Notes

1. A Brief Overview of Agrani Bank Limited
Agrani Bank Limited,a state owned leading commercial bank with 942 outlets strategicallylocated in almost
all the commercial areas throughoutBangladesh,overseas Exchange Houses and hundreds ofoverseas
Correspondents,came into being as a Public Limited Companyon May 17, 2007 with a view to take over the
business,assets,liabilities,rights and obligations ofthe Agrani Bank which emerged as a nationalized
commercial bank in 1972 immediatelyafter the emergence ofBangladesh as an independentstate.Agrani
Bank Limited started functioning as a going concern basis through a Vendors Agreementsigned between the
ministryof finance,Government of the People's Republic ofBangladesh on behalfofthe former Agrani Bank
and the Board of Directors of Agrani Bank Limited on November 15,2007 with retrospective effect from 01
July, 2007.
Agrani Bank Limited is governed by a Board of Directors consisting of10 members headed bya Chairman.
The Bank is headed by the Managing Director & ChiefExecutive Officer; Managing Director is assisted by
Deputy Managing Directors and General Managers.The bank has 11 Circle offices,34 Divisions in head
office, 52 zonal offices and 942 branches including 27 corporate and 40 AD (authorized dealer) branches.
Executive Summary:
Agrani Bank Limited (ABL) is established in 1972. It is a state owned bank. It is formed by the
composition of ex-Habib Bank ltd and ex-Commerce Bank ltd. There are six section of ABL
(Senpara branch) in GB- Cash, computer, account opening, clearing, Accounts and local
remittance.
The report indicates depth ratio analysis and financial performance of the year 2009, 2008, 2007
of Agrani Bank Limited. Here also calculate financial ratios like Liquidity, Asset Management,
debt Management, Profitability, Market Value. Calculate these ratios for strong analysis and try to
give a current and essential recommendation.
Chapter -1
Introduction
Background of the study:
Agrani Bank Limited (ABL) is established in 1972. It is a state owned bank. It is formed by
the composition of ex-Habib Bank ltd and ex-Commerce Bank ltd. Agrani Bank Limited is a Bank
with an Authorized Capital and Paid-up Capital of Tk.800.00 million and Tk.248.00 million
respectively. The total equity of the bank stands at 725.00 million as of December, 2010. The total
profit of last year is about Tk.680.00 million . There are about 867 branches in which 10 branches
are corporate. There are about 341 town branches and 526 rural branches.
The board of directors is consisted of 11 members. The Chairmen and Directors are nominated by
government. There are six section of ABL (senpara branch) – Cash, computer, account opening,
clearing, Accounts and local remittance. Cash section receive cash and pay payment in cash,
computer section posting the vouchers, account penning section open new accounts, clearing
section deal with clearing function, account section prepare different statement. The strengths of
ABL are, State owned bank, Wide image, and unlimited trustiness about ABL to rural people,
High commitments for customers, Qualified and experiences personnel.

2. The weaknesses of ABL are: Absence of service providing mentality, Absence of IT Applications.
Somewhat manual based, Lack of motivation of workers, depends on Head Office.
The opportunities of ABL are: High demand of credit, High demand of small Enterprise financing,
high demand of remittance facility, High demand of investment by Deposits.
It’s Vision is to become a leading bank of Bangladesh operating at international level of efficiency,
quality and customer service. And it’s Mission is We operate ethically and fairly within the
stringent framework set by our regulators. We will go fusing ideas and lessons from best practice
to explore new avenues to stay stronger and more efficient and competitive. We will apply
information and communication technology for the benefit of our customers and employees.
Objectives:
Main objective of this report is to evaluate the financial performance of Agrani Bank Limited
(ABL). And the specific objectives are:
 To figure out the liquidity, solvency, profitability and asset utilization ratios.
 To make a comparative analysis on financial performance based on the historical
information.
 To find out significant issues and put some relevant recommendations.
Methodology:
This report is fully based on primary and secondary data information. Primary data are collected
from directly the officials of Agrani Bank Ltd (ABL). The relevant secondary data collected from
internet, website of ABL, Annual report, Official data book.
Limitations:
The report has been done from the primary and secondary sources but it requires long time to
acquire to the real experience. Time limitation is the main constrain in this respect. The lack of
available of data is another limitation so the result shown by the study does not demonstrate actual
conditions and issues related this report. While conducting the report on “Performance Analysis
on ABL” Some limitations were yet present there:
 ABL is an government organization so they do not provide accurate information for making
this report.
 Because of time shortage many related area cannot be focused in depth.
 Website in different organization of Bangladesh contains poor information.
 Recent data information on different activities was unavailable.
Chapter-2
Financial Market of Bangladesh

3. Bangladesh is a developing country so the banking system as a whole plays a vital role in the
progress of economic development. Banking system plays a very important role in the economic
life of the nation. Banking is now an essential part of our economic system. Modern trade and
commerce would almost be impossible without the availability of suitable banking services.
Financial markets are three types in Bangladesh. There are given below-
 Money market
 Capital market
 Foreign Exchange market
Discuss this financial market
Money market:The primary money market is comprise of banks, FIs and primary dealers as
intermediaries and savings & lending instruments, treasury bills as instruments. There are currently
15 primary dealers in Bangladesh.12 banks and 3 FIs. The only active secondary market is quickly
call money market which is participated by the listed banks and FIs. The money market in
Bangladesh is regulated by Bangladesh Bank, the Central Bank of Bangladesh.
Capital market: The primary segment of capital market is operated through private and public
offering of equity and bond instruments. The secondary segment of capital market is
institutionalized by two stock exchanges is Dhaka Stock Exchange and Chittagong Stock
Exchange. The instruments in these exchanges are equity securities, debentures, corporate bonds
and treasury bonds. The capital market in Bangladesh is governed by Securities and Commission.
Foreign Exchange Market: Towards liberalization of foreign exchange transactions, a number of
measures were adopted since 1990s. Bangladeshi currency, the taka, was declared convertible on
current account transactions. The exchange rate is being determined in the market on the basis of
market demand and supply forces of the respective currencies. To avoid any unusual volatility in
the exchange rate, Bangladesh Bank, the regulator of foreign exchange market remains alert over
the developments in the foreign exchange market and intervenes by buying and selling foreign
currencies whenever it deems necessary to maintain stability in the foreign exchange market.
(Sources- Bangladesh bank)
There are three types of financial markets of Bangladesh. As Bank is a financial institution so it is
a part of money markets. Also Agrani Bank is a part of money market.
An overview of Agrani bank: Agrani Bank is a state-owned commercial bank of Bangladesh. It
established in 1972. Its headquarter is situated at Motijheel in Dhaka. Agrani Bank was
nationalized after liberation of Bangladesh. It started functioning as a commercial bank in 1972
and continued as a public sector bank till 16 May, 2007. On 17 May the bank started the third
chapter of its life as a limited company. The bank now performs its commercial banking operation
through 873 outlets all over Bangladesh under the leadership of a 13 member Board of Directors.
Chapter -3

4. Financial Performance of Commercial Bank
In Bangladesh Sonali Bank is the largest among the Nationalized Commercial Banks (NCBs) while
Pubali is leading in the private ones. Among the 12 foreign banks, Standard Chartered has become
the largest in the country. Besides the scheduled banks, Samabai (Cooperative) Bank, Ansar-VDP
Bank, Karmasansthan (Employment) Bank and Grameen bank are functioning in the financial
sector. In Bangladesh the number of total branches of all scheduled banks is 6,038. Of the branches,
39.95 per cent, 2,412 banks are located in the urban areas and 60.05 per cent ,3,626 banks in the
rural areas. Of the branches Nationalist Commercial Banks (NCBs ) hold 3,616, private
commercial banks 1,214, foreign banks 31 and specialized banks 1177.
Bangladesh Bank has been working as the central bank since the country’s independence. Its prime
jobs include issuing of currency, maintaining foreign exchange reserve and providing transaction
facilities of all public monetary matters. Bangladesh Bank regulates and supervises the activities
of all banks. Bangladesh Bank is also responsible for planning the government’s monetary policy
and implementing it thereby.
In Bangladesh there are many commercial banks. They perfume very well. The growth pattern of
some number of branches of commercial banks is very well. some are not well. Some growth of
Employee of Commercial Banks is good but some are not good.
Some commercial banks performance are given below-
Growth of branches: The growth pattern of number of branches of commercial banks. The growth
of branches is highest in Dutch Bangla Bank Limited. The lower growth percentage is in Prime
Bank. Till 2005 Prime Bank had 50 branches but in 2006 Prime Bank had closed 9 of its branches.
Growth of Employee of Commercial Banks: The highest no of employees are working in Islami
Bank Bangladesh Limited( IBBL) 7459 and lowest in DBBL. The growth percentage is higher in
DBBL and lowest in Prime Bank.
Growth of Deposit of Selected Private Commercial Banks: The growth pattern of deposits of
commercial banks. It is observed from the deposit is highest in IBBL that is TK 132,419,403,524
in 2006. The growth percentage of Prime Bank is highest that is 51.92% in 2006. In 2006 Growth
percentage of Dutch Bangla Bank and Dhaka Bank is 47.25% and 46.12%in year 2006
respectively. The lowest growth percentage of deposit is in National Bank Ltd. that is 22.33%
in 2006. During 2002 to 2006 every year deposit of Dhaka Bank, DBBL, NBL, Prime Bank and
IBBL has increased from the previous year except 2005.
The commercial plays a vital role in the economic development of the country. The selected private
commercial banks create employment opportunities for more than twelve thousand people. It has
been observed that the net income of the commercial banks has increased.
Chapter-4
Literature Review

5. Financial Ratios:
Liquidity ratios- A liquid asset is one that can be easily converted to cash without significant loss
of its original value.
 Current Ratio-
The ratio is calculated by dividing current assets by current liabilities.
Current ratio=current assets/ current liabilities
Asset Management- A set of ratios that measure how effectively a firm is managing its assets.
 Fixed asset turnover-
The ratio of sales to net fixed assets.
Total deposits / net fixed assets
 Total assets turnover ratio-
The ratio calculated by dividing total deposits by total assets
Total deposits / total assets
Debt management-
 Debt ratio =The ratio of total debt divided by total assets.
Debt ratio = total debt / total assets
 Times interest earning ratio= Earnings before income tax divided by interest charges.
Profitability – A group of ratios showing the effect of liquidity, asset management and debt
management on operating results.
 Profit margin of sales= Net income divided by total deposits
 Return on the total asset= net income divided by the total assets
Market Value-A set of ratio that relates the firm’s stock price to its earning and book value per
share.
 Price/Earning= Market price per share divided by earning per share
 Market/Book= Market price per share divided by Book value per share.

6. Chapter-5
Details Analysis & findings
(Here x means time)
(Industry average rate is collected from Essential of Financial Management book.)
Current Ratio
Here current ratio is 0.11163 in 2009, 0.17023 in 2008, and 0.08942 in 2007.But the industry
average is 4.1 x So it is the poor performance of Agrani Bank.
Fixed Asset Turnover
Performance Analysis of Agrani
Bank Limited
financial
ratio
(Amount
in crore
taka)
Year 2009
Industry
Average 2008 Industry average 2007 Industry Averag
Liquidity Comment comment co
1.Current ratio=current
assets/current liabilities 0.114.1x Low 0.17 4.1x Low 0.084.1x Low
Asset Management
1.fixed assets
turnover=Total
deposits/Net fixed assets 57.734.0x High 58.024.0x High 54.804.0x High
2.Total assets
turnover=total
deposits/total assets 0.782.1x Low 0.782.1x Low 0.722.1x Low
Debt Management
1.Debt ratio
Totaldebt/total
assets 1.87 4.50%High/ok 1.97 4.50%High/Ok 1.80 4.50%high/ok
Profit margin on deposits
1.Profitability margin on
deposits=Net
income/deposits 0.038 4.70%Low 0.043 4.70%Low 0.038 4.70%Low
2.Return on total asset=Net
income/total asset 0.03012.60%Low 0.0312.60%Low 0.028 12.60%Low
Market
Value
1.Price/Earnings=Market
price per share/earnings 70.84(taka)13.0x High/ok 14.26(taka)13.0x High/ok 41.84(taka)13.0x High/ok
2.Market/Book=Market
price per share/Book value 1.0122.0x Low 1.0132.0x Low 1.0132.0x Low

7. Here fixed asset turnover ratio is 57.73 in 2009, 58.02 in 2008 and 54.68 in 2007. The industry
average is 4.0x so it is the high performance of agrani bank.
Total Asset Turnover
Here total asset turnover is 0.78 in 2009, 0.78 in 2008, and 0.72 in 2007.And the industry average
is 2.1x so the performance of this sector is low.
Debt Ratio
Here Debt Ratio is 1.87 in 2009, 1.97 in 2008, and 1.80 in 2007. Here debt ratio is decrease in
2009.And it under controlled. Because the industry average is 4.50 percent.
Times interest Earned
In times interest earned they earned 4293.3 in 2009, 4220 in 2008. And 3506.6 in 2007.Their times
interest earned increase every year. So here there performance is ok. (Amount in crore taka).
Profitability
In 2009 there profit margin was 3.57 percent, 4.31percent in 2008, and 3.86 percent in 2007.In
three years their profit margin on deposits was higher in 2008 but the industry average is 4.7
percent so here their performance is low.
Return on total Asset
Here Return on total asset was 3.04 percent in 2009, 3.37 percent in2008, 2.82 percent in2007. So
in 2008 there performance is high. The industry average is 12.6%. The performance is ok. If their
return on total asset is higher than 12.6% so there performance is low.
MARKET/BOOK
Here a small different in 2009 and 2008. 2008 and 2007 was some ratio. Here the industry average
is 2.0x. So in this section the performance of ABL was low. This ratio is smaller than the industry
average.
Chapter-6
Summary of Findings
Fund Crisis: ABL have not enough fund. They have many deposits offers likes ABDS deposits, a
special deposits is MIS. ABL gives the MIS deposits holders 10% interest in every month. As 10%
of interest rate ,if any account holders deposit 10 lack taka than ABL will give him 10 thousand
taka monthly. And they have many MIS holders. So they think that it is the main reason of crisis
of fund, and they face shortage of fund.

8. Biased decision regarding loans: In loan section they have not maintain the rules and regulation of
Bangladesh Bank. General people face many problem to get loan but the officials get the loan
eassily.Some officials do politics so their relatives get loan eassily.So it create many problem for
fund.
Violations of regulations: They do not follow the rules and regulations, some officers are absence
in two or three days in a week. It creates bad effect to other employee.
Poor management and job culture: ABL have a big problem like recently hey add online system
but some branches have not this system. They have manual system, so many people cannot like
this bank because in Bangladesh there are many private bank and they have online system. It is the
poor management system of ABL. In IT section they have no IT manager so IT performance is
very poor, many employee have no skill about IT section. So this is the reason that people cannot
open account in ABL.
Chapter-7
Recommendations
In ratio analysis the bank indicates some poor and some good performance .So ABL should
improve some sectors to overcome some poor situation. They should improve their fund and
quality management to get ride for some poor performance situation. They should improve their
fund by utilizing their money. Like they offer some scam and they give loan in high interest
rate(house loans). They should change some rules of scam like MIS. They motivate people by their
new scam. They should maintain and follow some rules and regulation of loans of Bangladesh
Bank. They give the SME to the people for low interest rate for motivates people. They give any
kind of loan and they take care the client who takes the loan. They should improve their quality
management like IT system. They must train this people who have no knowledge about IT or
online system; they change the manual system and give online system in all branches. They should
recruit some people in IT sectors. They also avoid politics. They must follow the rules and
regulations. So they overcome this situation.
Reference
1. Annual report of ABL2009, 2008, 2007
3. Bangladesh Bank Annual Report
4. http://www.agranibank.org/
5. http://en.wikipedia.org/wiki/Agrani_Bank
6. http://www.facebook.com/pages/Agran Bank
7. http://www.banglapedia.org/httpdocs

9. 8.Essential of Financial Management.