[TYPE THE COMPANY NAME]

Ismail Hossain

A Report
On

Performance Analysis and Comparison Between Prime Bank &

Southeast Bank
Course Title: Financial Institution & Markets (FIN-303)

Submitted To:
Mijanur Rahman Joddar
Faculty of Business & Economics
Daffodil International University

Submitted By:
Group Name # IN2F
Section- B
SL No.
01
02
03
04
05

Name
Md. Ismail Hossain

ID No.
111-11-1798
111-11-1802
111-11-1803
111-11-1813
111-11-1838

Fahaduz Zaman Remon

Ali Ferdous
Nazmul Haque
Faculty of Business & Economics
Department of Business Administration
Daffodil International University

Date of Submission: 20-Apr-2013

Letter of Transmittal
April 20, 2013

Mijanur Rahman Joddar

Faculty of Business & Economics
Daffodil International University

Subject: Submission of repot on Performance Analysis and Comparison Between Prime

Bank & Southeast Bank.

Dear Sir,
It is our pleasure to submit report on comparing profitability ratio between Southeast Bank &
Prime Bank Limited as a part of BBA Program. We tried our best to gather relevant information
for preparing a complete report by following our honorable course instructors instruction.
Without your sincere co-operation and proper guideline, it would not possible for us to prepare
the term paper. For this act of support, we are grateful to you. This term paper is not free from
mistake due to some limitations.

We hope you accept it with gracious consideration.

Yours sincerely

..
Md. Ismail Hossain (Leader)
On behalf of Group
Sec # B, Program BBA
Daffodil International University

Acknowledgment

At first, we would like to express my gratitude to almighty Allah for enabling me the strength
and opportunity to complete the report within the schedule time successfully.

At first, we are supposed to express the gratefulness from the core of my heart to Mijanur
Rahman Joddar.

We make this report by collecting data from bank, online bank website, Wikipedia, website of
Bangladesh bank, website of bankinfo.com etc. after collecting data we analysis all those as we
need.

At last I shall be grateful to persons who read this term paper and who shall get benefit from this
paper at present and in future.

Executive Summary

This report based on comparing ratio analysis between Southeast Bank Limited& Prime Bank
Limited. Southeast Bank Limited is a private commercial bank in Bangladesh. The Banks
journey began when it was incorporated as a Public Limited Company on March 12, 1995. In the
Registrar of Joint Stock Companies and Firms issued the Certificate of Commencement of
Business of the Bank on the same date. The Southeast Bank received its Banking License from
the Bangladesh Bank on March 23, 1995. e Banks First branch was opened by Late M. Saifur
Rahman, the then Honorable Finance Minister of the Government of the Peoples Republic of
Bangladesh as the Chief Guest at the commercial hub of the country at 1, Dilkusha Commercial
Area, Dhaka on May 25, 1995. The incumbent Chairman of the Bank is Mr. Alamgir Kabir,
FCA. Mr. M. A. Kashem a member of the Board and Mr. Yussuf Abdullah Harun were past
Presidents of the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI).
[2]
Southeast Bank takes pride for bringing women into the banking professiontio in a significant
number for gender equality. At present, 32% of SEBL's employees are women that will rise to
45% over the next five years. On the other hand Prime Bank Limited is another private
commercial bank in Bangladesh. It was established on April 17, 1995. It is now one of the banks
in Bangladesh which follows international standard in Banking and Finance. Prime Bank was
created and commencement of business started on 17th April 1995. The sponsors are reputed
personalities in the field of trade and commerce and their stake ranges from shipping to textile
and finance to energy etc. Prime Bank offers all kinds of Commercial Corporate and Personal
Banking services covering all segments of society. Diversification of products and services
include Corporate Banking, Retail Banking and Consumer Banking right from industry to
agriculture, and real estate to software. Prime Bank Limited is the title sponsor of the 2013
edition of Bangladesh Premier League cricket tournament.

Table of Content
TOPIC NAME

PAGE NO.

Letter of Transmittal

Acknowledgment

ii

Executive Summary

iii

Introduction

Overview of Southeast &Prime Bank Limited

Financial statement analysis

2-3

Profitability ratio analysis of SEBL&PBL

4-12

SWOT analysis of SEBL&PBL

13-14

Recommendation & Findings

15

Conclusions

15

Introduction
A Bank is a financial institution and a financial intermediary that accepts deposits and channels those
deposits into lending activities, either directly or through capital markets. A bank connects customers that
have capital deficits to customers with capital surpluses.
There are different types of bank in Bangladesh. Like

Central Bank
Commercial Bank
Industrial Bank
Co-Operative Bank
Savings Bank etc

Generally when we use the term Bank that time actually it means the commercial bank. The main job of
the commercial bank is to collect the money from customers as deposit and give other customers money
as loan. The commercial bank gives interest on deposit money to the customer and receives interest on
loan money to the customers. The difference between these two interest rates is the main source of banks
income.
In Bangladesh the commercial banking sector dominates the financial sector. In Bangladesh there is one
central bank which is Bangladesh Bank. There are four state owned commercial banks. They areAgrani Bank, Janata Bank, Rupali Bank, Sonali Bank. Besides this, there is also good number of private
commercial bank in Bangladesh. Such as-Prime Bank, One Bank, Mercantile Bank, Bank Asia, South
East Bank, IFIC Bank, Dhaka Bank, United Commercial Bank, Dutch Bangla Bank and so on. There are
also some foreign Banks which are operating in our country. They are- Citi Bank, HSBC, Standard
Chartered Bank, Commercial Bank of Ceylon, State bank of India, Habib Bank Limited, National Bank of
Pakistan, Woori Bank, Bank Alfalah and ICICI bank.
In Bangladesh the banking sector is expanding day by day. A number of new banks are also taking
preparation to merge in the market. Banking process is becoming faster and easier because internet
banking system has already introduced in many banks. Now-a-days in order to keep pace in the
competitive field all the banks are trying to come up with the innovative products and services to satisfy
their customers. On the other hand customers also need to have an idea about all the process and products
of the different bank in order to make a right choice.

Overview of Prime Bank & Southeast Bank Limited

Prime Bank Limited
Prime Bank was created and commencement of business started on 17th April 1995. The sponsors are
reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile
and finance to energy etc. Prime Bank has already made significant progress within a very short period of
its existence. The bank has been graded as a top class bank in the country through internationally accepted
CAMELS rating. The bank has already occupied an enviable position among its competitors after
achieving success in all areas of business operation.
Prime Bank offers all kinds of Commercial Corporate and Personal Banking services covering all
segments of society within the framework of Banking Company Act and rules and regulations laid down
by our central bank. Diversification of products and services include Corporate Banking, Retail Banking
and Consumer Banking right from industry to agriculture, and real state to software. Prime Banks current
capital adequacy ratio of 9.96% is in the market. In spite of complex business environment and default
culture, quantum of classified loan in the bank is very insignificant and stood at less than 0.96%.
Prime Bank, since its beginning has attached more importance in technology integration. In order to retain
competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the
network within a reasonable limit, our strategy is to serve the customers through capacity building across
multi-delivery channels. Our past performance gives an indication of our strength. We are better placed
and poised to take our customers through fast changing times and enable them compete more effectively
in the market they operate.

Mission & Vision of Prime Bank Limited

Vision

Efficiency
Capital adequacy
Asset quality
Sound management and
Profitability having strong liquidity

Mission
To build Prime Bank Limited into an efficient, market-driven, customer focused institution with
good corporate governance structure.
Continuous improvement of our business policies, procedure and efficiency through integration
of technology at all levels.

Southeast Bank Limited

Southeast Bank Limited is a scheduled Bank under private sector established under the ambit of bank
Company Act, 1991 and Incorporated as a Public Limited Company under Companies Act, 1994 on
March 12, 1995. The Bank started commercial banking operations effective from May 25, 1995 during
this short span of time the Bank had been successful to position itself as a progressive and dynamic
financial institution in the country. The Bank had been widely acclaimed by the business community,
from small entrepreneur or large traders and industrial conglomerates, including the top rated corporate
borrowers for forward-looking business outlook and innovative financing solutions Thus within this very
short period of time it has been able to create an image for itself and has earned significant reputation in
the country's banking sector as a Bank with vision. Presently it has sixty three branches in operation. The
experience of the prosperous economies of Asian Vision" has been preciously the essence of the legend of
bank's success. Southeast Bank Limited has been awarded license by the Government of Bangladesh as a
Scheduled Bank in the private sector in pursuance of the policy of liberalization of banking and financial
services and facilities in Bangladesh. In view of the above, the up capital adequacy requirement of
Bangladesh bank It is well recognized that there is an urgent need for better-qualified management and
better- trained staff in the dynamic global financial market Bangladesh is no excepting of this trend
Banking sector in Bangladesh is facing challenges from different angles though its prospect is bright in
the future Money and Banking is the center around which all-economic science clusters. So this report is
carried on to find out the problems faced for by Southeast Bank and recommend some measures to
overcome these problems for economic development of Bangladesh.

Mission & vision of Southeast Bank Limited

SEBLs Vision:
The vision is to be a premier banking institution in Bangladesh and contribute significantly to the national
economy.
SEBLs mission:

High quality financial services with state of the art technology.

Fast & accurate customer service.
Sustainable growth strategy.
Follow ethical standards in business.
Steady return on shareholders' equity.
Innovative banking at a competitive price.
Attract and retain quality human resource.

Financial statement analysis

Financial statement Analysis involves a comparison of a firms performance with that of other firms in the
same line of business, which usually is identified by the firms industry Classification. Generally speaking
the analysis is used to determine the firms financial position so as to identify its current strengths and
weakness and to suggest action the firm might pursue to take advantage of the strength and correct any
weakness.

Profitability Ratio Analysis of SEBL & PBL (Last Five Years)

Profitability ratios: Profitability ratios are used to assess a business's ability to generate
earnings as compared to its expenses and other relevant costs incurred during a specific period of
time. Some of the ratios are mentioned below to determine the profitability of Southeast Bank
Limited & Prime Bank Limited from the year 2007-2011.
Return on assets: Return on Assets ratio of a bank gives an idea of how efficiently a
bank is using its assets to generate profit. Return on Assets (ROA) is calculated by dividing the
annual earnings of a bank by the total assets. So it can be said that the formula of ROA isNet Income
Returnon Assets( ROA)=
Total Assets

Southeast Bank Limited

Returnon Assets 2007-2011

Year

Net income

Total Assets

Ratio

2011

1912.19

158078.59

1.21%

2010

2763.13

131783.27

2.10%

2009

1870.19

112676.98

1.66%

2008

887.24

81181.53

1.10%

2007

1222.97

64370.69

1.90%

The above figure represents the Return on assets (ROA) Ratio of Southeast Bank Limited & we
see that in the year 2010 Southeast Bank was in most profitable position. In 2008 the Bank was
in lowest profitable position.

Prime Bank Limited from the year 2007-2011

Year

Net income

Total Assets

Ratio

2011

3662

199950

1.83%

2010

3003

154342

1.95%

2009

2748

124806

2.20%

2008

1232

110437

1.12%

2007

1401

79580

1.76%

The above figure represents the Return on assets (ROA) Ratio of Prime Bank Limited & we see
that in the year 2009 Prime Bank Limited was in most profitable position. In 2008 the Bank was
in lowest profitable position.

Return on Assetes of PB

2.20%
1.83% 1.95%

2011

2010

2009

1.12%
2008

Return on assets of SB

2.10%

1.76%

1.21%

2007

2011

2010

1.66%

2009

1.90%
1.10%
2008

2007

Return on deposit:
On time of deposited into your account was no good so the bank returned it and deducted the money from
your account. So it has to calculate on time how much return on time. The ration between net income and
total deposit.

Return on Deposits(ROD)=

Southeast Bank Limited

Year

Net Income
Total Deposit

Returnon Assets 2007-2011

Net Income

Total Deposit

Ratio

2011

1912.19

127178.22

1.5%

2010

2763.13

107729.58

2.56%

2009

1870.19

96669

1.93%

2008

887.24

68714.67

1.29%

2007

1222.97

55474.05

2.20%

The above figure represents the Return on Deposit (ROD) Ratio of Southeast Bank Limited &
we see that in the year 2010 Southeast Bank was in most profitable position. In 2008 the Bank
was in lowest profitable position.

Prime Bank Limited from the year 2007-2011

Year

Net Income

Total Deposit

Ratio

2011

3662

159816

2.29%

2010

3003

124574

2.41%

2009

2748

106956

2.58%

2008

1232

88021

1.40%

2007

1401

70512

1.99%

The above figure represents the Return on Deposit (ROD) Ratio of Prime Bank Limited & we
see that in the year 2009 Prime Bank Limited was in most profitable position. In 2008 the Bank
was in lowest profitable position.

Return on Deposit of SB Return on Deposit of PB

2.56%

2.20%

1.93%
1.50%

1.29%

2.29% 2.41% 2.58%

1.40%

11

10

11

10

1.99%

Return of Shareholders capital (ROC):

Return of Shareholders capital refers to payments back to "capital owners" (shareholders,
partners, unit holders) that exceed the growth (net income/taxable income) of a business. It
should not be confused with return on capital which measures a 'rate of return'.
The ROC effectively shrinks the firm's equity in the same way that all distributions do. It is a
transfer of value from the company to the owner. In an efficient market, the stock's price will fall
by an amount equal to the distribution. Most public companies pay out only a percentage of their
income as dividends. In some industries it is common to pay ROC.

Return on Shareholder capital =

Southeast Bank Limited

Net Income
Shareholder contribution capital

Returnon Assets 2007-2011

Year

Net Income

Return

1912.19

Shareholder contribution
capital
16745.84

2011
2010

2763.13

17095.90

16.16

2009

1870.19

9927.16

18.84

2008

887.24

7657.01

11.59

11.42

2007

1222.97

6468.36

18.91

Decision:
The above figure represents the Return on Shareholder Capital (ROSC) Ratio of Southeast Bank
Limited & we see that in the year 2007 Southeast Bank was in most profitable position. In 2011
the Bank was in lowest profitable position.

Prime Bank Limited from the year 2007-2011.

Year

Net Income

Return

3662

Shareholder contribution
capital
19139

2011
2010

3003

16908

17.76

2009

2748

11745

23.4

2008

1232

6697

18.40

2007

1401

5573

25.14

The above figure represents the

Return on Shareholder capital

19.13

Ratio of Prime Bank Limited

& we see that in the year 2009 Prime Bank Limited was in most profitable position. In 2008 the
Bank was in lowest profitable position.

Return on Shareholder Capital of SB Return on Shareholder Capital of PB

16.16%

11.59%

11.42%

11

18.91%

18.84%

10

19.13% 17.76%

11

10

23.40%

18.40%

25.14%

Net Interest Margin: A ratio that examines how efficiently an organization can manage
its investment decision to its debt situation. The formula of Net Interest Margin is-

Net Interest Margin=

Southeast Bank Limited

Net Interest IncomeInterest Expensein come

Total Assets

Returnon Assets 2007-2011

Year

Net Interest Income

Total Assets

Ratio

2011

2123.10

158078.59

1.34%

2010

2676.19

131783.27

2.03%

2009

1118.57

112676.98

2.24 %

2008

1320.04

81181.53

1.63%

2007

1556.46

64370.69

2.42%

The above figure represents the Net Interest Margin of Southeast Bank Limited & we see that
in the year 2007 Southeast Bank was in most profitable position. In 2011 the Bank was in lowest
profitable position.
Prime Bank Limited from the year 2007-2011.
Year

Net Interest Income

Total Assets

Ratio

2011

4089

199950

2.04%

2010

4323

154342

2.80%

2009

2430

124809

1.95%

2008

1970

110437

1.78%

2007

1930

79588

2.42%

The above figure represents the Net Interest Margin of Prime Bank Limited & we see that in
the year 2010 Prime Bank Limited was in most profitable position. In 2008 the Bank was in
lowest profitable position.

Net Interest Margin of SB Net Interest Margin of PB

2.80%
2.03%

2.24%

2.42% 2.04%

1.34%

11

1.95%

2.42%
1.78%

1.63%

10

11

10

Return on Equity: Return on Equity is a ratio that measures a corporation's profitability

by revealing how much profit a company generates with the money shareholders have invested.
ROE is expressed as a percentage. There are several ways of calculating the return on equity for
an organization. LikeNet Income-Preferred Dividends/Common Equity
Net Income/Average Shareholders Equity
Net Income/Shareholders Equity.
For calculating the ROE of Prime Bank Limited the formula of ROE will be used is-

Returnon Eqity( ROE )=

Southeast Bank Limited

Net Income
shareholders Equity

Returnon Assets 2007-2011

shareholders Equity

Year

Net Income

Ratio

2011

1912.19

16745.84

11.42%

2010

2763.93

17095.90

16.16%

2009

1870.19

9927.16

18.84%

2008

887.24

7657.01

11.59%

2007

1222.97

6468.36

18.91%

The above figure represents the Return on Equity of Southeast Bank Limited & we see that in
the year 2007 Southeast Bank was in most profitable position. In 2011 the Bank was in lowest
profitable position.
Prime Bank Limited from the year 2007-2011.
shareholders Equi ty

Year

Net Income

2011

3662

19139

20.32%

2010

3003

16908

21.65%

2009

2748

11745

30.19%

2008

1232

6697

20.58%

2007

1401

5573

30.68%

The above figure represents the

Return on Eqity

Ratio

of Prime Bank Limited & we see that in the

year 2007 Prime Bank Limited was in most profitable position. In 2011 the Bank was in lowest
profitable position.

Return on Equity of SB Return on Equity of PB

16.16%

10

30.68%

30.19%
20.32% 21.65%

11.59%

11.42%

11

18.91%

18.84%

11

10

20.58%

Other operating Income to Total Assets: This ratio represents the relationship between
Other operating Income of an organization to total assets. The formula is-

Other operating Income Total Assets=

Southeast Bank Limited

Other Operating Income

Total Assets

Returnon Assets 2007-2011

Year

Other operating Income

Total Assets

Ratio

2011

8168.46

158078.59

5.17%

2010

8507.00

131784.27

6.46%

2009

5858.46

112676.98

5.20%

2008

4039.43

81181.53

4.98%

2007

3817.97

64370.69

5.93%

The above figure represents the other operating Income to Total Assets of Southeast Bank
Limited & we see that in the year 2010 Southeast Bank was in most profitable position. In 2011
the Bank was in lowest profitable position.
Prime Bank Limited from the year 2007-2011.
Year

Other operating Income

Total Assets

Ratio

2011

11645

199950

5.82%

2010

9795

154342

6.36%

2009

10724

124806

8.59%

2008

8745

110437

7.92%

2007

8834

79588

11.10%

The above figure represents the other operating Income to Total Assets of Prime Bank Limited &
we see that in the year 2007 Prime Bank Limited was in most profitable position. In 2011 the
Bank was in lowest profitable position.

Other operating Income to Total Assets Of SB Other operating Income to Total Assets of PB

5.17%

11

6.46%

10

5.20% 4.98% 5.93%

5.82% 6.36%
11

10

8.59% 7.92%

11.10%

SWOT ANALYSIS
SWOT is a short form that is used to describe the particular strengths, weakness, opportunities and
threats that are strategies factors for a specific company.

SWOT ANALYSIS of Southeast Bank Limited

Strengths:

Efficient management.
Leading Retail loan providers
Better employee relations.
Better location of the branch.
Better financial standing.
Interesting consumer schemes.
Quick delivery of foreign exchange.
On line Banking
ATM facility
Simultaneously Islamic Banking

Opportunities:

Market leadership.
Growth of the banking sector.
Different consumer service scheme of the SEBL.
Make the goodwill.
Perform more quickly services.
Go beyond the national boundaries.
SMS banking.

Weakness:

Inadequate work force.

Conservative loan facility.
Profit rate is less than others.
Lack of sufficient own ATM booth

Threats:

Political instability.
Intense competition.
Government rules and regulation.
Economical variation.
Policy of competitive banks.

SWOT Analysis of Prime Bank limited

Strengths
Superior quality
Huge Capital Fund
Prime Bank Limited has a very well educated and professional management.
Wide coverage of the bank with its 132 branches across the country has broadened the horizon of
its service.
Quick delivery of foreign exchange.
On line Banking
ATM facility, 138 ATM available

Weaknesses
Non-availability of ATM Booths
Reliance on Sufficient Collateral
Absence of Recovery agen
Opportunities

Government Support
Perform more quickly services.
Go beyond the national boundaries
Evolution of E-Banking
Banking and information technology might give the bank leverage to its competitors.
M-Banking

Threats

Mergers and Acquisition

Frequent Currency Devaluation
Emergence of Competitors
Political instability.
Intense competition.
Government rules and regulation.

Recommendation & Findings

Findings:
When we analysis those two banks annual report, we calculate the profitability ratio, as well as current
scenario of market, and also swot analysis of those two bank. By analysis all fo above we got some lack
of those two bank. Those are given below1. The flow of Return on assets of southeast bank is better than Prime bank but the return on deposit
is better prime bank.
2. Return of Shareholders capital, Net Interest Margin & return on equity is better prime

banks.
3. Number of branch of Prime bank is more than Southeast Bank.
4. Number of ATM also more Prime banks.
5. Prime bank has Huge Capital Fund.

Recommendation:
Analysis all data, annual report, profitability ratio, swot analysis etc. It is clear that the current position of
Prime bank is better than Southeast bank. So we will recommend invest on Prime bank.

Conclusion:
Southeast Bank started with a vision to be the most efficient financial intermediary in the country and it
believes that the day is not far off when it will reach its desired goal. SEBL looks forward to a new
horizon with a distinctive mission to become a highly competitive modern and transparent institution
comparable to any of its kind at home and abroad.
On the other hand Prime Bank Limited is one of the leading commercial banks in our country. In all
economic condition of our country Prime Bank Limited has been working with great confidence and
competing tremendously with Government oriented bank, local commercial banks along with the
multinational banks also. Prime Bank Limited always tried its level best to perform financially well. In
spite of trying to do well in some aspects Prime Bank Limited faced some financial problems from time
to time. Some of the problems were-excessive bad loans, shortage of loans and advances, scarcity of cash
in hands due to vault limit etc. These problems arouse time to time due to economic slowdown, interest
rate fluctuation, emerging capital market, inflation in the money market and so on. Fighting with all these
problems and competing with other banks every moment the bank is trying to do better to best. If this
thing continues we hope that Prime Bank Limited will develop even more in the future.