaymentsshouldbe financed by
the company's earnings from that time period, according to theory .As a result, the payout ratio is
determined as the percentage of earnings distributed as dividends.
Formula :
Payout ratio = ( Cash Dividend ) / ( Net earning for the period ) × 100
Calculation
Year Payout Ratio
2021 37%
2020 38%
2019 21%
2018 26%
2017 10%
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)

32. Graphical Presentation :
Payout Ratio
2021 2020 2019 2018 2017
Analysis :
The trend of the payoutratio, whichisdepictedinthe table andfigure, shows that it was lower in 2017,
which means that the dividend was smaller .Due to greater incomes, the rate was 37 percent in 2021
and 2020 and was therefore high. The bank's earnings did, however, decline in 2017.As a result, the
dividend rate decreased.
3.4. Capital Adequacy of Sonali Bank Limited (2017-2021):
A bank or other financial institution is required by its financial regulator to maintain a certain level of
capital, commonly referred to as regulatory capital or capital requirement .As a percentage of risk
weighted assets, this is typically stated as a capital adequacy ratio of equity that must be kept .To
preventthese banksfromusingtoomuchleverage andgoing bankrupt, several rules have been placed
in place.
37%
38%
21%
26%
10%

33. (i) Capital Adequacy Ratio (CAR):
The capital adequacy ratio is a statistic that assesses a bank's ability to cover its short-term obligations
as well as other risks including operational and credit risk. In its most basic form, capital acts as a
"cushion"againstpotential lossesandsafeguardsdepositorsandotherlenders .Tosafeguarddepositors
and uphold public confidence in the financial system, banking authorities in most nations define and
oversee CAR.CAR is comparable to leverage; in its simplest form, it is the opposite of debt-to-equity
leverage formulas(althoughCARuses equity over assets instead of debt-to-equity; since assets are by
definition equal to debt plus equity, a transformation is required).Contrary to conventional leverage,
CAR understands that different assets can have varying amounts of risk.
Formula :
Capital adequacy ration = ( TIER 1 Capital + TIRE 2 Capital )/ ( Risk Weighted Assets ) × 100
Calculation
Year 2021 2020 2019 2018 2017
Capital
adequacy
ratio
10.06% 10.69% 10.16% 10.30% 1027%
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Capital Adequacy Ratio
2021 2020 2019 2018 2017
10.0
6%
10.69
%
10.1
6%
10.30
% 10.27
%

34. Analysis :
Everyschedule bankisrequiredtokeep a minimum CAR of 10% of its risk-weighted assets. It has been
demonstrated that the bank is upholding the regulation.
3.5. Asset Management Analysis of Sonali Bank Limited (2021-2017 ) :
The ratios used to analyze financial ratios are especially notable for asset management .It gauges the
efficiency with which a business manages and utilizes its resources. Analyzing how a business quickly
sold off its assets or converted to cash is what this is all about. Due to the fact that it shows how many
assets have been transformed into sales, it is also known as the turnover ratio.
(i) Earning Assets to Total Assets ratio:
EarningAssetreferstothe assetsthat generate income fromthe viewpointof a bank. Examples include
investmentsthatpayinterest,deposits,etc.Fora bank, the earning assets to total assets ratio refers to
the ratio of the earning assets to the total assets possessed by the business. A higher percentage
indicates that the bank is in excellent condition. In contrast, a smaller ratio indicates a less favorable
condition for the bank.
Formula :
Earning assets to total assets ratio = ( Earning asset )/ (Total assets ) × 100
Calculation
Year Earning assets to total assets ratio
2021 75.68%
2020 77.76%
2019 80.31%
2018 79.05%
2017 78.71%
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)

35. Graphical Presentation :
Earning Assets to Total Assets Ratio
2021 2020 2019 2918 2017
Analysis:
The bank is effectively utilizing its assets, based on the trend .With an 80 percent ratio, it was
satisfactory in 2019.After that, albeit it is diminishing, it is still in an excellent position.
(ii) Fixed Assets Turnover :
The ratio shows how much revenue may be generated in terms of assets. A higher asset turnover
demonstrates that the business has been more successful at generating revenue from its assets. The
ideal levelof thisratiohasno establishedstandard.Itiscrucial to track this ratio over time for the same
business. The resultsof thiscomparisonwill show whetherthe company'sperformanceisgetting better
or worse over time. A high fixed asset turnover ratio indicates that a corporation manages its fixed
assets well.
75.68
%
77.76%
80.31%
79.05%
78.71%

36. Formula :
Fixed assets turnover = ( Total revenue ) / ( Total fixed assets )
Calculation
Year 2021 2020 2019 2018 2017
Fixed assets
turnover
5.09 5.14 5.54 5.8 5.66
(Source : Annual Reports of Sonali Bank Limited ,2017-2021)
Graphical Presentation :
Fixed Assets Turnover
2021 2020 2019 2018 2017
Analysis:
The highestratiowas in2018 since there were fewer fixed assets than in the previous years, according
to the trend of Sonali Bank Limited Fixed Assets Turnover (times) as shown in the table and figure.
Later, in 2019, 2020 and 2021, there is a deficit in this ratio. The amount of fixed assets increased over
these yearscomparedtothe prior years,andthe pace of increase was higher than the rate of growth in
total income.
3.6 . Solvency Analysis of Sonali Bank Limited (2017-2021) :
By comparing debt levels with equity, assets, and earnings, solvency ratios, also known as leverage
ratios,assessa company's capacity to continue operating indefinitely .Solvency ratios, in other words,
5.0
9
5.1
4
5.54
5.8
5.66

37. reveal problems with continuing as a going concern and a company's capacity for long-term debt
repayment. Liquidity ratios and solvency ratios are frequently mixed up .Solvency ratios place more
emphasisona company'slong-termsustainabilitythanoncurrentliabilitiespayments,eventhoughthey
bothassessa company's capacity to pay its debts .The capacity of a corporation to pay interest when it
isdue and to repaythe face value of debt at maturity is of special relevance to long-term creditors and
stockholders .Two ratios that offer information are Debt to Total Assets and Times Interest Earned.
(i) Debt to Total Assets Ratio:
The ratio of a company's total assets to its total debt, or debt to total assets, is shown .The company's
level of leverage wasreflectedbythisratio.Italsogives some indication of the company's resilience to
losseswithoutjeopardizingcreditors'interests .Because it combines all tangible and intangible assets,
the total debt to total asset ratio has the drawback of not giving any indicator of asset quality .Like all
otherratios,the total debttototal assettrendneedstobe assessedovertime .Thiswillmake itpossible
to determine whether the financial risk profile of the company is improving or declining.