Letter of Transmittal

Date: November 30, 2020

Kawser Ahmed Shiblu, FMVA

Assistant Professor
Department of Finance
Jagannath University

Subject: Submission of the internship report.

Dear Sir,

I am pleased to present the final internship report on “An analysis of financial performance
Social Islami Bank Limited” prepared as per the requirement of MBA program.

I sincerely believe that this internship program will help me to enrich my adaptability quality
in the long run when I will involve in practical field. I am grateful to for your valuable advices
and cooperation. I have tried my best to go to deep into the matters and make full use of my
capabilities in making this report meaningful, through there may me some mistakes and
shortcomings.

I sincerely hope that this report will meet your expectations. If you have any queries regarding
this report, please let me informed.

Sincerely Yours,

………………….

Manik Sutradhar

Program: MBA
Batch: 15th
ID NO: M18150203792
Department of Finance
Jagannath University

1
 Supervisor’s Certificate

This is to certify that the Internship Report on “An analysis of financial performance Social
Islami Bank Limited” in the bona fide record at the report is done by Manik Sutradhar, ID:
M18150203792 of the requirement of Masters of Business Administration (MBA) degree from
the Department of Finance, Jagannath University, Dhaka.
The Report has been prepared under my guidance and is a record of the bona fide work carried
out successfully.
I wish him every success in life.

……………………….
Kawser Ahmed Shiblu, FMVA
Assistant Professor
Department of Finance
Jagannath University, Dhaka

2
 Student’s Declaration

I’m, Manik Sutradhar hereby declare that the presented report of Internship titled “An analysis
of financial performance Social Islami Bank Limited”. This report is uniquely prepared by me
after completion of internship period in Social Islami Bank Limited.
I also confirm that, the report only prepared to my academic requirement not for any other
purposes. It should not be used with the interest of opposite party of Jagannath University,
Dhaka.

………………….
Manik Sutradhar
Program: MBA
Batch: 15th
ID NO: M18150203792
Department of Finance
Jagannath University

3
 Acknowledgement

First of all, I'm expressing my heartfelt gratitude to the Almighty Lord, the most Merciful and
the Benevolent, for his special kindness to give me the opportunity to complete internship
successfully and prepare internship report timely.

I would like to express my gratitude to our honorable faculty member Mr. Kawser Ahmed
Shiblu, FMVA Assistant Professor, Department of Finance, Jagannath University, who gave
me such an attractive prospect to make a report on “An analysis of financial performance Social
Islami Bank Limited” as well as helped me in every step to accomplish my report and try to
provide me a fair practical knowledge as should as it possible.

I would also like to respect Social Islami Bank Limited that give me chance to obtain practical
knowledge through their internship program. I thank the Branch Manager & SAVP Mr.
Mohammad Shofiullah Jewel, who helped me to do internship in his branch. I also give thanks
to Nusrat Jahan, SEO Head-Office, SIBL who gave me an opportunity to complete my
Internship in SIBL.

I am also thankful to my beloved colleagues’ who gave me essence of belongings which help
me to get acquainted with the culture of the bank and encourage me to complete my internship
successfully.

Finally, I am very grateful to my family members especially my mother, my paternal uncle and
my brother for their respective support and inspiration to accomplish my study.

4
 Executive Summary

The report is originated in result of my internship program which I have done as a requirement
of MBA program and this program helps me a lot to learn about practical situation of corporate
environment. The main objective of the report is to analyze the overall financial performance
of social Islami Bank Limited. To prepare this report, I had conversation with the branch
manager, other officers, and staff members in different desk of the bank on financial aspects
and work experience. I used websites, annual report and other documents as secondary data to
prepare the report more informative. Through the scope of this report is limited, I have tried
my best to make this report more informative. And I prepared this report, I have to pay some
problems; the main problem is time limitation and lack of experience.
The second chapter is based on the overview of the bank. Social Islami Bank Limited was
established under Bangladesh banks order 1972. The report covers the background Islamic
banking system, vision, mission, main focus, organization structure, function, services and
financial performance of the bank.
In the analytical part of this report is the analysis of financial performance of social Islami Bank
Limited. Financial analysis tools to evaluate the financial performance of the bank liquidity
ratio, profitability ratio, solvency ratio, market ratio efficiency ratio which shows the financial
performance of the bank at a glance. The report shows the financial performance of the bank
from 2015 to 2019.
In the last chapter of the report, some findings are included in the report on the basis of the
analysis. These findings include both negative and positive aspect of financial performance.
Positive findings can be the students of the bank and on the basis of negative Findings
recommendations are given. The liquidity condition of the bank is satisfactory. Finally, the
report is concluded by stating the present financial position, potential and possibilities of social
Islami Bank Limited.

5
 CHAPTER 1.0

INTRODUCTION PART

1.1 Origin of the Report:

6
It is very important to have a practical application of the knowledge acquired from any
academic course of the study. Because only a lot of theoretical knowledge will become fruitless
if is not applied in the practical life. So, I need proper application of my knowledge to get some
benefit from my theoretical knowledge to make it more fruitful. Such an application can be
possible through internship.

The internship program is important because it allows students to get to know one another
practical business. Student work ends with organizational and employee Learn more about how
this organization works. These programs allow students to develop themselves analytical skills
and school skills.

This report is prepared to satisfy the requirement for fulfillment of Masters of Business
Administration (MBA) degree under Jagannath University. I took internship with Social
Islamic Bank Limited which established a popular banking industry. I am very lucky to work
as an intern in the Social Islamic Bank Limited (SIBL). I believed that this internship period
experience will help me very much in my professional life. In the student life we gather solely
theoretical knowledge but this internship period gives me the real-life experience of the
activities of SIBL.

As a requirement of the completion of the internship program, I had to submit this report, which
includes the overview of the organizations and financial performance analysis of SIBL.

As part of the Internship program of Bachelor of Business Administration course requirement,

I was assigned for doing my internship in Social Islamic Bank Limited for the period of three
months starting from September 14, 2020 to December 30, 2020. During my intern period in
the Social Islamic Bank Limited, I worked under all departments of the bank. I worked under
the supervision of Mr. Belaiat Hossain (Senior Officer, Panchdona Branch) and her assistance
and guidance help me in completing this report.

Topic of the report was “An analysis of financial performance Social Islami Bank Limited”,
which was assigned by supervisor Kawser Ahmed Shiblu, FMVA, Assistant Professor,
Department of Finance; Jagannath University.

1.2 Objective of the Report:

7
The writing of this report contains two objectives: Main objective and Specific objective.

Main Objective:

The general objective of this report is to complete the internship program. As per
requirement of MBA program of Jagannath University, a student need to work in a
business organization for three months to acquire practical knowledge about real
business operations of a company.

Specific Objective:

✓ To present the overview of SIBL

✓ To apprise financial analysis of SIBL
✓ To know the strength, weakness, opportunities and threats of SIBL
✓ To understand the basic problems of SIBL
✓ To present my observation & suggestion to the bank.

1.3 Scope of the Study:

This report contains the results of financial performance of Social Islami Bank Limited. The
time limit has been set for the past five financial years. Related findings and recommendations
are made on the basis of the application of financial performance. To avoid complexity, the
selected performance variables are taken into account in performance analysis. Analysis of the
efficiency of individual branches is avoided because of missing data.

1.4 Methodology of the Study:

The study requires a systematic procedure from selection of the topic to preparation of the final
report. To perform the study, the data sources were to be identified and collected, to be
classified, analyzed, interpreted and presented in a systematic manner and key points were to
be found out. The overall process of methodology has been given as below.

❖ Selection of the topic: The topic of the study was assigned by the honorable
supervisors. While assigning the topic necessary recommendations and suggestions
were provides by my honorable supervisor to make this internship report a well-
organized and perfect one.

8
 ❖ Identifying data sources: Essential data sources, both primary and secondary data
source, were identified that would be needed to carry on the study and complete this
report.

Information collected to furnish this report is both from primary and secondary sources.

Primary Sources of Data:

✓ Face to face conversation with the respective officers of the banks.

✓ Practical experience gained by visiting different desks during internship period.
✓ Face to face conversation with the clients.
✓ Take Interview.

Sources of Data:

✓ Annual Reports of Social Islami Bank Limited.

✓ Website of Bangladesh Bank.
✓ Relevant papers and articles.
✓ Official Records of Social Islami Bank Limited.
✓ Official web site of the Social Islami Bank Limited.
❖ Data Collection: Primary data were collected through direct and face to face interview
of the different personnel of the Social Islami Bank Limited, Norsingdi Branch.
❖ Classification, analysis, interpretations and presentation of data: Some arithmetic
and graphical tools are used in this report for analyzing the collected data and to
classifying those to interpret them in a clear and understandable manner.
❖ Findings of the study: The collected data were scrutinized and were pointed out and
shown as findings. Few recommendations are also made for improvement of the current
situation.
❖ Final report preparation: On the basis of the suggestions of my honorable faculty
some corrections were made to present the paper in this form.

1.5 Limitation of the Study:

9
Legal obligations: Due to legal obligations and business secrecy the bank was reluctant to
provide some sensitive data. Thus, this study limits only on the available published data and
certain degree of formal and informal interview and limited survey

Extensive nature: Although the particular study is extensive in nature, hard effort was given
to make the study worthwhile and meaningful even then there exist some limitations.

Lack of Time: The researcher was in the organization for three months so within this short
span of time it is very difficult to be familiar with all the activities of the company.

Lack of Supervision by the company officers: As the officer were busy with their daily
working activities, they were not able to give me much time apart from their daily working
activities

Restricted Information: There were various types of information that the company officers
can not disclose due to the security and other corporate obligations.

10
 CHAPTER 2.0

ORGANIZATIONAL OVERVIEW

2.1 Company Overview:

11
SIBL was started its journey on July 5, 1995. It was an endeavor of devoted determination of
a collection of well-known Bangladeshi financiers and globally significant personalities. In
November 22, 1995, the bank has commenced its operation with a vibrant platform to validate
the functioning with a view to meaningfully economy thereby banking and economic actions
as an incorporated share of Islamic perplexity of life. Being perused poverty, SIBL is certainly
a perception of twenty first century participating numerous segment banking style. The bank
has been delegated with the accountability of activity innumerable stages that is associated to
the expansion of the country’s marketable manufacturing and farming areas. A country’s
banking division is termed the financial gauge of the country. The SIBL is a pioneer marketable
bank in the private division in Bangladesh. It offers substantial economic supports to the
commercial area that imports manufacturing merchandises and/or ships surplus fabrication
outer the country for profit. Through importing the SIBL delivers Loan against Import
Merchandise (LIM) and Loan against Trust Receipt (LTR) capacity and for exports transports
both pre consignment funds. Therefore, bank supports the projections in the commercial area
has augmented more than earlier. SIBL propelled some new goods, those are Sonali Din,
Sommridhir Sopan, Sonchoy Protidin and SwapnerShiri, Sabujshayanho, ShukherThikana,
Subornorekha, Sanchita and Zamil ATM debit card. Among others, the authorized corporate
area, this bank would deal the most modern banking facilities through inaugural of several sorts
of security and stock accounts, funding trade, providing letters of guarantee, introductory letters
of credit, gathering of bills producing national and global transmission, leasing of apparatus
and buyer durables, rental buying and episode transactions for investment goods.

2.2 History of SIBL:

Social Islamic Bank Limited (SIBL) is a keeping money organization enlisted by the
organization demonstration 1994 with its head office in 15 Daksha C/A, Dhaka-1000. The bank
works as a planned bank under the managing account licenses issued by the Bangladesh Bank.
The bank begins its task on 22 November 1995. SIBL is a promoted new creating manage an
account with an approved capital sum is 10,000,000,000 of every 2016 and paid up capital sum
is 7,328,986,420 out of 2016. As of now have 125 branches everywhere throughout the world.
Since SIBL is working with serving the nationals as a perfect and exceptional money related
house. Each association has claimed a few destinations. The prime goal of SIBL is to acquire
benefit toss undertaking obligation giving money related help to the advancement of the
national business and mechanical are. SIBL keep up and accomplished a solid position in every

12
single key zone of activity deposit challenge in 2011. The year 2012 considered as a brilliant
year for SIBL and receiving the procedures business approach.

2.3 Vision:

In SIBL journey towards continuous excellence it is striving to become the Country’s leading
Islamic Bank offering one-step service of an wide range of value added products and services
meeting the needs of its customers; conducting its business ethically in accordance with the
laws of Shariah while optimizing best utilization of the most modern state-of-the-art
technological solutions through creation of a pro-active organizational culture based on sound
team spirit, fairness, mutual understanding and pragmatic leadership always remain open to
new ideas and adaptable to the best practices in the market ensuring recognition and quality
banking experience to its customers and deliver best value to all its stakeholders as well.

2.4 Mission:

SIBL mission is to establish a 3-sectorof banking model with transforming to a service oriented
technology driven profit-earning bank. Their agenda is too fast, precise and pleasing customer
service. They have initiated stable & sustainable growth strategy with optimum return on
shareholders’ equity. Meanwhile they familiarized innovation Islamic banking products to
invite and retain high quality human resources. SIBL has emphasized empowerment real poor
families and creation local income opportunities. Furthermore, they provide funding for social
advantage organizations by way of mobilizing funds and social services.

2.5 Commitments:

SIBL is very strongly committed to Shariah, to the regulators, to their shareholders, to the
nation, to their employees, to the other stakeholders and to the environment.

2.6 Strategic objective:

➢ Revolution-oriented technology-driven into a service profit earning bank.

➢ Guarantee fast, perfect, and superior customer services with customer’s satisfaction.
➢ Well-adjusted and viable growth strategy with prime return on shareholders’ equity.
➢ Presenting invention Islamic Banking products.
➢ Draw attention, stimulate and preserve high quality human resources.
➢ Investing real poor families generate local income opportunities.

13
 ➢ Distributing support for social assistance organizations-by assembling funds and social
services.
➢ Attaining global standards in Islamic Banking.
➢ Capitalizing in the thrust sector for the whole economic development.
➢ Make sure greatest CSR (Corporate Social Responsibilities) practices.
➢ Confirming Green Banking.

2.8 Core values:

I observed during my internship period SIBL bank all they maintain their honesty,
Accountability with Transparency and Efficiency. They always not only help their loyal
customers but also new potential customers. They have flexibility with their clients alongside
they preserve Security all types of depositors with compelling religiousness code of conduct.
Nonetheless SIBL is playing a vital role to boost up our economy with inclusion of Innovation
of on-demanding services with sophisticated technology over the year by adding value of the
bank with sustainable growth to vindicate their potentiality.

2.9 Functions of SIBL

The functions of SIBL are as follows:

✓ Mobilization of idle resources of the country by accepting Deposits from the general
public.
✓ Granting Loans and Advances to the individual firms and companies for activating and
developing trade, commerce and industries and other productive activities in the
country.
✓ To give facilities to the client and shareholders in a systematic way.
✓ Give encouragement to the people for savings.
✓ To make easy transfer of foreign currency.
✓ To identify consumer’s demand and fulfill their demand by supplying money.
✓ To improve economy by borrowing financial facility.
✓ To assist capital market.

2.10 Products & Services of SIBL

✓ Mudaraba Term Deposit

✓ Mudaraba Savings Deposit

14
 ✓ Al-Wadia Current Account
✓ Mudaraba Notice Deposit
✓ Mudaraba Scheme Deposit
✓ Mudaraba Hajj Savings Deposit
✓ Mudaraba Monthly Savings Scheme
✓ Mudaraba Special Deposit Pension Scheme (5 Years)
✓ Mudaraba Monthly Profit Deposit Scheme
✓ Mudaraba Education Deposit Scheme
✓ Mudaraba Home Saving Scheme
✓ Mudaraba Millinery Deposit Scheme
✓ ATM Service
✓ Locker Service
✓ Online Banking.

2.11 Different departments of SIBL

In recent times management has brought a change in the organizational structure in view of
need of time. There are few departments. The departments are:

✓ Human Resources Division

✓ Personal banking Division
✓ Treasury Division
✓ Computer and Information Technology Division
✓ Credit Division
✓ Operation Division
✓ Card Division
✓ Finance & Accounts Division
✓ Audit & Risk Management Division
✓ Risk Management Unit

2.12 Corporate Structure of SIBL:

Managing Director

15
 Additional Managing Director

Deputy Managing Director

Executive Vice Presidents

Senior Vice Presidents

Vice Presidents

Senior Assistant Vice Presidents

First Assistant Vice Presidents

Senior Executive Officers

Executive Officers

Residency Officers

Senior Officers

Officers

Junior Officers

Assistant Officers

16
 Chapter 3.0

ANALYSIS AND EVALUATION

3.1 Financial Analysis:

17
Financial analysis refers to an assessment of the viability, stability, and profitability of a
business, sub-business or project. It is performed by professionals who prepare reports using
ratios that make use of information taken from financial statements and other reports. These
reports are usually presented to top management as one of their bases in making business
decisions. Financial analysis may determine if a business will-

✓ Continue or discontinue its main operation or part its business;

✓ Make or purchase certain materials in the manufacture of its product;
✓ Acquire or rent/lease certain machineries and equipment in the production of its goods;
✓ Issue stock or negotiate for a bank loan to increase its working capital;
✓ Make decisions regarding investing or lending capital;
✓ Make other decision that allows management to make an informed selection on various
alternatives in the conduct of its business.

3.2 Tools & Techniques of Financial Analysis:

Horizontal
Analysis

Regression Vertical
Analysis Analysis

Financial
Statement
Analysis
Graphical Ratio
Analysis Analysis

Trend
Analysis

Graph 1: Tools of Financial Analysis

3.3 Horizontal Analysis:

18
The comparison of financial data between two periods is horizontal analysis. Revenue and
expense accounts are examined to determine the changes from one period to the other. These
changes are usually expressed as a percentage.

For example, assume that a company’s sales in one period were BDT 7,68,000 and increased
to BDT9,40,000 in the next period. The amount of the sales increase in BDT 1,72,000. The
percentage increase would be BDT 1,72,000 divided by BDT 7,68,000 times 100, or 22.4
percent.

3.4 Vertical Analysis:

The comparison of three or more financial reporting periods can start to identify a trend.
Management is especially interested in trends. For example, managers like to see sales trending
upward and expenses headed down, these favorable movements lead to increased profits.

3.5 Ratio Analysis:

The most common methods of financial analysis involve the calculations of ratio from the
income statement and balance sheet. Financial ratios are used to analyse a company’s liquidity,
profitability, financial leverage and asset turnover.

Among all the methods of analyzing financial statement, I prefer ratio analysis to analyse the
financial performance of SIBL.

Main objective of this report is to analyze financial performance of SIBL. Financial ratios of
SIBL during the period of year 2014 to year 2018 are being analyzed. Here ratios are classified
into five categories

Ratios

Profitabilit
Liquidity Market Solvency Efficiency
y

Graph 2: Ratios for Analysis

Liquidity Ratio:

19
It refers the ability of a company to meet short term obligations. This ratio shows how quick
SIBL is able to convert its asset into cash. Current ratio represents that liquidity positions of
SIBL is quite good.
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐴𝑠𝑠𝑒𝑡𝑠
Current Ratio =
𝐶𝑢𝑟𝑟𝑒𝑛𝑡 𝐿𝑖𝑎𝑏𝑖𝑙𝑖𝑡𝑖𝑒𝑠
Current ratio is the most commonly used financial ratio that express the firm liquidity position.
It represents the company short-term obligation. Higher the current ratio is better for the
liquidity position.

Though the ideal ratio depends to some extent on the type of business, a general rule of thumb
is that it should be at least 2:1

Year 2015 2016 2017 2018 2019

BDT in 180,008 227,815 276,290 307,402
Million
150,511 193,293 233,407 255,950
Current 1.20 1.18 1.18 1.20
Ratio

Table 2: Current Ratio Source: Annual Report of SIBL

Current Ratio
Current Ratio

4.3
3.5 3.5

2.5 2.5

2015 2016 2017 2018 2019

Graph 3: Current Ratio Source: Annual Report of SIBL

Basically, current ratio measures the ability of a firm to pay the current liabilities. From the
table I found that SIBL current ratio was 1.20 in 2015. In the year 2018 it was 1.20 that means

20
in the time SIBL had current asset of 1.18 current liabilities of 1. We can easily say that current
asset is enough to repay the current liability. Higher ratio is better for the bank because its helps
to prevent from default.

Quick Ratio:

The quick ratio is an indicator of a company’s short-term liability position and measure a
company’s ability to meet its short-term obligations with its most liquid assets. Since it
indicates the company’s ability to instantly use its near cash assets to pay down its current
liabilities. It is also called the acid test ratio.
Current assets – Inventories – Prepaid Expense
Quick Ratio =
Current liabilities - Bank Overdraft

Year 2015 2016 2017 2018 2019

BDT in 173,421 220,618 265,553 301,491
Million
150,511 193,293 233,407 255,950
Quick 1.18 1.15 1.02 1.05
Ratio
Table 3: Quick Ratio Source: Annual Report of SIBL

Quick Ratio
Quick Ratio

4.3
3.5 3.5

2.5 2.5

2015 2016 2017 2018 2019

Graph 4: Quick Ratio Source: Annual Report of SIBL

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From the table o found that SIBL quick ratio was 1.11 in 2014. In the year 2015 it was 1.15.
So, over the long run decreasing the quick ratio is not a good indicator for a company. The
higher the quick ratio the better the bank’s short-term liquidity position is.

Cash Ratio:

The cash ratio is as a measurement of a company’s liquidity, specifically the ratio of a

company’s total cash and cash equivalents to its current liabilities. The metric calculates a
company’s ability to repay its short-term debt with cash or near cash resources, such as easily
marketable securities, this information is useful to creditors when they decide how much
money, if they would be willing to loan a company.

Cash and cash equivalents + Marketable securities

Cash Ratio =
Current liabilities

Year 2015 2016 2017 2018 2019

BDT in 173,421 220,618 265,553 301,491
Million
164,043 210,600 255,668 280,740
Cash 1.18 1.15 1.02 1.05
Ratio
Table 4: Cash Ratio Source: Annual Report of SIBL

Cash Ratio
Cash Ratio

4.3
3.5 3.5

2.5 2.5

2015 2016 2017 2018 2019

Graph 5: Cash Ratio Source: Annual Report of SIBL

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Cash ratio measure the liquidity position of a firm. In 2014 the cash ratio of SIBL was 1.18. In
2015 it decreased to 1.15. Again in 2016 and 2017 the cash ratio so SIBL was 1.11 and 1.07.
In the last year 2018 cash ratio for SIBL was 1.03. The higher the cash ratio the better the
bank’s liquidity position is.

Profitability Ratio:

Profitability ratio designate a bank overall efficiency and performance. It measures how to use
asset and how to control its expenses to generate an acceptable rate of return. It also examines
how well the Bank is operating or how well current performance compares to past record of
bank. To know the profitability of SIBL here I will be using Return on Asset ratio, Return on
Equity, Earning per Share and Dividend Payout Ratio.

Return on Asset:

Return on assets measures that the overall effective of management in generating profits with
its available assets. The higher ratio is better.

Net Income
Return on Asset =
Total assets

Year 2015 2016 2017 2018 2019

BDT in 6,278 7,389 7,983 8,935
Million
180,008 227,815 276,290 307,402
Return 3.49% 3.24% 2.89% 2.91%
on
Asset
Table 5: Return on Asset Source: Annual Report of SIBL

23
 Return on Asset
Return on Asset

4.3
3.5 3.5

2.5 2.5

2015 2016 2017 2018 2019

Graph 6: Return on Asset Source: Annual Report of SIBL

The ROA shows the percentage of how profitable a company’s asset are in generating revenue.
Till 2016 the situation is good. In 2017 & 2018 the ROA decreased. The ROA may fall down
in the next years. The bank should be aware of this. Income felt down from 2017. To increase
the ROA income should be expanded.

Return on Equity:

The return on equity measures the return earned on the owner’s investment. Higher return is
better for the owners.

Net Income
Return on Equity =
Total equity

Year 2015 2016 2017 2018 2019

BDT in 6,278 7,389 7,983 8,935
Million
180,008 227,815 276,290 307,402
Return 16% 16.16% 10.27% 10.05%
on
Equity
Table 6: Return on Equity Source: Annual Report of SIBL

24
 Return on Equity
Return on Equity

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 7: Return on Equity Source: Annual Report of SIBL

ROE is considered the return on net asset. It measures how effectively management is using a
company’s assets to create profit. In SIBL till 2016, it was doing well. But in 2017 & 2018 it
decreasing continuously. It will affect the investors. Because by seeing ROE an investor can
easily understand the future of a company.

Earnings Per Share (EPS):

EPS is portion of a firm total profit allocated to outstanding share of stock. A higher earnings
per share is expected for any standard company.
Net Income
Earnings Per Share (EPS) =
Number of Share Outstanding

Year 2015 2016 2017 2018 2019

BDT in 6,278 7,389 7,983 8,935
Million
703 738 738 812
Earnings 8.93 10.01 10.81 11.00
Per
Share
(EPS)
Table 7: Earnings Per Share (EPS) Source: Annual Report of SIBL

25
 Earnings Per Share (EPS)
Earnings Per Share (EPS)

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 8: Earnings Per Share (EPS) Source: Annual Report of SIBL

EPS indicates how much money a company makes for each share of its stock and is widely
used metric for corporate profits. A higher EPS indicates more value, because investors will
pay more for a company with higher profits. From this table we can say that the earnings per
share of SIBL in 2014 was 7.08. From 2014 to 2018 EPS increased. From 2017 the rate was
increased gradually. It may create a positive impact on the future investor of SIBL. So, it
indicates that the market believes that Bank will do better in future.

Dividend Payout Ratio:

The dividend payout ratio measures the percentage of net income that is distributed to
shareholders.

Dividend Payout Ratio = Dividend per Share

Earning Per Share

Year 2015 2016 2017 2018 2019

BDT in 6,278 7,389 7,983 8,935
Million
703 738 738 812
Dividend 8.93 10.01 10.81 11.00
Payout
Ratio
Table 8: Dividend Payout Ratio Source: Annual Report of SIBL

26
 Dividend Payout Ratio
Dividend Payout Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 9: Dividend Payout Ratio Source: Annual Report of SIBL

That earnings encourages to pay the dividend. In 2014 dividend payout ratio of SIBL was 2.54.
In the year 2016 it was decreased by 1.68 and in 2018 it was decreased by 0.91. The D/P ratio’s
condition is so-so. It will affect a great impact in the bank. The decreasing trend of dividend
payout ratio indicates that it will discourage investors to invest in SIBL.

Solvency Ratio:

Solvency ratio express the ability of firm to meet its long-term obligations. From this ratio of
debt to total asset, Debt to equity ratio, Capital adequacy and Net interest margin we can know
the solvency of SIBL.

Debt to Total Asset Ratio:

Debt to total asset ratio tell us the percentage level of total asset that are investment by the
creditors.

Total Liabilities
Debt to Total Asset Ratio =
Total Assets

27
 Year 2015 2016 2017 2018 2019
BDT in 167,053 213,621 262,106 291,615
Million
180,008 227,815 276,290 307,402
Debt to 92.80% 93.77% 94.87% 94.86%
Total
Asset
Ratio
Table 9: Debt to Total Asset Ratio Source: Annual Report of SIBL

Debt to Total Asset Ratio

Debt to Total Asset Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 10: Debt to Total Asset Ratio Source: Annual Report of SIBL

It reflects the ability of shareholders’ equity to cover all outstanding debts in the event of a
business downturn. Here we can see that debt to total asset ratio of SIBL in 2014 was 92.07%.
In the year 2017 and 2018 it was increased by 94.87% and 94.86%. It indicates that SIBL is
using more leverage and has a week equity position.

Debt to Equity Ratio:

Debt to equity ratio is a solvency ratio. It represents the relation between the capital grant by
the shareholders and also the capital grant by creditors.

Total Liabilities
Debt to Equity Ratio =
Total Equity

28
 Year 2015 2016 2017 2018 2019
BDT in 167,053 213,621 262,106 291,615
Million
12,955 14,193 14,183 15,787
Debt to 12.89 15.05 18.48 18.47
Equity
Ratio
Table 10: Debt to Equity Ratio Source: Annual Report of SIBL

Debt to Equity Ratio

Debt to Equity Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 11: Debt to Equity Ratio Source: Annual Report of SIBL

From the table we can say that in 2014 debt to equity ratio was 11.62 times. In the year 2017
and 2018 it was grown up at increased by 18.48 times and 18.47 times. A higher debt to equity
ratio be seen that SIBL has been aggressive financing its growth with debt.

Capital Adequacy Ratio:

Capital adequacy ratio is mostly used solvency ratio. A higher capital adequacy ratio is better
for the company. Higher capital adequacy ratio means the bank is able to meet its financing
obligation.
Tier One Capital+ Tier Two Capital
Capital Adequacy Ratio =
Risk Weight Asset

29
 Year 2015 2016 2017 2018 2019
BDT in 167,053 213,621 262,106 291,615
Million
12,955 14,193 14,183 15,787
Capital 12.50% 12.33% 11.55% 11.36%
Adequacy
Ratio
Table 11: Capital Adequacy Ratio Source: Annual Report of SIBL

Capital Adequacy Ratio

Capital Adequacy Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 12: Capital Adequacy Ratio Source: Annual Report of SIBL

In the year 2014 the capital adequacy ratio of SIBL was 12.65%. But in the year 2017 and 2018
the rate was decreased by 11.55% and 11.36%. Here we can see that SIBL capital adequacy
ratio is decreasing in recent year. But here SIBL fails to meet its financial obligation.

Net Interest Margin:

Net interest margin ratio expresses how successfully a company can make a its investment
decisions comparing to the revenues and expenses.
Interested Received – Interest Paid
Net Interest Margin =
Average Invested Assets

30
 Year 2015 2016 2017 2018 2019
BDT in 6,278 7,389 7,983 8,935
Million
77,440 100,702 120,414 136,964
Net 8.11% 7.34% 6.63% 6.52%
Interest
Margin
Table 12: Net Interest Margin Source: Annual Report of SIBL

Net Interest Margin

Net Interest Margin

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 13: Net Interest Margin Source: Annual Report of SIBL

From the table we see that in 2014 SIBL net interest margin was 7.71%. The NIM is increasing
gradually every year. So, it is really a good sign to the Bank. There is no doubt for the SIBL
that will do well in the future.

Market Ratio:

Market ratio refers a company’s ability to generate positive market expectation. This includes
expectation of both company return and risk as market perceives. To identify market value
ratios of SIBL here, I used P/E ratio.

P/E Ratio:

The price/earnings ratio shows how much investors are willing to pay per dollar of reported
profits.

31
 Market Value per Share
P/E Ratio =
Earning Per Share

Year 2015 2016 2017 2018 2019

BDT in 14.4 18.4 24.3 15.1
Million
9 10 11 11
P/E 1.61 1.84 2.25 1.37
Ratio
Table 12: P/E Ratio Source: Annual Report of SIBL

P/E Ratio
P/E Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 13: P/E Ratio Source: Annual Report of SIBL

In the year 2014 the price earnings ratio of SIBL was 1.92 times. From the year 2015 & 2016
it grew up at a decreased rate by 1.61times, 1.84 times. It increased 2.25 times. But it falls in
2018 at 1.37 times. Here we can see that P/E ratio of SIBL was fluctuating every year. It means
that it may create a negative impact on the future investor of SIBL.

Efficiency Ratio:

Efficiency ratios measure how effective date the farm is managing its assets and its liabilities
in the current period or in the short term. To measure the efficiency of SIBL I use total asset
turnover ratio and inventory turnover ratio.

32
Total Asset Turnover Ratio:

The Asset turnover ratio is an efficiency ratio that measures a company's ability to generate
sales from its assets by comparing net sales with average total assets.

Net Sales
Total Asset Turnover Ratio =
Total Assets
Table 12: Total Asset Turnover Ratio Source: Annual Report of SIBL
Year 2015 2016 2017 2018 2019
Total 0.72 0.74 0.76 0.76
Asset
Turnover
Ratio

Total Asset Turnover Ratio

Total Asset Turnover Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 13: Total Asset Turnover Ratio Source: Annual Report of SIBL

Inventory Turnover Ratio:

Inventory turnover ratios show how many a time the selective asset is turned over during the
year the ratio expenses how is skillful in winter is managed.

Inventory Turnover Ratio = Sales

Inventories

33
 Table 12: Inventory Turnover Ratio Source: Annual Report of SIBL
Year 2015 2016 2017 2018 2019
Total 88.90 89.53 91.32 91.63
Asset
Turnover
Ratio

Inventory Turnover Ratio

Inventory Turnover Ratio

4.3
3.5 3.5
2.5 2.5

2015 2016 2017 2018 2019

Graph 13: Inventory Turnover Ratio Source: Annual Report of SIBL

Trend (Horizontal) Analysis:

Trend analysis involves the collection of information from multiple time periods and plotting
the information on a horizontal line for further review. The intent of this analysis is to spot
actionable patterns in the presented information.

Net Interest Income:

Net Interest Income

Net Interest Income

79.53
48.48 60.42
26.16
0

2015 2016 2017 2018 2019

34
Net profit is increasing year by year. From 2015 to 2019 net profits growth is in upward. The
profit shows us the liquidity of the bank.

Net Interest Income (Forecast)

100
90
80
70
60
50
40
30
20
10
0
2020 2021 2022 2023 2024

Graph 18: Net Interest Income (Forecast)

The forecast value indicates us that, the profits of the bank increasing. As the actual value
increasing, we can forecast that the future value will also increase year by year.

Total Operating Income:

Total Operating Income

Total Operating Income

72.07
61.57

42.89

21.79

2015 2016 2017 2018 2019

Graph 19: Total Operating Income (Actual)

35
Total operating income increased year by year. It indicates a good sign for the bank. Operating
income shows us the income after deducting expenses, that’s needed for operating a business
in the time period.

Total Operating Income(Forecast)

90
80
70
60
50
40
30
20
10
0
2020 2021 2022 2023 2024

Graph 20: Total Operating Income (Forecast)

The graph shows us the forecasted operating income of SIBL. The total operating income is
increasing day by day. From this chart we can predict that the it will stand in a good figure.

Total Operating Expenses:

Total Operating Expenses

Total Operating Expenses

97.12

71.73

43.65
23.7

2015 2016 2017 2018 2019

Graph 20: Total Operating Expenses (Actual)

36
Total operating income increased year by year. It indicates a good sign for the bank. Operating
income shows us the income after deducting expenses, that’s needed for operating a business
in the time period.

Total Operating Expenses (Forecast)

160
140
120
100
80
60
40
20
0
2020 2021 2022 2023 2024

Graph 20: Total Operating Expenses (Forecast)

We can forecast that the operating expenses will also be increased year to year, after seeing the
actual value of 2015 to 2019. From 2020 to 2024 it will also increase.

Total Profit/Loss before Tax:

Total Profit/Loss Before Tax (Actual)

Total Profit/Loss Before Tax (Actual)

25.43

15.84

6.24
3.18
0

2015 2016 2017 2018 2019

Graph 23: Total Profit/Loss Before Tax (Actual)

37
The chart shows us that the profit of SIBL increase day by day. In 2018 profit felt, again
increased in 2019. The profit was in peak in 2017.

Total Profit/Loss Before Tax

0
-5 2020 2021 2022 2023 2024

-10
-15
-20
-25
-30
-35
-40
-45
-50

Graph 24: Total Profit/Loss Before Tax (Forecast)

We can predict from the actual value that, there will make a loss by the year 2020 and it will
continue. The operating expenses will be increased, and it increased in the past. So, that there
will be a loss before tax from 2020 to 2021.

Net Profit/Loss after Tax:

Total Profit/Loss Before Tax (Actual)

Total Profit/Loss Before Tax (Actual)

18.81

6.11
0

2015 2016 2017 2018 2019

-16.95
-24.05

Graph 25: Net Profit/Loss after Tax (Actual)

38
The net profit of the bank is good enough in 2016 & 2017. After that it faced a loss in 2018 &
2019. Increasing of operating expenses, tax is the main reason for loss.

Net Profit/Loss after Tax

0
-5 2020 2021 2022 2023 2024

-10
-15
-20
-25
-30
-35
-40
-45
-50

Graph 26: Net Profit/Loss after Tax (Forecast)

We can easily see that the bank’s net profit is decreasing as the year go on. It doesn’t indicate
a well sign for the bank.

Total Asset:

Total Asset (Actual)

Total Profit/Loss Before Tax (Actual)

18.81

6.11
0

2015 2016 2017 2018 2019

-16.95
-24.05

Graph 27: Total Asset

39
Bank’s total asset is increasing year by year. It will do better in future. There have a much
number of assets that can be turn into cash easily and quickly.

Total Asset (Forecast)

250

200

150

100

50

0
2020 2021 2022 2023 2024

Graph 28: Total Asset (Forecast)

As we can see in the actual amount of assets in the previous chart, we can forecast a good
amount for the bank, that it will do better in the future. SIBL can turn its current assets quickly
into the cash.

Total Liabilities:

Total Liabilities (Actual)

Total Liabilities (Actual)

106.22
85.35

51.06

18.13
0

2015 2016 2017 2018 2019

Graph 29: Total Liabilities (Actual)

40
Total liabilities increased year by year. It is not a good sign for the bank. The bank can’t effort
more if the liabilities increase from the base year. The bank could be insolvent.

Total Liabilities (Forecast)

180
160
140
120
100
80
60
40
20
0
2020 2021 2022 2023 2024

Graph 30: Total Liabilities (Forecast)

The more liabilities increase the more insolvency of possibility increased. The bank couldn’t
be in a good position in future, if it couldn’t bridle.

41
 CHAPTER 4.0

FINDINGS, RECOMMENDATIONS
&

CONCLUSIONS

42
4.1 Findings of the report:

❖ Quick ratio of SIBL is in decreasing form, which is not good for a company
❖ SIBL has declining cash ratio so the liquidity position of the company is not good
❖ Return on Asset (ROA) growth rate is decreasing in every year
❖ Decreasing dividend payout ratio so it will discourage investors to invest in SIBL
❖ Increasing operational expenses which reduce the profitability of SIBL
❖ Total asset growth rate of SIBL varies in every year
❖ Bank has not sufficient earning control from the operating process
❖ Debt to total asset has been growth on regularly which indicates SIBL is highly depends
on leverage that is subject to profligate risk.
❖ Capital adequacy ratio has been shrinking which made SIBL less favorable
❖ SIBL’s loan to deposit ratio increment gradually indicates that it is not good for SIBL.

4.2 Recommendations:

It is not easy to recommend some prepositions to enhance the performance level of the
organization like SIBL although social Islami Bank is now providing a very efficient Foreign
Exchange Services there is also room for enhancement to offer their services even better on the
basis of my observation, I would like to present the following recommendations.

❖ An increase in quick ratio is preferred so that company can meet its short-term
obligations.
❖ SIBL should improve their cash ratio as it shows the banks overall liquidity positions.
❖ SIBL should increase Return on Asset (ROA) growth rate.
❖ Dividend payout ratio should be increased for its shareholders.
❖ Operational expenses should be reduced management should consider the fluctuations
in the growth rate.
❖ Bank should increase operating income.
❖ Debt to total asset ratio should be reduced by decreasing its external debt.

43
4.3 Conclusions:

In conclusion it can be said that the performance of social Islami Bank Limited is well enough.
In this report overall performance of SIBL during the period 2014 to 2018 has been analyzed
and evaluated. By analyzing its overall performance, various positive and negative sides of the
bank have come into light. The overall performance of SIBL is well.

Shareholders who want to buy share of SIBL Bank can surely buy the shares of this Bank. The
ratio indicates that the profitability will be increased in the long for SIBL. In 2018 the profit is
higher than the others years. I found some problems for SIBL and try to give few necessary
solutions about those problems so that they can improve their future performance.

In this investigation to assess budgetary execution of this Bank different monetary parameters
are considered and SIBL was found as quickly developing Bank and performing great in some
proportion, for example, cash ratio, profit margin ratio, return on equity ratio, debt ratio, equity
multiplier ratio, cash position indicator, price earnings, proportion price to book ratio get
current ratio, return on asset ratio, direct equity ratio, at NWC to total asset ratio, written on
deposit ratio this proportion out to be enhanced generally Bank confront the issue in the
financial part. What's more in this financial area seeded equity to assets ratio is the impression
position that implies it's not very great or not all the terrible.

Social Islami Bank Limited is a bank with exchange excellence. During the time of my
internship program I have assembled a lot of practical knowledge and experienced and lastly
exit to this statement is true. Working and includes a pizza bank is extremely and extraordinary
for joy for me. This temporary job program is external useful for auditory considering my
profession. I should thank the greater part of the authorities with whom I have work and who
have given me suitable opportunities apply my hypothetical information in the reasonable field.

44
REFERENCE/(S) AND APPENDIX

REFERENCE(S)

45
Websites

1. www.siblbd.com

2. www.google.com.bd

3. www.wikipedia.org

4. Wikipedia-Social Islami Bank Limited

5. Wikipedia-Banking Industry in Bangladesh

Articles

1. Pavithra, K.P Thooyamani and Kermiki Dkhar

2. Amalendu Bhunia, Sri Somnath Mukhuti and Sri Goutam Roy

3. Henry W. Collier, Timothy Grai, Steve Haslitt and Carl B. McGowan

Annual Report

I. Annual Report of SIBL 2015

II. Annual Report of SIBL 2016

III. Annual Report of SIBL 2017

IV. Annual Report of SIBL 2018

V. Annual Report of SIBL 2019

APPENDIX

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