Due to the demand of better banking facilities rather than the public bank, a few entrepreneurs take a

bold step to start private commercial banks in Bangladesh and from the foot steps from the first
generation commercial banks Bangladesh now have 49 public and private commercial banks. The
role of Commercial Banks in our economy is more significant compared to other service oriented
organizations. Already private commercial banks take a large portion of our banking sector.

Introduction

Origin of the study:

The internship report is a basic requirement of the BBA program of the School of Business,
University. During the 12 week internship program, students are assigned to an organization to
observe the practical applications of their theoretical knowledge. Finally, a report with proper
analysis and possible solution of the problematic zones of the organization needs to be submitted
to the Faculty Advisor Mohammad Mujibul Haque, Associate Professor, School of Business,
NSU.

Objective of the study:

The objective of the study is to examine organization structure, products, business strategy and
last 3 year performance of Bank Asia Ltd.

Scope of the study:

The scope of the study is to analyze the Bank Asia Limited.

Methodology:

Both primary and secondary sources have been used for colleting necessary data to analyze the
Bank Asia Ltd. Primary sources include face-to-face interview with respective officers in credit
department. Secondary sources consist of several reading materials such as journals, brochures
and Annual Reports.

Limitation of the study

One of the crucial limitations is time constraint. As I posted in the Corporate Branch of the Bank;
so, it is difficult for me to collect all the organization structure and other necessary information to
know all related documents. Finally, lack of previous experience in this area will be another
limitation.

Organizational Benefit:
This report would helpful for the organization for future decisions. Whether they will stick with
their present plan or whether they would change their strategy to attract more clients to get the
service from the bank but also how they improve their present scenario.

Overview of Bank Asia Ltd

Introduction

Due to the demand of better banking facilities rather than the public bank, a few entrepreneurs
take a bold step to start private commercial banks in Bangladesh and from the foot steps from the
first generation commercial banks Bangladesh now have 49 public and private commercial
banks. Already 3rd generation private commercial banks are operating their services. The role of
Commercial Banks in our economy is more significant compared to other service oriented
organizations. Already private commercial banks take a large portion of our banking sector.

Bank Asia Limited is a third generation bank started its commercial banking operation from
November 27, 1999. During the short span of time (less than five years) the bank has been
successful in positioning itself as progressive and dynamic financial institution in the country.
The bank has been widely acclaimed by the business community, from small entrepreneurs to
large traders and industrial conglomerates, including the top rated corporate borrowers for
forward-looking business outlook and innovative financing solutions. In the beginning of year
2001 Bank Asia Limited acquired the operation of the Bank of Nova Scotia of Canada in
Bangladesh. In September 2001 a Memorandum of Understanding was signed with the Muslim
Commercial Bank Limited (MCB) of Pakistan to take over their operations in Bangladesh.
Eventually MCBs operations were taken over through acquisition with effect from January 1,
2002. These events are milestones in the forward march of the Bank and have added new
dimensions to the banking industry in the country. The acquisitions have provided wider access
to Bank Asia Ltd regionally and internationally and helped the bank to expand its clientele.
Bank Asia Ltd. started selling its share for the public in September 2003 and traded in DSE &
CSE from that time.

Bank Asia Limited is the first commercial Bangladeshi bank that acquired two foreign
commercial banks to operate business. Now we will see how Bank Asia Ltd performed in the
previous five years.

2003 2002 2001 2000 1999

Authorized Capital 1,200.00 800.00 800.00 800.00 800.00
Issued, Subscribed & Paid up
Capital 600.00 235.44 218.00 218.00 218.00
Shareholders Equity 889.72 375.23 282.21 219.80 213.14
Total Assets 12,599.81 8,457.85 4,721.76 2,122.82 632.01
Deposits 10,431.38 7,008.47 3,848.81 1,512.17 341.91
Loans & Advances 8,189.82 5,449.13 3,012.69 1,114.06 19.52
Import Business 14,556.11 7,761.09 3,953.75 1,520.47
Export Business 5,996.48 5,336.25 1,135.86 262.60
Net interest Income 268.00 183.65 106.85 43.99 2.98
Operating Income 408.04 218.78 121.30 33.55 0.19
Operating Expense 256.95 172.77 102.46 58.16 8.03
Operating Profit 419.09 229.66 125.70 19.37 (4.86)
Dividend 24% 28% 18%
Branches 14 12 7 5 1

All the figures are in million and currency is BDT except dividend and Branch

From Annual Report 2003

Bank Asia started its operation with a huge amount of paid up capital that no other commercial
bank starts with such a huge amount of money. And day by day the paid up capital amount is
increasing.

The stockholders equity is also increasing trend which reflect that shareholders eager to invest in
the bank to increase revenue for the bank; which definitely a good sign for the bank.

Total assets of the bank also increasing and especially in the year 2003 its jump to more than 4
million than in the previous year. It suggests that bank is wants to expand its business all over the
Bangladesh and have the capability to tackle in the upcoming years.

The amount of deposits also increase day by day that reflects customers have the faith in the
bank to deposit their money in the bank. the amount of loans and advance of also increase that
suggests that they are not put deposit idly in the bank they are investing the deposits in various
credit facilities so that they are able to generate more revenue.

As a new bank in the country, their Import and Export business have doing a good job. For a
short period of time they are able to generate foreign currency at an increasing trend for the last
four years. Net interest income also has an upward trend which is definitely a good sign for the
company.

Operating income, operating expense and operating profit is also increasing that show Bank Asia
doing well in the industry.

The number of branch also increasing rapidly which suggests that they are trying provides
services more to the customers.

Type of Business

Bank Asia Limited was licensed as a scheduled bank. It is engaged in pure commercial banking
and providing services to all types of customers ranging from small and medium enterprises to
large business organizations. It is working for the economic welfare by transferring funds from
the surplus economic unit to those who are in deficit.
Objectives of the Bank

The core business objective of Bank Asia Limited is not maximizing profit rather it focuses on
maximizing its shareholders wealth. The major corporate objectives of the Bank are noted as
under:

A) Delivering high quality service to its clients.

B) Increasing the volume of deposits.

C) Ensuring better security of public fund

D) Being the market leader by automation of banking operations and innovation of services.

E) Being an equal opportunity employer.

Mission of the Bank

The mission of the Bank is:-

To assist in bringing high quality service to our customers and to participate in the growth
and expansion of our national economy.

To set high standards of integrity and bring total satisfaction to our clients, shareholders
and employees.

To become the most sought after bank in the country, rendering technology driven
innovative services by our dedicated team of professionals.

Vision of the Bank

Vision statement of Bank Asia Limited claims is To Serve the Society with a difference.

Strategic Business Units

Introduction

The Corporate Office of Bank Asia Ltd. is situated at Rangs Bhaban(8 th floor), 113-116 Old
Airport Road, Tejgaon, Dhaka-1215, Bangladesh. It looks after and controls the banking
operations of the branches scattered in different important business locations in Bangladesh. At
present, there are 10 divisions in the Corporate Office. The classifications of the different
division are mentioned as follows:

Credit Division:
The Credit Division is one of the most vital and important divisions of every commercial bank.
The Credit Division of the Bank deals with issuing, monitoring different types of loan. At present
Kamal U. Ahmed (FAVP), is the Head of Credit Division.

Financial Control and Accounts Division:

This division is located in the Principal Office(PO). For this reason PO commonly known as
Feeding Branch; the main objective of this division to monitor and control the Financial and
Accounts department of all branches. Usually Manager of PO is the head of this division. Bank
Asia Ltd. This division monitors several important functions of banking operations performed in
different branches across the country. It deals with accounts, financial planning, and budget.

Human Resource Division:

HR Division is one of the crucial divisions of a bank. The jobs performed by the HR are
recruitment of employees, placement of employees in different branches; arrange workshops &
training program for the employees, performance evaluation, disciplinary actions, promotion,
cadre change, employee service rules and benefits and others. Company Secretary is the Head of
this division at the moment.

Logistic and General Services Division:

Logistic and General Services Division is considered as the centre for providing necessary
supporting services to other departments, other branches as well as the employees. The function
of this division includes providing utility services, maintenance of premises, purchase of printing
and general stationary, dispatch and transport pool. This division has a store in Tejgaon link road
where all the necessary products are stored there.

International Division (ID):

The main role of the ID is to deals with foreign currency and local currency. ID has the authority
to deals every kind foreign currency conversion and made any kind of currency swap. It also
deals maintains the mutual relationship with many corresponding banks on several issues such as
agency and credit line arrangement, reconciliation, authorized signature control, TK.C (test key
control), issuance of power of attorney, fund management and treasury operations (foreign) etc.
At present ID is headed by an AVP of the bank.

Information Technology Division (ITD):

At present, ITD is based on Corporate Office and in the Gulshan Branch. Near Future it will fully
shifted in Gulshan Branch. In recent times ITD changed the banks software system from
Bexibank to Stealer. In the modern day banking ITD is a very important division as Bank
Asia is now serving the customers in online service. It is very significant to adapt with the
ongoing information technology revolution to provide faster services to the clients. The ITD
supervises the overall computerization of the banking operations and networking, provides
system support, deals with data processing and data entry, procures and maintain hardware,
maintains and develops software required by the Bank to facilitate and support the day to day
operations.

Card Division:

The card division is situated in the Scotia Branch. The core function of the Card Division is
dealing with issues ATM card, and customer and vendors management. The manager of Scotia
Branch is the Head of Card Division.

Audit Division:

Bank Asia believes in full transparency and accurate banking jobs perform by its employees. For
this purpose Bank Asia created a division called audit division. They have the authority audit in
anytime in anywhere and only bound to report to the board of directors. The head of audit
department is headed by Azhar Ali Miah,SVP.

Share Division:

Share division deals with all kind of share related activities for example issuing dividends,
arranging AGM, issuing new shares, etc. at present Company Secretary is the head of share
division.

Marketing Division:

The main objective of this division to expand its business all over Bangladesh; to focus on
selecting new locations for new branches, how to attract new customers and to keep the present
customer for the future. At present, an SVP of the bank is headed this division.

Marketing Issues of the Bank

In the modern day banking marketing issues are very vital to move forward and prosper in
future. At present in the banking sector there is a huge competition in this sector, the number of
banks are increasing, government and central bank guidelines become tougher to control money
laundering, forgery, and other burning issues. Government also tries to monitor how the banks do
day to day banking, what is the chance of providing bad debts, take initiatives so that banks can
not provide loans to those persons, company, etc. which would have the chance to loan default.

Banking is categorized under the service marketing strategy. The service marketing strategy
follows 6 Ps. They are:-

Product

Place

Promotion
 Price

People

Packaging

Place:

Place is the branches and corporate office where the customer can get the service. At present
except the Corporate Office Bank Asia has 16 branches and within this year they would increase
three more branches. 7 of the sixteen branches are outside Dhaka City which reflects that they
are eager to provide their services all around Bangladesh.

People:

From the beginning of the bank, the authority of the bank believes that a highly qualified,
energetic, enthusiastic, cooperative, eager to learn more employees can improve the bank in the
modern day competition. Thats why the authority hires those people who have this quality.
Moreover, at the top level of the management is full of renowned bankers in Bangladesh. A very
few bank in Bangladesh has this kind of manpower or human resources.

Packaging:

Although packaging in banking sector is not popular in Bangladesh, though Bank Asia tries to
provide. After open an account in the bank the authority also send a letter as acknowledgement to
the customers mail address. When a person opens an account in the bank; the bank provides all
the documents in a beautiful package. Bank provides a plastic packet to protect the ATM cards
when they purchase ATM cards. Whenever a business deals occurs in the bank need to provide
documents, bank provides the documents with a beautiful packet which has a logo of the bank
and respective branch address.

Promotion:

At the present day banking promotion is the vital role to play to increase the business share. And
this motto follows Bank Asia. They provides regularly ads in the newspaper, provides press
release to the paper to inform the citizens what they are now doing at moment.

In the rural areas they provide billboards both sides of the highways. This step is taken to fulfill
its objective to popularize the bank in the rural areas.

They also regularly take parts in social activities like clean your city, sanitation, drink pure water,
etc.

Bank Asia always regularly publishes leaflets to provide information about their products,
branches, objectives, etc.
As the promotion campaign Bank Asia authority provides jobs to the national cricketers. At
present in this criterion, Tareq Aziz Khan and Khaled Mahmood Sujon are performing their
banking duties. More cricketers and other sports persons, reputed personalities in different fields
would get the opportunity to work in Bank Asia. In next cricket season, Bank Asia will
participate in the corporate league.

Products and Price:

Products and price are two different criteria in service marketing. I would do it jointly. Products
and price are the core equipments that will attract customers.

According to division wise I would try to narrate the products of Bank Asia.

All business concerns earn a profit through selling either a product or a service. A bank does not
produce any tangible product to sell but does offer a variety of financial services to its customers.
General banking is the starting point of all the banking operations. It is the department, which
provides day-to-day services to the customers. Everyday it receives deposits from the customers
and meets their demand for cash by honoring cheques. It opens new accounts, remit funds, issue
bank drafts and pay orders etc. Since bank is confined to provide the service everyday, general
banking is also known as retail banking. General banking is categorized in following stages.

Customer Service:

Customer service deals with opening different type of deposit accounts, issuing Sanchaypatra,
Demand Draft, Telegraphic Transfer, ATM Card, Pay Order and SMS Banking and finally but not
least deals with the clients of all type of enquiries and try to solve the problem.

Bearer Certificate of Deposit (BCD):

Bearer Certificate of Deposit account is almost same as Fixed Deposit account. But in case of
BCD account, no name and address are mentioned. The customer opens this type of account as a
bearer but it is negotiable. Whoever presents it to the bank has the right to get the money. There
is no prescribed interest rate on such funds but Bank Asia Ltd offers same interest rate of the
term deposit of different maturity.

The face value of the instrument is the future value. The face value is the sum of the principal
amount and the interest. It is beneficial to both NCCBL and the investor because of the following
reasons:

The banker is not required to encash the deposit before the date of maturity;

The investor is assured of ready liquidity. In case of need he can sell the certificate in the
secondary market.
s the identification of the owner is not given in the instrument, it is very much popular. During
the encashment of the instrument, the excise duty and income tax (10%) is deducted. In case of
premature encashment, the principal amount is only paid to the customer.

Savings Account:

Individuals and party for savings purposes open this type of account. Current interest rate of
these accounts is 6% per annum. Interest on Savings account is calculated and accrued monthly
and credited to the account half yearly. Interest calculation is made for each month based on the
lowest balance at credit of an account in that month. A depositor can withdraw from his SB
account not more than twice a week.

Current Account:

Both individuals and party can open this type of account. Frequent transactions are (deposits as
well as withdrawal) allowed in this type of account. A current a/c holder can draw checks on his
account, any amount, and twice a in a day as the balance in his account permits

STD Account:

In Short Term Deposit account, the deposit should be kept for at least seven days to get interest.
The interest offered for STD is less than that of savings deposit. In BANK ASIA LTD, various
big companies, organizations, Government Departments keep money in STD accounts. Frequent
withdrawal is discouraged and requires prior notice. STD Account opening procedure is similar
to that of the saving account

Interest rate for STD account5.00% per annum

Fixed deposit Account:

These are deposits, which are made with the bank for a fixed period specified in advance. The
bank needs not to maintain cash reserve against these deposits and therefore, bank gives high rate
of interest on such deposits. A FDR is issued to the depositor acknowledging receipt of the sum
of money mentioned therein. It also contains the rate of interest and the date on which the deposit
will fall due for payment.

Interest Rate

Rate of Interest varies depending on the period of maturity date.

Duration Rate of Interest

3 months 8.00%
6 months 8.50%
12 months 9.00%

Issuing Sanchaypatra:

As per the rules of Bangladesh bank, every bank has to sell the government Sanchaypatra. By
selling the Government Sanchaypatra bank earns an amount of money from the government.

PAY ORDER:

A pay order is an instrument from one branch to another of the same Bank to pay a certain sum
of money to the person thereon or to his order. Unlike cheque, there is no possibility of
dishonoring pay order because before issuing P.O Bank takes out money of the pay order in
advance.

Charges:

Upto Tk. 2,00,000/- is Tk. 50/-

Above Tk. 2,00,000/- is Tk. 75/-

Telegraphic/Telephone TRANSFER (TT):

Telegram, telephone or telex transfer is another widely used mode for remittances of funds. In
case of TT the message for transfer of funds is communicated through tested telephone or
telegraph. TT is issue against cash, cheque, and letter of instruction. . The drawer and the payee
should have accounts with Bank Asia Ltd.

Commission

On banks other branch is @0.15%, minimum Tk. 100/- + cost of telex

On other banks is @0.15%, minimum Tk. 100/- + cost of telex and other bank charges.

DEMAND DRAFT:

Demand Draft is an instrument containing an order of the Issuing branch upon another branch
known as Drawee branch, for payment of a certain sum of money to the payee or to his order on
demand by the beneficiary presenting the draft itself. DD is issued in favour of a customer who
maintains an A/c with this branch. It can be issued against Cash.

Commission
 On banks other branch is @0.15%, minimum Tk. 100/- + cost of postage/Cable /Telex
charges

On other banks is @0.15%, minimum Tk. 100/- + Postage and other bank charges.

Cancellation of DD/OD/TT is Tk.75/- + postage /Telex charges.

E-CASH {ATM (AUTOMATED TELLER Machine):

Automated teller machine (ATM) is one of the modern financial services provided by bank. This
is providing customer collection of money any time he desires. Now a day life is to fast. To
consider this bank creates this service where s/he needs not to follow the banking hour to collect
money from his deposit .It is a debit card. Customer firstly deposit money against this a/c then
gets ATM service.

Bank Asia Ltd is introducing ATM service from October 2001 with the seven other Banks. Those
Banks are:

Dhaka Bank,

National Bank Ltd.

Credit Agricole Indosuez,

Islami Bank Bangladesh Ltd.,

South-East Bank Ltd.,

Al-Baraka Bank Ltd.

National Credit & Commerce Bank Ltd.

Charges:

Tk. 1500 annual fees for each Card

Tk 200 for replacement of each lost, stolen or damaged card.

Tk. 500 annual fee per card for bill payment to the first 3 utility bills

Tk. 100 annual fees per card for any additional utility bill payment.

SMS Banking
SMS banking is the new product of Bank Asia. With the help of Grameen Phone, Citicell and in
the internet customers can check the balance enquiry without any cost. This facility also sends
message to the cell phone of the customer whenever he deposited or withdraw cash from his
account.

Cell phone providers take only the message charge only when the customer enquires about his
balance.

LOCKER SERVICES:

Bank Asia is providing facility of locker service for the purpose of safe guarding the valuable
property of customers. The person or organization that has any account in bank branch can enjoy
this service. They keep their valuable assets in bankers custody. Customers have right to look
after with a key of their individual lockers provided by bank.

Charges:

Size of the locker Charges

Small Yearly Tk. 1200/- plus Security money Tk.500/-
Medium Yearly Tk. 1800/- plus Security money Tk.1000/-
Big Yearly Tk. 2500/- plus Security money Tk.1500/-

CLEARING & BILLS SECTION:

Corporate Branch receives different types of instruments, such as cheque, PO, DD etc. from its
customers for collection. It also pays on behalf of its customers for those instruments that come
to it through clearinghouse. When instruments of Bank Asia Ltd are sent for collection or
received for payment through clearinghouse it is called Inter Branch Collection or IBC. These
are treated in a little different manner than instruments of other banks.

Teller Section

The teller section of Bank Asia Ltd deals with all types of negotiable instruments, cash and other
instruments and treated as a sensitive section of the bank. It includes the vault, which is used as
the store of cash, instruments. If the cash stock goes beyond this limit, the excess cash is then
transferred to Bangladesh Bank. Keys to the room are kept under control of cash officer and
branch in charge. The amount of opening cash balance is entered into a register. After whole
days transaction, the surplus money remains in the cash counter is put back in the vault and
known as the closing balance. Money is received and paid in this section. Grameen Phone bills
also collect here. According to the contract receive of each bill the branch will get Tk. 5 each.

Credit Division

All the products and prices of credit facilities describes in the project parts in chapter 2
Foreign Trade Division

Foreign exchange department plays significant roles through providing different services for the
customers. Opening or issuing letters of credit is one of the important services provided by the
banks. Letters of credit is the key player in the foreign exchange business. With the globalization
of economies, international trade has become quite competitive. Timely payment for exports and
quicker delivery of goods is, therefore, a pre-requisite for successful international trade
operations. Growing complexity of international trade, separation of commercial parties across
the globe and operating in a totally unknown environment underlined the need for evolving a
system that balances between the expectations of the seller and the buyer. Documentary Credit
has emerged as a vital system of trade payment, and fulfilled the requisite commercial need. This
system substantially reduces payment-related risks for both exporter and importer. Not
surprisingly, therefore, the letter of credit is the classic form of international export payment,
especially in trade between distant partners. The bank upon presentation of stipulated documents
(e.g., bill of lading, invoice, and inspection certificate) makes payment, acceptance or negotiation
of the credit by the seller. Foreign exchange business of Bank Asia Ltd has been divided into two
sections:

Import section

Export section

Products of foreign exchange department:

Foreign Demand Draft (F.D.D):

Bank Asia Ltd accepts the charges for TOEFL, SAT, GMAT etc. through Foreign Demand Draft.
Bank Asia Ltd opens Student Files to issue Foreign Demand Draft following the permission of
Bangladesh Bank.

Endorsements of US$ in passport:

BANK ASIA LTD endorses US$ in passports. To endorse US Dollar, the client has to apply in
the prescribed form (TM Form).

Travelers Cheque:

Traveler cheques are issued by banks to avoid the risk of loss or inconvenience in having to
carry large amount of cash while traveling. The salient features of T.C. are:

i) The buyer has to deposit money with the branch of Bank Asia Ltd equivalent to the amount of
the T.C. he wants to buy.

ii) Each T.C. is signed by the buyer at place marked when countersigned below with this
signature, before the Bank Asia Ltd Officer.
iii) T.C. is issued in single name .It is not issued in joint names or names of clubs, societies and
companies.

iv) There is no expiry period for the T.C.

Loan against trust receipt (LTR):

This is also a post- import finance facility awarded to retire import bills directly or under PAD as
the case may be. Like LIM in this case too bank may or may not realize margin on the total
landed cost, ending upon banker customer relationship.

Documentary credit/letter of credit (LC):

Documentary Credit is an assurance of payment by the bank. It is an arrangement under which

the bank at the request of the buyer or on its own undertakes to make payment to the seller
provided specified documents are submitted. Documentary Credit is an arrangement whereby a
bank (issuing bank) acting at the request and on the instruction of a customer (the applicant) or
on its own behalf undertakes to make payment to or to the order of a third party (the beneficiary)
or to accept and pay bills of exchange (draft) drawn by the beneficiary, or authorize another bank
to negotiate against stipulated documents provided the terms and conditions to the credit are
complied. Thus, documentary credits are akin to bank guarantees. In popular language, they are
known as letters of credit (L/Cs). Bank guarantees are, however, issued to cover situation of
non-performance whereas documentary credits are issued on behalf of the buyer to cover
situation of performance, i.e., the issuing bank agrees to make payment to the beneficiary once
he surrenders the requisite complying documents. However, the term documentary credit has of
late been extended to cover the situation of non-performance too. Documentary credits have
gained wider acceptance in international trade for they try to safeguard the interest of both the
buyer and the seller by reducing their risks. Thus, documentary credit offers a unique and
universally used method of achieving a commercially acceptable arrangement by providing for
payment to be made against complying documents that represent the goods and making possible
the transfer of those goods.

Foreign documentary bill purchase (FDBP):

After those, exporter submits all these documents along with a Letter of Indemnity to Bank Asia
Ltd for negotiation. An officer scrutinizes all the documents. If the document is a clean one,
Bank Asia Ltd purchases the documents based on banker- customer relationship. This is known
as Foreign Documentary Bill Purchase (FDBP).

Local documentary bill purchase (FDBP):

After those, exporter submits all these documents along with a Letter of Indemnity to Bank Asia
Ltd for negotiation. An officer scrutinizes all the documents. If the document is a clean one,
Bank Asia Ltd purchases the documents based on banker- customer relationship. This is known
as Local Documentary Bill Purchase (LDBP).
Foreign documentary bill collection (FDBC) and Local documentary bill collection
(LDBC):

Both the products are similar to FDBP and LDBP

Human Resource Issues

Human resource is one of the major issues of a bank. A powerful HR can go through for a
success in a difficult situation. As any service company the major issue is how effective the HR
is to provide service to the customer. More efficient HR is able to deliver the service properly. As
the banking service is competitive day by day any bank need a powerful HR to move in a smooth
way to survive or do well in the business.

Recruitment Policy

Bank Asia Ltd Two years ago made a decision that they would hire for next 5 years Management
Trainee (MT) on the basis of examinations. Already 2 batches of MTs are in the bank and doing
their jobs. Most of the 1st batch MT are now Senior Officers as per the circular. In the recruitment
process the authority gives advertisement in newspaper regarding hiring MT. the criteria for MT
is one must have 2 First Division in 2 Public Examinations and Bachelor Degree. Bachelor
Degree must be in MBA, BBA, Marketing, Finance from IBA, NSU, IUB, DU.

MT selection process is divided into 4 parts: in the 1st part is written examination. And rest of the
three parts are interview process. Board of Directors, Management Executives take the interview
to select new MT. after selection the MTs, the bank divided all the MTs into different groups and
each group contain two members. After that all the groups move different branches of the bank
and observe the activities of different divisions.

After a month long observation all the groups going to BIBM for a month long training program.
After that all the MTs places in different branches of the bank

Trainee Officers (TO) are recruited time to time basis. Usually those who could not qualify for
the final selection of MT are recruited as TO. Tellers and Front Desk Officer/Receptionists are
recruited time to time basis. Here the qualification of the candidates is less categorized.

In the process, the top level management executives join from other banks with better facilities.
Usually the bank does not give any advertisements for hire ranks. Those people who are
interested to join in the bank drops their CV in the HR. Management of the bank also try to
pursue top level executives from other banks.

The Classification of Posts:

Management Executive
 President & Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

First Vice President

Assistant Vice President

First Assistant Vice President

Senior Vice President

Vice President

First Vice President

Assistant Vice President

First Assistant Vice President

Senior Executive Officer

Executive Officer

Senior Officer

Officer

Assistant Officer

Management Trainee

Trainee Officer

Teller

Receptionist
 o Junior Officer

o Assistant Officer

Messenger

Bank Guard

II Banking Staff

III Computer Staff

IV Subordinate Staff

Employee Benefits

Bank Asia provides different type of employee benefits to the employees to encourage working
in the bank. They offer lucrative salary scale compare to other commercial banks in Bangladesh.
Due to confidentiality I could not manage the salary scale of the employees of the bank but
talking with the employees of the bank they told me that the bank provide a better amount in
every position compare to other commercial banks.

Bonus:

All the employees of the bank are entitled to two festival bonuses on the occasion of Eid-ul-Fitr
and Eid-ul-Azha worth of one months basic pay.

The bank also provides 3 performance bonuses according to their performance in the bank. The
performances are evaluated by how much deposit and account they provide to the bank, working
performance which is basically evaluated by the ACR provided by the respective branch
manager, head of the department for corporate office employee, MD for the branch manager
and respective head of the departments. However, employees who are dismissed from the service
are not entitled to get any bonus.

Provident Fund:

Bank Asia has the facility of Provident Fund services for their employees; which allows the
employees of the Bank to save 10% of their basic salary in every month. The Bank also
contributes an equal amount in this fund as the employees to amass an attractive sum. After the
retirement from the service the bank provide the amount to the employee.
Messengers, drivers and guards of the bank also get a lucrative amount of money after their
retirement from the bank. Here they do not have to pay an amount of money for this facility.

Death cum Survival Benefit:

The employees of the Bank are entitled to this benefit scheme if an employee dies during his or
her service period with the Bank or after completion of 5 years of service without any
discontinuation.

Maternity Benefits:

The Bank provides this type of benefit to the permanent female employees. Bank provides two
month live for this purpose.

Honorarium:

The Bank encourages its employees seeking higher and specialized education. Employees who
have successfully completed Banking Diploma Examination conducted by Bangladesh Institute
of Bank Management (BIBM) are entitled to get honorarium in the following manner:

TK. 15,000.00/- for passing the 1st part of the examination.

TK. 20,000.00/- for passing the 2nd part of the examination.

Staff House Building and Car Loan:

The Bank grants house building and car loan for the management executives (lowest criteria is
Senior Executive Officer). The loan amount does not exceed 75% of the total cost and is
amortized in every month from their salaries. The interest rate range is between 7-8%.

Leave Fare Concession:

The Bank pays one month salary to the employee for this purpose also the bank provides 10 days
holidays for this facility. Every year the employees are enjoying this benefit.

Financial Performance Analysis

How an organization financially sound well can evaluate by some financial calculations focusing
various aspects. To evaluate the financial performance of a company, ratio analysis, an effective
tool among other analytical tools, can reveal numerous amazing facts which are not noticeable
seemingly.

Leverage Ratio Analysis:

Leverage ratios are one of the most useful tools in analyzing the risk worthiness of an
organization. Leverage ratio mainly focuses on how a company is performing with compare to its
debts situation.

Long Term Debt Ratio (Long-term Debt / Long-term Debt + Equity):

2003 2002 2001 Avg St. Dev

58.20% 65.24% 41.44% 54.96% 0.12

The Long Term Debt ratio explores the percentage of total long term capital in the form of Long
Term Debt. The average Long Term Debt of the Bank is 54.96% and has been reduced recently
but in middle it went up according to the aforementioned graph. It indicates that the Bank has
shifted its attention from long term borrowing to short term borrowing.

Total Debt Ratio (Total Liabilities / Total Assets):

2003 2002 2001 Avg St. Dev

92.94% 95.56% 94.01% 94.17% 0.01

It is noticeable that the Bank is operating with very high and steady financial leverage of 94.17%
which is riskier as the debt holders can force the Bank to be declared as bankrupt in case of
missing on time interest payment. The tendency of equity holders to made less investment.

Liquidity Ratios:

The performance of a bank should also be calculated from the viewpoint of liquidity. Business
organizations with more liquid assets stay in a good position in meeting their short term
liabilities even they are not able to generate enough cash flow from operations.

Therefore, the liquidity ratios are effective tools for examining the performance of an
organization within a short span of time.

Current Ratio (Current assets / Current Liabilities):

2003 2002 2001 Avg St. Dev

1.17 1.18 1.20 1.18 0.02

Although the Bank maintains good current ratios on an average, it has been decreased in a
downward trend. This unexpected reduction of current ratio indicates the enhancement of current
liabilities by the Bank.
Quick Ratio [(Cash + Short Term Investment + Receivables) / Current Liabilities]:

2003 2002 2001 Avg St. Dev

91.98% 97.17% 105.43% 98.19% 0.07

Cash, Short Term Investment (equivalent to marketable securities) and Receivables are the most
liquid assets of the Bank. Quick or Acid Test Ratio compares the volume of most liquid current
assets to the current liabilities of an organization. It is found that the Bank holds TK 0.98 for
every TK 1.00 of its current liabilities on an average. The quick ratios of the Bank have gone
down indicating either a reduction in the liquid current assets or incensement of current liabilities
in compliance with the current ratios.

In conclusion, Bank Asia Limited is still in a good position if it is judged from the liquidity
aspect but the trend is decreasing at a decreasing rate. Bank should take corrective measures to
avoid this consequence in future.

Efficiency Ratios:

The efficiency ratios are estimated to explore how efficient an organization to utilizing its assets.
Those who have good efficiency ratios are expected to outperform its competitors in the long
run.

Total Asset Turnover (Revenue / Total Assets):

2003 2002 2001 Avg St. Dev

0.021 0.022 0.023 0.022 0.001

The Total Asset Turnover ratios of the Bank are vet low as it is generating only TK0.22 of its
income from every TK 1.00 of total assets on an average. The Bank needs to increase more
revenue out of its total assets to be more efficient in turning its assets into revenue.

NET WORKING CAPITAL TURNOVER (Revenue / Net Working Capital):

2003 2002 2001 Avg St. Dev

0.15 0.15 0.14 0.15 0.01

These ratios are focus on how well the net working capital is being used to generate the revenue.
These figures suggest that the bank is going through a line. There are smooth trend in this
analysis we can observe

Profitability Ratios:
Profitability analysis will determine either the company is in a profitable organization or not.
Again it also gives an indication that it would be profitable company in future. It is very
important for a company to analyze its profitability ratios.

Net Profit Margin ([EBIT Tax] / Revenue):

2003 2002 2001 Avg St. Dev

80.54% 62.20% 59.84% 67.53% 0.11

NPM gives the indication how a company is earning profit. According to the graph, they have a
upward trend and the average NIM is 67.53% which is very good. The Bank is in a very good
position as its profitability is not only high but is also stable over the time even with the adverse
condition of the economy.

NET INTEREST MARGIN [(Interest Earned Interest Paid) / Total Assets]:

2003 2002 2001 Avg St. Dev

3.16% 2.77% 2.65% 2.86% 0.00

The Net Interest Margin measures the Banks ability to earn interest out of its total assets. It is
seen that the Bank is maintaining an average interest margin of 2.86% which is average and
needs to be increased immediately.

BANK OPERATING MARGIN [(Operating Revenue Operating

Expense) / Total Assets)]:

2003 2002 2001 Avg St. Dev

3% 3% 3% 3% 0.0037

Bank Operating Margin is estimated to find out the percentage of net income from total assets.
The bask has consistently maintain 3% which is not good for the Bank for competitive
performance. Low operating margin indicates the lower percentage of operating income
compared to total assets and needs to be increased to survive in the business.

ROA ([EBIT Tax] / Total Assets):

2003 2002 2001 Avg St. Dev

2% 1% 1% 1% 0.0021

The return from total assets after excluding the taxes from the EBIT is very low for the Bank.
The Bank needs to increase its return on assets in the future to remain competitive among its
contemporary counterparts.
Du Pont ROA (Profit Margin*Total Asset Turnover):

2003 2002 2001 Avg St.Dev

2% 1% 1% 1% 0.0021

The Du Pont ROA reveals that Total Asset Turnover Ratios must rise to increase the ROA since
the Bank is maintaining a good Profit Margin.

ROE (Net Income / Common Equity):

2003 2002 2001 Avg St. Dev

30% 49% 38% 39% 0.095

The average Return on Equity of around 39% refers the lower investment of equity capital in the
total capital structure of the Bank.

Market Value Ratios:

Most of the ratios primarily consider the book value rather than the market value. Hence, the
Market Value Ratios are analyzed to bring the market scenario in the performance analysis of an
organization. Three major elements of this analysis are Earnings per Share, Dividend per Share
and Book Value per Share and they are mentioned below:

Earnings per Share (Earnings / Common Shares Outstanding):

2003 2002 2001 Avg St. Dev

35.97 48.51 29.33 37.94 9.74

Each share of the Bank is earning TK 37.94 on an average for the last three years and it is going
up and down for the last three years.

Dividend per Share (Dividend / Common Shares Outstanding):

2003 2002 2001 Avg St. Dev

Tk.24 Tk.28 Tk18 Tk.23 0.050

It is referring that the shareholders are earning TK 23.00 on an average from each share in their
possession. The dividend per share is going up and down for the last three years.

Book Value per Share (Equity / Common Shares Outstanding):

2003 2002 2001 Avg St. Dev

Tk. 296.57 Tk. 125.08 Tk. 94.27 Tk. 171.97 109.00
The Book Value per Share is increasing over the years indicating changes in the amount of equity
per year.

P/E Ratio (Stock Price / Earnings per Share):

2003 2002 2001 Avg St. Dev

Tk.10.54 Tk.7.81 Tk12.92 Tk.10.42 2.56

As the average P/E Ratio is TK 10.42, it is good for the Bank because the shareholders want to
allocate more than ten time of its earning.

Dividend Yield (Dividend per Share / Stock Price):

2003 2002 2001 Avg St. Dev

6.33% 7.39% 4.75% 6.16% 0.013280

The dividend yield for the Bank on an average is 6.16%, this is a good sign for the bank investor
would keep their money with the share.

The market value ratios imply that the Bank has the ability to survive in the competition with
good reputation. Bank Asia Limited has already able to get the confidence among the
shareholders. Therefore, the Bank should keep on maintaining the same reputation to succeed in
future.

SWOT Analysis

Every organization is composed of some internal strengths and weaknesses and also has some
external opportunities and threats in its whole life cycle. The following will briefly introduce the
audience to the Bank Asias internal strengths and weaknesses, and external opportunities and
threats as I have explored in the past ten weeks.

Strengths

Bank Asia provides its customers excellent and consistent quality in every service. It is of
highest priority that customer is totally satisfied.

Bank Asia draws its strength from the adaptability and dynamism it possesses. It has
quickly adapted to world class standard in terms banking services. Bank Asia has also
adapted state of the art technology to connect with the world for better communication to
integrate facilities.

Bank Asia is a financially sound company backed by the enormous resource base of the
mother concern RANGS group. As a result customers feel comfortable in dealing with
the company.
 All the levels of the management are solely directed to maintain a culture for the
betterment of the quality of the service and development a corporate brand image in the
market through organization wide team approach and open communication system.

Bank Asia utilizes state-of-the-art technology to ensure consistent quality and operation.
The proof of that can be found in one of its branches, Scotia that is equiped with Reuters
and SWIFT. All these facilities will be introduced in every branch very shortly.

One of the key-contributing factors behind the success of Bank Asia is its employees who
are highly trained and most competent in their own field. Bank Asia provides their
employees training both in-house and out side job.

Bank Asia is free from dependence from the ever-disruptive power supply of our public
sources. The required power is generated by the company through generator fed on
diesel. Water generation at present is also done by deep tube wells on site and is abundant
in quantity.

Bank Asia provides its workforce an excellent place to work in. Total complex has been
centrally conditioned. The interior decoration was done exquisitely with the choice of
soothing colors and blend of artisti that is comparable to any multinational bank.

Bank Asia Limited has already achieved a goodwill among the clients that helps it to
retain valuable clients.

Weaknesses

Bank Asia has very limited human resources compared to its financial activities. There
are not many people to perform most of the tasks. As a result many of the employees are
burdened with extra work loads and works late hours without any overtime facilities. This
might cause high employee turnover that will prove to be too costly to avoid.

The Bank lacks aggressive advertising and promotional activities to get a broad
geographic coverage.

The Bank does not have any research and development division.

The procedure of credit facility is to long compare to other commercial banks which
disallow the bank to fulfill its objective

The branch manager has less power to provide loan to the customers

Opportunities

Government of Bangladesh has rendered its full support to the banking sector for a sound
financial status of the country, as it is becoming one of the vital sources of employment in
 the country now. Such government concern will facilitate and support the long-term
vision for Bank Asia.

Emergence of e-banking will open more scope for Bank Asia to reach the clients not only
in Bangladesh but also in the global arena. It will also facilitate wide area network in
between the buyer and the production unit of Bank Asia to smooth operation to meet the
desired need with least deviation.

The Bank can introduce more innovative and modern customer services to better survive
in the competition. For example, the Bank can introduce credit cards and go for merchant
banking.

Many branches can be opened to reach the Banks services in remote locations.

The Bank can recruit experienced, efficient and knowledgeable workforce as it offers
attractive compensation package and good working environment.

Threats

The worldwide trend of mergers and acquisition in financial institutions is causing

concentration the industry and competitors are increasing in power in their respective
areas.

As previously mentioned, the world is advancing towards e-technology very fast. Though
Bank Asia has taken effort to join the stream, it is not possible to complete the mission
due to the poor technological infrastructure of our country.

Frequent Taka Devaluation and foreign exchange rate fluctuations and particularly South-
East Asian currency crisis adversely affects the business globally.

Due to existence of unserved demand in financial sector, it is expected that more financial
institutions will be introduced in the industry very shortly. And we have already seen
such cases in our country that lots of new banks are coming in the scenario with new
services. Bank Asia should always be prepared for the competition in the coming years.

Local competitors can capture a huge market share by offering similar products and
services provided by the Bank.

Recommendation & Summary

Summary:
Bank Asia Ltd. is a 3rd generation commercial bank and has acquired two foreign commercial
banks which give them an advantage over other commercial banks. They are now doing business
for five years and already made its presence in a positive frame to the mind of shareholders,
clients, other bankers as well as other banks.

They have the capital, human resource to grow rapidly in the coming days. As the competition in
commercial bank sector is increasing rapidly, to exist its present position or improve its present
position the bank have to go for better, quick services to the customers in future. They have
different type of products in the market but they should also increase products to get more
market share.

They have 16 branches all around Bangladesh at present which are good for a new bank but they
should also focus on different business zone to set up new branches all over the country.

According to the financial statements of the bank they are doing good in the previous years but
they should improve in different activities other wise they have to face tough time in future.

Recommendation:

Bank Asia should increase skilled human resources to do its financial activities more
efficiently. So, that, many of the employees do not have to do extra work loads and works
late hours without any overtime facilities.

The Bank should go for aggressive advertising and promotional activities to get a broad
geographic coverage.

The Bank should have any research and development division.

The procedure of credit facility has to be reduce, to compete with commercial banks
which will allow the bank to fulfill its objective

The branch manager should give more power to provide loan to the customers

The bank should introduce different type of products such as deposit scheme, different
type of loan facilities, etc.

The Bank should introduce more innovative and modern customer services to better
survive in the competition. For example, the Bank can introduce credit cards and go for
merchant banking.

The Bank should recruit experienced, efficient and knowledgeable workforce as it offers
attractive compensation package and good working environment.
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