This presentation summarizes the financial analysis of United Commercial Bank Limited (UCBL) over a five year period from 2010-2014. It includes an analysis of UCBL's current ratio, debt ratio, net profit margin, return on assets, return on equity, and earnings per share over this time period. It also provides a comparative analysis of UCBL's performance versus industry averages for return on assets and return on equity. Major findings are that UCBL has maintained a stable current ratio and lower cost to income ratio compared to industry averages. The presentation concludes with recommendations to UCBL such as maintaining their current ratio and developing their information systems.
5. Scope of the Study
United Commercial Bank Limited is one of the traditional
banks of Bangladesh. The scope of the study covers the
organizational overview and objectives, and Financial
analysis of the bank. However, the presentation of the five
years at a glance, products and services, total asset
position, total liability & shareholder equity and also
different analysis & comparison are showed to evaluate
the performance of the bank.
6. Objectives of the Study
Specific Objectives:
To analyze the capacity of United Commercial bank limited to meet
up the short term financial obligation.
To examine debt position of United Commercial bank limited.
To evaluate the profitability and Marketability position of UCBL’s.
To analyze the profitability of UCBL’s within the banking industry.
General Objective:
The prime objective of the financial Performance of United Commercial
bank limited.
7. Methodology of the Study
Sources of data:
The study had been conducted based on mainly secondary data. Annual
report of UCBL was the major secondary sources in this regard. The data
had been collected for the period of five years from 2010 to 2014. Data of
industry average are collected from annual report of Bangladesh Bank.
The data also collected from website and annual report 2014 of UCBL’s.
8. Methodology of the Study
Instruments Used for data Analysis
Trend Analysis: Trend analysis is the analysis of firm’s performance over
time using ratios. It is really important to analyze trends in ratios as well
as their absolute levels. This analysis informs us whether a company’s
financial condition improving or deteriorating.
Comparative analysis: Comparative analysis is comparison of banks
performance with the industry average. The study compares the
profitability of the bank with industry average.
9. Limitation of the Study
To prepare this, we have faced some limitations, which are mentioned
in the follows:
Time Limitation
Lack of experience
Limitation of scope
Inadequate Data
11. United Commercial Bank Limited (UCBL) is a First-generation
private commercial bank established in Bangladesh in the year
1983 under the Companies act. Since inception, it has committed
to provide high quality financial services to the people of this
country to accelerate economic development of the nation. As
such, it has been working for stimulating trade and commerce,
accelerating the pace of industrialization, boosting export, creating
employment opportunity, alleviating poverty, raising standard of
the living of the people etc. and thereby contributing to the
sustainable development of the country.
At present the bank has 148 branches in both rural and urban areas
of the country.
History
12. Vision:
To be the bank of first choice through maximizing value for our clients, shareholders &
employees and contributing to the national economy with social commitments.
Mission:
To offer financial solutions that create, manage and increase our clients’ wealth while
improving the quality of life in the communities we serve.
Corporate Slogan of UCB: “United We Achieve”
Core Values:
We put our customers first
We emphasize on professional ethics
We maintain quality at all levels
We believe in being a responsible corporate citizen
We say what we believe in
We foster participative management
14. Current ratio
Source: Annual Report of UCBL (2010-2014)
1.05
1.1
1.17
1.21
1.13
0.95
1
1.05
1.1
1.15
1.2
1.25
2010 2011 2012 2013 2014
Current Ratio
Current Ratio
Figure: Current Ratio
Graphical Presentation:
Years 2010 2011 2012 2013 2014
Current
Ratio(%)
1.05 1.10 1.17 1.21 1.13
15. Debt ratio
Year 2010 2011 2012 2013 2014
Debt ratio(%) 94% 91% 91% 91% 92%
Source: Annual Report of UCBL (2010-2014)
Graphical Presentation:
94%
91% 91% 91%
92%
90%
90%
91%
91%
92%
92%
93%
93%
94%
94%
95%
2010 2011 2012 2013 2014
Debt Ratio
Figure: Debt Ratio
16. Net Profit Margin
Year 2010 2011 2012 2013 2014
Net profit Margin 28% 32% 16% 25% 24%
Source: Annual Report of UCBL (2010-2014)
28.00%
32.00%
16.00%
25.00% 24.00%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2010 2011 2012 2013 2014
AxisTitle
Net Profit Margin
Net Profit Margin
Graphical presentation:
Figure: Net Profit Margin
17. Return on Assets
Year 2010 2011 2012 2013 2014
ROA 1.98% 1.97% .84% 1.41% 1.49%
Source: Annual Report of UCBL (2009-2013)
Graphical Presentation:
1.98% 1.97%
0.84%
1.41%
1.49%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2010 2011 2012 2013 2014
ROA( In Percentage)
ROA( In Percentage)
Figure: ROA
21. Year UCBL Industry Average
2011 1.97% 1.5%
2012 0.84% .60%
2013 1.41% .90%
2014 1.49% .60%
Return on Assets
Source: Annual report of UCBL, and Bangladesh bank
Graphical Presentation:
Figure: Return on Assets
1.97%
0.84%
1.41% 1.49%1.50%
0.60%
0.90%
0.60%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2011 2012 2013 2014
Return On Assets
UCBL Industry Average
22. Year UCBL Industry Average
2011 24.77% 17.00%
2012 9.29% 8.20%
2013 15.85% 11.00%
2014 17.07% 8.40%
Source: Annual report of UCBL, and Bangladesh bank
Return on Equity
Graphical Presentation:
24.77%
9.29%
15.85% 17.07%17.00%
8.20%
11.00%
8.40%
0.00%
10.00%
20.00%
30.00%
2011 2012 2013 2014
Return On Equity
UCBL Industry Average
Figure: Return on equity
23. MAJOR FINDINGS
The current ratio of UCBL’s was upward trend from 2011 to 2013. But it was
decreased to 1.13 in 2014. UCBL maintains Tk. 1.13 current assets against Tk. 1
current liabilities.
Cost to income ratio of UCBL’s was stable position in previous three years. And also
it is standing in a batter position compare to the last 5 years industry average.
We know higher the net profit margin is batter for the firm. UCBL’s NPM was
increasing from 2012 to 2014. In 2014, NPM increased to 24%.
The ROA and ROE of UCBL was fluctuating. However, both of them are
comparatively higher than industry average. So, we can state it as a positive sign of
UCBL to earn profitability.
24. RECOMMENDATIONS
United Commercial Bank Ltd. is an established privatized bank in our country. This bank is doing
well over years. Based on my three months of internship program, ours recommendations towards the
UCBL’s operations are:
Current ratio of United Commercial Bank Limited is enough to recover its current liabilities. So,
UCBL should keep up this ratio because excess liabilities may affect profitability of the bank.
UCBL’s information system should be developed to deal with its local and international clients
properly.
UCBL should introduce new short term DPS like other banks to increase its deposits.
As cost to income ratio is decreased in 2014, bank should always reduce the operating cost like as
software cost, security cost, and manpower cost etc. to decrease the cost.
UCBL’s should to provide E-banking system to the customer, increase number of ATM Booths &
number of Agri. branches to increase its profitability.
25. CONCLUSION
Private commercial banks are playing a vital role in the development of our economy.
Government and Bangladesh Bank also play a crucial role in banking sector by regulating
the overall banking systems and setting rules and regulation in the activities of commercial
banks. In recent years of banking sector, UCBL has shown better performance comparing
with other first generation banking.