Fin 464 Samuel.Prime and Eastern Bank

Project On_
“Comparing the performance of Prime Bank and
Eastern Bank Limited "
Bank Management &
Financial Services
COURSE INSTRUCTOR – M. Morshed (mdm)
FIN 464 SECTION-01
Submission Date: 23rd August,2014
Prepared By:
Arman Nabil - 111 0556 030
Imtiaz Ahmed Chowdhury- 111 0673 030
Md Ferdous Khan Samuel- 111 0706 030

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EXECUTIVE SUMMARY
The report compares the performance of Prime Limited and Eastern Bank limited, within the
time period of 2008 to 2013, making use of financial statements such as balance sheet, profit
& loss account, and all other relevant data required for the purpose of analyzing the financial
performances. Both the bank and the non-bank are enlisted in the Dhaka Stock Exchange
(DSE). The overall performances were analyzed using various financial ratios regarding
liquidity, efficiency, financial risk, and profitability, market ratios. The resulting ratios were
used to comparison purposes in order to come up with the findings from the analysis.
The report covers the introduction, objectives, limitation, methodology, the overview of
Prime Bank and Eastern Bank Limited, the findings and analysis with recommendations and
the conclusion. One of the major areas of this report is the findings and analysis section as it
discusses all the resulting information essential for potential investors. The appendix,
provided in the end, includes all the relevant calculations used throughout the report.

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Introduction
The report has been prepared to analyze the performance of two listed private commercial
bank. For our research and analysis purpose we were given two banks: prime Bank Limited
and Eastern Bank Limited to compare the performance between the two.
In this report, the analysis of the performance is done in terms of liquidity, leverage,
efficiency, profitability, market position, provision for loan losses and capital adequacy, over
the period of time starting from 2008 to 2013. Throughout the report we have tried to find out
whether the overall performance of both the banks has improved or declined. Comparative
analysis has also been done to find out the better performing bank in terms of liquidity,
leverage, efficiency, profitability, market position and also the reason behind that. Other
performance indicators have also been considered to analyze the performances of the banks.
Throughout the report our focus is to understand the financial position of the banks in the
banking industry and to find out what are the factors helping the banks to perform better and
to suggest what other better strategies can be undertaken if the performance is not
satisfactory.

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Objective
The objective of the project is to evaluate the performances of Prime Bank Limited and
Eastern Bank Limited. The primary objective of the term paper is to analyze the performance
of Prime Bank Limited and Eastern Bank Limited in terms of their liquidity positions,
financial risk positions, efficiency ratios, profitability ratios, market positions and investors’
view point. And also reveal the Total risk of the bank as well as following risk Financial risk,
Credit risk, Price risk and Interest risk. Their performances will be calculated and analyzed
over the period between 2008 and 2013 using both time series and cross-sectional analysis.
Based on the ratios calculated, the resulting findings will be discussed.
As a result, the findings or resulting information will be useful to assess the overall
performances of Prime Bank Limited and Eastern Bank Limited which can be used as the
basis for investment decisions by potential investors. Thus, performances are also analyzed
according to investors’ view point. Lastly, some recommendations on policy implementation
are provided which can be used to enhance their performances.

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LIMITATIONS
In the course of attempting to successfully complete the term paper with effective results,
certain limitations were inevitable. There were several limitations that restricted the ability to
disclose some of the information of both Prime Bank Limited and Eastern Bank Limited. The
number of limitations includes the following:
 Since the performance analysis has been done based on the financial data of the last
few years only, the results might be limited to a certain extent.
 The findings are based only on the outcomes of the financial risk and ratios. The
findings and recommendations do not reflect the future perspectives of the bank.
 The annual reports may have limitations in terms of data discrepancies which make it
difficult to calculate some ratios and thus affect the quality of the analysis or
comparison to some extent.
 During the completion of the term paper, few ratios could not be dealt with due to the
absence of required relevant information in the annual reports of Prime Bank Limited
and Eastern Bank Limited. Thus, some relevant information could not be addressed.

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OVERVIEW OF PRIME BANK LIMITED
Prime Bank Limited, a scheduled bank, was incorporated under the Companies Act 1994, and
started its operation on April 17, 1995 with the target of playing the vital role in the socio-
economic development of the country as well as earning profit. It was registered as a banking
company under the Bank Company Act 1991 from the Bangladesh Bank on February 12,
1995. The bank started making profit from the year of its inception. The first Managing
Director, Mr. Lutfar Rahman Sarkar, Ex-Governor, Bangladesh Bank, provided required
leadership for a newly established bank.
Prime Bank Limited is a second - generation private commercial bank has been working for
stimulating trade and commerce, accelerating the pace of industrialization, boosting up
export, creating employment opportunity, alleviating poverty, raising standard of living of the
people etc and thereby contributing to the sustainable development of the country. At present,
the bank has a network of 89 branches with around 2280 employees stationed in both rural
and urban areas of the country. Since inception, the Bank has been making significant profit
every year and positioning itself as second highest profit-making bank in the country for last
five consecutive years. This has been possible due to significant growth of the bank. This has
also been possible due to minimize the risks of the bank successfully.
The bank serves its customers with the following motto—
‘A Bank with a difference’
Vision:
Bank Profile

6
To be the best Private Commercial Bank in Bangladesh in terms of efficiency, capital
adequacy, asset quality, sound management and profitability having strong liquidity.
Mission :
 To build Prime bank limited into an efficient, market driven, customer focused
institution with good corporate governance structure.
 Continuous improvement in our business policies, procedure and efficiency through
integration of technology at all levels.
OBJECTIVE OF PRIME BANK LIMITED
Prime Bank aims to continuously update and develop its product line and range of
services to cater to the needs of retail and corporate customers. To achieve this goal,
efforts have been directed in three main areas:
 Design and introduction of new products and services
 Shaping and developing the system to face new challenges and emerging need of the
market
 Full implementation and utilization of the Bank’s excellence program which aims to
provide service to customers.

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OVERVIEW OF EASTERN BANK LIMITED
The emergence of Eastern Bank Limited in the private sector is an important event in the
banking industry of Bangladesh. Eastern Bank Limited was formed on August 08, 1992 and
commenced its business as a scheduled bank with effect from August 16, 1992. EBL started
its operation with one Head Office, two branches one in Dhaka and the other one in
Chittagong. Its shares are listed with Dhaka and Chittagong Stock Exchange(s) Limited and
are being quoted in the market regularly.
One of the objectives behind creation of this new bank was to give effect to the bank of
Credit and Commerce International (Overseas) Limited in Bangladesh (Reconstruction)
Scheme, 1992 framed by the Bangladesh Bank under section 77(4) of the Bank Company
Act. EBL is listed in the Dhaka Stock Exchange Limited and Chittagong Stock Exchange
Limited. Currently the bank has 34 branches, 26 own ATMs, 65(91-96) shared Q-cash ATMs
(excluding ours) and 5 Bills pay machines across the country. EBL also has 68, 772 Debit
Cards (first of its kind in Bangladesh), 1,228 Cool Cards and 5,845 Lifestyle Cards.
Eastern Bank Limited (EBL) is one of the modern, fully online and technologically superior
private commercial Banks in Bangladesh. Eastern Bank markets a wide range of depository,
loan & card products. These products include different types of Savings & Current Accounts,
Personal Loans, Auto Loan, Debit Card, Pre-paid Cards, Internet Banking, Treasury,
Syndication, Corporate Banking and SME Banking services through a network of branches &
centers countrywide. Eastern Bank has its presence in major cities/towns of the country
including Dhaka, Chittagong, Sylhet, Khulna and Rajshahi. Tracing its origin back to 1992,
EBL is serving the individual and corporate clientele alike with remarkable success offering
innovative banking services since then. Here is the brief profile of EBL:
 EBL was formed as a public limited company in Bangladesh with primary objective
to carry on all kinds of banking business in and outside Bangladesh.
 The bank was formed on August 08, 1992.
 EBL commenced its business with four branches from 16 August 1992.
 The authorized capital of the Bank is Tk. 3300 million.
 The paid-up capital the Bank is Tk. 1,035 million.
 Address of Head Office of EBL: Jiban Bima Bhaban 10, Dilkusha C/A, Dhaka-
1000

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VISION
The vision of Eastern Bank Limited is to become the bank of choice by transforming the way
they do business and developing a truly unique financial institution that delivers superior
growth and financial performance and be the most recognizable brand in the financial
services in Bangladesh.
MISSION
EBL will deliver service excellence to customers, both internal and external.
EBL will constantly challenge their systems, procedures and training to maintain a
cohesive and professional team in order to achieve service excellence.
EBL will create an enabling environment and embrace a team based culture where
people will excel.
EBL will ensure to maximize shareholder’s value.
Objectives of EBL
Maximization of profit along with the benefits of employees is the main objective of the
bank. In addition, the other objectives are:
 To be one of the leading banks of Bangladesh in terms of ROE and ROE
 To be the market leader in high quality banking products and service.
 Achieve excellence in customer service through providing the most modern and
advanced state-art technological in the different spheres of banking
 Cater to a broader and differentiated segment of retail and wholesale customers.
 To grow its credit extension service to the commercials as well industrial sector;
 To increase its diversification of loan portfolio and geographical coverage
 To curd present operating expenses further so as to increase earning before tax
 To reduce the burden of nonperforming assets

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METHODOLOGY
The financial data for all the years between 2008 and 2013 have been collected from the
annual reports of Prime Bank Limited and Eastern Bank Limited available in their respective
websites. Using the financial data provided in the annual reports, all the required ratios were
calculated accordingly. After analyzing the performances both of the bank individually
through both time series and cross-sectional analysis, their overall performances throughout
the periods were compared. Then, the resulting findings were revealed and discusses in the
findings and analysis section. Lastly, a list of suggestions and recommendations were
discussed regarding which one would be better to invest as a potential investor.

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Literature Review
For the thorough analysis of the performance of the banks, certain ratios and techniques had
been used, the explanation and relevance of which had been explained in the paragraphs
below.
Leverage ratio:
Banks in general are highly leveraged, as they deal mostly with borrowed funds.
The more leveraged a bank is, the more it will be subject to several kinds of risks including
interest rate risks, liquidity risks and maturity risks.
Debt ratio:
This measures the portion of the total assets that are generated through debts. Creditors
generally find it more comfortable when the debt ratio is lower, as that indicated a better
cushion for them. On the contrary, stockholders prefer a higher debt ratio as that increases
their expectation for earnings in the near future
=
𝐓𝐨𝐭𝐚𝐥 𝐋𝐢𝐚𝐛𝐢𝐥𝐭𝐢𝐞𝐬
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭𝐬
Debt to Equity Capital Ratio:
The Debt to Equity Ratio measures the amount of money that a firm can safely borrow over a
longer period of time.
=
𝐓𝐨𝐭𝐚𝐥 𝐋𝐢𝐚𝐛𝐢𝐥𝐭𝐢𝐞𝐬
𝐒𝐡𝐚𝐫𝐞𝐡𝐨𝐥𝐝𝐞𝐫𝐬 𝐄𝐪𝐮𝐢𝐭𝐲
Times Interest Earned:

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Times interest earned indicates the number of time the interest expenses can be paid of with
the current operating revenue that the bank is able to generate through its services. The higher
it is, the better it is.
=
𝐓𝐨𝐭𝐚𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐑𝐞𝐯𝐞𝐧𝐮𝐞
𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐄𝐱𝐩𝐞𝐧𝐬𝐞
Profitability Ratios:
In order to measure the performance of the of the bank, profitability ratios have been used as
well. The profitability ratios of the banks are used to measure how well exactly the bank is
performing , as far as their profits are considered. It is one of the most basic means to
measure the performance of any profit making organization and may provide management, as
well as investors with a more thorough analysis of the bank in question.
Return on Equity:
The ROE of a bank determines the amount of net income after tax that it is able to generate as
a result of its share holders equity. In other the total revenue that a firm is able to generate
through the investements made by the share holders.
=
𝐍𝐞𝐭 𝐈𝐧𝐜𝐨𝐦𝐞 𝐀𝐟𝐭𝐞𝐫 𝐭𝐚𝐱
𝐓𝐨𝐭𝐚𝐥 𝐄𝐪𝐮𝐢𝐭𝐲 𝐂𝐚𝐩𝐢𝐭𝐚𝐥
Return On Assets.
This particular ratio indicates the amount of revenue that was generated trhough the use of
the asset. The more this is , the better the assets have been managed, and the more efficient
was the management.

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𝐍𝐞𝐭 𝐈𝐧𝐜𝐨𝐦𝐞 𝐀𝐟𝐭𝐞𝐫 𝐭𝐚𝐱
𝐓𝐨𝐭𝐚𝐥 𝐀𝐬𝐬𝐞𝐭
Net Interest Margin
Net interest margin of the company/bank, is the difference between the interest income that
is generate by them and the amount of interest that these instititutions pay off to the lenders.
=
𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 − 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐞𝐱𝐩𝐞𝐧𝐬𝐞
𝐓𝐨𝐭𝐚𝐥 𝐚𝐬𝐬𝐞𝐭𝐬
Non Interest Margin:
The net non interest margin measure the amount o f non intereset revenue that the bank
generates through its services, fees , relative ot the amount of non interest costs that they had
incurred through all the expenses of the bank. e.g. wages, salaries, etc.
𝐍𝐨𝐧 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐫𝐞𝐯𝐞𝐧𝐮𝐞 − 𝐍𝐨𝐧 𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐞𝐱𝐩𝐞𝐧𝐬𝐞
Net operating margin:
this measures the company’s pricing strategy and operating efficiency. This measures the
amount of the proportion of the company’s revenue, after providing for the indirect expenses
such as
𝐓𝐨𝐭𝐚𝐥 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐫𝐞𝐯𝐞𝐧𝐮𝐞𝐬 − 𝐓𝐨𝐭𝐚𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐞𝐱𝐩𝐞𝐧𝐬𝐞
Earnings per Share:
This particular ratio identifies the amount of profit each share is entitle to. It is calculated by
dividing the net income with the total number of shares outstanding. The more this ratio is ,
the happier are the investors and the more confidence they would portray while investing in
it.
𝐍𝐞𝐭 𝐈𝐧𝐜𝐨𝐦𝐞 𝐚𝐟𝐭𝐞𝐫 𝐓𝐚𝐱
𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐂𝐨𝐦𝐦𝐨𝐧 𝐬𝐭𝐨𝐜𝐤 𝐨𝐮𝐭𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠

13
Market Position Ratios:
The market ratios provide the information that are required by any investors before they
invest in any organization. A good view of the company can contribute to its increased share
prices providing its shareholders with capital gain on the shares they have purchased of the
company.
Price Earning Ratio:
The P/E ratio indicates exactly how much investors or the shareholders are ready to pay for
each Taka worth of return that the shares would provide.
𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐞 𝐏𝐞𝐫 𝐬𝐡𝐚𝐫𝐞
𝐄𝐚𝐫𝐧𝐢𝐧𝐠 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞
Market to Book Ratio:
The book value of the firm is basically its historic cost, where as the market cost is the one
that is generated by the demand and supply of the shares in the market. this ratio compares
the ratio between the two. The higher the market value, them higher is the consumer
perception towards the shares of the firm.
𝐌𝐚𝐫𝐤𝐞𝐭 𝐕𝐚𝐥𝐮𝐞 𝐏𝐞𝐫 𝐬𝐡𝐚𝐫𝐞
𝐁𝐨𝐨𝐤 𝐯𝐚𝐥𝐮𝐞 𝐩𝐞𝐫 𝐬𝐡𝐚𝐫𝐞
Dividend Per Share:
This ratio shows the dividend that the company/bank has declared/paid on each of its share.
The higher it is, the more the investors will be willing to invest in it.
𝐓𝐨𝐭𝐚𝐥 𝐃𝐢𝐯𝐢𝐝𝐞𝐧𝐝
𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐜𝐨𝐦𝐦𝐨𝐧 𝐬𝐭𝐨𝐜𝐤 𝐨𝐮𝐭𝐬𝐭𝐚𝐧𝐝𝐢𝐧𝐠

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Dividend Yield:
This determines the price that the shareholders pay to earn each Taka worth of dividend by
investing in the shares.
Retention Ratio:
This ratio calculates the percentage of net income which is retained as earning of the
institution. This ratio also helps us to find the internal growth rate of the bank. The ratio is:
=
𝐑𝐞𝐭𝐚𝐢𝐧𝐞𝐝 𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬
𝐍𝐞𝐭 𝐢𝐧𝐜𝐨𝐦𝐞
Asset Utilization (AU):
The asset utilization ratio calculates the total revenue earned for every Taka worth of assets a
company owns. This ratio indicates a company's efficiency in using its assets.
=
𝐓𝐨𝐭𝐚𝐥 𝐨𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐫𝐞𝐯𝐞𝐧𝐮𝐞𝐬
Equity Multiplier (EM):
The equation shows degree of total assets is financed by total equity capital.
=
Efficiency Ratios:
The efficiency ratios of the bank measures the efficiency with which bank manages certain
important aspects of the bank such as , employee productivity, operating activities, tax
management etc. due to the lack of information provide in the annual reports and the web

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sites of both the AB and the City Bank, some of the ratios such as the employee productivity
ratios couldn’t be calculated.
Operating efficiency ratio:
This measures how efficiently the operating expenses of the bank/other institutions are
managed.
𝐓𝐨𝐭𝐚𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐄𝐱𝐩𝐞𝐧𝐬𝐞
𝐓𝐨𝐭𝐚𝐥 𝐎𝐩𝐞𝐫𝐚𝐭𝐢𝐧𝐠 𝐑𝐞𝐯𝐞𝐧𝐮𝐞
Tax Management Efficiency:
This ratio portrays the use of security gain/losses and other management tools such as the
process of buying bonds and other securities on which the taxes have been exempt to
minimize the tax liability of the institution.
Expense Control Efficiency:
This ratio calculates the pretax net operating income relative to the total operating revenue.
The efficiency with which the bank manages its operating expense can be derived from this.
Asset Management Efficiency:
Its is the same as asset utilization ratio.
Fund Management Efficiency:

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It is the same as the equity multiplier explained above.
𝐓𝐨𝐭𝐚𝐥 𝐚𝐬𝐬𝐞𝐭
Liquidity risk:
This is the risk of not being able to meet the liquidity payments when due because of several
reasons such as the lack of good quality security, cash or due from other institutes etc.
Price risk:
This is the risk that the bank/other institutions are exposed to due to changes in interest rate.
The price here is basically the price of the assets owned by the organization or its shares.
Interest rate risk:
The impact of changing interest rates on a financial institution’s margin profit is called
interest rate risk. It is calculated by the ratio of interest sensitive asset to interest sensitive
liabilities. Bank will try to make the interest sensitive asset equal to interest sensitive
liabilities either in terms of volume or mature.
*Analysis is done by column chart. 1st column is Eastern bank and 2nd column is Prime
bank

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Analysis of Ratios
A) LIQUIDITY RATIO:
1.Cash Position:
Cash position simply tells us from our total assets how much cash do we hold in our hand to
meet our short term obligations.
Time series analysis:
For Eastern bank:
In 2008 , 2009,2010,2011,2011,2012 and 2013 out of 100 banks cash was 6.47%, 4.98%,
4.49%, 5.12%, 7.34% and 5.18% respectively. What we can see that there was a slight
decrease and increase over the period. But in 2013 it decreased significantly. This trend
implies that the bank to some extant may face problem if there is high withdrawal as the
cash is the first line of defense against the deposit withdrawals and cash demands.
For Prime Bank:
For prime bank : For prime bank there was a constancy over the period except 2009. This
trend implies that the bank is in same position to handle its immediate cash needs as the cash
is the first line of defense against the deposit withdrawals and cash demands.
2008 2009 2010 2011 2012 2013
Eastern Bank 6.47% 4.98% 4.49% 5.12% 7.34% 5.18%
Prime Bank 6.52% 8.21% 6.27% 6.75% 6.83% 7.23%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
1.Cash Position

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Cross Sectional Analysis:
Prime bank has better cash position than Eastern. It means Prime might be in better than
eastern in future. Depositors may prefer prime than eastern as the will not face cash shortage
while withdrawing money.
2.Liquid securities indicator
For Eastern bank:
The ratio was fluctuating a lot over the period of time. At first from 2008 to 2009 it increased
due to increase in investment in government securities. However then it decreased as
investment decreased and it may happen that they sold out in order to meet their short term
obligation but from 2010 it started to increase gradually, which is a good sign for the bank as
it is the second line of defense.
2008 2009 2010 2011 2012 2013
Eastern Bank 9.06% 11.29% 8.32% 10.92% 12.09% 13.72%
Prime Bank 18.84% 15.24% 12.68% 17.20% 18.97% 23.02%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2.Liquid securities indicator

19
For Prime Bank:
For prime bank there was a significant decrease from 2008 to 2010. The decrease was due to
decrease in investment in government security. However from 2011 the ratio started to
increase significantly as investment in government security increased a lot making the bank
more stronger in terms of liquid assets.
For prime bank the ratio is way better than eastern in 2013. This shows that if any
liquidity crises occur prime bank will easily overcome but eastern will face a serious
difficulty in overcoming liquidity crisis. Eastern bank should invest more in
government or marketable security as it is the second line of defence.
c) Capacity ratio:
For Eastern bank:
For eastearn bank there was decrease in trend from 2008 to 2013 expect 2010. If ratio goes
down it is a good sign for liquidity as less money will be stuck in long term assets. Loans and
2008 2009 2010 2011 2012 2013
Eastern Bank 72.54% 67.51% 71.43% 69.55% 65.73% 65.18%
Prime Bank 68.05% 71.51% 72.75% 69.72% 67.93% 62.98%
58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
70.00%
72.00%
74.00%
AxisTitle
3.Capacity Ratio

20
leases are the most illiquid among all the assets. However earnings from loan will decrease. The
management should maintain a balance between the earnings and the liquidity.
For Prime Bank:
For prime bank there was a fluctuating trend and in 2013 it decreased significantly. It simply mean
s the bank will become more stronger in terms of liquidity. However banks earnings from
loan and leases will drop significantly in 2013 from the past. However decrease in giving
loan may be due to decrease in market interest rate.
As we know that the capacity ratio is a negative liquidity indicator, the trend indicates both the bank
have quite dissimilar capacity ratio. But in 2013 the two banks ratio was close enough. This means in
2013 in terms of capacity ratio the liquidity position was more or less similar.
4.Deposit composit Ratio
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 15.04% 14.69% 14.94% 13.80% 14.63% 11.04%
Prime Bank 15.84% 17.66% 21.48% 17.74% 18.10% 15.36%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
AxisTitle
4.Deposit composit Ratio

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The ratio decreased gradually from 2008 to 2009 and from 2009 to 2010 the ratio remained
almost same. From 2010 to 2011 it decreased slightly then increased in 2012 but in 2013 it
decreased significantly making the bank more stronger in terms of liquidity. The reason for
decrease may be proportionate increase in time deposit was higher than proportionate
increase in demand deposit.
For Prime Bank:
The ratio increased from 2008 to 2010 but decreased in 2011 significantly and then increased
slightly in 2012. However it decreased in 2013 significantly. The bank became more stronger
in 2013 from the past in terms of liquidity.
Eastern bank is more liquid in terms of demand deposit ratio in 2013 than prime bank as we
know that demand deposit has more withdrawals than time deposit.

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B)LEVERAGE RATIO:
1.Debt to equity ratio
For Eastern bank:
The ratio was decreasing over the period of time. At first the ratio was decreasing up to 2010
then it started to increase up to 2012 and then decreased in 2013. In 2013 debt was 0.76 times
of equity which means equity is higher than debt. The decrease in ratio over the period made
the bank less financially leverage.
For Prime Bank:
The ratio was fluctuating over the period up to 2012 but in 2013 it decreased significantly by
going to 0.17. In 2013 debt was very low compare to equity, making the bank less financially
2008 2009 2010 2011 2012 2013
Eastern Bank 1.00 0.87 0.76 1.50 1.82 0.76
Prime Bank 1.70 0.01 0.23 0.57 1.03 0.17
0.00
0.20
0.40
0.60
0.80
1.00
1.20
1.40
1.60
1.80
2.00
1.Debt to equity Ratio

23
leverage as low debt decreases financial leverage of the bank. In 2008 the bank was highly
financially leverage and in 2009 it was very low. The bank was in very good shape in 2008.
The increase in debt in 2008 may be due to the expansion of the business. But the company
successfully paid out all the debts in 2008 and decreased its debt making the bank very low
financially leverage in 2009.
In 2013 prime banks debt was 0.17 times of equity making it low financially leverage but in
the same time eastern banks debt was 0.76 times of equity making the bank highly
financially leverage. Investors will have low confidence in eastern bank as they have more
debts as making the bank more risky and highly financially leverage.
2.Debt to asset Ratio
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 91.29% 87.66% 85.27% 87.75% 88.37% 88.31%
Prime Bank 93.94% 90.59% 89.03% 90.43% 91.22% 90.56%
80.00%
82.00%
84.00%
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
2.Debt to asset Ratio

24
The ratio was fluctuating over the period . In 2013, 88.13% of total assets were financed by
debt making the bank highly dependant on debt. Too much dependant on debt will make the
bank to pay higher interest payment . As a result companies net profit will decrease.
For Prime Bank:
The ratio was decreasing gradually over the period. But yet the bank was highly dependant on
debt to finance its asset. Highly dependant on debt will make the bank more financially
leverage and more risky.
In 2013 both the banks was highly dependant on debt to finance its asset. The most likely
reason may be increase in borrowing from non deposit borrowing as it is the cheapest source
of financing.

25
C) EFFCIENCY RATIO:
1.Operating efficiency Ratio
Operating efficiency ratio is a negative ratio. It means if the ratio goes down it will be better.
For Eastern bank:
The ratio was fluctuating over the period of time. The ratio was almost same over the period
of time. The ratio was high. This simply means that operating expense was higher for the
bank. In 2013 , for every amount of Tk 100 revenue it made a expense of TK 70. Too much
operating expense will decrease the net profit.
For Prime Bank:
The ratio was decreasing up to 2010 but from 2010 it started to increase up to 2013. In 2013
operating expense was 75% of operating revenue. The increase in operating expense will
definitely decrease the net profit of the bank.
2008 2009 2010 2011 2012 2013
Eastern Bank 67.69% 65.69% 58.07% -26.17% 69.27% 70.14%
Prime Bank 70.19% 68.18% 65.21% 69.31% 72.33% 75.54%
-40.00%
-20.00%
0.00%
20.00%
40.00%
60.00%
80.00%
100.00%
1.Operating efficiency Ratio

26
Both the banks had high operating efficiency ratio. Prime banks operating efficiency ratio
was 75% and eastern banks was 70%. The likely reason for increase in operating ratio may be
due to increase in net non deposit borrowing.
2.Employee productivity Ratio
Net income per staff is mainly calculated to know the productivity of each employee. The
reasons for changing the net income per staff are-
 Increase or decrease the amount of Net Income
 Increase or decrease the total number of staffs in Prime Bank Limited from 2008-2013.
For Eastern bank:
It wsa fluctuating over the period but in 2013 it decreased a lot compare to previous years.
I think employees needs further training.
2008 2009 2010 2011 2012 2013
Eastern Bank 3800998.778 1949842.47 2235960.202 6680895.987 2029151.63 1790920.835
Prime Bank 248184161.0 286806886.6 284145702.0 325261914.0 336117616.0 275821307.7
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
2.Employee productivity Ratio

27
For Prime Bank:
It was increasing over the period except 2013 where it decreased a lot. The management
should give more emphasize on increasing it.
Prime bank is much better than eastern in 2013. Their employees are much efficient.

28
D) PROFITABILITY RATIO:
1.ROA
This ratio will tell us how much net profit is generated from total assets.
For Eastern bank:
The ratio was increasing from 2008 to 2010 but started to decrease up to 2012 and then
increased to 1.63%. Tk 100 amount of total assets has generated Tk 1.63 amount of net profit
in 2013. All the assets don’t generate profit hence the ratio is low.
For Prime Bank:
The ratio was fluctuating over the period of time. In 2009 it was 2.23 % but in 2013 it went to
0.75%. Prime banks ratio decreased significantly in 2013 from the past years. The banks
assets were not used efficiently.
2008 2009 2010 2011 2012 2013
Eastern Bank 1.47% 2.14% 2.96% 2.14% 1.55% 1.63%
Prime Bank 1.12% 2.23% 1.97% 1.83% 1.14% 0.75%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
1.ROA

29
Both banks ratio was very low in 2013. Both the banks assets were not used efficiently. Both
the banks should use their assets efficiently in order to earn more profit.
2.ROE
ROE means how much common shareholder will get by investing Tk 100.
For Eastern bank:
The ratio was increasing from 2008 to 2011 but it decreased in 2012 significantly. Then in
2013 it almost remained same. It was 13.92%. The decrease may be due to increase in
operating expense.
For Prime Bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 16.87% 17.30% 20.07% 17.50% 13.30% 13.92%
Prime Bank 18.39% 23.71% 17.91% 19.13% 13.45% 7.94%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2.ROE

30
The ratio increased from 2008 to 2009 significantly but started to decrease from 2010 to
2013.
In 2013 it went down to 7.94%. The most likely reason may be due to increase in operating
expense. They need to focus on decreasing their operating expense.
Eastern banks return on equity was higher than prime bank in 2013. Prime banks ROE was
much lower than eastern banks. Eastern banks shareholder may expect to get higher return
than prime bank.
3.Net Interest Margin
This ratio means how much total asset is generating net interest margin. Higher ratio is good
for the company.
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 2.85% 3.15% 3.62% 2.82% 3.27% 3.10%
Prime Bank 1.78% 1.93% 2.77% 2.04% 2.28% 1.78%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
3.Net Interest Margin

31
The ratio was increasing from 2008 to 2010 but in 2011 it decreased a bit. Then the ratio
started to increase gradually. The ratio always remained same over the period.
For Prime Bank:
The ratio was increasing from 2008 to 2010 but started to decrease gradually to 2013. In
2013 it went to 1.78. The ratio went very low in 2008.
In 2013 prime banks net interest margin was very low compare to eastern bank. Prime bank
should emphasize more on increasing interest income and decrease interest expense.
4. Net Noninterest Margin
This ratio will tell us how much total asset is generating net noninterest margin.
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 4.38% 4.34% 5.35% 15.23% 3.70% 3.67%
Prime Bank 3.48% 4.24% 3.98% 3.73% 3.61% 3.07%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
4. Net Noninterest Margin

32
The ratio almost remained same up to 2010 but in 2011 it increased significantly to 15.23%.
The reason may due to increase in non interest income . But from 2012 it started to decrease
significantly. Banks investment income has decreased a lot in 2012.
For Prime Bank:
The ratio almost remained same over the period. Banks income from non interest activities
almost same over the period.
In 2013 both the banks ratio was almost same. Both the banks may have followed same
investing policy.
5.Net Bank Operating Margin
This ratio will tell us how much operating income is generated by total assets by operation of
the bank.
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 6.81% 6.76% 7.87% 6.63% 6.01% 6.00%
Prime Bank 5.23% 6.57% 6.34% 5.82% 5.70% 5.28%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
8.00%
9.00%
5.Net Bank Operating Margin

33
The ratio almost remained same over the period but picked in 2010. Operating income
generated by total assets almost remained same.
For Prime Bank:
The ratio has peaked in 2009 and the gradually decreased to 5.28% in 2013.
In 2013, operating inome generated by total assets for both the banks were almost same.
Eastern Bank’s was a bit higher than the Prime Bank.
6.Dividend per share
This ratio tells us how much each share will receive as a dividend.
For Eastern bank:
In 2008 DPS was very low but increased significantly in 2010. Then DPS started to fall in
2011 and went to 2 in 2012 and 20 13. The ratio was fluctuating a lot over the period.
2008 2009 2010 2011 2012 2013
Eastern Bank 0.30 0.37 5.50 3.50 2.00 2.00
Prime Bank 2.5 4 4 3 2 1.25
0.00
1.00
2.00
3.00
4.00
5.00
6.00

34
For Prime Bank:
DPS started to increase from 2008 to 2010 Reaching 4. Then from 2011 it started to fall and
went to 1.25 in 2013. The reason for decrease in DPS from 2011 may be due to increase in
retention rate.
In 2013 DPS for Eastern bank was higher than prime bank. Eastern banks shareholders will
be more happy than prime banks shareholder.
7.Dividend Yield
This ratio will tell us how dividend will be given if the current market price of the stock is
Tk.100.
For Eastern bank:
From 2008 to 2009 the dividend yield was very low. The reason was for low dividend paid
during those years. But in 2010 it reached the peak to 42.50. In that year shareholder got
good dividend. But in 2011 it decreased a lot to 5.32. Then it started to increase gradually.
2008 2009 2010 2011 2012 2013
Eastern Bank 0.51% 0.57% 42.50% 5.32% 6.31% 6.87%
Prime Bank 4.63% 6.13% 4.23% 6.74% 5.41% 4.83%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
7.Dividend Yield

35
For Prime Bank:
The ratio was fluctuating over the period. In 2009 and 2011 it was good.
In 2013 eastern banks DPS was 6.87 and prime banks was 4.83. The new investor will get
higher return from eastern bank than prime.
8. Dividend payout Ratio
This ratio will tell us out of total earning how much dividend is paid to shareholder.
For Eastern bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 5.21% 6.33% 66.25% 62.86% 53.73% 47.60%
Prime Bank 57.71% 51.07% 76.94% 63.88% 69.34% 70.33%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%

36
From 2008 to 2009 the ratio was very low but from 2010 it increased a lot to 66.25. From
2011 it started to decrease gradually. The reason for increase was due to increase in net profit
from 2010.
For Prime Bank:
The ratio was fluctuating over the period. The ratio reached the peak in 2010. In 2013 it went
to 70.33%.
Prime banks dividend payout ratio was more than eastern making the shareholder more
satisfied in 2013. However retain earning will be lower for prime bank which may hamper
future growth.
9.Rettention Ratio
Retention ratio simply means how much the bank is retaining after paying out the dividends
to its existing shareholders. Retaining money for the company is done due to future growth
and to overcome future uncertainty
2008 2009 2010 2011 2012 2013
Eastern Bank 94.79% 93.67% 33.75% 37.14% 46.27% 52.40%
Prime Bank 42.29% 48.93% 23.06% 36.12% 30.66% 29.67%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
9.Rettention Ratio

37
For Eastern bank:
In 2008 and 2009 the company was retaining huge amount. The purpose may be for future
growth in the upcoming year. However rather earning per share started to fall from 2010
which tells us that they couldn’t use their retained earnings efficiently. The reason for
decrease in retained earnings in 2010 may be due to increase in payment in dividend. From
2010 the trend almost remained same.
For Prime Bank:
From 2008 there was a increasing trend up to 2009 and from 2010 retained earning dropped
significantly due to increase in dividend in 2010. From 2011 companies net profit did not
increase in proportion to increase in shares’.
In 2013 eastern banks retained earnings was way more than prime bank. This shows that
eastern bank may have future growth which is a good sign for the company.
10. EPS
2008 2009 2010 2011 2012 2013
Eastern Bank 5.76 5.84 8.30 5.57 3.72 4.20
Prime Bank 4.33 7.83 5.69 4.7 2.88 1.78
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10. EPS

38
Earning per share will tell us how much the common shareholders have earned for every one
share.
For Eastern bank:
The EPS was increasing from 2008 to 2010 which was a positive sign for the company but
from 2011 it started to decrease significantly up to 2010. The reason may be due to increase
in expense. In 2013 it increased a bit.
For Prime Bank:
From 2008 to 2009 the EPS increased significantly due to increase in profit. But from 2010
it started to fall rapidly up to 2013 when it became 1.78 from 7.83 in 2009. The decline in
EPS will not encourage investors to invest in prime bank.
In 2013 eastern banks EPS was 4.20 whereas prime banks was only 1.78. Eastern banks
investors will be satisfied with the investment but we expect that investors will loose
confidence in prime bank due to low EPS.
11. Net profit Margin

39
This ratio will tell us how much profit will be made by generating TK 100 amount of sales.
For Eastern bank:
From 2008 the ratio was increasing at a good rate up to 2010. In 2010it went to 23.17 from
10.82. Between this year the company was managing its expense efficiently. But from 2011
it started to fall rapidly and went to 13.25 in 2013. The reason may be proportionate increase
in expense was higher than proportionate increase in revenue.
For Prime Bank:
The ratio was increasing from 2008 to 2010 at a increasing rate but from 2011 it started to
drop significantly and the ratio went to around 6 in 2013 from 9.55 in 2008 .
In 2013 eastern banks net profit margin was 13.25 but prime banks net profit margin was
only 6
2008 2009 2010 2011 2012 2013
Eastern Bank 10.82% 16.87% 23.17% 17.76% 12.83% 13.25%
Prime Bank 9.55% 16.75% 17.19% 15.07% 8.73% 5.99%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
11. Net profit Margin

40
. Eastern bank was able to control its expense more efficiently than prime.
12. Tax management efficiency Ratio
This ratio will tell us how much profit will remain to shareholder after paying tax to
government.
This ratio will tell us how efficiently we are managing our tax.
For Eastern bank:
From 2008 the ratio was increasing at a increasing rate up to 2011 and then a slight decrease
from 2012 to 2013. This shows the company was able to manage its tax efficiently from
2010 when the ratio became around 61.
For Prime Bank:
The ratio was fluctuating over the period. In 2009 the company could manage its tax more
efficiently. But then started to fall over the period.
2008 2009 2010 2011 2012 2013
Eastern Bank 41.35% 53.93% 60.73% 61.05% 53.92% 53.10%
Prime Bank 50.01% 60.67% 54.22% 53.90% 50.59% 53.10%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
12. Tax management efficiency Ratio

41
In 2013 both the companies tax management efficiency ratio was almost same. The high
corporate tax has decreased both the companies tax management efficiency ratio.
13. Expense control efficiency Ratio
This ratio will tell us how efficiently the company is managing its expense . Its very
important to manage expense in order to survive in this competitive market. This ratio can be
a major reason for increase and decrease in net profit.
For Eastern bank:
The ratio was increasing from 2008 to 2010 but from 2011 it started to fall rapidly. The
management should be more concerned about decreasing its expense.
For Prime Bank:
The ratio was increasing from 2008 to 2010 which was good but from 2011 it started to fall
up to 2013. This was the major reason for decrease in net profit from 2011. The reason may
be increase in non interest expense.
2008 2009 2010 2011 2012 2013
Eastern Bank 26.17% 31.27% 38.15% 29.10% 23.80% 24.95%
Prime Bank 19.09% 27.61% 31.70% 27.97% 17.26% 11.27%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
13. Expense control efficiency Ratio

42
Eastern bank was able to control its expense more efficiently than prime bank in 2013. Prime
bank is very bad in controlling its expense.
For Eastern bank: ------------------------
For Prime Bank: ------------------------
Cross Sectional Analysis: ------------------------
2008 2009 2010 2011 2012 2013
Eastern Bank 13.57% 12.66% 12.75% 12.07% 12.05% 12.28%
Prime Bank 11.68% 13.32% 11.43% 12.15% 13.05% 12.53%
10.00%
10.50%
11.00%
11.50%
12.00%
12.50%
13.00%
13.50%
14.00%
14. Asset Utilization

43
15. Equity Multiplier
For Prime Bank:
From the above figures we can say that from 2008 to 2010 the equity multiplier was
decreasing from 16.47 times to 8.89 times. Then from 2010 to 2012 it went up to 11.39 times.
Lastly at 2013 the equity multiplier of Prime Bank again decreased to 10.60 times. This ratio
gives us an idea of Prime Bank’s financing or leverage policies that more equity is required to
finance the assets of the company. Though, the larger the multiplier, the more exposed the
company is towards risk but there will be a greater potential for high return.
In conclusion we can say that the bank is highly leveraged and in 2013,90.56% of its assets
are financed by liabilities and 10.60 times more equity is required to finance the assets of the
bank and thus the bank is open to high financial risk.
For Eastern bank:
decreasing from 11.48 times to 6.73 times. Then from 2011 to 2013 it again went up to 8.51
2008 2009 2010 2011 2012 2013
Eastern Bank 11.48 8.10 6.79 8.16 8.60 8.56
Prime Bank 16.49 10.63 9.11 10.45 11.80 10.59
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00

44
times. This ratio gives us an idea of Eastern Bank’s financing or leverage policies that more
equity is required to finance the assets of the company. Though, the larger the multiplier, the
more exposed the company is towards risk but there will be a greater potential for high
return.
In 2013 prime banks equity multiplier was higher than eastern bank. Prime bank has higher
ris than eastern bank in terms of financial risk.
16.Debt Ratio
For Prime Bank:
2008 2009 2010 2011 2012 2013
Eastern Bank 91.29% 87.66% 85.27% 87.75% 88.37% 88.31%
Prime Bank 93.94% 90.59% 89.03% 90.43% 91.22% 90.56%
80.00%
82.00%
84.00%
86.00%
88.00%
90.00%
92.00%
94.00%
96.00%
16.Debt Ratio

45
The ratio shows what percentage of assets is financed by liability. From 2008 to 2010, the
financial leverage ratio had a steady decrease at a rate from 93.93% to 88.75%. Then at 2011,
it increased a bit to 90.39% up to 2012 to 91.22%. Then it decreased to 90.56% in 2013. So
we can say that the prime bank is lowering its leverage ratio and this decreases the risk the
bank is exposed to even though the bank is highly leveraged.
For Eastern bank:
it increased a bit to 87.59%and then to88.27% in the consecutive years up to 2013. So we can
say that eastern bank is lowering its leverage ratio and this decreases the risk the bank is
exposed to
Both the banks were highly financed by debt. Both the banks assets were financed by debt
approximately to 90 percent making the bank highly financially leveraged.

46
E) MARKET POSITION RATIO:
1. Price earning Ratio
This ratio will tell us for every 1 TK of earnings how much investors are willing to pay.
For Eastern bank:
In 2013 investors are willing to pay around 7 Tk for every 1 TK of reported earnings.
For Prime Bank:
In 2013 investors are willing to pay around tk 15 for every 1 Tk of reported earnings.
As the ratio is higher for prime bank, this tells us that investors have more confidence in
prime bank than eastern.
2008 2009 2010 2011 2012 2013
Eastern Bank 10.23 11.02 1.56 11.82 8.52 6.93
Prime Bank 12.46 8.34 16.60 9.47 12.85 14.57
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00

47
2. Market to Book value Ratio
This ratio will tell us how many times the market value was higher the book value. Sky is the
limit here.
For Eastern bank:
The ratio was good up to 2009 but in 2010 it decreased significantly. From 2011 it started to
rise again but from 2012 it started to fall due to stock market crash.
For Prime Bank:
The ratio was increasing up to 2010 but from 2011 it started to fall due to stock market crash.
I don’t think the market price fell down due to internal problem of the company rather it fell
due to external factor.
Both the companies ratio was almost same
. F) INVESTORS POINT OF VIEW RATIO:
2008 2009 2010 2011 2012 2013
Eastern Bank 5.89 6.44 1.29 6.58 3.17 2.91
Prime Bank 4.35 6.53 9.445 4.45 3.7 2.59
-
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
10.00
2. Market to Book value Ratio

48
1.ROE
ROE means how much common shareholder will get by investing Tk 100.
For Eastern bank:
The ratio was increasing from 2008 to 2011 but it decreased in 2012 significantly. Then in
2013 it almost remained same. It was 13.92%. The decrease may be due to increase in
operating expense.
For Prime Bank:
The ratio increased from 2008 to 2009 significantly but started to decrease from 2010 to
2013.
In 2013 it went down to 7.94%. The most likely reason may be due to increase in operating
expense. They need to focus on decreasing their operating expense.
2008 2009 2010 2011 2012 2013
Eastern Bank 16.87% 17.30% 20.07% 17.50% 13.30% 13.92%
Prime Bank 18.39% 23.71% 17.91% 19.13% 13.45% 7.94%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
1.ROE

49
Eastern banks return on equity was higher than prime bank in 2013. Prime banks ROE was
much lower than eastern banks. Eastern banks shareholder may expect to get higher return
than prime bank.
This ratio tells us how much each share will receive as a dividend
For Eastern bank:
In 2008 DPS was very low but increased significantly in 2010. Then DPS started to fall in
2011 and went to 2 in 2012 and 20 13. The ratio was fluctuating a lot over the period.
For Prime Bank:
DPS started to increase from 2008 to 2010 Reaching 4. Then from 2011 it started to fall and
went to 1.25 in 2013. The reason for decrease in DPS from 2011 may be due to increase in
retention rate.
2008 2009 2010 2011 2012 2013
Eastern Bank 0.30 0.37 5.50 3.50 2.00 2.00
Prime Bank 2.5 4 4 3 2 1.25
0.00
1.00
2.00
3.00
4.00
5.00
6.00

50
In 2013 DPS for Eastern bank was higher than prime bank. Eastern banks shareholders will
be more happy than prime banks shareholder.
3.Dividend Yield
This ratio will tell us how dividend will be given if the current market price of the stock is
Tk.100.
For Eastern bank:
From 2008 to 2009 the dividend yield was very low. The reason was for low dividend paid
during those years. But in 2010 it reached the peak to 42.50. In that year shareholder got
good dividend. But in 2011 it decreased a lot to 5.32. Then it started to increase gradually.
For Prime Bank:
The ratio was fluctuating over the period. In 2009 and 2011 it was good.
In 2013 eastern banks DPS was 6.87 and prime banks was 4.83. The new investor will get
higher return from eastern bank than prime.
2008 2009 2010 2011 2012 2013
Eastern Bank 0.51% 0.57% 42.50% 5.32% 6.31% 6.87%
Prime Bank 4.63% 6.13% 4.23% 6.74% 5.41% 4.83%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
45.00%
3.Dividend Yield

51
This ratio will tell us out of total earning how much dividend is paid to shareholder.
For Eastern bank:
From 2008 to 2009 the ratio was very low but from 2010 it increased a lot to 66.25. From
2011 it started to decrease gradually. The reason for increase was due to increase in net profit
from 2010.
For Prime Bank:
The ratio was fluctuating over the period. The ratio reached the peak in 2010. In 2013 it went
to 70.33%.
Prime banks dividend payout ratio was more than eastern making the shareholder more
satisfied in 2013. However retain earning will be lower for prime bank which may hamper
future growth.
2008 2009 2010 2011 2012 2013
Eastern Bank 5.21% 6.33% 66.25% 62.86% 53.73% 47.60%
Prime Bank 57.71% 51.07% 76.94% 63.88% 69.34% 70.33%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%

52
5. EPS
Earning per share will tell us how much the common shareholders have earned for every one
share.
For Eastern bank:
The EPS was increasing from 2008 to 2010 which was a positive sign for the company but
from 2011 it started to decrease significantly up to 2010. The reason may be due to increase
in expense. In 2013 it increased a bit.
For Prime Bank:
From 2008 to 2009 the EPS increased significantly due to increase in profit. But from 2010
it started to fall rapidly up to 2013 when it became 1.78 from 7.83 in 2009. The decline in
EPS will not encourage investors to invest in prime bank.
----------------------
2008 2009 2010 2011 2012 2013
Eastern Bank 5.76 5.84 8.30 5.57 3.72 4.20
Prime Bank 4.33 7.83 5.69 4.7 2.88 1.78
0.00
1.00
2.00
3.00
4.00
5.00
6.00
7.00
8.00
9.00
5. EPS

53
----------------------
This ratio will tell us for every 1 TK of earnings how much investors are willing to pay.
For Eastern bank:
In 2013 investors are willing to pay around 7 Tk for every 1 TK of reported earnings.
For Prime Bank:
In 2013 investors are willing to pay around tk 15 for every 1 Tk of reported earnings.
As the ratio is higher for prime bank, this tells us that investors have more confidence in
prime bank than eastern.
2008 2009 2010 2011 2012 2013
Eastern Bank 10.23 11.02 1.56 11.82 8.52 6.93
Prime Bank 12.46 8.34 16.60 9.47 12.85 14.57
-
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00

54
For Prime Bank:
For Eastern bank:
return.
2008 2009 2010 2011 2012 2013
Eastern Bank 11.48 8.10 6.79 8.16 8.60 8.56
Prime Bank 16.49 10.63 9.11 10.45 11.80 10.59
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
18.00

55
In 2013 prime banks equity multiplier was higher than eastern bank. Prime bank has higher
ris than eastern bank in terms of financial risk

56
RISK ANALYSIS
PRIME BANK AND EASTERN
BANK
Financial Risk Ratios
1. Financial Leverage ratio =
𝐓𝐨𝐭𝐚𝐥 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐲
Year Prime Bank Eastern Bank
2008 103,808,390,629
110,516,618,171
= 93.93%
49,618,437,316
54,351,795,983
= 91.29%
2009 113,188,025,112
124,984,702,326
= 90.56%
59,826,151,298
68,330,333,103
= 87.55%
2010 137,757,712,934
155,222,005,259
= 88.75%
70,273,534,050
82,530,978,439
= 85.15%
2011 181,689,285,267
200,995,680,436
= 90.39%
102,972,118,140
117,564,320,732
= 87.59%
2012 216,045,966,674
236,833,005,579
= 91.22%
129,794,892,351
147,044,438,547
= 88.27%
2013 220,839,187,716
243,868,804,824
= 90.56%
139,604,536,856
158,163,357,490
= 88.27%
Prime Bank
it increased a bit to 90.39% up to 2012 to 91.22%. Then it decreased to 90.56% in 2013. So

57
we can say that the prime bank is lowering its leverage ratio and this decreases the risk the
bank is exposed to even though the bank is highly leveraged.
Eastern Bank
it increased a bit to 87.59%and then to88.27% in the consecutive years up to 2013. So we can
say that eastern bank is lowering its leverage ratio and this decreases the risk the bank is
exposed to.
Equity Multiplier
2. Equity Multiplier =
𝐓𝐨𝐭𝐚𝐥 𝐄𝐪𝐮𝐢𝐭𝐲
Year Prime Bank Eastern Bank
2008 110,516,618,171
6,708,227,542
= 16.47times
54,351,795,983
4,733,358,666
= 11.48times
2009 124,984,702,326
11,796,677,214
= 10.59times
68,330,333,103
8,434,181,804
= 8.10times
2010 155,222,005,259
17,464,292,325
= 8.89times
82,530,978,439
12,257,444,389
= 6.73times
2011 200,995,680,436
19,306,395,169
= 10.41times
117,564,320,732
14,592,202,592
= 8.06times
2012 236,833,005,579
20,787,038,905
= 11.39times
147,044,438,547
17,249,546,196
= 8.52times
2013 243,868,804,824
23,029,617,108
= 10.60times
158,163,357,490
18,558,820,634
= 8.51times
Prime Bank

58
Eastern Bank
return.
Credit Risk Ratio
3. Credit Risk Ratio =
𝐓𝐨𝐭𝐚𝐥 𝐋𝐨𝐚𝐧
𝐓𝐨𝐭𝐚𝐥 𝐃𝐞𝐩𝐨𝐬𝐢𝐭
Year Prime bank Eastern bank
2008 75,156.21
88,020.59
= 85.38%
39,662,162,813
41,572,767,785
= 95.40%

59
2009 89,252.22
106,956.27
= 83.45%
47,667,987,118
49,189,542,218
= 96.91%
2010 116,056.52
124,573.63
= 93.16%
58,607,085,693
56,425,228,517
= 103.87%
2011 139,408.89
159,815.72
= 87.23%
81,773,910,178
75,535,746,703
= 108.26%
2012 160,889.85
182,052.87
= 88.38%
96,719,736,531
91,780,968,457
= 105.38%
2013 153,588.76
201,907.14
= 76.07%
102,910,218,949
117,101,708,180
= 87.88%
Prime Bank
The credit risk ratio shows the possibility that borrowers will not repay the loan taken. From
2008 to 2009, the credit risk ratio has gone down from 85.38% to 83.45%. But from the same
year 2009 to 2010 it increased by a lot more from 83.45% to 93.16%. Then again in 2011 it
decreased to 87.23%. After that in 2012, it increased a bit to 88.38% and lastly in 2013 it
decreased to 76.07%. The credit risk fluctuated quite a bit from 2008 to 2013. In general, the
higher the credit risk the higher will be the interest rate that the debtor will be asked to pay on
the debt. Seeing the bank’s own trend we can say risk declined but as a whole the risk is still
quite high and is as high as 76.07%, which means there is approximately 76% chance that the
borrower will fail to repay the loan.
Eastern Bank
The credit risk ratio shows the possibility that borrowers will not repay the loan taken. From
2008 to 2011, the credit risk ratio has gone up drastically from 95.40% to 108.26%. It showed
that the risk was excessively high during that period. But in 2012, it decreased a bit to
105.38%. Lastly in 2013 it decreased a lot to 87.88% which reduced its risk by quite a
significant amount. In general, the higher the credit risk the higher will be the interest rate
that the debtor will be asked to pay on the debt. Seeing the bank’s own trend we can say risk
declined but as a whole the risk is still quite high and is as high as 87.88%, which means
there is approximately 87% chance that the borrower will fail to repay the loan. So between
the years 2010 to 2012 there was more than 100% chance that the borrower would fail to
repay the loan.

60
Price Risk
4. Price Risk =
𝐁𝐨𝐨𝐤 𝐯𝐚𝐥𝐮𝐞 𝐨𝐟 𝐞𝐪𝐮𝐢𝐭𝐲 𝐜𝐚𝐩𝐢𝐭𝐚𝐥
𝐌𝐚𝐫𝐤𝐞𝐭 𝐯𝐚𝐥𝐮𝐞 𝐨𝐟 𝐞𝐪𝐮𝐢𝐭𝐲 𝐜𝐚𝐩𝐢𝐭𝐚𝐥
2008 138,690,000*10/138690000*58.9
= 16.9%
6,696,770,778/
284,375,000 *43.50
=54.15
2009 249,642,000*10/ 249642000*64.4
=15.5%
11,745,223,217 /
355,468,750 *65.30
=50.50%
2010 292,081,140*10/292081140*12.94
=77.2%
16,768,521,255 /
577,636,710 *94.45
=30.7%
2011 452,725,767*10/
452,725,767*66
=15.2%
19,138,724,931 /
779,809,558 *44.50
=55.1%
2012 611,179,785*10/
611,179,785*31.7
=33.2%
20,072,227,283 /
935,771,469 *37
=57.9%
2013 611,179,785*10/
611,179,785*29.1
=34.3%
23,029,617,108 /
1,029,348,616 *25.90
=86%
Prime Bank

61
Eastern Bank
Interest rate risk
5. Interest rate risk =
𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐬𝐞𝐧𝐬𝐢𝐭𝐢𝐯𝐞 𝐚𝐬𝐬𝐞𝐭
𝐈𝐧𝐭𝐞𝐫𝐞𝐬𝐭 𝐬𝐞𝐧𝐬𝐢𝐭𝐢𝐯𝐞 𝐥𝐢𝐚𝐛𝐢𝐥𝐢𝐭𝐢𝐞𝐬
2008 ------------------------ ------------------------
2009 ------------------------ ------------------------
2010 ------------------------ ------------------------
2011
2012
2013
Prime Bank
Eastern Bank

62
Total Risk
When the market risk and the bank’s specific risk are combined together, it is called total
risk. Total risk is calculated by the standard deviation and a few variables can be used to
measure the risk. Standard deviation of net income or stock price or return on assets or return
on equity can be used to calculate the total risk. Here we have used return on equity (ROE).
Total risk is the measure that is used because it includes the risks that affect each individual
bank or the risk that affects the entire banking industry.
Total Risk of Eastern Bank
When n=1, ROE= 16.87%
n=2, ROE= 17.30%
n=3, ROE= 20.07%
n=4, ROE= 17.50%
n=5, ROE=13.30%
n=6, ROE= 13.92%
Mean ROE =
16.87+17.30+20.07+17.50+13.30+13.92 %
6
= 16.49%
(16.87 − 16.49)2
+ (17.30 − 16.49)2
+ (20.07 − 16.49)2
+ (17.50 − 16.49)2
+ (13.30 − 16.49)2
+ (13.92 − 16.49)2

63
= 31.418
Standard deviation of ROE =
31.418
6−1
𝑛=6
𝑖=1
Therefore, Standard deviation of ROE = 2.51%
2.51% standard deviation means the value of ROE varies by 2.51% from the mean or average
value of ROE which is calculated to be 16.49%. So the bank’s ROE varies within the range
of 13.98% to 19%. This variation is no so high and suggests that the bank is exposed to not so
high risk.
Judging all the risks together it can be said that the bank is taking an appropriate risk, in fact
just enough risk for its operations and for the generation of income both for itself and for the
shareholders and investors.
Total Risk of Prime Bank
When n=1, ROE= 18.39%
n=2, ROE= 23.71%
n=3, ROE= 17.91%
n=4, ROE= 19.13%
n=5, ROE=13.45%
n=6, ROE= 7.94%
Mean ROE =
18.39+23.71+17.91+19.13+13.45+7.94 %
6
= 16.755%
(18.39 − 16.755)2
+ (23.71 − 16.755)2
+ (17.91 − 16.755)2
+ (19.13 − 16.755)2
+ (13.45 − 16.755)2
+ (7.94 − 16.755)2

64
= 146.647
Standard deviation of ROE =
146.647
6−1
𝑛=6
𝑖=1
Therefore, Standard deviation of ROE = 5.42%
5.42% standard deviation means the value of ROE varies by 5.42% from the mean or average
value of ROE which is calculated to be 16.755%. So the bank’s ROE varies within the range
of 11.335% to 22.175%. This variation is quite high and suggests that the bank is exposed to
high risk.
Judging all the risks together it can be said that the bank is taking a lot of risk, in fact very
high risk for its operations and for the generation of income both for itself and for the
shareholders and investors. Higher risks give higher return and thus may be the cause that the
bank is facing such high risks. Prime Bank is taking a chance to earn higher profit by taking
higher risk.

65
Recommendation and conclusion
To my opinion in terms of liquidity prime bank is better than eastern bank. I will tell that if
anyone wants to open current account which needs withdrawal frequently should open
account in prime bank rather than eastern as cash and liquid security are in good shape than
eastern.
Both the banks are highly financially leveraged but eastern banks shareholders are
compensated by giving more dividend than prime. Eastern bank is more profitable as Return
on equity and asset are higher for eastern than prime. Net interest margin is also higher for
eastern and it is the main source of income for the bank. Dividend yield is also high for the
eastern so new investors will get more return rather than investing in prime. Retention ratio is
also better for eastern which assures future growth for the bank. And in Bangladesh we know
that price of the share fluctuates a lot so investors should mainly rely on dividend and in this
case eastern bank will be a better option as it gives good dividend. We know that the main
goal of the company is to maximize shareholders wealth but unfortunately prime bank is not
able to minimize its expense. Eastern bank is good at managing expense efficiently.

66
Conclusion
Banks are enormously involved to the national and international economy through utilization
of the resources and assembling the savings of the people for the investment purposes,
therefore aiding the development different sector and making venture capital. In this report,
the operation and management performance of two local banks have been revealed through a
very effective a tool of performance evaluation, ratio analysis. Though in the real-world, the
theoretical assessment often fall short reflecting actual market situation. Several peripheral
issues, gossips influence investment choice in practical-world. Yet, financial ratio analysis is
awfully vital to widen the theoretical acquaintance of investing in banks. In addition, it
provides the logical guideline to choose among the banks to investors, depositors and to all
other prospective groups
In conclusion I will tell eastern bank is in good shape than prime. Investing in eastern bank
will assure good return at present and future.

67
BIBLIOGRAPHY
1) https://www.primebank.com.bd/
2) http://www.ebl.com.bd/
3) http://populationaction.org/annual-
report/?gclid=Cj0KEQiAq_SkBRC3jLvJ1IPt2eIBEiQASUZy1zsOLn5JK78fGfpuhZ
ZH_olVRpx7VeQHzldAOlznrYIaArQi8P8HAQ
4) http://en.wikipedia.org/wiki/Prime_Bank_Limited
5) http://en.wikipedia.org/wiki/Eastern_Bank_Ltd_(Bangladesh)

69
BALANCE SHEET
Year 2008 2009 2010
PROPERTIES AND ASSETS
Cash 3
Cash in hand (including foreign currency) 3.1
426,684,325 481,498,299 725,168,966
Balance with Banlgesh Bank (including foreign currencies) 3.2
3,091,861,836 2,920,942,423 2,956,146,840
3,518,546,161 3,402,440,722 3,681,315,806
Balance with other Bank and Financial Institutions 4
In Bangladesh 4.1
2,948,217,394 5,459,255,745 3,507,711,860
Outside Bangladesh 4.2
458,106,531 1,317,960,808 1,045,568,539
3,406,323,925 6,777,216,553 4,553,680,399
Money at call and short notice 5
700,000,000 330,000,000 -
Investments 6
Government 6.1
4,923,272,085 7,716,875,500 6,828,141,845
Others 6.2
401,486,455 1,089,429,806 2,999,055,228
5,324,758,540 8,806,305,306 9,827,197,073
Loans and Advances 7
Loans, Cash Credits, Overdraft etc. 7.1
38,632,083,300 45,277,521,185 54,498,712,055
Bills purchased and discounted 7.2
795,300,591 852,000,898 4,108,373,638
39,427,383,891 46,129,522,083 58,607,085,693
Fixed assets including land, building, furniture and
fixturres
8
1,246,107,178 1,804,049,534 3,614,398,915
Other assets 9

70
728,676,288 832,920,905 1,522,035,035
Non banking assets 10
- 247,878,000 247,878,000
TOTAL ASSETS
54,351,795,983 68,330,333,103 82,053,590,922
LIABILITIES AND CAPITAL
Liabilities
Borrowing from other banks, financial institutions and
agents
11
4,714,170,952 7,339,797,296 9,213,075,020
Deposits and other accounts 12
Current deposits & other accounts, etc 12
4,393,679,354 4,887,995,996 5,522,402,626
Bills payables 12
618,020,525 1,192,855,487 1,079,503,680
savings bank deposits 12
7,337,769,077 9,797,294,072 12,853,595,212
Fixed deposits 12
29,192,341,198 33,259,986,755 36,947,476,998
Bearer certificates of deposits 13
22,250,000 22,250,000 22,250,000
41,564,060,153 49,160,382,310 56,425,228,516
Other liabilities 13
3,340,206,211 3,395,971,692 4,331,732,822
TOTAL LIABILITIES
49,618,437,317 59,896,151,298 69,970,036,358
SHAREHOLDERS' EQUITY
Share Capital-Paid up Capital 14
1,386,900,000 2,496,420,000 2,920,811,400
Stautory reserve 15
1,386,900,000 1,927,039,732 2,725,521,942
Dividend equalization reserve 16
356,040,000 356,040,000 356,040,000
Reserve against per taka over loss 17
1,554,759,750 1,554,759,750 1,554,759,750
Per taka over loss 18
(1,019,763,617) (997,316,025) (989,138,238)
Asset revaluation reserve 19
405,015,050 913,678,854 2,651,941,750
Reserve for amortization of tresury securities (HTM) 20
26,212,662 22,956,196 -
Reserve for revaluation of reserve securities (HFT) 21
30,841,625 817,840,106 823,251,968
Reserve for building fund
60,000,000 60,000,000
General reserve 22

71
100,000,000 100,000,000 160,000,000
Reserve for non banking assets 23
- 233,527,796 233,537,796
Foreign currency translation gain/(loss) 24
- - -
Profit & loss account-retained earnings 25
446,453,197 949,235,396 1,646,838,196
Attributable to equity holders
- -
Non controling Interest
- -
TOTAL SHAREHOLDERS EQUITY
4,733,358,666 8,434,181,805 12,083,554,564
TOTAL LIABILITIES AND SHEREHOLDERS' EQUITY
54,351,795,983 68,330,333,103 82,053,590,922
Year 2011 2012 2013
PROPERTIES AND ASSETS
Cash 3
Cash in hand (including foreign currency) 3.1
1,095,795,193 1,097,919,688 1,752,660,726
Balance with Banlgesh Bank (including foreign currencies) 3.2
4,926,961,943 9,699,237,183 6,428,136,805
6,022,757,136 10,797,156,871 8,180,797,531

72
Balance with other Bank and Financial Institutions 4
In Bangladesh 4.1
3,429,581,406 7,616,918,267 8,012,554,438
Outside Bangladesh 4.2
101,735,964 1,369,531,149 2,390,509,831
3,531,317,370 8,986,449,416 10,403,064,269
Money at call and short notice 5
2,650,000,000 100,000,000 -
Investments 6
Government 6.1
12,841,220,762 17,789,164,429 21,659,579,849
Others 6.2
4,068,970,503 3,865,510,224 4,244,004,844
16,910,191,265 21,654,674,633 25,903,583,693
Loans and Advances 7
Loans, Cash Credits, Overdraft etc. 7.1
80,144,671,921 87,363,196,058 94,491,939,790
Bills purchased and discounted 7.2
1,629,238,257 9,356,540,473 8,418,279,159
81,773,910,178 96,719,736,531 102,910,218,949
Fixed assets including land, building, furniture and
fixturres
8
4,453,286,336 5,768,259,820 6,897,393,729
Other assets 9
1,991,379,197 2,904,324,025 3,394,841,686
Non banking assets 10
247,878,000 217,733,000 191,733,000
TOTAL ASSETS
117,580,719,482 147,148,334,316 157,881,633,857
Liabilities
Borrowing from other banks, financial institutions and
agents
11
21,652,484,276 31,158,073,038 14,079,880,398
Deposits and other accounts 12
Current deposits & other accounts, etc 12
7,464,670,557 9,806,371,635 9,877,524,621
Bills payables 12
814,170,727 866,317,963 789,543,484
savings bank deposits 12
13,159,045,299 14,080,165,001 16,923,994,211
Fixed deposits 12
54,075,610,120 67,005,863,858 89,510,645,864
Bearer certificates of deposits 13
22,250,000 22,250,000 -

73
75,535,746,703 91,780,968,457 117,101,708,180
Other liabilities 13
5,985,437,035 7,099,953,349 8,249,547,103
TOTAL LIABILITIES
103,173,668,013 130,038,994,844 139,431,135,680
Share Capital-Paid up Capital 14
4,527,257,670 6,111,797,850 6,111,797,850
Stautory reserve 15
3,551,351,414 4,395,274,232 5,362,423,625
Dividend equalization reserve 16
356,040,000 356,040,000 356,040,000
Reserve against per taka over loss 17
1,554,759,750 1,554,759,750 1,554,759,750
Per taka over loss 18
(787,204,238) (952,794,812) (973,078,718)
Asset revaluation reserve 19
2,651,941,750 3,689,495,550 3,689,495,550
Reserve for amortization of tresury securities (HTM) 20
3,793 98,740 827,635
Reserve for revaluation of reserve securities (HFT) 21
409,033,635 13,754,631 59,972,091
Reserve for building fund
-
General reserve 22
160,000,000 160,000,000 130,000,000
Reserve for non banking assets 23
233,527,796 204,427,796 178,971,165
Foreign currency translation gain/(loss) 24
15,073,031 (5,418,843) (781,214)
Profit & loss account-retained earnings 25
1,735,266,868 1,581,904,578 1,980,070,442
- - -
Non controling Interest
- - -
14,407,051,469 17,109,339,472 18,450,498,176
117,580,719,482 147,148,334,316 157,881,633,857

74
Consolidated Income Statement
YEAR 2008 2009 2010
Interest Income 27
5,224,413,145 6,186,163,190 6,976,456,856
Less: interest paid on deposit and borrowings 28
3,675,380,751 4,032,711,612 4,003,003,299
Net Interest Income
1,549,032,394 2,153,451,578 2,973,453,557
Income from Investments 29
862,903,795 1,107,303,239 2,050,312,502
Fees,commission and brokerage 30
770,793,298 747,999,037 1,215,741,801
Other operating income 31
518,903,343 608,879,284 221,212,790
Total operating income
3,701,632,829 4,617,633,138 6,460,720,650
Salary &allowances 32
600,073,608 732,479,992 1,152,524,093
Rent,taxes, insurance, utilities etc 33
108,926,781 148,316,341 187,971,376
legal &proffesional expenses 34
20,215,333 21,664,793 34,549,400
Postage stamp telecommunication etc 35
48,670,601 52,353,711 62,293,128
Stationary, printing, advertisement etc 36
139,733,665 171,075,567 165,373,422
Managing director's salary and allowances 37
9,940,258 10,574,284 12,615,162
Director's fee & expenses 38
993,393 955,950 1,736,448
Audit fees 39
274,424 209,000 345,000
Charges on loan losses
2,387,822 6,138,198 -
Repairs, maintenance and depriciation 40
141,842,352 220,695,388 235,509,569
Other operating expenses 41
245,348,359 285,509,674 220,849,136
Total operating expenses
1,318,406,597 169,972,897 1,073,766,734
Net operating Income don't
2,383,226,232 4,447,660,241 4,386,953,916
Other non operating expenses 42
- - 22,628,988
Profit before provitions

75
2,385,539,471 2,967,660,241 4,409,582,904
Provitions for loans and advance
Specific provision
241,420,278 130,958,500 132,169,073
General provision
211,265,795 131,552,822 248,518,078
452,686,073 262,511,322 380,687,151
Other provision 43
- - 36,484,704
total provisions
452,686,073 262,511,322 417,171,855
Profit before tax for the year
1,930,540,159 2,705,148,918 3,992,411,049
Provision for tax made for the year 13.3
(1,136,123,212) (1,251,702,859) (1,570,000,000)
Deferred tax (expenses)/income 44
3,936,250 5,545,873 2,378,746
(1,132,186,962) (1,246,156,986) (1,567,621,254)
profit after tax for the year
798,353,197 1,458,991,932 2,424,789,795
Appropriation
Statuatory reserve 15
(351,900,000) (540,139,732) (789,482,210)
General reserve
- - -
(351,900,000) (540,139,732) (789,482,210)
Retained earning carried forward
446,453,197 918,852,200 1,626,307,586
Weighted average number of shares
EPS 45
8.30
Net Non interest Income
834,193,840 814,208,662 1,413,500,359
Operating Revenue
7,377,013,581 8,650,344,750 10,463,723,949
Operating Expenses
4,993,787,347 5,682,684,510 6,076,770,033
operating Income
2,383,226,234 2,967,660,240 4,386,953,916
Number of Employee
627 1,522 1,962

76
Dividend Calculations
RE
NI
Dividend paid for the year 41,600,000 92,300,000 1,606,446,270
number of share outstanding 138,690,000 249,642,000 292,081,140
Market Price 58.9 64.4 12.94

77
YEAR 2011 2012 2013
Interest Income 27
9,713,139,461 13,698,222,818 14,807,156,889
Less: interest paid on deposit and borrowings 28
(6,398,718,277) 8,884,100,640 9,915,598,012
Net Interest Income
3,314,421,184 4,814,122,178 4,891,558,877
Income from Investments 29
1,970,089,489 1,494,601,857 2,070,848,267
Fees,commission and brokerage 30
2,093,589,181 2,299,911,740 2,357,317,315
Other operating income 31
414,504,968 235,751,865 149,648,740
7,792,604,822 8,844,387,640 9,469,373,199
Salary &allowances 32
1,471,530,156 1,750,682,613 1,963,508,938
Rent,taxes, insurance, utilities etc 33
253,889,895 349,945,005 423,237,948
legal &proffesional expenses 34
44,080,615 51,052,665 50,841,431
Postage stamp telecommunication etc 35
78,559,281 96,448,339 102,784,849
Stationary, printing, advertisement etc 36
203,888,076 210,436,903 233,344,345
Managing director's salary and allowances 37
13,956,361 147,823,997 16,155,930
Director's fee & expenses 38
2,602,236 2,929,483 3,002,587
Audit fees 39
365,750 403,500 460,000
Charges on loan losses
- - -
Repairs, maintenance and depriciation 40
309,492,977 420,010,651 436,238,593
Other operating expenses 41
306,874,783 366,382,358 451,542,438
2,685,240,130 3,263,072,914 3,681,117,160
Net operating Income don't
5,107,364,692 5,581,314,726 5,788,256,039
Other non operating expenses 42
- - -
5,107,364,692 5,581,314,726 5,788,256,039
Specific provision
320,968,073 845,884,252 706,268,210

78
General provision
403,465,121 23,892,959 84,148,586
724,433,194 869,777,211 790,416,796
Other provision 43
253,784,137 491,923,424 162,092,275
total provisions
978,217,331 1,361,700,635 952,092,275
4,129,147,361 4,219,614,091 4,835,746,968
Provision for tax made for the year 13.3
(1,739,842,732) (2,186,375,000) (2,589,787,489)
Deferred tax (expenses)/income 44
131,399,784 241,861,619 321,904,353
2,520,704,413 2,275,100,710 2,567,863,832
Appropriation
Statuatory reserve 15
(825,829,472) (843,922,818) (967,149,393)
General reserve
- - -
(825,829,472) (843,922,818) (967,149,393)
Retained earning carried forward
1,694,874,941 1,431,177,892 1,600,714,438
EPS 45
5.57 3.72 4.20
1,792,943,508 634,149,948 896,697,263
Operating Revenue
14,191,323,099 17,728,488,280 19,384,971,211
Operating Expenses
(3,713,478,147) 12,280,216,154 13,596,715,071
operating Income
17,904,801,246 5,448,272,126 5,788,256,140
Number of Employee
2,680 2,685 3,232
RE
NI
Dividend paid for the year 1,584,540,185
1,222,359,570 1,222,359,570

79
number of share outstanding 452,725,767 611,179,785 611,179,785
Market Price 66 31.7 29.1

80
--_______ratio Analysis_______
Year 2008 2009 2010 2011 2012 2013
Liquidity Ratio:
1. Cash position 6.47% 4.98% 4.49% 5.12% 7.34% 5.18%
2.Liquid securities indicator 9.06% 11.29% 8.32% 10.92% 12.09% 13.72%
3. Capacity Ratio 72.54% 67.51% 71.43% 69.55% 65.73% 65.18%
4.Deposit composit Ratio 15.04% 14.69% 14.94% 13.80% 14.63% 11.04%
Laverage Ratio:
1.Debt to equity Ratio 1.00 0.87 0.76 1.50 1.82 0.76
2.Debt to asset Ratio 91.29% 87.66% 85.27% 87.75% 88.37% 88.31%
Efficiency Ratio
1.Operating efficiency Ratio 67.69% 65.69% 58.07% -26.17% 69.27% 70.14%
2.Employee productivity Ratio 3800998.78 1949842.47 2235960.2 6680895.99 2029151.63 1790920.835
Profitability ratio
1.ROA 1.47% 2.14% 2.96% 2.14% 1.55% 1.63%
2.ROE 16.87% 17.30% 20.07% 17.50% 13.30% 13.92%
3.Net Interest Margin 2.85% 3.15% 3.62% 2.82% 3.27% 3.10%
4. Net Noninterest Margin 4.38% 4.34% 5.35% 15.23% 3.70% 3.67%
5.Net Bank Operating Margin 6.81% 6.76% 7.87% 6.63% 6.01% 6.00%
0.30 0.37 5.50 3.50 2.00 2.00
7.Dividend Yield 0.51% 0.57% 42.50% 5.32% 6.31% 6.87%
8. Dividend payout Ratio 5.21% 6.33% 66.25% 62.86% 53.73% 47.60%
9.Rettention Ratio 94.79% 93.67% 33.75% 37.14% 46.27% 52.40%
10. EPS
5.76 5.84 8.30 5.57 3.72 4.20
11. Net profit Margin 10.82% 16.87% 23.17% 17.76% 12.83% 13.25%
12. Tax management efficiency
Ratio
41.35% 53.93% 60.73% 61.05% 53.92% 53.10%
13. Expense control efficiency
Ratio
26.17% 31.27% 38.15% 29.10% 23.80% 24.95%
14. Asset Utilization 13.57% 12.66% 12.75% 12.07% 12.05% 12.28%
15. Equity Multiplier 11.48 8.10 6.79 8.16 8.60 8.56
16.Debt Ratio 91.29% 87.66% 85.27% 87.75% 88.37% 88.31%
Market Position

81
10.23 11.02 1.56 11.82 8.52 6.93
2. Market to Book value Ratio 5.89 6.44 1.294 6.58 3.17 2.91
Investors Point of View
1. ROE 16.87% 17.30% 20.07% 17.50% 13.30% 13.92%
2.EPS
5.76 5.84 8.30 5.57 3.72 4.20
0.30 0.37 5.50 3.50 2.00 2.00
5.Price earning Ratio
10.23 11.02 1.56 11.82 8.52 6.93
6.Equity Mulitiplier 11.48 8.10 6.79 8.16 8.60 8.56
7. Dividend Yield 0.51% 0.57% 42.50% 5.32% 6.31% 6.87%

82
BALANCE SHEET
PROPERTIES AND ASSETS 2008 2009 2010
Cash
Cash in hand (including foreign currency)
750,107,609 922,721,774 1,267,659,482
Balance with Banlgesh Bank (including foreign currencies)
6,447,553,847 9,327,459,373 8,309,148,371
7,197,661,456 10,250,181,147 9,576,807,853
Balance with other Bank and Financial Institutions
In Bangladesh
420,777,975 351,824,646 416,957,643
Outside Bangladesh
1,581,293,172 367,098,273 618,924,978
2,002,071,147 718,922,919 1,035,882,621
Money at call and short notice - - -
Investments
Government
20,807,924,500 19,017,337,618 19,368,115,114
Others
2,295,173,745 916,591,960 1,116,172,748
23,103,098,245 19,933,929,578 20,484,287,862
Loans and Advances
Loans, Cash Credits, Overdraft etc.
70,574,812,562 84,766,516,739 104,191,063,179
Bills purchased and discounted
4,581,394,255 4,485,705,750 6,976,325,713
75,156,206,817 89,252,222,489 111,167,388,892
Fixed assets including land, building, furniture and fixtures
1,374,826,295 1,572,618,882 1,691,643,703
Other assets
1,603,239,351 3,078,508,831 8,840,934,896
Non banking assets - -
TOTAL ASSETS
110,437,103,311 124,806,383,846 152,796,945,827
Liabilities
Borrowing from other banks, fin institutions and agents
11,397,859,931 86,546,077 3,868,678,036
Deposits and other accounts

83
Current deposits & other accounts, etc
11,868,543,906 15,811,376,614 21,582,196,478
Bills payables
1,239,622,153 1,606,929,647 2,437,755,219
Savings/ Mudaraba deposits
6,797,681,897 12,111,585,771 15,302,405,243
Team deposit/Mudaraba team deposits
68,114,743,430 77,426,378,449 85,196,271,642
Bearer certificate of deposit - - -
Other deposits - - -
88,020,591,386 106,956,270,481 124,518,628,582
Other liabilities
4,321,881,216 6,018,344,071 7,641,117,954
TOTAL LIABILITIES
103,740,332,533 113,061,160,629 136,028,424,572
Share Capital-Paid up Capital
2,843,750,000 3,554,687,500 5,776,367,100
Share Premium - -
2,241,230,396
Stautory reserve
2,366,214,496 3,284,058,294 4,391,633,607
Revaluation gain/loss on investments
180,281,588 2,437,039,424 1,416,425,850
Revaluation Reserve
251,603,566 251,603,566 251,603,566
Other Reserve - - -
Profit & loss account-retained earnings
1,054,921,127 2,217,834,432 2,691,260,736
6,696,770,778 11,745,223,217 16,768,521,255
Non controling Interest - - -
6,696,770,778 11,745,223,217 16,768,521,255
110,437,103,311 124,806,383,846 152,796,945,827
PROPERTIES AND ASSETS 2011 2012 2013
Cash
Cash in hand (including foreign currency)
1,464,103,675 2,059,503,576 2,683,867,027
Balance with Banlgesh Bank (including foreign currencies)
12,032,573,269 14,117,939,937 14,958,779,761
13,496,676,944 16,177,443,513 17,642,646,788

84
Balance with other Bank and Financial Institutions
In Bangladesh
377,477,308 251,389,642 244,165,129
Outside Bangladesh
1,138,697,962 1,392,741,405 626,533,772
1,516,115,270 1,644,131,047 870,698,901
Money at call and short notice - - -
Investments
Government
34,395,651,805 44,936,697,967 56,147,165,851
Others
982,145,986 4,733,737,225 792,350,658
35,377,797,791 49,670,435,192 56,939,516,509
Loans and Advances
Loans, Cash Credits, Overdraft etc.
132,589,361,294 153,440,706,958 147,380,881,952
Bills purchased and discounted
6,819,531,891 7,449,141,605 6,207,878,277
139,408,893,185 160,889,848,563 153,588,760,229
Fixed assets including land, building, furniture and fixtures
3,975,458,490 4,363,349,270 6,406,719,662
Other assets
6,175,551,802 4,087,797,994 8,420,462,735
Non banking assets - - -
TOTAL ASSETS
199,950,493,482 236,833,005,579 243,868,804,824
Liabilities
Borrowing from other banks, fin institutions and agents
10,969,847,805 20,681,977,457 3,858,260,882
Deposits and other accounts
Current deposits & other accounts, etc
23,628,852,206 27,373,823,258 26,612,333,767
Bills payables
2,992,596,076 3,421,438,111 2,081,417,055
Savings/ Mudaraba deposits
17,943,889,911 19,188,831,632 21,125,908,174
Team deposit/Mudaraba team deposits
115,250,383,779 132,068,779,059 152,087,482,186
Bearer certificate of deposit - - -
Other deposits - - -
159,815,720,972 182,052,872,060 201,907,141,182
Other liabilities
10,026,199,774 13,311,117,157 15,073,785,652
TOTAL LIABILITIES
180,811,768,551 216,045,966,674 220,839,187,716

85
Share Capital-Paid up Capital
7,798,095,580 9,357,714,690 10,293,486,160
Share Premium
2,241,230,396 2,241,230,396 2,241,230,396
Stautory reserve
5,778,119,737 6,839,527,566 7,528,626,614
Revaluation gain/loss on investments
243,159,736 19,719,692 109,193,803
Revaluation Reserve
251,603,566 251,603,567 1,511,486,306
Other Reserve
8,694,724 5,015,711
-
Profit & loss account-retained earnings - -
1,341,080,535
19,138,724,931 2,072,227,283 23,029,617,108
Non controling Interest - - -
19,138,724,931 20,072,227,283 23,029,617,108
199,950,493,482 236,833,005,579 243,868,804,824

86
Consolidated Income Statement
YEAR 2008 2009 2010
Interest Income
9,095,891,683 10,831,380,275 12,023,158,687
Less: interest paid on deposit and borrowings
7,126,309,515 8,426,118,565 7,789,506,602
Net Interest Income
1,969,582,168 2,405,261,710 4,233,652,085
Income from Investments
1,743,677,466 3,372,478,627 2,631,672,904
Fees,commission and brokerage
1,436,986,251 1,746,268,559 2,241,330,818
Other operating income
627,564,412 671,597,792 574,150,521
5,777,810,297 8,195,606,688 9,680,806,328
Salary &allowances
899,204,898 1,257,931,940 1,676,952,818
Rent,taxes, insurance, utilities etc
203,265,914 282,492,748 311,383,242
legal &proffesional expenses
14,164,497 26,258,442 19,514,057
Postage stamp telecommunication etc
78,712,209 94,757,714 123,022,000
Stationary, printing, advertisement etc
95,990,087 256,259,139 223,095,742
Managing director's salary and allowances
7,385,044
8,830,000
8,980,000
Director's fee & expenses
2,385,044
3,153,420
4,655,876
Audit fees
418,000
940,500
575,000
Charges on loan losses - - -
Repairs, maintenance and depriciation
151,233,852 187,699,388 218,881,885
Other operating expenses
477,666,956 788,564,408 1,015,869,141
1,930,955,801 2,906,887,699 3,602,929,761
Net operating Income
3,846,854,496 5,288,718,989 6,077,876,567
Other non operating expenses - - -
3,846,854,496 5,288,718,989 6,077,876,567
Specific provision
1,115,000,000 234,242,000 120,000,000
General provision
145,000,000 262,758,000 120,000,000
Provision for Off-shore Banking Units
5,500,000 15,000,000 30,000,000
Provision for off balance sheet iteams
118,000,000 112,000,000 270,000,000

87
1,383,500,000 624,000,000 540,000,000
Provision for diminution in value of investments - 1,500,000 -
Other provision -
74,000,000
-
total provisions
1,383,500,000 699,500,000 540,000,000
2,463,354,496 4,589,218,989 5,537,876,567
Provision for tax made for the year
1,012,449,724 1,735,000,000 2,285,000,000
Deferred tax (expenses)/income
219,072,598 70,000,000 250,000,000
1,231,522,322 1,805,000,000 2,535,000,000
1,231,832,174 2,784,218,989 3,002,876,567
Retained earning brought forward from previous year
315,759,852 351,459,241 795,959,482
1,547,592,026 3,135,678,230 3,798,836,049
Appropriation
Statuatory reserve
492,670,899 917,843,798 1,107,575,313
General reserve - - -
492,670,899 917,843,798 1,107,575,313
Retained earning surplus
1,054,921,127 2,217,834,432 2,691,260,736
EPS
43.32
78.33 3.98
1,877,272,328 2,883,457,279 1,844,224,482
Operating Revenue
12,904,119,812 16,621,725,253 17,470,312,930
Operating Expenses
9,057,265,316 11,333,006,264 11,392,436,363
operating Income
3,846,854,496 5,288,718,989 6,077,876,567
Number of Employee
1,550
1,844
2,139
RE
NI
Dividend paid for the year
710,937,500 1,421,875,000 2,310,546,840
number of share outstanding
284,375,000 355,468,750 577,636,710
Market Price
43.50
65.30
94.45

88
YEAR 2011 2012 2013
Interest Income
16,736,821,063 22,821,500,674 22,010,657,745
Less: interest paid on deposit and borrowings
12,647,982,518 17,410,286,124 17,678,359,259
Net Interest Income
4,088,838,545 5,411,214,550 4,332,298,486
Income from Investments
4,215,423,017 4,633,326,302 5,582,706,055
Fees,commission and brokerage
2,688,968,185 2,429,444,757 2,155,485,165
Other operating income
652,092,975 1,017,962,459 812,592,003
11,645,322,722 13,491,948,068 12,883,081,709
Salary &allowances
2,057,909,184 2,673,292,974 2,939,016,912
Rent,taxes, insurance, utilities etc
367,568,017 430,873,148 550,258,309
legal &proffesional expenses
16,312,942 28,570,418 37,756,195
Postage stamp telecommunication etc
132,056,013 127,601,535 134,001,255
Stationary, printing, advertisement etc
257,637,681 304,366,321 392,246,376
Managing director's salary and allowances
9,003,067 11,448,000 11,590,000
Director's fee & expenses
3,569,924 5,152,571 4,364,816
Audit fees
522,500 575,000 690,000
Charges on loan losses - - -
Repairs, maintenance and depriciation
271,478,216 331,708,120 348,115,280
Other operating expenses
1,074,262,109 1,027,527,828 990,885,125
4,190,319,653 4,941,115,915 5,408,324,268
Net operating Income
7,455,003,069 8,550,832,153 7,474,157,441
Other non operating expenses - - -
7,455,003,069 8,550,832,153 7,474,157,441
Specific provision
226,000,000 1,490,000,000 2,980,000,000
General provision
305,000,000 240,000,000 642,000,000
Provision for Off-shore Banking Units - -
362,000,000
Provision for off balance sheet iteams
130,000,000 140,000,000 10,000,000
661,000,000 1,870,000,000 3,994,000,000
Provision for diminution in value of investments -
43,797,548 24,527,202
Other provision -

89
1,301,942,300 10,135,000
total provisions
661,000,000 3,215,739,848 4,028,662,202
6,794,003,069 5,335,092,305 3,445,495,239
Provision for tax made for the year
2,907,320,000 2,449,800,000 1,616,000,000
Deferred tax (expenses)/income
224,500,000 186,300,000
-
3,131,820,000 2,636,100,000 1,616,000,000
3,662,183,069 2,698,992,305 1,829,495,239
Retained earning brought forward from previous year
514,438,737 440,253,439 200,684,344
4,176,621,806 3,139,245,744 2,030,179,583
Appropriation
Statuatory reserve
1,358,800,614 1,067,018,461 689,099,048
General reserve - - -
1,358,800,614 1,067,018,461 689,099,048
Retained earning surplus
2,817,821,192 2,072,227,283 1,341,080,535
EPS 4.70 2.88 1.78
3,366,164,524 3,139,617,603 3,142,458,955
Operating Revenue
24,293,305,240 30,902,234,192 30,561,440,968
Operating Expenses
16,838,302,171 22,351,402,039 23,086,683,527
operating Income
7,455,003,069 8,550,832,153 7,474,757,441
Number of Employee
2,292 2,544 2,710
RE
NI
Dividend paid for the year
2,339,428,674 1,871,542,938 1,286,685,770
number of share outstanding
779,809,558 935,771,469 1,029,348,616
Market Price
44.50 37.00 25.90

90
--_______ratio Analysis_______
Year 2008 2009 2010 2011 2012 2013
Liquidity Ratio:
1. Cash position 6.52% 8.21% 6.27% 6.75% 6.83% 7.23%
2.Liquid securities indicator 18.84% 15.24% 12.68% 17.20% 18.97% 23.02%
3. Capacity Ratio 68.05% 71.51% 72.75% 69.72% 67.93% 62.98%
4.Deposit composit Ratio 15.84% 17.66% 21.48% 17.74% 18.10% 15.36%
Laverage Ratio:
1.Debt to equity Ratio 1.70 0.01 0.23 0.57 1.03 0.17
2.Debt to asset Ratio 93.94% 90.59% 89.03% 90.43% 91.22% 90.56%
Efficiency Ratio
1.Operating efficiency Ratio 70.19% 68.18% 65.21% 69.31% 72.33% 75.54%
2.Employee productivity Ratio 2481841.61 2868068.87 2841457.02 3252619.14 3361176.16 2758213.08
Profitability ratio
1.ROA 1.12% 2.23% 1.97% 1.83% 1.14% 0.75%
2.ROE 18.39% 23.71% 17.91% 19.13% 13.45% 7.94%
3.Net Interest Margin 1.78% 1.93% 2.77% 2.04% 2.28% 1.78%
4. Net Noninterest Margin 3.48% 4.24% 3.98% 3.73% 3.61% 3.07%
5.Net Bank Operating Margin 5.23% 6.57% 6.34% 5.82% 5.70% 5.28%
6.Dividend per share 2.50 4.00 4.00 3.00 2.00 1.25
7.Dividand Yield 4.63% 6.13% 4.23% 6.74% 5.41% 4.83%
9.Rettention Ratio 42.29% 48.93% 23.06% 36.12% 30.66% 29.67%
10. EPS
4.33 7.83 5.69 4.70 2.88 1.78
11. Net profit Margin 9.55% 16.75% 17.19% 15.07% 8.73% 5.99%
12. Tax management efficiency
Ratio
50.01% 60.67% 54.22% 53.90% 50.59% 53.10%
13. Expense control efficiency Ratio 19.09% 27.61% 31.70% 27.97% 17.26% 11.27%
14. Asset Utilization 11.68% 13.32% 11.43% 12.15% 13.05% 12.53%
15. Equity Multiplier 16.49 10.63 9.11 10.45 11.80 10.59
16.Debt Ratio 93.94% 90.59% 89.03% 90.43% 91.22% 90.56%
Market Position
1. Price earning Ratio 12.46
8.34 16.60 9.47 12.85 14.57

91
2. Market to Book value Ratio 4.35 6.53 9.445 4.45 3.7 2.59
Investors Point of View
1. ROE 18.39% 23.71% 17.91% 19.13% 13.45% 7.94%
2.EPS
4.33 7.83 5.69 4.70 2.88 1.78
3.Dividend per share 2.50 4.00 4.00 3.00 2.00 1.25
5.Price earning Ratio 12.46 8.34 16.6 9.47 12.85 14.57
6.Equity Mulitiplier 16.49 10.63 9.11 10.45 11.80 10.59
7. Dividend Yield 4.63% 6.13% 4.23% 6.74% 5.41% 4.83%

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