Project Report

On
Financial Performance analysis of Lanka
Bangla Finance Ltd.

Supervised By
Prof. Md. Abdul Quddus
Department of Business Administration,
Dhaka International University.

Prepared by
Tomal Chandro Sarker
Roll: 01, Reg: 242461
Session: 2012-13, Batch: 22nd A
Major in Finance, BBA
Letter of Transmittal
Date: 25 August, 2016

To
Prof. Md. Abdul Quddus
Department of Business Administration,
Dhaka International University.

Subject: Submission of project report on Financial Performance analysis of Lanka

Bangla Finance Ltd.
Dear Sir,
I am hereby submitting my Project report paper based on the topic Financial
Performance analysis of Lanka Bangla Finance Ltd. as the partial requirement of the
BBA program.
I made sincere efforts to study related materials, documents, observe operations. Within
the time limit, I have tried my best to compile the pertinent information as
comprehensively as possible and if you need any further information, I will be glad to
assist you.
I shall be highly obliged if you are kind enough to receive this report and provide your
valuable judgment. It would be my immense pleasure if you find this report useful and
informative to have an apparent perspective on the issue.
Thanking you
______________________
Tomal Chandro Sarker
Roll: 01, Reg: 242461
Session: 2012-13, Batch: 22nd A
Major in Finance, BBA

2|Page

Executive Summary
The financial health of a company may be determined by use of diagnostic procedures. As in a
some clues about its future condition. The first battery of tests consists of financial ratios. The
ratios describe relationships between selected items that appear on a firms financial statements.
Financial ratios may be combined in various ways provide different analytical perspectives. This
paper presents diagnostic tools designed to determine the financial performance of a company.
To illustrate the paper, the author has referred to the financial statements for Lanka Bangla
Finance Limited for five consecutive years. Lanka Bangla Finance Limited has adopted an
aggressive financing position, has higher market prices, is generating higher revenues and is
capital-equity ratio its capital employed less frequently than overall situation. At the same time, it
has improved its profit margin and is attempting to bring its return on equity up. It may have
increased the growth and cash flow prospects for the company, but it has also increased its risk.
Through financial analysis, my aim to understand the financial factors is influencing the financial
institutions and its decision making. Later, I will try to evaluate the various ratios to appreciate
their impact on Financials performance physical examination, a variety of tests is needed to
obtain a complete picture. The purpose of financial analysis is to diagnose the current and past
financial condition of a firm and to give over the last few years.

3|Page

Acknowledgement

I would like to express my sincere gratitude and appreciation to my supervisor Prof. Md. Abdul
Quddus, Department of Business Administration, Dhaka International University., Dhaka,
Bangladesh. Her magnanimous help, excellent guidance, constant encouragement and incessant
assistance were available at all stages of my report. I am extremely grateful to her for her earnest
feeling and help in matters concerning my report.

I would like to extend my warmest gratitude to my friends, for their cooperation, stimulation and
help during my work.

I am grateful to my parents who guided me through the entire studies and had helped me morally
and spiritually.
Tomal Chandro Sarker
Date: 25 August 2016

4|Page

Table of Contents
Particulars

S.No.

Page No.

Letter of Transmittal

Executive Summary

Acknowledgement

Chapter - 1
1.1

Introduction

1.2

Objectives

1.3

Scope of the Report

10

1.4

Sources of Data

11

1.5

Methodology

12

1.6

Limitation

13

Chapter -2
2.1

An over view of Banking Sector in Bangladesh

14

2.2

Types of financial Institution

15

2.3

Commercial Bank

15

2.4

Thrift Bank

16

2.5

Insurance Companies

16

2.6

Securities

17

2.7

Finance Companies

17

2.8

Mutual Fund

17

2.9

Pension Fund

17

Chapter-3
3.1

An Over view of LBFL.

18

3.2

Lanka Bangla Finance Ltd.

19

3.3

Objective of the Company

19

3.4

Code of conduct of the Company

20

3.5

Products of the service of the Company

20

3.6

Corporate Hade Quarter

22

3.7

Mission

23

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CHAPTER: 1
Introduction

6|Page

Introduction
Financial statements provide a summarized view of the financial position and performance of a
firm. Therefore, much can be learnt about a firm from careful examination of its financial
statements as invaluable documents/performance reports. The analysis of financial statements is,
thus, an important aid to financial analysis. The focus of financial analysis is on key figures in
the financial statements and the significant relationship that exists between them. The analysis of
financial statements is a process of evaluating the relationship between component parts of
financial statements to obtain a better understanding of the firms position and operations. The
first task of the financial analyst is to select the information relevant to the decision under
consideration from the total information contained in the financial statements. The second step is
to arrange the information in a way to highlight significant relationships (Khan & Jain, 2008).
The final step is interpretation and drawing of inference and conclusions. In brief, financial
analysis is the process of selection, relation and evaluation. The present paper is devoted to an indepth analysis of financial statements and its use for decision making by various parties
interested in them. The focus of the paper is on ratio analysis as the most widely used technique
of the financial analysis.
In this project paper I want to show Financial Performance analysis of lanka Bangla Finance
Ltd . Under the supervision of Prof. Md. Abdul Quddus, Department of Business
Administration, Dhaka International University.

7|Page

Objectives

The objective of the study may be viewed as:

General objective
Specific objective

# General objectives
This internship report is prepared primarily to fulfill the Bachelor of Business Administration
degree requirement under Department of Finance, Dhaka International University and get an
overall idea of NBFIs sectors and its activity specially the performance of Lanka Bangla Finance.

# Specific objectives

More specifically, this study entails the following aspects:

To make fundamental company analysis.

To analyze the profitability of Lanka Bangla Finance Limited with the help of different
statistical tools.

To test the predetermined hypothesis relating to the financial performances of Lanka

Bangla Finance Limited, only regarding profitability.

To make fundamental NBFIs industry analysis.

Impact of Industry Performance on Lanka Bangla Finance.

8|Page

SCOPE OF THE REPORT

The study would focus on the following areas.

Relationship of Net Profit with its fundamental determinants.

Company Analysis (LBFL) and whole financial industry,

Brief overview of Lanka Bangla Securities.

Each of the above areas would be critically analyzed in order to determine the regression model
and to build predetermined hypothesis.

9|Page

SOURCES OF DATA
Information collected to furnish this report is both from primary and secondary in nature.

# Primary Source of Data

The primary data of this report were collected through:

Direct interview & Conversation with the research analyst of the Research Department.

Practical experiences obtained from the corporate office of LBSL

Experts opinion.

Official records.

# Secondary Source of Data

I have gathered the secondary data via following sources:

Annual report of Lanka Bangla Finance ltd.

Printed outlines and documentation supplied by Lanka Bangla Finance ltd.

Annual Financial Statement of last 4 years of different NBFIs.

Analysis report of LBSL research and analysis department.

Website of Lanka bangla Finance (http://www.lankabangla.com/).

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METHODOLOGY
The data for this study was gathered from the annual financial statements published by the Lanka
Bangla Finance Limited in some selected internal magazines to accomplish the aforesaid
objectives. The Quarterly and annual data for the selected NBFI during 2011 to 2015 are used in
order to assess the profitability of the bank. Any progress of Lanka Bangla Finance Limited
thereafter is thus out of the scope of the report. Help of other sources like annual report,
magazines, brochures, journals, newspapers, websites, etc. have also been chosen whenever
found necessary. This paper is based on secondary data collection.

In processing the data, various methods of conventional statistics were deployed. Frequency
distribution, measures of central tendency and dispersion, time series analysis, simple correlation
and multiple regression analysis, correlation matrix and ANOVA in some cases calculated data
are presented in graph to give the reader a better understanding of financial components.

Kerala-Pearson correlation coefficient also used to investigate the correlation between the
variables at 5% level of significance according to the SPSS software package. Microsoft excel
was also used to produce some graphs and charts.

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LIMITATION
I have faced some usual constrictions throughout my internship program to some extent that I are
presented as follows:

Primary data is always hard to work on because of authenticity.

Time is another hindrance to prepare a quality report.

Power failure is another main restraint to prepare this report

And scarcity of information is always a common hindrance to prepare any types of report.

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CHAPTER: 2
An Overview of
Financial Institution
sector in
Bangladesh

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Introduction
Financial sector reform in Bangladesh started in 1976 with privatization of the banks to
encourage private investment, and continue in the mid-1980s as part of Structural Adjustment
Policies (SAP). Between 1992 and 1996, a Financial Sector Reform Programmed (FSRP) was
implemented. Its major aim was to improve the operations of Nationalized Commercial Banks
(NCBs) through the development of new banking technologies, computerization of banking
operations, upgrading of skills, changing outdated internal banking practices and corporate and
credit cultures. Further reforms are underway. In Bangladesh, there are 49 banks (with 6318
branches) of which there are 30 private commercial banks, 10 foreign commercial banks and 9
nationalized commercial and specialized banks. The banking sector employs about 110,000
people. Total deposits and loans and advances also increased considerably between 1990 and
2005 and some financial deepening has taken place as a result of intensive reforms in the
financial system. Foreign joint venture banks now hold about 9.5 percent of the total assets of
commercial banks.

Types of financial institutions:

Commercial Banks
Insurance companies
Securities firms and investment banks
Non-banking financial institutions
Mutual funds
Pension funds
Micro financial institutions

Commercial Bank
A financial institution that provides services, such as accepting deposits, giving business loans
and auto loans, mortgage lending, and basic investment products like savings accounts and
certificates of deposit. The traditional commercial bank is a brick and mortar institution with
tellers, safe deposit boxes, vaults and ATMs. However, some commercial banks do not have any
physical branches and require consumers to complete all transactions by phone or Internet. In
exchange, they generally pay higher interest rates on investments and deposits, and charge lower
fees. The commercial banks are:

Sonali Bank Limited

Janata Bank Limited
Agrani Bank Limited
Rupali Bank Limited
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Private commercial banks

AB Bank Limited
Bangladesh Commerce Bank Limited
Bank Asia Limited
BRAC Bank Limited
Dhaka Bank Limited
Dutch Bangla Bank Limited
Eastern Bank Limited
IFIC Bank Limited
Jamuna Bank Limited
Meghna Bank Limited

Thrift Bank:
A financial institution focusing on taking deposits and originating home mortgages. Thrift banks
often have access to low-cost funding from Federal Home Loan Banks, which allows for higher
savings account yields to customers and increased liquidity for mortgage loans.
Also known as "savings and loan associations".

Insurance companies:
A business that provides coverage, in the form of compensation resulting from loss, damages,
injury, treatment or hardship in exchange for premium payments. The company calculates the
risk of occurrence then determines the cost to replace (pay for) the loss to determine the premium
amount. A protection against the loss of income that would result if the insured passed away. The
named beneficiary receives the proceeds and is thereby safeguarded from the financial impact of
the death of the insured.The insurance companies are:

Jiban Bima Corporation

National Life Insurance Co. Ltd
Delta Life Insurance Co. Ltd.
Baira Life Insurance Company Ltd.

Securities:
Evidence of a corporation's debts or property.
15 | P a g e

Securities are documents that merely represent an interest or a right in something else; they are
not consumed or used in the same way as traditional consumer goods
Types of securities include notes, stocks, treasury stocks, bonds, debentures, certificates of
interest or participation in profit-sharing agreements, collateral-trust certificates, preorganization
certificates or subscriptions, transferable shares, investment contracts, voting-trust certificates,
certificates of deposit for a security.

Finance company
an institution engaged in such specialized forms of financing as purchasing accounts receivable,
extending credit to retailers and manufacturers, discounting installment contracts, and granting
loans with goods as security.

Mutual fund
An open-ended fund operated by an investment company which raises money from shareholders
and invests in a group of assets, in accordance with a stated set of objectives

Pension Fund
A fund established by an employer to facilitate and organize the investment
of employees' retirement funds contributed by the employer and employees.
The pension fund is a common asset pool meant to generate stable growth
over the long term, and provide pensions for employees when they reach the
end of their working years and commence retirement.

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CHAPTER: 3
An Overview
of LBFL

The Company: Lanka Bangla Finance Limited:

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Lanka Bangla Finance Limited (LBFL) a joint venture financial institution established with
multinational collaboration is in operation since 1997 having license from Bangladesh Bank
under Financial Institutions Act, 1993. With institutional shareholding structure, educated &
motivated human resources, friendly working environment & dynamic corporate culture has
enabled LBFL to be a diversified financial services providing institution of the country. Technical
support provided by Sampath Bank Limited, Sri Lanka has been working as a catalyst to emerge
LBFL as most innovative financial solution provider strictly in compliance with the rules &
regulations of Bangladesh Bank.

Objectives of the Company:

Lanka Bangla Finance Limited practices participatory management and adheres to industry
best practices in all endeavors. Increasing stakeholders value is a natural driving force for
the people at Lanka Bangla; nevertheless, maintaining quality of service is at the core of
business which earned its unparalleled customer loyalty. Everything is done in compliance of
all norms and regulatory requirements. The objectives of the company are given below:

Enrichment & expansion of financial offerings by introducing new product and service
lines through proper diversification and customization of existing products and services
for ensuring maximum market coverage to meet & exceed stakeholders needs &
expectations.
Continuous improvement in operational processes through technological advancement,
employee capacity building and improvement through human resources development
programs, thereby ensuring effective and efficient utilization of resources to maximize
the value of the company.
Strengthening building blocks to consolidate the product & service framework and
maintaining strict compliance to good governance norms and regulations to ensure long
term sustainability of the company.
Building synergy among resources and activities to ensure maximum outputs from
resource inputs.
Contribute to the society to share the achievements of the company with the nation.

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Code of Conduct of the Company:

Lanka Bangla is a value driven organization that means it does not depart from the principles
even if it gives sometimes temporary benefit to the company. Company believes that its
reputation and dignity is absolutely priceless asset. The companys affairs get the utmost
priority all of the employees. The companys reputation not only affects whether or not
someone will be customer; it also determines to be associated with the firm. The code of
conduct is designed to guide the employees of the company to observe, comply with the
prudential norms of conduct, manner and behavior. It is in alignment with the companys
vision and values to achieve the mission, objectives and aims at enhancing the ethical and
transparent process in managing the affairs of the company. It also applies to every employee
of Lanka Bangla and may be furnished to others for discharging the responsibilities. In
additional to the ethical guidelines included in the code, there are many laws and regulations
that affect each of the business that company does. Complying with law is mandatory for
everyone and is not subject to business priorities or individual discretion.

Products and Services of the Company:

Lanka Bangla is the lone non-banking financial institution who operates MasterCard & VISA
Card including third party processing business with other banks. The company is also
involved in dealing with securities as broker in capital market both Dhaka Stock Exchange
and Chittagong Stock Exchange through its subsidiary named Lanka Bangla Securities
Limited, who is the business leader in this arena. The merchant banking department has
converted into another subsidiary of Lanka Bangla Finance to comply with the statutory
regulations that are catering the premier investment banking service. The products and
services of the company are:

# Credit and Investment Products:

Lease Finance
Term Finance
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Short Term Finance

Working Capital Finance
Factoring Finance
Personal Loan

# Merchant Banking Operation:

Investors Portfolio

# Management Services:
Margin loan
IPO Advisory
Issue Management
Underwriting
# Card Operation:
MasterCard and VISA Card Issuing
MasterCard Acquiring
Third Party Card Processing
# Deposit Schemes:
Periodic Return Term Deposit
Cumulative Term Deposit
Double Money Term Deposit
Money Builders Term Deposit
Mortgage Loan
Home Loan
Real Estate

# Developers Finance Corporate Services:

Syndication of Loan
Corporate Advisory Services
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Investment Counseling
SME Finance
SME Finance- for small
Medium businesses to
empower the people.
Primary Dealership
Primary and Secondary operation of
Treasury Bill and
Treasury Bond
Auto Loan
Car Finance- for individuals and institutions
Stock Broking
Cutting edge Broking provided by
Lanka Bangla Securities Limited

Corporate Headquarter:
Safura Tower(Level-11)
Kemal Ataturk Avenue, Banani
Dhaka- 1213, Bangladesh
Email:- Info@lankabangla.com

Mission:
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To lead by example through a commitment that empowers the organization at every level to
strive for the highest levels of quality, customer care and stakeholder value.

Vision:
To be the nations most preferred financial services provider.

Focus:

To be the most sought after facilitator in creating wealth.

To optimize the value of being their customer, shareholder or employee.
To establish strong regional presence.

Financial Highlights of Lanka Bangla

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Financial
Position

2010

2011

2012

2013

2014

Growth 5 Year
of
CAGR
2014 over (%)/
2013
Averag
e*

Total Assets

19,322

22,380
16,293

24.90%

22.53%

Business
Disbursement
Property Plant
and Equipment

4,276

4,444

78.41%

46.60%

195

189

238

291

39,12
9
31,99
7
19,75
0
311

19.29%

14,193

32,64
8
25,61
9
11,070

19.85%

Total Liabilities

25,33
9
18,67
2
6,370

6.72%

12.38%

Current Assets

8,986

9,345
8,945

13,31
6
9,381

10.33%

7,870

-37.31%

4.49%

1,116

400

19,28
1
14,96
5
4,317

-30.94%

Current
Liabilities
Net current assets

19,88
7
10,80
5
9,082

3,935

-8.85%

37.03%

Non-Current
Assets
Long Term
Liabilities
Term Deposits

10,337

13,035

5,452

25.71%

7,348

7,867

112.28%

37.52%

4,560

5,310

7,616

54.08%

38.30%

Total Investment
Portfolio

17,269

20,049

23,42
4

25,81
3
22,61
6
16,68
3
36,57
6

93.11%

6,323

13,36
7
10,65
4
10,82
7
29,81
2

22.69%

20.64%

Operational Performance
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Financial
Position

2010

2011

2012

2013

2014

Growth
of
2014
over
2013

5 Year
CAGR
(%)/
Average
*

Operating
Revenue
Operating
Expenses
Financial
Expenses
Net Profit
Before
Tax
Net Profit
After Tax

4,176

3,410

3,537

5,189

5,100

-1.71%

5.12%

498

627

794

892

1,285

44.03%

26.76%

1,016

1,397

2,148

2,731

3,033

11.06%

31.44%

2,331

1,304

510

997

434

-56.51%

-34.33%

1,839

859

348

955

454

-52.44%

-29.52%

EBITDA

3,710

2,818

2,808

4,369

3,909

-10.54%

1.31%

Turnover
of Share
Trading
by LBSL

560,36
6

229,16
2

135,33
5

135,79
5

181,67
4

33.79%

-24.54%

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CHAPTER: 4
Financial Analysis
Of LBFL

Current Ratio:
Current Ratio= Current Asset/ Current Liabilities

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Year
LBFL

2010
1.14

2011
1.04

2012
1.84

2013
1.29

2014
1.42

Comments: If a company's current ratio is in this range, then it generally indicates good shortterm financial strength. If current liabilities exceed current assets (the current ratio is below 1),
then the company may have problems meeting its short-term obligations. Here LBFLs current
ratio is over 1. So LBFL has good short-term financial strength.

Debt Equity Ratio:

Debt Equity ratio= Total Debt/ Shareholders Equity

Year
LBFL

2010
10.22

2011
7.72

2012
4.04

2013
5.17

2014
5.96

Comments: The debt to equity ratio is a financial, liquidity ratio that compares a company's total
debt to total equity. The debt to equity ratio shows the percentage of company financing that
comes from creditors and investors. A higher debt to equity ratio indicates that more creditor
financing (bank loans) is used than investor financing (shareholders). Here due to decreasing
debt equity ratio, liquidity is increasing of LBFL.

Earnings Per Share:

Earnings Per Share = EAT/ Number of common Stock

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Year
LBFL

2010
1.84

2011
2.13

2012
5.65

2013
2.05

2014
2.98

Comments: Earnings per share (EPS) is the portion of the companys distributable profit which is allocated
to each outstanding equity share (common share). Earnings per share is a very good indicator of the
profitability of any organization, and it is one of the most widely used measures of profitability. Here Lanka
Banglas profitability is raising year to year.

Price Earnings Ratio

Price Earrings Ratio= Market value per share/ EPS

Year
LBFL

2010
15.56

2011
17.71

2012
33.39

2013
15.54

2014
21.78

Comments: The price earnings ratio, often called the P/E ratio or price to earnings ratio, is a market
prospect ratio that calculates the market value of a stock relative to its earnings by comparing the market price
per share by the earnings per share. In other words, the price earnings ratio shows what the market is willing to
pay for a stock based on its current earnings. Here the ratings of Lanka Banglas price earnings ratio is
upgrading day by day its a positive sign for a the company.

Return on Equity :
Return on Equity= EAT/ Shareholders Equity
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Year
LBFL

2010
35.95

2011
30.62

2012
43.39

2013
10.95

2014
14.54

Comments: This ratio indicates how profitable a company is by comparing its net income to its
average shareholders' equity. The return on equity ratio (ROE) measures how much the
shareholders earned for their investment in the company. The higher the ratio percentage, the
more efficient management is in utilizing its equity base and the better return is to investors.
Here Lanka Banglas indicates that its management cannot properly utilized its equity base
because its ROE is become decreasing year to year.

Return on Assets
Return on Asset= EAT/ Total Asset

Year
LBFL

2010
2.94

2011
3.15

2012
6.98

2013
1.94

2014
2.21

Comments: Return on assets (ROA) is an indicator of how profitable a company

is relative to its total assets. ROA gives an idea as to how efficient management is at
using its assets to generate earnings. Calculated by dividing a company's annual
earnings by its total assets, ROA is displayed as a percentage. Here Lanka Banglas
management uses their Asset properly from2010 to2012 but in 2013 & 2014 asset
management is not maintain properly.

Return on Investment
Return on Investment= Net profit after interest and tax/ Total Asset
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Year
LBFL

2010
3.56

2011
3.28

2012
7.67

2013
2.03

2014
2.38

Comments: Return on investment (ROI) is performance measure used to evaluate the efficiency
of investment. It compares the magnitude and timing of gains from investment directly to the
magnitude and timing of investment costs. It is one of most commonly used approaches for
evaluating the financial consequences of business investments, decisions, or actions. Here ROE
is decreasing year to year in Lanka Bangla and its a threat for a company.

Total Asset Turnover Ratio

Total Asset Turnover Ratio= Net Sales/ Total Average Asset

Year
LBFL

2010
10.76

2011
13.90

2012
18.61

2013
13.11

2014
12.64

Comments: 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. In other words,
this ratio shows how efficiently a company can use its assets to generate sales. Here is a
fluctuating situation in Lanka Bangla in asset generating sales.

Non-Performing Loan
Year

2010

2011

2012

2013

2014
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LBFL

7.9

6.51

3.96

4.84

5.08

Comments: A nonperforming loan (NPL) is the sum of borrowed money upon which the debtor
has not made his scheduled payments for at least 90 days. A nonperforming loan is either in
default or close to being in default. Once a loan is nonperforming, the odds that it will be repaid
in full are considered to be substantially lower. Here non-performing loans are decreasing in
Lanka
Bangla
which
is
very
good
sign
for
a
company.

CHAPTER: 5
30 | P a g e

Findings and
Conclusion

Key Findings
According to our analysis it is clear that the chosen profitability indicator variables have impact
upon net profit, but among the independent variables the Term Deposit and Operating Revenue
exert significant influence on Profitability of Non-Banking sector (LBFL) in Bangladesh. As we
know that Liquidity is considered as one of the most prominent yardstick of performance
measurement of financial institutions. Investors generally perceive the financial institutions to be
superior over the others if it has sufficient liquid or current assets. When an NBFI has huge
Operating Revenue and Total Equity the investors feel more secured and approach to this NBFI
for their investment. The more the number of customers increases the more it becomes
31 | P a g e

profitable. Again we see operating revenue is the another variable which has a major impact on
net profit. So it is undoubtedly true that if the revenue increases, ultimately it has a positive
effect over the profitability.
The results of multiple regressions suggest that the selected independent variables explain more
than 88.9% changes in the net profit. By analyzing the other statistical results of multiple
regressions we found that the results are very much consistent with the simple regression. All the
results are statistically significant and overall provide an idea that liquidity is the basic
determinant of profitability in NBFI sector. So it can be inferred that this promising and potential
sector in Bangladesh can flourish very fast and enhance profitability by improving total equity
and operating efficiency.

To make the findings easier to understand, summary of the analysis is given below:

There were 7 variables. 6 were independent and 1 was dependent.

In total, 16 quarterly data of each variable was taken for analysis.
Almost all the independent variables have strong positive relation with the
dependent variable.
Total Asset has direct effect on Net Profit.
Total Equity has direct effect on Net Profit.
Term Deposit has no significant t effect on Net Profit. Operational Revenue
has direct effect on Net Profit.
Operational Expense has direct effect on Net Profit

Recommendation
It was very difficult to find out any significant negative sides of Lanka Bangla Finance Limited
among its numerous positive sides in term of profitability. However there are few problems need
to be corrected by the management of the institution. Some necessary steps are recommended
below on the basis of collected data, observation, expert staffs opinion and my knowledge and
judgment:

Net profit was in a sharp rise in the recent past. The company should try to keep the
momentum going.
32 | P a g e

 Operating revenue has significant effect on net profit. So the company should look to
maximize operating revenue as much as possible.
Operating expense has significant effect on net profit. So the company should look to
minimize operating expense as much as possible.
Term deposit also has significant effect on net profit. So the company should attract more
depositors to deposit with attractive deposit scheme
Total Equity directly affect the NAV of the company and investors pays a huge attention
on NAV so company should always try to increase the Total Equity.

Conclusion
The findings of the paper cannot be taken as conclusion and it will be wrong to end here with
such a result. Because this study gives a simple picture and leaves room for further study in
different areas of NBFI functions such as products of productivity analysis, Data Envelopment
Analysis (DEA), CAMELS rating, robust estimation approach based on the competing efficient
structure (ES) hypothesis, effect of commercial property price movements, use of statistical tools
and more. The impact of government policy in the performance of Standard bank limited is also
not studied in this study which must have significant impact on the performance of Lanka
33 | P a g e

Bangla Finance Limited. Further study also can be concluded on post and
performs of NBFI sector.

However, the study provides managers with understanding of activities that would improve their
NBFIs financial performance. The result of this study imply that it might be necessary for the
management of Lanka Bangla Finance Limited to take all the required decisions by consistently
observing key financial data and deviations among various elements to enhance the financial
position of this NBFI.

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BIBLIOGRAPHY
Article:
Ali K, Akhter M F., Ahmed H Z, (2011) Bank-Specific and Macroeconomic Indicators
of Profitability - Empirical Evidence from the Commercial Banks of Pakistan,
International Journal of Business and Social Science, 2, 235-242.
Abreu M., Mendes V., Commercial bank interest margins and Profitability: evidence for
some eu countries, 1-11.
Davydenko A., (2011) "Determinants of Bank Profitability in Ukraine," Undergraduate
Economic Review, 7, 1-30.
Gul S., Irshad F., Zaman K, (2011) Factors Affecting Bank Profitability in Pakistan,
The Romanian Economic Journal, no.39, 61-87.
Hays F. H., Lurgio S A D, Gilbert A H, Efficiency Ratios and Community Bank
Performance, Journal of Finance and Accountancy, 1-15
Jahangir N., Shill S. and Haque A. J., (2011) Examination of profitability in the context
of Bangladesh banking industry, ABAC Journal, 27, 36-46.
Shah-Noor Rahman, Tazrina Fara / IJAR-BAE (March 2012) Vol. 1, Issue 1 / Page No:
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Fadzlan Sufian, and Royfaizal Razali Chong DETERMINANTS OF BANK
PROFITABILITY IN A DEVELOPING ECONOMY: EMPIRICAL EVIDENCE FROM THE
PHILIPPINES, AAMJAF, Vol. 4, No. 2, 91112, 2008

Website:

LBS Yearly Market Review, Issue 47, December 2010

http://www.dsebd.org/dse_nrb_pro_usa_2010.pdf
DSE Monthly Review, Vol. 267
http://www.lankabangla.com/
http://www.lbsbd.com

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