This document provides an overview of Eastern Bank Ltd's (EBL) performance evaluation. It discusses EBL's objectives, strategic priorities, technology upgrades, employee benefits, financial ratios analyzing profitability, and SWOT analysis. Key points include EBL achieving a return on equity of 17.3% in 2009, upgrading its ICT infrastructure, offering competitive employee benefits, and having strengths such as expanding its authorized capital while also facing threats from rival banks growing faster.

1. Welcome to Our Presentation Topic: Performance Evaluation of Eastern Bank Ltd.

2. Md. Likhon - - - 080102005 Farhan Uddin Ahmed - - - 080102023 Md. Atiqul Islam - - - 080102025 Shabnam Jahan - - - 070102004 Muhammad Sazzad Hussain Chowdhury - - - 080102027 Group Members

3. Shabnam Jahan 07.01.02.004

4. Company Profile 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. 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.

5. Vision: To become the bank of choice by transforming the way we do business and developing a truly unique financial institution that delivers superior growth and financial performance and are the most recognizable brand in the financial services in Bangladesh.

6. Mission: We will deliver service excellence to all our customers, both internal and external. We will constantly challenge our systems, procedures and training to maintain a cohesive and professional team in order to achieve service excellence. We will create an enabling environment and embrace a team based culture where people will excel. We will ensure to maximize shareholder's value.

7. Values: Openness; Trust; Commitment; Integrity Service excellence; Responsible Corporate Citizen;

8. Performance Evaluation Bank Planning: Objectives of EBL: EBL will deliver service excellence to all his customers, both internal and external. EBL will ensure to maximize shareholders’ value. EBL will constantly challenge his 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.

9. Strategic priority of EBL: Further improvement of asset quality. Further change in deposit mix to increase pie of low cost deposits. To become cost efficient organization. Moderate growth in conventional products. Careful presentation in the capital market. Increased and focused Corporate Social Responsibility (CSR). Increase shareholders’ value. Create world class IT infrastructure to deliver superior service to our customers.

10. Muhammad Sazzad Hussain Chowdhury 08.01.02.027

11. Technology: EBL started its journey from a meager information technology platform. The branches were operating in a standalone/decentralized environment using local software where limitations were in abundance. The sense of customer support and service at these private banks, literally, were not up to the par with what the customers came to expect from these MNC banks. Described in 3 steps - Success story EBL with new ICT infrastructure features Benefits from changes

12. Success story: EBL management consisting of dynamic bankers from foreign banks working environment could assess the benefits out of Information Technology [IT] in utilizing it to the maximum through their experience. Their guideline and streamlined decision making has played a pivotal role in the implementation process of Flex cube software in the branches. EBL is the pioneer Bank in laying foundation to the world class banking software in Bangladesh. No other private Banks in Bangladesh could implement foreign banking software with success in the past

13. EBL with new ICT Infrastructure features: High Speed DDN and Radio Link connectivity between Branches and the Head Office Local Area Network (LAN) - providing data network connectivity at the Head Office and the Branches Metropolitan Area Network (MAN) - connecting the DHK branches with HO, CTG branches with Agrabad and SYL branches with Chouhatta Wide Area Network (WAN) - enabling the data network circle between Head Office and the Branches Solid foundation over data and network security implementation

14. Benefits from Changes: We list a few of the benefits of centralization here – At a glance - Benefits from Changes Standalone systems = > Centralized system Branch Banking = > Anywhere Banking Telegraphic Transfers = > Online Inter-branch transfer Produce MIS at Branch = > Centralized MIS Audit needs branch visit = > MIS available at Head Office On Card Signature/Pix = > Digital Signature/Pix

15. Farhan Uddin Ahmed 08.01.02.023

16. Personal Development: Employee Benefits: At Eastern Bank, they believe compensation and benefits should not be single offerings, but should be integrated into their Total Rewards employee benefits program, which is designed to help their employees achieve their goals in their personal and professional lives. Below is a brief list of the programs available to their employees:

17. Compensation Their compensation plans are performance based and, depending upon your position, may include base salary, incentives, commissions, referral incentives and recognition awards. Health and Wellness Medical insurance – plan options through Tufts; Delta Dental insurance; Eye Med Vision Care insurance; Vision and hearing aid reimbursements; Flexible spending accounts – medical, dependent care, adoption, insurance premiums; Use on-site fitness center in Lynn;

18. Personal Protection Life insurance and AD&D insurance; Supplemental Life and Dependent Life; Sick days; Short-term disability; Long-term disability; Financial Future Defined benefit pension plan; 401(k) savings and investment plan with company contribution;

19. Education Tuition reimbursement program; Wide variety of on-site training courses; Other Benefits Free or discounted banking services; Discounted group auto and homeowners insurance; T-Pass pre-tax program;

20. Md. Likhon 08.01.02.005

21. Bank Profitability: Like all businesses, banks profit by earning more money than what they pay in expenses. The major portion of a bank's profit comes from the fees that it charges for its services and the interest that it earns on its assets. Its major expense is the interest paid on its liabilities. The major assets of a bank are its loans to individuals, businesses, and other organizations and the securities that it holds, while its major liabilities are its deposits and the money that it borrows, either from other banks or by selling commercial paper in the money market.

22. To analyze performance of Eastern Bank Limited (EBL) by calculating different financial ratios, we use following ratios- ROE (Return on Equity) ROA (Return on Asset) Profit Margin Asset Utilization Net Interest Margin Provision for Loss Ratio Loan Ratio Temporary Investment Ratio EPS (Earning Per Share) DPS (Dividend Per Share) P/E (Price Earning) Ratio

23. ROE (Return on Equity): ROE= (Net Income ÷ Total Equity) × 100 Year 2005 2006 2007 2008 2009 Net Income 546,515,028 513,233,680 418,648,150 798,353,197 1,458,991,932 Total Equity 3,071,336,910 3,314,723,164 3,710,912,939 4,733,358,666 8,434,181,804 ROE 17.79% 15.48% 11.28% 16.87% 17.3%

24. By this ratio we see that in 2006 & 2007 EBL’s ROE is relatively lower than others. But in 2008 its increasing & also continuous increasing is going on. Therefore, investors will attract more effectively to invest.

25. ROA (Return on Asset): ROA= (Net Income ÷ Total Asset) × 100 Year 2005 2006 2007 2008 2009 Net Income 546,515,028 513,233,680 418,648,150 798,353,197 1,458,991,932 Total Asset 27,399,954,469 35,934,833,110 42,507,025,504 54,351,795,983 68,330,333,103 ROA 1.99% 1.43% 0.99% 1.47% 2.14%

26. Managing asset or handling asset is the most important part of an organization. Here, we see that Eastern Bank Ltd. Managing their asset in average at 1.5%. And also in 2009, ROA is much better than others.

27. Profit Margin: Profit Margin= (Net Income ÷ Operating Revenue) × 100 Year 2005 2006 2007 2008 2009 Net Income 546,515,028 513,233,680 418,648,150 798,353,197 1,458,991,932 Operating revenue 1,591,610,252 2,110,747,329 2,820,667,205 3,701,632,829 4,617,633,138 Profit Margin 34.34% 24.32% 14.84% 21.57% 31.60%

28. EBL’s profit margin ratio in 2005 is 34.34% but it decreases in 2006, 2007, 2008 and it’s overcome in 2009. So, EBL is doing well in 2009.

29. Asset Utilization: Asset Utilization== (Operating Revenue ÷ Total Asset) Year 2005 2006 2007 2008 2009 Total Asset 27,399,954,469 35,934,833,110 42,507,025,504 54,351,795,983 68,330,333,103 Operating revenue 1,591,610,252 2,110,747,329 2,820,667,205 3,701,632,829 4,617,633,138 Asset Utilization 0.058 0.059 0.066 0.068 0.067

30. EBL’s asset utilization capability is increasing 0.058 to 0.067. That’s a very good sign to any financial organization.

31. Net Interest Margin: Net Interest Margin= (Total Interest Income – Total Interest Expense) ÷ Average Earning Asset Year 2005 2006 2007 2008 2009 Total Interest Income 2,075,412,522 2,829,332,632 3,808,903,036 5,224,413,145 6,186,163,190 Total Interest Expense 1,365,455,642 2,160,078,142 2,498,068,117 3,675,380,751 4,032,711,612 Average Earning Asset 13,602,755,449.5 17,768,026,879 21,062,048,945 26,962,555,829 33,924,417,402 Net Interest Margin 0.052 0.038 0.062 0.057 0.063

32. EBL’s net interest margin standing in 2009 is 0.063, which is much better from previous years.

33. Provision for Loss Ratio: Provision for Loss Ratio= (Provision for Loan Losses ÷ Total loans & Leases) × 100 Year 2005 2006 2007 2008 2009 Provision for Loan Losses 88,425,742 223,369,258 584,394,008 452,686,073 262,511,322 Total loans &Leases 17,757,598,566 25,973,981,280 30,895,706,294 39,427,383,891 46,129,522,083 Provision for Loss Ratio 0.5% 0.86% 1.89% 1.15% 0.57%

34. Provision for loan losses is doing better when it’s decreasing. Here we see that in 2006, 2007, 2008 this rate is increase & in 2009 its rate become lower. So, EBL is standing in a low risk position.

35. Md. Atiqul Islam 08.01.02.025

36. Loan Ratio: Loan Ratio= = (Net Loan ÷ Total Asset) × 100 Year 2005 2006 2007 2008 2009 Net loan 17,174,528,536 25,046,619,296 30,194,171,436 38,632,083,300 45,277,521,185 Total Asset 27,399,954,469 35,934,833,110 42,507,025,504 54,351,795,983 68,330,333,103 Loan Ratio 62.69% 69.7% 71.03% 71.08% 66.26%

37. EBL use their asset against loan very well like more than 50%. So, it is the good sign to EBL. But in 2009 it decreases. So, EBL must have to concentrate on this & solve the problem.

38. Temporary Investment Ratio: Temporary Investment Ratio= (Treasury bill + Investment ≤ 1year + Due from other Bank) ÷ Total Asset Year 2005 2006 2007 2008 2009 Treasury bill 4,560,000,000 3,680,000,000 1,170,000,000 - - Investment ≤ 1year - 2,962,734,773 1,298,180,168 440,079,520 278,305,675 Due from other Bank 745,258,450 927,301,729 1,540,351,987 3,406,323,925 6,777,216,553 Total Asset 27,399,954,469 35,934,833,110 42,507,025,504 54,351,795,983 68,330,333,103 Temporary Investment Ratio 0.19 0.21 0.094 0.071 0.1

39. Temporary invest ratio of EBL in 2009 is running low. EBL must have to keep concentrate on it.

40. EPS (Earning Per Share): EPS= Net Income ÷ No. of Shares Issue Year 2005 2006 2007 2008 2009 Net Income 546,515,028 513,233,680 418,648,150 798,353,197 1,458,991,932 No. of Shares Issue 8,280,000 8,280,000 10,350,000 13,869,000 24,964,200 EPS 66 61.98 40.50 57.56 58.44

41. EPS of EBL 2005 & 2006 is good but in 2007 it is too much lower. In 2008 EBL make over the problem for EPS is increasing & also keep it in 2009.

42. DPS (Dividend per Share): DPS= Proposed Dividend ÷ No. of Shares Issue Year 2005 2006 2007 2008 2009 Proposed Dividend 331,200,000 372,600,000 351,900,000 - - No. of Shares Issue 8,280,000 8,280,000 10,350,000 13,869,000 24,964,200 DPS 40 45 34 - -

43. DPS of EBL 2005 & 2006 is good but in 2007 it is much lower. And it is going on in 2008 & 2009. EBL can’t give dividend.

44. P/E (Price Earning) Ratio: P/E Ratio = Market Price of per Share ÷ Annual Earnings per share (EPS) Year 2005 2006 2007 2008 2009 Market Price of per Share 1222.75 792.50 1070.75 589.30 644.25 Annual Earnings per Share (EPS) 66 61.98 40.50 57.56 58.44 P/E (Price Earning) Ratio 18.53 12.79 26.44 10.24 11.02

45. EPS of EBL 2005, 2007 is good but in 2006, 2008, 2009 it is too much lower. Somehow external factors are not work properly for that P/E ratio decreasing.

46. SWOT analysis of EBL Strengths: First online banking operations across all the branches. Authorized share capital increased to BDT 3.3 billion. EBL listed with Dhaka and Chittagong stock exchange Ltd. Became partner bank of IFC under Global Trade Finance Program (GTFP) to support EBL handle complex trade transactions. Launching of SME Banking Division. Signed agreement with ADB to become ADB’s partner bank under their Trade Finance Facilitation Program (TFFP) support guarantee and revolving credit facility. Launched Own managed Cards Software and Production System. Awarded ‘Super brand’ by super brands Inc. for the period 2009-2011

47. Opportunities: Lack of Bank Branches and ATM Booths. Lack of Capital. Lower growth rate. Weaknesses: Emerging economies. The Middle East. Threats: Downturn in American spending. Rival Banks are growing faster than EBL.

48. At Eastern Bank, they know that your business is unique with specific financial challenges and opportunities. Their experienced team of business bankers not only will take the time to understand them, but to solve them. So no matter what lies ahead for you and your business, you can count on them to be there for you – every step of the way.

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