1) The document analyzes the overall performance of Islami Bank Bangladesh Limited using ratio analysis, the aggregate ROE model, and examining its management of credit risk and liquidity risk. 2) Ratio analysis shows trends from 2012-2016 in the bank's liquidity, solvency, profitability, activity, and market ratios. The aggregate ROE model also tracks declining returns on equity and asset ratios over this period. 3) Credit risk management includes client evaluation, risk-based pricing, and an early alert system. Liquidity risk management utilizes a contingency funding plan and maturity ladder. 4) In conclusion, the bank's returns have been falling since 2012 due to political issues, rising defaults

1. Overall performance of
Islami Bank Bangladesh
Limited
Using The Aggregate ROE Model
Presentation on

2. Ratio Analysis
Part 1

3. Ratio Analysis (1)
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
Current Ratio Quick Ratio Absolute Liquid Ratio Current Cash Debt
Coverage Ratio
Cash Ratio
Liquidity
2012 2013 2014 2015 2016

4. Ratio Analysis (2)
0
5
10
15
20
Current Debt to
Net Worth Ratio
Total liabilities to
net worth ratio
Fixed assets to net
worth ratio
Debt to Asset
Ratio
Proprietory Ratio Capital Equity
Ratio
Solvency
2012 2013 2014 2015 2016

5. Ratio Analysis (3)
0
1
2
3
4
5
6
Operating Income
Margin
Gross Profit Ratio Net Profit Ratio ROE Operating Ratio Cash Return on
Capital Invested
Profitibility
2012 2013 2014 2015 2016

6. Ratio Analysis (4)
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
Working Capital Turnover Total Asset Turnover Ratio Fixed Asset Turnover Ratio
Activity
2012 2013 2014 2015 2016

7. Ratio Analysis (5)
0
0.2
0.4
0.6
0.8
1
Dividend Payout Ratio Dividend Yield Return on Capital Employed Ratio
Market
2012 2013 2014 2015 2016

8. Aggregate ROE Model
Part 2

9. Aggregate ROE Model
2012 2013 2014 2015 2016
Yield on asset ratio 2.54% 2.04% 1.62% 1.25% 1.31%
Non-Interest income ratio 1.16% 0.92% 0.61% 0.43% 0.56%
Rate of profit or loss ratio 3.27% 2.60% 2.36% 2.01% 1.79%
Overhead expenses ratio 1.84% 2.01% 1.86% 1.86% 2.22%
Provision ratio 0.73% 0.56% 0.74% 0.76% 0.49%
Asset utilization ratio 3.70% 2.96% 2.23% 1.68% 1.87%
Expense ratio 1.84% 2.01% 1.86% 1.86% 2.22%
ROA ratio 1.16% 0.92% 0.61% 0.43% 0.56%
EM ratio 12.16926 12.55985 13.98703 15.34632 16.3354
ROE 14.16% 11.54% 8.52% 6.66% 9.17%

10. Risk Management
Part 3

11. Credit Risk (1)
 Process of managing high and poor investment risk
management
1. client evaluation and planning
2. risk base pricing
3. Follow administrative process.

12. Credit Risk (2)
Services by MS System:
 Limit increase, limit decrease and renewals
 Unutilized and undrawn amount
 First payment default
 Risk rating on customer expousures
 Early alert reporting
 Studying historical data to know supply demand gap

13. Liquidity Risk (1)
 well managed by the Treasury Department
 Contingency Funding Plan (CFP) has been developed
 CFP ensures that the bank is well prepared to respond to
an unexpected problem
 also provides directions for plausible actions in distress
and emergency situations.

14. Liquidity Risk (2)
Policies and process of mitigating liquidity risk
 maturity ladder of cash inflows and outflows
 Bucket wise maturity
 Structural maturity ladder.

15. Conclusion
Islami Bank Bangladesh Limited is the first Islami Shariah based
bank in Bangladesh. In past few years, it was the top performing
bank leading the banking industry. But due to some political
issues, credit problems, loans sanctioning without strong
securities, it is drastically falling. From the ratio analysis,
aggregate ROE model and risk management, it is clearly stated
that its ROE is falling since 2012 to 2016. It indicates that they
should reform their activities and take necessary steps to stop
the rate of default loan. It should take strong securities before
disbursing loans to new loan seekers. If they do not take
necessary steps to stop the falling of ROE, it won’t be able to
survive in the economy