Performance Evaluation of Dutch-Bangla

Bank Ltd.
 Report on
Performance Evaluation of Dutch-Bangla Bank Ltd

Course Title: Financial Institutions & Markets

Section: 01

Submitted To

Mohammad Sohail Mustafa CFA

Associate Professor (BIBM)
Adjunct Faculty, East West University

Submitted By
No. Name Id
1. Syed Parash Maanzur 2021-1-95-086
2. Nafiz Ahmed 2020-3-95-047
3. Selina Rahman 2021-1-95-090
4. Israt Jahan 2021-1-95-084
5. Amit Kumar Saha 2021-1-95-065

Submission Date: 16/05/2021

LETTER OF TRANSMITTAL
Mohammad Sohail Mustafa
Department of Masters of Business Administration

East West University, Dhaka-1212.

Subject: “Report submission on Performance Evaluation of “Dutch-Bangla Bank

Ltd.”

Dear Sir;

We would like to take this opportunity to thank you for the guidance and support you
have provided us during the course Financial Institutions & Markets of this report.
Without your help, this report would have been impossible to complete. With deep
gratitude, we also acknowledge the help provided by Senior Manager, Corporate Brand,
DBBL for providing us utmost supervision during our report in the organization.

To prepare the report we collected what we believe to be the most relevant information
to make our report as analytical and reliable as possible. We have concentrated our best
effort to achieve the objectives of the report and hope that our endeavor will serve the
purpose. The practical knowledge and experience gathered during our report preparation
will immeasurably help in our future professional life.

We would be grateful if you enlighten us with your thoughts and views regarding the
report. Also, if you wish to enquire about an aspect of our report, we would gladly
answer your queries. Thank you again for your support and patience.

Sincerely;

Syed Parash Maanzur

Nafiz Ahmed

Selina Rahman

Israt Jahan

Amit Kumar Saha

Acknowledgment
We take this opportunity to convey our sincere thanks & gratitude to all who have
directly or indirectly helped and contributed towards the complication of this term paper.
At the very beginning all praises to Almighty for enabling us to complete the term paper
with good and sound health.

Then, we would like to take this opportunity to express our gratitude to our honorable
faculty member Mohammad Sohail Mustafa (CFA), Associate Professor, Bangladesh
Institute of Bank Management (BIBM) under the course of Financial Institution and
Market (FIN 523). Without his continuous inspiration, guidance, and support it would
not have been possible to come this far. This report will help us to have an insight into
how to create performance evaluation reports and how evaluation reports are done and
its total process. We will always be grateful to him for guiding us and helping us pave
the journey to complete our term paper on “Performance Evaluation of Dutch Bangla
Bank Limited”.

We also discussed the term paper with our group members multiple times, finding ways
of making the term paper rich and sound. The successful accomplishment of this report
is the outcome of the contribution and involvement of the group members. Without their
help, the report would have been incomplete. So, we are cordially grateful.

Table of Contents
Executive Summary.............................................................................................................1
Chapter 1.............................................................................................................................2
1.1 Introduction................................................................................................................2
1.2 Overview of Dutch Bangla Bank...............................................................................3
1.3. Objective of the Report.............................................................................................4
1.4. Methodology.............................................................................................................4
Chapter 2.............................................................................................................................5
1. PEC-1: Strength and Soundness of DBBL..................................................................5
2. PEC-2: Size and Growth............................................................................................11
3. PEC-3: Profitability and Efficiency...........................................................................20
4. PEC-4: Asset Quality of DBBL.................................................................................24
5. PEC-5: Inclusive and Online Banking.......................................................................30
Chapter 3...........................................................................................................................36
Findings.........................................................................................................................36
Recommendations..........................................................................................................38
Conclusion.....................................................................................................................38
Bibliography......................................................................................................................39
Appendix...........................................................................................................................40
Financial Highlights.......................................................................................................40

List of Tables
 Table No. Participants Page No.
Table 1.1 Capital Adequacy Ratio 15
Table 1.2 NPL to Equity Ratio 16
Table 1.3 Liquid Assets to Short-term Liabilities Ratio 17
Table 1.4 Borrowing liability to Total Liability Ratio 18
Table 1.5 Advance Deposit Ratio 19
Table 2.1 Number of Deposits 20
Table 2.2 No of Branches 21
Table 2.3 Total Revenue 22
Table 2.4 Total Asset 23
Table 2.5 Total Deposit Growth 24
Table 2.6 Total Advance Growth 25
Table 2.7 Net Profit Growth 26
Table 2.8 Net Interest Income Growth 27
Table 3.1 Return On Asset 28
Table 3.2 Return On Equity 29
Table 3.3 Total Expense to Total Revenue 30
Table 3.4 Profit Per Employee 31
Table 4.1 Growth in Gross NPL 32
Table 4.2 NPL to Total Advances 33
Table 4.3 Credit Concentrations by Loan 34
Table 4.4 Credit Concentration by division 36
Table 5.1 Rural Bank Branch to Total Branches 37
Table 5.2 CMSME to Total loan 38
Table 5.3 Agricultural Credit to Total Loans 39
Table 5.4 CSR Expense to Total Asset 41
Table 5.5 Number of ATM Booths 42
Table 5.6 Number of Any Branch Bank to Total Bank 42
 List of Figures
Figure No. Titles Page No.
Figure 1.1 Capital Adequacy Ratio 15
Figure 1.2 NPL to Equity Ratio 16
Figure 1.3 Liquid Assets to Short-term Liabilities Ratio 17
Figure 1.4 Borrowing liability to Total Liability Ratio 18
Figure 1.5 Advance Deposit Ratio 19
Figure 2.1 Number of Deposits 20
Figure 2.2 No of Branches 21
Figure 2.3 Total Revenue 22
Figure 2.4 Total Asset 23
Figure 2.5 Total Deposit Growth 24
Figure 2.6 Total Advance Growth 25
Figure 2.7 Net Profit Growth 26
Figure 2.8 Net Interest Income Growth 27
Figure 3.1 Return on Asset 28

Figure 3.2 Return on Equity 29

Figure 3.3 Total Expense to Total Revenue 30
Figure 3.4 Profit Per Employee 31
Figure 4.1 Growth in Gross NPL 33
Figure 4.2 Gross NPL to Total Advances 34
Figure 4.3 Credit Concentrations by Loan 35
Figure 4.4 Credit Concentration by division 36
Figure 5.1 Rural Bank Branch to Total Branches 37
Figure 5.2 CMSME to Total loan 38
Figure 5.3 Agricultural Credit to Total Loans 40
Figure 5.4 CSR Expense to Total Asset 41
Figure 5.5 Number of ATM Booths 42
Figure 5.6 Number of Any Branch Bank to Total Bank 43
 List of Acronyms
Full Form Abbreviation
Dutch Bangla Bank Limited DBBL
Non-performing Loan NPL
Corporate Social Responsibility CSR
Return on Asset ROA
Return on Equity ROE
Small and Medium Enterprises SME
Bangladesh Bank BB
Automated Teller Machine ATM
Capital Adequacy Ratio CAR
Net Interest Income NII
Dhaka Stock Exchange Commission DSEC
Classified Loan CL
Cottage, Micro, Small & Medium Credit CMSME
 Executive Summary
This report provided a comprehensive and practical overview in the field of Financial
Performance Analysis of the Dutch Bangla Bank Limited. DBBL is a Bangladesh-
Netherlands joint venture scheduled commercial bank established in Bangladesh. The
bank's primary objectives were to performs various types of banking business in and
outside of Bangladesh. During the period of its operation, this bank creates a milestone of
success in the banking sector.
The main purpose of this report is to analyze the Performance Evaluation of Dutch
Bangla Bank Limited. Due to globalization and the digitalization of the financial sector
the competition among the bank's increases. Continuous development is essential to
sustain and the development is measured through certain measurement techniques.
Among these techniques’ ratio analysis works as a good indicator where the performance
of the bank can be evaluated from several angles. This complete report is generated based
on the performance evaluation of Dutch Bangla Bank Limited from 2017 to 2021, where
the core objective is to measure the strength, quality, growth, efficiency, and operational
efficiency. Considering the strength, the bank can satisfy all the measures except the risk
of liquidity. Looking into the size or the expansion of its business, the bank also increases
its number of operations that also has a positive link with income and assets. When the
term comes to the return and the profitability it has quite consisting and balanced
performance that indicates the need not only to focus on increasing the operation but also
utilization of the resources is a considerable factor. By the representation of tables &
figures, five broads Performance Evaluation
Criteria (PEC) are discussed to evaluate DBBL’s performance: Strength and Soundness;
Size and Growth; Profitability and Efficiency; Asset Quality; and Inclusive and Online
Banking. In terms of measuring the quality of its assets DBBL shows a good signal when
comes to the point of reducing the growth of NPL and emphasizing loan diversification.
Finally, DBBL has a large set of operations throughout Bangladesh compare to any other
competitors’ bank. But considering both economic and social development DBBL needs
to involve more CSR activity and putting more concentration on agriculture-based loans.
From the discussion of all the analyses, we will discuss the overall changes and the

1
actions that the bank should take to improve themselves. Despite numerous challenges,
adverse economic conditions, and market patterns over the years, the bank tried to
maintain its growth trend through the indicators like the expansion of operation over the
country.

Chapter 1
1.1 Introduction
The banking industry is one of the significant and contributing sectors in Bangladesh.
Over the past few decades there is has been a huge expansion of this banking sector. By
promoting financial inclusion, the banking industry has to go one step further especially
in the distant location where it supposes to explore. The increased amount of
financialization and the introduction of digital financing created an environment to work
deeper into this system for the safeguard of this financial system. Now Bangladesh has
plenty of commercial banks that provide services from retail to corporate level customers.
Despite adaptation to the internationally recognized banking practices such as Basel III
Accord, we are lagging in terms of offers of instruments and the ultimate financial
safeguard. But what matters most is the offering of the financial instruments according to
the necessity of the customers.
Now increased adoption of the internet as a delivery channel contributes to a gradual
reduction in overhead expenses (Marketing, IT and Staff) of the banks by providing a
high level of quality services through ATM, POS (Point of Sale), Internet; Tele-banking,
SWIFT and Reuter. These have changed the market structure of the Bangladesh banking
industry significantly. As a result, in recent years, the state-owned public banks have lost
market share to the private commercial banks. These changes will have vast implications
for concentration and competition in the banking and financial sectors. However,
increased concentration can intensify the market power of the large banks by fostering
collusive behavior among them and therefore hinder both competition and efficiency. To
judge the implications of these structural changes and developments, it is imperative to
examine the current market structure of the banking sector to understand the impact the
changes are likely to have on the market structure and the behavior of banks.

2
1.2 Overview of Dutch Bangla Bank
Dutch-Bangla Bank is a second-generation commercial private Bank. During the period
of its operation, this bank creates a milestone of success in the banking sector. This bank
holds an experienced team of banking professionals. They achieve this success because
of their experienced banking professional team, proper management & so on. Dutch-
Bangla Bank Limited is a Bangladesh–Netherlands joint venture scheduled commercial
bank established in Bangladesh with the primary objective to carry on all kinds of
banking business in and outside of Bangladesh.
Starting with one Branch in 1996, DBBL has expanded to 210 branches. To provide
client services all over Bangladesh it has established a wide correspondent banking
relationship with several local banks. To facilitate international trade transactions, it has
arranged correspondent relationships with a large number of international banks that are
active across the globe.
The objectives of Dutch-Bangla Bank Limited remains to offer modern & innovative
products & services to its clients in Bangladesh the partnership with FMO is
optimistically scene to offer scopes opportunities to draw on modern tools & techniques
of Banking from the western world which could be blended with the currently prevalent
local customs & practice.

Mission
Each business unit needs to define its specific mission within the broader company
mission. Dutch Bangla Bank engineers’ enterprise and creativity in business and industry
with a commitment to social responsibility. “Profits alone” do not hold a central focus in
the Bank’s operation; because
“Man does not live by bread and butter alone”. Mission statements are at their best when
they are guided by a vision.

Vision
“To become a leading banking institution and play a pivotal role in the development of
the country” Vision, a compelling view of a future yet to be, creates meaning and purpose
which catapults both individuals and organizations to high levels of achievement. Dutch-

3
Bangla Bank dreams of a better Bangladesh, where arts and letters, sports and athletics,
music and entertainment, science and education, health and hygiene, clean and pollution-
free environment, and above all a society based on morality and ethics make all our lives
worth living. DBBL’s essence and ethos rest on a cosmos of creativity and the marvel-
magic of a charmed life that abounds with the spirit of life and adventures that
contributes towards human development.

1.3. Objective of the Report

The vital objective of this report is to analyze the Performance Evaluation of Dutch
Bangla Bank Limited. Other objectives of this reports are to measure the overall
performance of DBBL, to apply the critical knowledge in the practical field, to make a
bridge between the theories and practical procedures of banking day-to-day operations, to
gain practical knowledge by working in different desks of Local office branch of DBBL,
to observe the working environment in commercial banks, to study existing banker-
customer relationship, to know the overall functioning of DBBL and to have some
practical exposures that will be helpful for my future career.
The core objective of this report is to do a performance evaluation which is based on the
five major evaluation criteria.
Criteria 1: Strength and Soundness
Criteria 2: Size and Growth
Criteria 3: Profitability and Efficiency
Criteria 4: Asset Quality
Criteria 5: Inclusive and Online Banking
Based on these criteria, we need to look into the financial condition of this bank and its
future possibility to sustain and grow.

1.4. Methodology
We have mainly collected data from secondary sources. We used the information’s from
the annual report (2017-2021) of Dutch Bangla Bank Ltd. We also have googled some
websites for getting authentic information about DBBL. We took help from websites
such as Bangladesh Bank (BB) and Dhaka Stock Exchange Commission (DSEC).

4
 Chapter 2
Competitiveness in banks is one of the key perspectives to remain in the banking market.
Measuring competitiveness in banks is very difficult because the product of this sector is
mainly financial claims or services. A comparative analysis of the competitiveness of
different categories of banks may show the relative strengths and weaknesses of banks in
Bangladesh.
The performance evaluation of Dutch Bangla Bank Limited for the year 2017 to 2021 has
been done based on the following five indicators.
o Strength and Soundness
o Size and Growth
o Profitability and Efficiency
o Asset Quality
o Inclusive and Online Banking
Several ratio analyses are done in each of these indicators to evaluate the performance in
360 angles and that comprise a comprehensive analysis of the banking performance.

1. PEC 1: Strength and Soundness of DBBL

Strength analysis provides financial information and by having a glance anyone will be
able to know the position of that institution at the time. The five indicators to determine
the capacity of DBBL to survive in an economic downturn where some of these show a
consistent performance in terms of capital to risk-weighted assets, Non-performing Loan
(NPL) to equity, and advance to deposit. But the others show some challenging evidence
like a liquid asset to short-term liabilities, borrowing to total liability. Having good
control over its classified loan and increasing the loan or advance out of its deposits
indicate positive growth in the future for the bank. All these indicators are discussed
briefly in the following.

1.1 PEC 1- Indicator 1: Capital Adequacy Ratio

A bank must have sufficient capital to meet the losses that it might incur without
triggering the bankruptcy of the bank. Low capital adequacy directly affects the banks’

5
default loans as the banks had to keep their provisioning against default loans. So, a bank
must raise the quality and level of capital to ensure banks are better able to absorb losses
on both a going concern and a gone concern basis.
Capital to Risk-Weighted Assets = [Total Eligible Capital ÷ Risk-Weighted Assets]
×100
According to the Bangladesh Bank’s guidelines on risk-based capital adequacy, banks
have to maintain a minimum Capital Adequacy Ratio (CAR) which is a bank's capital
reserve to cover their risk exposure of 12.50% by 2019, in line with the BASEL III
requirement.
PEC 1- Indicator 1: Capital Adequacy Ratio
Year 2017 2018 2019 2020 2021
(In Million Taka)
Total Eligible 26,106.60 34,077.40 37,192.80 46,083.90 50,234.7
Capital
Risk 200,953.00 218,204.90 239,471.30 267,462.00 306,117.4
Weighted
Assets
Capital 13% 15.62% 15.53% 17.23% 16.41%
Adequacy
Ratio
Table 1.1: Capital Adequacy Ratio

Figure 1.1: Capital Adequacy Ratio

20%

18%

16%
17.23% 16.41%
14% 15.62% 15.53%
12%
13.00%
10%

8%

6%

4%

2%

0%
2017 2018 2019 2020 2021

6
From the above graph, we can see that the capital adequacy ratio from 2017 to 2021
shows an inconsistent growth where the lowest (13%) CAR was in the year 2017.
Whereas the higher was in the year 2020 when the CAR was approximately 17.23%
which is much more than the requirement so it can be said that DBBL is in a strong
position according to the CAR.

1.2 PEC 1- Indicator 2: NPL to Equity Ratio

Higher NPL is a recognized indicator of lack of strength and soundness. The complete
title of the ratio should be NPL net of provisions to total equity. Like CAR, the ratio
indicates a bank’s capacity to absorb credit risk. A lower ratio indicates better
performance. Non-performing Loan (NPL) to Equity Ratio indicates the size of the NPL
against its Equity. The non-performing loan is considered by deducting provision for
NPLs.
The indicator is computed as:
NPL to Equity Ratio = [(Classified Loan – Provision against Classified Loan) ÷Total
Equity]
PEC 1- Indicator 2: NPL to Equity Ratio
Year 2017 2018 2019 2020 2021
(In Million Taka)
Classified Loan 9,644.50 9,580.80 11,230.10 5,921.90 11,965.1
Provision against 5,100.19 5,160.99 5,094.01 4,200.10 5369.23
Classified Loan
Net NPL 4,544.31 4,419.81 6,136.09 1,721.80 6595.87
Total Equity 19,482.20 23,086.00 27,443.30 32,256.70 36,966.4
NPL to Equity 23.33% 19.14% 22.36% 5.34% 17.84%
Ratio
Table 1.2: NPL to Equity Ratio

7
 Fiqure 1.2: NPL to Equity Ratio

2021 17.84%

2022 5.34%

2019 22.36%

2018 19.14%

2017 23.33%

0.00% 5.00% 10.00% 15.00% 20.00% 25.00%

From the above graph, we can see that the NPL to equity ratio was much higher in the
early years but DBBL tried to minimize it. In 2018 it was lower than in previous years.
But in 2019 it increases again. In 2020 they had the lowest ratio in five years. The ratio
decreased from 22.36% to just 5.34% which indicates that DBBL was doing well in
2020. But the NPL to equity ratio increased again in 2021.

1.3 PEC 1- Indicator 3: Liquid Assets to Short term Liabilities

To banks, liquidity is the ability to meet obligations when they become due without
incurring unacceptable losses. Here the Liquid Assets are the sum of Cash, Balance with
other banks and Financial Institutions, Money at Call, and Short Notice and Investment.
Short-term Liabilities are the sum of Borrowed Liabilities and Total Deposits less Fixed
Deposits. The ratio measures a bank’s ability to meet its short-term obligations with its
most liquid assets. A higher ratio indicates better performance. The indicator is computed
as:
Liquid Assets to ST Liabilities = [Liquid Asset ÷ Short Term Liabilities] ×100
PEC 1- Indicator 3: Liquid Assets to Short term Liabilities
Year 2017 2018 2019 2020 2021
(In Million Taka)
Total Liquid 26,197.91 32,208.44 55,104.75 112,589.79 116,681.3
Assets
Total Short-term 190,467.22 207,847.89 157,599.60 190,467.22 108,313.17
Liabilities

8
 Ratio in % 13.75 15.50 34.97 59.11 107
Table 1.3: Liquid Assets to Short-term Liabilities Ratio

Figure 1.3: Liquid Assets to Short-term Liabilities Ratio

120.00%

100.00%

80.00%

60.00%
107.00%

40.00%
59.11%
20.00% 34.97%
13.75% 15.50%
0.00%
2017 2018 2019 2020 2021

In the graph we can see from 2017 to 2021 there was an increasing trend from 20.16% to
107% in liquid assets to short term liabilities ratio. Eventually, the bank managed to turn
back and continually breaking its previous records. This shows their liability is well
managed and it will gain their depositor’s trust.

1.4 PEC 1- Indicator 4: Borrowing liability to Total Liability

Banks should mainly rely on deposit liabilities as a source of funds to create their assets.
Higher borrowing liabilities indicate greater dependency on the money market and a lack
of strength and soundness required to attract adequate deposits. The indicator shows the
proportion of borrowing liability of the total liabilities of a bank. A lower ratio indicates
better performance. The indicator is computed as:
Borrowing Liability to Total Liability = [Borrowed Liability ÷Total Liability] × 100
PEC 1- Indicator 4: Borrowing liability to Total Liability

Year 2017 2018 2019 2020 2021

9
 (In Million Taka)
Borrowed 25,134.80 20,200.70 18,919.50 25,796.10 28,974.5
Liabilities
Total Liabilities 292,424.60 323,340.10 362,918.70 440,098.80 477,433.4

Ratio 8.60% 6.25% 5.21% 5.86% 6.06%

Table 1.4: Borrowing liability to Total Liability Ratio

Fiqure 1.4: Borrowing liability to Total Liability Ratio

10.00%

9.00% 9%

8.00%

7.00%
6% 6%
6%
6.00%
5%
5.00%

4.00%

3.00%

2.00%

1.00%

0.00%
2017 2018 2019 2020 2021

The graph indicates that the borrowing liability to total liability ratio was lower than in
2017. But after 2017 it has fallen significantly in 2018 and 2019 but then again in 2020
and 2021 it has gone up. This means in that year the bank may be able to give huge no. of
loans to their customers from which it generates higher liabilities. The bank needs to
concentrate on this issue.

1.5 PEC 1- Indicator 5: Advance Deposit Ratio

Banks should maintain a balance between the volume of advances and deposits. The
advance deposit ratio is used to measure the degree of balance between advance and
deposit. The high value of this ratio may increase bank income but may increase liquidity
risk and vice-versa.
Advance Deposit Ratio = [Total Advances ÷ Total Deposit] ×100
PEC 1- Indicator 5: Advance Deposit Ratio
Year 2017 2018 2019 2020 2021
(In Million Taka)

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 Total Advances 207,257.40 231,553.90 256,239.70 273,382.90 319,448.1
Total Deposits 233,796.40 262,467.70 302,159.20 362,611.00 401,500.3
Ratio 88.65% 88.22% 84.80% 75.39% 79.56%
Table 1.5: Advance Deposit Ratio

Fiqure 1.5: Advance Deposit Ratio

2021 79.56%

2020 75.39%

2019 84.80%

2018 88.22%

2017 88.65%

65.00% 70.00% 75.00% 80.00% 85.00% 90.00%

From the above graph, the advance deposit ratio dropped from 2017 to 2020. This trend
indicates that the DBBL has loses its control to maintain its deposit properly. In 2021, the
ratio increased by 79.56%.

2. PEC-2: Size and Growth

The size of DBBL attempts to more remarkable financial access. It is supporting
boundless monetary incorporation in making esteems for their customers and networks as
a rule. Bank size affects the profits of banks and ensures greater financial access.
Relatively big banks have greater opportunities to minimize risks and may enjoy
economies of scale. Growth is recognized as one of the prime indicators of the
performance of any institution. Under this head, four indicators related to size and four
indicators related to growth are considered to assess the performance of the bank.

2.1 PEC 2 - Indicator 1: Number of Deposit Account

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A deposit account is a bank account maintained by a financial institution in which a
customer can deposit and withdraw money. Deposit accounts can be savings accounts,
current accounts, or any of several other types of accounts. The higher number of deposit
account indicates a greater market share and bigger size of the bank. The absolute
number of deposit accounts has been used to assess the banks in terms of size. Larger the
number of deposit accounts, the better the performance.

PEC 2 - Indicator 1: Number of Deposit Account (in millions)

Year 2017 2018 2019 2020 2021

No. of Deposit Account 6.2 7.5 8.6 8.30 8.31

Table 2.1 Number of Deposit accounts

Fiqure 2.1: Number of Deposit Accounts

10
9 8.6 8.3 8.31
8 7.5
7 6.2
6
5
4
3
2
1
0
2017 2018 2019 2020 2021

In the graph, we can see from 2017 deposit account is increasing at DBBL till 2019. In
the year 2020, their volume of deposit account decreased slightly. And in 2021 it has
increased a bit, but the change is very negotiable. The pandemic might have affected the
numbers. Still, we can see depositors have good relation with DBBL as their positive
growth indicates.

2.2 PEC 2 - Indicator 2: Number of Branches

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A branch of a bank is a retail location where a bank offers a wide array of face-to-face
and automated services to its customers. A higher number of branches indicates a greater
market share and a bigger size of the bank. The absolute number of branches has been
used to assess the banks in terms of size. Larger the number of branches, the better the
performance.
PEC 2 - Indicator 2: Number of Branches
Year 2017 2018 2019 2020 2021

No. of Branch 175 184 195 208 220

Table 2.2- No of Branches

To provide optimal service DBBL has increased its branches all over Bangladesh. As we
know the higher number of branches is better, we can say DBBL is one of the largest
banks of Bangladesh. Though with additional branches their operating cost increases as
well.

2.3 PEC 2 - Indicator 3: Total Revenue

A higher volume of total revenue indicates a greater volume of activities and a bigger
size. The absolute volume of total revenue has been used to evaluate the banks in terms
of size. Higher the volume of total revenue, the better the performance.
Table and graphical presentation of Total Revenue of DBBL. from 2017 to 2021 are
given below:
PEC 2 - Indicator 3: Total Revenue
Year 2017 2018 2019 2020 2021
(Values in million Taka)
Total Revenue 23,550.5 29,215.5 34,705.8 34,679.6 34,898.8

Table 2.3 Total Revenue

13
 Fiqure 2.2: Total Revenue
40000
34705.8 34679.6 34898.8
35000
29215.5
30000

25000 23550.5

20000

15000

10000

5000

0
2017 2018 2019 2020 2021

From the graph, it can be seen that from the year 2017 to 2021 the total revenue of DBBL
has increased. This means the volume of activities and size have also increased. It means
in that year. Dutch Bangla bank’s performance was better than other years. In 2021 they
had the highest revenue. We can see in the graph it is at the same level though.

2.4 PEC 2 – Indicator 4: Total Asset

The total asset of a bank includes cash in hand, balance with bb, other banks, and
financial institutions, money at call on short notice, investments, loans and advances,
fixed assets including land, building, furniture and fixtures, non-banking assets Higher
volume of total assets indicates greater market share. The absolute volume of total assets
has been used to assess the banks in terms of size. Higher the volume of total assets, the
better the performance.
Table and graphical presentation of Total Asset of DBBL of last 5 years are given below:
PEC 2 – Indicator 4: Total Asset
Year 2017 2018 2019 2020 2021
(Values in million Taka)
Total Asset 311,906.8 346,468.8 390,362.0 472,355.4 514,399.8

Table 2.4 Total Asset

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 Fiqure 2.3: Total Asset
600000

500000

400000

300000
514399.8
472355.4
200000 390362
346468.8
311906.8
100000

0
2017 2018 2019 2020 2021

From the graph, it can be seen that in the last 5 years the Total Assets of DBBL has
increased. It means DBBL market share has increased. In 2021 the Total assets were Tk.
514,399.8 million which was the highest among 5 years. It indicates in that year DBBL’s
performance was better than other years. In every year their asset is increasing it’s a good
signal for the company. A higher amount of assets increases the probability of higher
performance.

2.5 PEC 2 – Indicator 5: Total Deposit Growth

Deposit growth indicates an increase in sources of funds by banks. Higher the growth rate
of deposits, better the performance. By calculating Total Deposit Growth, we can find out
the growth of total deposits from the previous year to the present year. The indicator is
computed as:
Deposit Growth = [(Current Year Deposit – Previous Year Deposit) ÷ Previous Year
Deposit]
PEC 2 – Indicator 5: Total Deposit Growth
Year 2016 2017 2018 2019 2020 2021

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 Total deposit 207,234 233,796 262,468 302,159 362,611 401,500.3
(in million)
Total deposit - 12.82% 12.26% 15.12% 20.01% 10.7%
growth (%)
Table 2.5 total Deposit Growth

Fiqure 2.4: Total Deposit Growth

25.00%

20.01%
20.00%

15.12%
15.00%
12.82% 12.26%
10.70%
10.00%

5.00%

0.00%
2017 2018 2019 2020 2021

Here, in the graph we can see, DBBL has a positive growth rate in terms of deposits. In
2018 their growth rate was slightly lower than in 2017. After that, it has increased a lot.
In 2020 it the highest growth rate at 20.01%. In 2021 their total deposit has increased but
the growth rate has declined by about 9.31%. We can see that DBBL is going well in
terms of attracting customers through its different deposit schemes.

2.6 PEC 2 – Indicator 6: Total Advance Growth

Advances growth in the balance sheet of any bank means the amount of money lent out
as loans. Higher the growth rate of advances, better the performance. The positive and
sustainable growth rate is always viewed as a good sign for the company. The bank will
sanction this as a short-term loan, an overdraft, cash credit, or a bill purchase.
Advance Growth = [(Current Year Advance–Previous Year Advance) ÷Previous
Year Advance] ×100
16
Table and graphical presentation of total advance growth of DBBL given below:
PEC 2 – Indicator 6: Total Advance Growth
Year 2016 2017 2018 2019 2020 2021
Total 173,398 207,257 231,554 256,240 273,383 319,448.1
Advance
(in million)
Total - 19.53% 11.72% 10.66% 6.69% 16.85%
Advance
Growth (%)
Table 2.6 Total Advance Growth

Fiqure 2.5: Total Advance Growth

25.00%

19.53%
20.00%
16.85%

15.00%
11.72%
10.66%
10.00%
6.69%

5.00%

0.00%
2017 2018 2019 2020 2021

Here, the growth rate of loan advances is increasing which indicates good performance.
In 2020 it was 6.69% which is the lowest among the last five years. In 2017 they have the
highest growth rate, after that, the percentage has decreased over the years. But they have
buckled up now. In 2021 the growth rate was 16.85% which is a good sign for DBBL.

2.7 PEC 2 - Indicator 7: Net Profit Growth

Growth in Net Profit is the most crucial indicator to evaluate the growth performance of
any commercial institution. It indicates the amount remaining after subtracting all costs
and expenses from gross revenue. Higher the growth rate of net profits, better the
performance. The indicator is computed as:
Profit Growth = [(Current Year Profit – Previous Year Profit) ÷ Previous Year
Profit] ×100
PEC 2 - Indicator 7: Net Profit Growth

17
Year 2016 2017 2018 2019 2020 2021
Net Profit (in 1,775.20 2,455.20 4,201.40 4,341.40 5,498.70 5,561.1
million)
Net Profit - 38.31% 71.12% 3.33% 26.66% 1.13%
Growth (%)
Table 2.7 Net Profit Growth

Fiqure 2.6: Net Profit Growth

80.00%
71.12%
70.00%

60.00%

50.00%

40.00% 38.31%

30.00% 26.66%

20.00%

10.00%
3.33%
1.13%
0.00%
2017 2018 2019 2020 2021

In the graph, DBBL had a negative growth rate in 2017 as their previous year's net profit
was huge. So here the higher-level management should take a great observation and
resolve the issue behind this downfall. Though after 2017 they were in positive growth
till 2018 at 71.12%. Again, in 2019 their net profit growth dropped to 3.33%. Their
expenditure might be higher as they invested to improve their resources. In 2021 their net
profit growth (1.13%) was the lowest among last five years.

2.8 PEC 2 - Indicator 8: Net Interest Income Growth

Net Interest Income is generally the major income of banks. Higher the growth rate of net
interest income, the better the performance.
The indicator is computed as:
18
Net Interest Income Growth= [(Current Year NII – Previous Year NII) ÷ Previous
Year NII]

PEC 2 - Indicator 8: Net Interest Income Growth

Year 2016 2017 2018 2019 2020 2021
Net 9,963.55 11,489.36 14,888.28 17,784.02 14,129.7 15,542.2
Interest
Income
Net - 15.31% 29.58% 19.45% -20.55% 9.99%
Interest
Income
Growth
(%)
Table 2.8 Net Interest Income Growth

Fiqure 2.7: Net Interest Income Growth

40.00%

29.58%
30.00%

19.45%
20.00%
15.31%
9.99%
10.00%

0.00%
2017 2018 2019 2020 2021

-10.00%

-20.00%
-20.55%
-30.00%

Here, we can see DBBL’s net interest income growth has ups and down. Though a higher
growth rate is considering better performance. DBBL data indicated their performance is
not that good in terms of interest income. In 2018 it was the highest among the last few

19
years. Ever since their net interest income growth rate has dropped eventually. In 2020 it
was the lowest in terms of five years. The pandemic situation might have decreased their
interest income as borrowers were unable to pay back the loan interest on time. In 2021
their net interest growth rate has increased which means they have focused highly on this
particular issue and so we can see it will be beneficial for the bank.

3. PEC-3: Profitability and Efficiency

A successful bank is called when it can maximize its shareholders' wealth and continue
its profitability. Profitability and efficiency are the indicators of how an organization
should work to achieve its aim. The profitability and efficiency ratios are calculated to
measure how efficiently the bank is operating its activities and how effectively it is
utilizing its resources to earn a return. Profitability is a concept associate to assess a
bank's results from the efficiency point of view for entire activities. It represents the
modality to achieve the major goal of the bank's activity.
3.1 PEC 3-Indicator 1: Return on Asset
Return on Asset (ROA) also known as return on total assets is a measure of how much
profit a bank is generally from its asset. This probability ratio demonstrates the
percentage growth rate of profit.
The indicator is computed as Return on Assets: (Net Income after Tax ÷ Total Assets)
× 100
PEC 3-Indicator 1: Return on Asset
Year 2017 2018 2019 2020 2021
Return on Asset 0.9 1.3 1.2 1.27 1.13
(ROA) %
Table 3.1: Return on Asset

20
 Fiqure 3.1: Return on Asset
1.4
1.3 1.27
1.2
1.2 1.13

1
0.9

0.8

0.6

0.4

0.2

0
2017 2018 2019 2020 2021

The ROA has increased from 2017 to 2018 whereas after 2018 it started going down. At
the following year 2020, the company managed to hold their upper trend and get back to
the company’s good situations. But the ROA again fall down in 2021.

3.2 PEC 3-Indicator 2: Return on Equity

Return on equity (ROE) is a measure of management efficiency in the bank with
dimensions that are calculated by dividing net income by shareholder’s equity. ROE
helps to know the overall scenario of banks' efficiency in earning profit.
The indicator is computed as Return on Equity: [Net Income after Tax ÷ Total
Equity] × 100
3.2 PEC 3-Indicator 2: Return on Equity

Year 2017 2018 2019 2020 2021

Net Income after Tax (in 2,455.25 4201.42 4341.39 5498.74 5,561.1
million tk)

Total Equity 19482.19 23085.97 27443.34 32256.65 36,966.4

Return on Equity (ROE) 13.22% 19.74% 17.18% 18.42% 15.04%

Table 3.2: Return on Equity

21
 Fiqure 3.2: Return on Equity
25.00%

19.74%
0
20.00% 18.42%
0
17.18%
0
15.04%
0
15.00% 13.22%
0

10.00%

5.00%

0.00%
2017 2018 2019 2020 2021

The return on equity of DDBL was higher in 2018 which was 19.74% whereas the ROE
was fell in 2019 by 17.08%. But the ROE was increasing from 2019 to 2020 which is
very appreciable of DDBL. This rising ROE indicates the bank’s operation management
is efficiently utilizing the bank’s assets. But it decreased again in 2021 by 15.04%.

3.3 PEC 3-Indicator 3: Total Expense to Total Revenue

the total expense measure by the related earnings of revenue by the bank. This measure
shows that banks use their resources properly to achieve their goal. The indicator is
computed as:
Total Expense to Total Revenue = [Total Expenses ÷ Total Revenue] × 100
3.3 PEC 3-Indicator 3: Total Expense to Total Revenue

Year 2017 2018 2019 2020 2021

Total Revenue (million) 3,550.50 29,215.5 34,705.8 34,679.6 34,898.8

Total Expense (in 17,867.0 20,522.5 23,445.8 24,778.3 23,291.6

million)

Total Expense to total 69.30% 61.58% 58.21% 60.54% 66.74%

Revenue

Table 3.3: Total Expense to Total Revenue

22
 Fiqure 3.3: Total Expense to Total Revenue
72.00%

70.00% 69.30%

68.00% 66.74%
66.00%

64.00%

62.00% 61.58%
60.54%
60.00%
58.21%
58.00%

56.00%

54.00%

52.00%
2017 2018 2019 2020 2021

The ratio level of banks has a decreasing trend from the year 2017 to 2019. This graph
shows that the ratio was higher in 2017 by 69.30% that went down in 2019 by 58.21%.
From 2020 to 2021, the expense to total ratio increased by 60.54% and 66.74%. The
performance of the Bank is at a satisfactory level. It indicates that the banks properly
utilize resources to achieve their goal.

3.4 PEC 3-Indicator 4: Profit per Employee

Profit per employee ratio is Net Income per employee is a company's net income divided
by the number of employees. This number shows the company how efficient it is with its
employees. The higher the net income per employee the better. The indicator is computed
as:
Profit per Employee = [Net Income after Tax ÷ Total Employees]
3.4 PEC 3-Indicator 4: Profit per Employee
Year 2017 2018 2019 2020 2021

Net Income After Tax (in 2,455.25 4201.42 4341.39 5498.74 5,561.1
million)

Total Employees 6,816.00 8,195.00 9,988.00 10,022.00 9,643

Profit Per Employee 0.36 0.51 0.43 0.55 .58

Table 3.4: Profit Per Employee

23
 Fiqure 3.4: Profit per Employee
0.6
0.55
0.51 0.52
0.5
0.43
0.4
0.36

0.3

0.2

0.1

0
2017 2018 2019 2020 2021

The profit per employee of DBBL has a fluctuating trend. From 2019 to 2021, the profit
per employee has a increasing trend and it indicates that total expense is associated with
more than 70% of the total revenue.

4. PEC 4: Asset Quality of DBBL

Assets are the sources of earning for any organization. If the quality of assets deteriorates,
it adversely affects the earning potentials which eventually reduce the value of the firm.
The largest category of earning assets of a bank is loans and advances. So, the
consideration of the quality of loans is necessary while performing the ranking. Four
indicators related to asset qualities are considered to rank the performances of banks.
Considering the earning assets of DBBL, the size increases every year starting from 2017
to 2021. But what matters most is the quality of these assets and to measure the quality of
loan or earning assets the following four indicators give an idea of whether the Bank is
making a good move or not. The 1st indicator gives a red signal that the bank is not able
to control its NPL efficiently that reflects in the 2nd indicator as well. In the 3rd
indicator, the concentration of large loans over the total loan of DBBL Ltd. shows a
downfall in the recent year though it had a fluctuating trend in the previous years. Finally,
the credit concentration based on division gives a view regarding the diversification of its
loan portfolio.

24
4.1 PEC 4- Indicator 1: Growth in Gross NPL
Growth in gross NPL indicates the change in the performance of a bank in terms of asset
quality. So, if the growth rate of the gross NPL ratio of the bank is lower, then the
performance of the bank will be better in terms of asset quality. The indicator is
computed as:
Gross NPL Growth = [(Current Year CL – Previous Year CL) ÷ Previous Year CL]
×100
PEC 4- Indicator 1: Growth in Gross NPL
Year 2017 2018 2019 2020 2021

Classified Loan 9,644.50 9,580.80 11,230.10 5,921.90 11,965.1

Gross NPL Growth 7.17% -0.66% 17.21% -47.27% 102%
Table 4.1: NPL growth

Fiqure 4.1: NPL Growth

120.00%
102.00%
100.00%

80.00%

60.00%

40.00%
17.21%
20.00%
7.17%
-0.66%
0.00%
2017 2018 2019 2020 2021
-20.00%

-40.00% -47.27%

-60.00%

The chart shows that the Dutch Bangla bank hold a level of -0.66 % on their growth in
gross NPL ratio back in 2018, but the performance of Dutch bangle bank was poor when
the growth in gross NPL ratio was 59.98 % back in 2017. growth in gross NPL from
2017 to 2018 was decreased significantly but then it again dropped to a negative figure in

25
2018 which is not expected. However, they managed to increase the amount in a positive
figure in 2019. After that, the growth rate was negative by a huge difference and it shows
how much they reduced their NPL growth which is a pretty impressive performance
DBBL.

4.2 PEC 4 -Indicator 2: Gross NPL to Total Advances

Gross NPL to Total Loans and Advances, indicates the portion of total advances that are
nonperforming. If the bank has lower gross NPL to total advances, the Bank’s
performance will be higher. The indicator is computed as:
Gross NPL to Total Advances = [Classified Loan ÷ Total Loan and Advances] ×100
PEC 4 -Indicator 2: Gross NPL to Total Advances
Year 2017 2018 2019 2020 2021
Classified Loan 9,644.50 9,580.80 11,230.10 5,921.90 11965.1

Total loans & 256,239.7 231,553.90 207,257.4 273,382.9 300,928.88

advance (million Tk) 0 0

Gross NPL to Total 3.76% 4.14% 5.42% 2.16% 3.98%

Advances
Table 4.2: NPL to Total Advances

Fiqure 4.2: NPL to Total Advances

6.00%
5.42%

5.00%
4.14%
3.98%
4.00% 3.76%

3.00%
2.16%

2.00%

1.00%

0.00% 0 0 0 0 0
2017 2018 2019 2020 2021

26
The graph shows that at an early age their NPL to Advances was pretty low which is a
good sign for the institution but afterward, in 2018 NPL advances increases significantly
and in 2020 it is again decreasing and the in 2020 to the final year (2021), their gross
NPL to Total advances has reached to more than double the figure was in 2020 which
needs to be improved.

4.3 PEC 4-Indicator 3: Credit Concentrations by Loan

Credit concentration has been measured in terms of large loans. A loan has been
considered a large loan if the outstanding loan amount is more than 10% of its capital.
Lower the Large Loan to Total Loans and Advances, better the performance.
The indicator is computed as Credit Concentration = [Total Large Loan ÷ Total
Loan and Advances] ×100
PEC 4-Indicator 3: Credit Concentrations by Loan
Year 2017 2018 2019 2020 2021
Total Large Loan (in 4,608.39 3,719.28 3,407.74 2,610.67 2,117.88
million Tk)
Total loan & advances (in 256,239.7 231,553.9 207,257.4 273,382.9 300,928.88
million Tk) 0 0 0
Credit Concentration by 1.80 1.61 1.64 0.9 0.7
loan
Table 4.3: Credit Concentrations by Loan

27
 Fiqure 4.3: Credit Concentration by Loan
2
1.8 1.8
1.6 1.61 1.64

1.4
1.2
1
0.9
0.8
0.7
0.6
0.4
0.2
0
2017 2018 2019 2020 2021

The graph indicates that in the recent year 2018-2020 the Credit Concentrations by loan
ratio has been following a decreasing trend which is good for the betterment of the
company. In fact, among the 5 mentioned years, even the lowest Credit Concentrations
by loan ratio was in 2021 (0.7%).

4.4 PEC 4 - Indicator 4: Credit Concentration by Division

A good credit portfolio is well diversified in terms of the allocation of advances or
credit. High credit concentration increases credit portfolio risk and vice versa. A high
concentration of bank advances to a particular division or region may endanger a bank if
that division or region is affected by natural calamity or another external event.
Bank can minimize the risk of its credit by focusing on the diversification of its loan
portfolio. The better is that the diversification the lower the risk of credit. Every year
DBBL provides a loan in a different sector that indicated it concentrate on diversification.
Credit Concentration = [Total Loans to a Division ÷ Total Loan and advances] ×100

PEC 4 - Indicator 4: Credit Concentration by Division

Year 2017 2018 2019 2020 2021
A particular division 143,652.50 167,371.3 151,979.30 135,113.4 178,831.7
(Trade Finance) 0 0
Total loan & 256,239.70 231,553.9 207,257.40 173,397.8 300,928.88

28
 advances 0 0
(in million Tk)
Credit Concentration 56.06% 72.28% 73.32% 77.92% 59.43%
by division
Table 4.4: Credit Concentration by division

Bank can minimize the risk of its credit by focusing on the diversification of its loan
portfolio. The better the diversification the lower the risk of credit. Every year DBBL
provides a loan in a different sector that indicated it concentrate on diversification.

Figure 4.4 Credit Concentration By Division

90.00%

80.00% 72.28% 77.92%

70.00%

60.00% 73.32%

50.00% 56.06% 59.43%

40.00%

30.00%

20.00%

10.00%
0.00%
2017 2018 2019 2020 2021

As we can see from the graph that there is a continuous increasing trend in terms of
Credit Concentration by loan ratio. Looking at the credit concentration to a particular
sector, DBBL provided 77.92% of its total loan to the textile industries that are quite
similar in the previous years. We can also look into the table where the sector-wise loan
amount in each year is given and all these indicate DBBL has a well-diversified loan
portfolio.

5. PEC 5: Inclusive and Online Banking

The term inclusive banking means to provide financial services at an affordable to low-
income segment of the society. Sustainability and ethical banking concept reflect the
motto of inclusive banking. In Bangladesh, the inclusive operation of Dutch-Bangla Bank

29
Ltd should be connected with the distribution of banks resources to the rural economy,
the agricultural sector, and micro and small enterprise sector. It is said that online
banking is the starting point of green or environmental banking. Under this head, six
indicators related to inclusive and online banking are considered to rank performances of
DBBL.

5.1 PEC 5 Indicator 1: Rural Bank Branch to Total Branches

DBBL placed its network all over Bangladesh. Currently, there are 210 branches spread
all over the country. It has now a well-established network in rural areas. The number of
branches indicates customer access to finance of a particular bank Number of DBBL
branches is given below:

PEC 5 Indicator 1: Rural Bank Branch to Total Branches

Year 2017 2018 2019 2020 2021

No. Rural Bank 72 75 78 81 76

Branches
Total Branches 175 184 195 208 220

Table 5.1 Rural Bank Branch to Total Branches

30
 Fiqure 5.1: Rural to Total Brances

2021

2020

2019

2018

2017

0 50 100 150 200 250

Rural Branches Tota Branches

As the bank considers opening a new branch as its expansion strategy, indicates that
DBBL tries to expand the branches. So, the chart determines that there was a gradually
increased number of branches between 2016 to 2021. So, it refers the better performance.

5.2 PEC 5 Indicator 2: Cottage, Micro, Small and Medium Credit

SME, Cottage, Microcredit is the top priority for the bank. They are running the bank for
rapid industrialization, employment generation, poverty reduction, gender equality. All
banks and financial institutions have been disbursing credit to CMSMEs following their
indicative target set on a calendar year (Jan-Dec) basis. SMESPD has been taking
multifaceted initiatives for developing the Cottage, Micro, Small, and Medium
Enterprises (CMSMEs) including women entrepreneurship development all over the
country. Higher volume of Cottage, Micro, Small and Medium Credit to Total Credit
indicates greater access to finance by the under-served enterprises of Bangladesh. Larger
the volume of Cottage, Micro, Small, and Medium Credit to Total Loans and Advances,
better the performance.
Cottage, Micro, Small and Medium Credit to Total Loans = [Cottage, Micro, Small
and Medium credit ÷ Total Loan, and advances] ×100
PEC 5 Indicator 2: Cottage, Micro, Small and Medium Credit

31
 Year 2017 2018 2019 2020 2021
CMSM (Million) 26268 28474 34745 35429 43,395.3
Loan and Advances 207257.4 231553.9 256239.7 273382.9 300,928.88
(Million)
CMSME to Total loan 12.67% 12.30% 13.56% 12.96% 15.09%
Table 5.2 CMSME to Total loan

Fiqure 5.2: CMSME to Total Loans

16.00%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%
2017 2018 2019 2020 2021

If we see the graph the CMSME credit to Total Loans ratio is downward till 2018 and
sudden pick in 2020-21. The bank has also increased its micro-credit over the last two
years. Lastly, the ratio indicates that DBBL has not increased its volume of microcredit
proportionately with general loan operations. Moreover, there was the highest percentage
as 15.09% but after that; there was a fluctuating slope between 2017 to 2021.

5.3 PEC 5 - Indicator 3: Agricultural Credit to Total Loans

The heart of our country's economy is Agriculture. In recent years Agricultural
innovation took several investors' attention. It is very important for the economic growth
of Bangladesh. There are several incentives modes imposed by the government to
promote agriculture sectors. It is now in the booming stage. DBBL has been increasingly
extending agricultural credit line to reputed MFIs for onward disbursement to ultimate
beneficiaries over last one decade. DBBL has also been providing agricultural credit
directly to the primary producers in rural areas through its branch network. A higher
volume of Agricultural Credit to Total Loans and Advances indicates greater access to

32
finance by the underprivileged farmers or small rural investors of Bangladesh. Larger the
volume of Agricultural Credit to Total Loans, the better the performance.
Agricultural Credit to Total Loans = [Agricultural Credit ÷ Total Loan and
advances] ×100
Agricultural and Rural Credit Performance of Dutch-Bangla Bank Limited for last
05(five) years is appended below:

PEC 5 - Indicator 3: Agricultural Credit to

Total Loans
Year 2017 2018 2019 2020 2021

Agriculture 3547.54 2311.78 4390.58 5198.92 2004

Loan
(Million)
Total Loan 207257 231554 256240 273383 319448
(million)
Agriculture 1.71% 1% 1.71% 1.90% 0.62%
loan to Total
Loan
Tale 5.3 Agricultural Credit to Total Loans

Figure 5.3: Agriculture loan to Total Loan

2021 1%

2020 2%

2019 2%

2018 1%

2017 2%

0.00% 0.20% 0.40% 0.60% 0.80% 1.00% 1.20% 1.40% 1.60% 1.80% 2.00%

33
The table and figure above show that the Agricultural Credit to Total Loans Ratio of
DBBL had started to drop in 2018 and it increases in 2019 and then in 2020 and it again
dropped in 2021. The reason behind the drop was that DBBL did not increase their
agricultural credit volume proportionally with their general loan volume. In 2019 and
2020 has the large loan ratio that’s why it has come to the largest ratio in the recent year
of 2019 and 2020. According to 2020 and 2021, DBBL is performing poorly than last
year.

5.4 PEC 5 - Indicator 4: CSR Expense to Total Asset

For social development, DBBL has taken several measures. In DBBL, CSR is modified
to the term of Social Cause to make its services more pro-active towards social needs and
national development through ethical, legal. DBBL has always aspired to the highest
standards of conduct, recognizes its wider obligation to society, and believes in the
symbiotic relationship between social cause and sustainable success. DBBL is not only a
financial institution acting as an engine of growth for economic development in
Bangladesh; but also, a bellwether in societal progress. As an extension of this
quintessential philosophy, the bank has established the Dutch-Bangla Bank Foundation
which has been rendering invaluable services to various fields relentlessly covering the
areas of education, healthcare, natural calamities as well as man-made disaster. Ethically
conducting business, creating opportunities for business & economic growth,
empowering people to fulfill their aspirations, ensuring the protection of the environment
while financing businesses, and supporting the distressed people of the society are at the
heart of the social cause policy of DBBL.
A higher volume of CSR Expenditure to Total Assets indicates the greater contribution of
a bank to community development and environmental activities. A larger ratio indicates
better performance.
PEC 5 - Indicator 4: CSR Expense to Total
Asset
Year CSR Expense Total Asset CSR Expense to Total Asset
( In million)
2017 859.99 311,906.8 0.28%

34
 2018 834.83 346,468.8 0.24%
2019 876.68 390,362.0 0.22%
2020 691.4 472,355.4 0.15%
2021 421.4 514,399.8 0.08%
Table 5.4 CSR Expense to Total Asset

Figure 5.4: CSR Expense to Total Asset

0.30%
0.28%

0.25% 0.24%

0.22%
0.20%

0.15% 0.15%

0.10%
0.08%

0.05%

0.00%
2017 2018 2019 2020 2021

Here, we can see in the graph a lower volume of CSR Expenditure to Total Assets which
indicates a lower contribution of a bank to community development and environmental
activities. Over the last five years, the CSR expense is going down as well. It is not a
good performance of DBBL and they should focus on it.
5.5 PEC 5 - Indicator 5: Number of ATM Booth
The ATMs have revolutionized the banking industry. An overwhelming achievement by
DBBL is that they have established the highest number of ATM booths in the country.
DBBL has set up the country's ATM network comprising 4930 ATM centers at the end of
the year 2021.
PEC 5 - Indicator 5: Number of ATM Booths
Year 2017 2018 2019 2020 2021

Number Of 4467 4705 4837 4862 4917

ATM

Table 5.5 Number of ATM Booths

35
They are trying to gradually increase the number of ATM booths which indicates greater
and easier access to banking activities by the clients. They established the larger the
number of ATM booths by years to years which focused the better the performance.

5.6 PEC 5 - Indicator 6: Number of Any Branch Bank to Total Bank

A greater number of branches under Any Branch Banking indicates better status and
networking of banks. Larger the number of branches under Any Branch Banking, the
better the performance. DBBL has 210 branches and its operating system runs through a
centralized server. All branches are connected with their system.
PEC 5 - Indicator 6: Number of Any Branch Bank to Total Bank
Year No of Branches Total Banks No of Branch Bank to Total Bank
2017 175 57 3.07
2018 184 59 3.12
2019 195 59 3.31
2020 208 61 3.41
2021 220 61 3.61
Table 5.6 Number of Any Branch Bank to Total Bank
Over the years DBBL has increased its branches all over Bangladesh as we can see in the
graph. As it has a greater number of branches under the Branch Banking which indicates
better status and networking of DBBL.

Chapter 3
Findings
Based on the five years of analysis from the different perspectives, Dutch Bangla Bank
has performed decently and some of the sectors perform poorly. The findings from the
report are mentioned below-
 DBBL performed well mostly in income generation, asset utilization, loan
diversification, liquidity management.

36
  NPL to equity ratio was much lower than in the early ages. Though the lack of
consistency as after 2018 the NPL to equity ratio decreased at an increasing rate
which is a good sign in terms of the company.
 While analyzing, we have seen that they performed decently in income or revenue
generation as throughout the years their revenue kept increasing, their asset
utilization was decent, also in terms of short-term liabilities, several depositors,
branches, employee facilities and, loan diversification.
 The strength and soundness of DBBL were quite good as they have been
successfully maintained capital to absorb its losses, their capability to fulfill their
short-term liabilities with liquid assets was also good, but their performance was
not good in terms of controlling its classified loans which means the capacity of
the bank in terms of credit risk has increased.
 A continuous downfall on the SME loan and less concentration on the agriculture
loan also stop the bank from spreading its operation. Along with that the bank is
also less concentrating on CSR activities which is part of its social responsibility.
 In terms of revenue and net profit, DBBL is stable as they were able to generate a
sufficient amount even in the pandemic situation.
 The net interest income of DBBL has increased in 2017 but in 2019 and 2020 it
goes adverse. It is unexpected and disappointing for its stakeholders.
 ROA and ROE are from 2017 to 2021 are fluctuating. It is an alarming situation
as it continuously fluctuating. It indicates that DBBL is not using assets and
equity effectively to get more net income.
 They have also less concentrating on corporate social responsibility an activity
that is part of its social responsibility.
 DBBL has the highest number of ATM booths in the country, a huge number of
deposits, mobilization of the banking process.
 Dutch-Bangla Bank Limited demonstrated its success by providing quality and
timely services to its customers.
They faced some limitations, such as an increasing number of non-performing loans, an
increasing number of borrowings, and so on. Based on compelling evidence, Dutch-
Bangla Bank Limited management believes that in the coming years, the bank will do

37
everything possible to maintain its earning capacity and steady growth, which may help
them become the best performing bank in the country.
Recommendations
Though DBBL is already in a good position, I think they need to keep the focus on some
issues for their further development. As per the findings we have got some issues and
problems. DBBL should consider taking necessary steps to foster their growth. From the
findings few Recommendations are given below:
o As we have already seen before in the graph that their probability is decreasing
over time, which is very much risky for the future. The management should more
focus on this.
o The bank should more focus on an organized borrowed fund that may impact their
future performance.
o Hire more experienced employees to need to provide better customer service
since they increase their operations.
o Asset Management is unflattering. The return from their investment is not that
much satisfying. The management should focus on their investments.
o DBBL should more focus on their social responsibilities, as they more involve
with social responsibility, they get more attached to the customers to find out their
potential customers.
o As they have a huge number of nonperforming loans so their loan should be
monitor properly.
Conclusion
As there are lots of local and foreign banks in Bangladesh, the DBBL is a promising
commercial Bank among them. DBBL is more capable of contributing towards economic
development as compared with other banks. DBBL invested more funds in the export and
import business. The right thinking of this bank including establishing a successful
network over the country and increasing resources will be able to play a considerable role
in the portfolio of development. In terms of technology and services, the banking industry
has advanced significantly in recent years. People nowadays prefer faster and one-stop
service because they are so busy. By analyzing the performance of Dutch-Bangla Bank

38
Limited (DBBL) on their operation for the year 2017 to 2021, we have got to know a few
areas where they are doing great whereas we have witnessed few areas where they should
improve. As the study focused on the technical aspects of operational efficiency, there
were few limitations encountered while compiling the report. Success in the banking
business largely depends on effective lending. Less the amount of loan losses, the more
the income will be from Credit operations the more will be the profit of the DBBL
Limited, and here lays the success of Credit Financing. In addition, the demand for a
proper and simple banking service is growing by the day. As a result, many new
commercial banks have been established in recent years, making the banking sector
extremely competitive. Therefore, banks are focusing to be more organized and moving
towards a customer-friendly system in their operation. In addition, banks are trying to
survive in this competitive environment is by managing their assets and liabilities in more
modern and efficient ways.

Bibliography

 Annual Report Dutch Bangla Bank Limited. (n.d.). Annual Reports.

Retrieved from:
https://www.dutchbanglabank.com/investor-relations/financial-
statements.html

▪ Dutch Bangla Bank Limited. (2015). Annual Report.

▪ Dutch Bangla Bank Limited. (2016). Annual Report.

▪ Dutch Bangla Bank Limited. (2017). Annual Report.

▪ Dutch Bangla Bank Limited. (2018). Annual Report.

▪ Dutch Bangla Bank Limited. (2019). Annual Report.

▪ Dutch Bangla Bank Limited. (2020). Annual Report.

39
  Bangladesh Bank Publications. (n.d.). Retrieved from Bangladesh
Bank: https://www.bb.org.bd/pub/publictn.php

 Dhaka Stock Exchange Ltd. (n.d.). Retrieved from Dhaka Stock Exchange
Ltd.:

o https://www.dsebd.org/displayCompany.php?name=DUTCHBANGL

Appendix
Financial Highlights

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41