Chapter - 1

Introduction
1.1 BACKGROUND OF THE REPORT
Learning becomes perfect when it is associated with theory and practice. For that
organizational attachment is required. After completion of BBA program of faculty of
Business Studies, Department of Finance, Bangladesh University of Business of
Technology (BUBT), three month‟s organizational attachment is must. So the preparation
and submission of this report is partial requirement for the completion of Bachelor of
Business Administration (BBA). This report is outcome of the three-month long
internship program conducted in Jamuna Bank Limited at Mirpur Branch. This report is
design on the topic “Analysis of Financial Performance of Jamuna Bank Limited”.
Banking institution helps to economic growth of a country by their banking service. I
chose a bank to complete my internship program that helped me to learn practical
knowledge and gather experience about financial task.

1.2 SIGNIFICANCE OF THE STUDY

As a mandatory requirement of the Bachelor of Business Administration (BBA) program.
I was assigned to do my internship in Jamuna Bank for a period of three months. This is
because knowledge and learning become perfect when it is associated with theory &
practice. By this internship program students can establish contacts networking. This
report “Analysis of Financial Performance of Jamuna Bank Ltd.” has been prepared to
fulfill the partial requirement of BBA program a mean of Internship Program.

1.3 SCOPE OF THE STUDY

The report is mainly combined to the “Financial Performance of Jamuna Bank Ltd”. In
order to conduct this on this main issue, the following aspects come within the span of the
study.
 An overview of Jamuna Bank Ltd.
 Evaluation of Financial Performance of Jamuna Bank Ltd. through financial
ratios.

1.4 OBJECTIVES OF THE REPORT

1.4.1 Board Objective
 The board objective of this is report to analyze the financial performance of
Jamuna Bank Limited.

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 1.4.2 Specific Objectives
The specific objectives of the study are-
 To analyze the liquidity position of Jamuna Bank Limited.
 To assess the debt position of Jamuna Bank Ltd.
 To analyze the profitability Jamuna Bank Ltd.
 To compare the financial performance of Jamuna Bank Ltd. within the banking
industry.

1.5 METHODOLOGY OF THE REPORT

1.5.1 Research Design:
The study, Analysis of Financial Performance of Jamuna Bank Ltd. is descriptive in
nature that has been conducted mainly using secondary data. The study focuses on
Financial Performance of Jamuna Bank Ltd.

1.5.2 Data Used in the Study:

In order to prepare the report secondary data are mainly used. The secondary data are
collected from the annual report of Jamuna Bank Ltd, annual report of Bangladesh Bank,
Website & book. The data are collected for the period of five years from 2012 to 2016.
The use of primary data is very limited in the report. Some information has been collected
from observation & discussion with officers of Jamuna Bank Ltd.

1.5.3 Data Analyzing & Reporting

The study of financial performance of Jamuna Bank Ltd. is conducted using ratio analysis
in the form of trend & comparative analysis. Computer software like Microsoft Word,
Microsoft Excel & Microsoft PowerPoint is also used for analyzing & reporting purpose
of collected data.
 Trend Analysis: Trend Analysis is the analysis of firm‟s performance over time
using ratios.
 Comparative Analysis: Comparative Analysis is the comparisons of bank‟s
performance with the industry average

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1.6 LIMITATIONS
To prepare a report on the achieved practical on the achieved practical experience in a
short duration it does not an easy task. In preparing this report, some problems
&limitations have encountered which are summarized.
 One of the major limitations is the shortage of internship period. Since three
month is not enough to know everything of a bank, so this report does not contain
all the area of Jamuna Bank ltd.
 The employees in the Jamuna Bank ltd are so much busy in their responsible
fields they could provide me very little time.
 Large scale analysis was not possible due to constraints & restrictions posted by
the banking authority.
 Limitation of personal knowledge is another one. Some knowledge has known no
bound, so this report is incapable to represent all things with more depth.
 Every organization has report did not disclose much information for the sake of
organization confidentiality.
 I carried out such a study for the first time so inexperience is one of the main
constraints of study.

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Chapter - 2
Organizational Profile
2.1 ORGANIZATIONAL OVERVIEW
Jamuna Bank Limited (JBL) is a Banking Company registered under the Companies Act,
1994 of Bangladesh with its Head Office currently at Chini Shilpa Bhaban, 3, Dilkusha
C/A, Dhaka-1000, and Bangladesh. The Bank started its operation from 3rd June 2001.
JBL undertakes all type of banking transactions to support the development of trade and
commerce in the country. JBL‟s services are also available for the entrepreneurs to set up
new ventures and BMRE for industrial units. The Bank gives special emphasis on Export,
Import, Trade Finance, SME Finance, Retail Credit and Finance to Women
Entrepreneurs.
Jamuna Bank Ltd. the only Bengali named new generation private commercial bank was
established by a group of winning local entrepreneurs conceiving an idea of creating a
model banking institution with different outlook to offer the valued customers, a
comprehensive range of financial services and innovative products for sustainable mutual
growth and prosperity. The sponsors are reputed personalities in the filed of trade,
commerce and industries.
The scenario of banking business is changing day by day, so the Bank‟s responsibility is
to device strategy and new products to cope with the changing environment. Jamuna
Bank Ltd. has already achieved tremendous progress within only nine years. The bank
has already ranked at top of the quality service providers & is known for its reputation.
Jamuna Bank offers different types of Corporate and Personal Banking Services
involving all segments of the society within the purview of rules and regulations laid
down by the Central Bank and other regulatory authorities. As per the provisions of
Bangladesh Bank license, the Bank has offered initially its shares to public by Pre – IPO
and subsequently sold shares to the public through IPO in the year 2004. The shares of
the Bank are listed with both Dhaka Stock Exchange Ltd. & Chittagong Stock Exchange
Ltd.
At present the Bank has real-time Online banking branches (of both Urban and Rural
areas) network throughout the country having smart IT-backbone. Besides traditional
delivery points, the bank has ATMs of its own, sharing with other partner banks and
consortium throughout the country.
The operation hour of the Bank is 10:00 A.M. To 6:00 P.M. from Sunday to Thursday
with transaction hour from 10:00 A.M. to 4:00 P.M. The Bank remains closed on Friday,
Saturday and government holidays.

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To provide clientele services in respect of International Trade it has established wide
correspondent banking relationship with local and foreign banks covering major trade and
financial centre at home and abroad.

2.2 JBL (VISION, MISSION, OBJECTIVES AND STRATEGIES)

Vision
To be in the forefront of national development by providing all the customers
inspirational strength, dependable support and the most comprehensive range of business
solutions, through our team of professionals who work passionately to be outstanding in
everything we do.

Mission
Jamuna Bank Ltd will become most caring, focused for equitable growth based on
diversified deployment of resources, and nevertheless would remain healthy and gainfully
profitable Bank.
Will become most caring, focused for equitable growth based on diversified deployment
resources, and nevertheless would remain healthy and gainfully profitable Bank. Jamuna
Bank Limited aims to become one of the leading banks in Bangladesh by prudence, flair
and quality of operations in their banking sector. The bank has some mission to achieve
the organizational goals. Some of them are as follows as:
 Jamuna Bank Limited provide high quality financial services to strengthen the
well-being and success of individual, industries and business communities.
 Its aim to ensure their competitive advantages by upgrading banking technology
and information system.
 JBL intends to play more important role in economic development of Bangladesh
and its financial relations with the rest of the world by interlining both modernistic
and international operations.
 JBL encourages investors to boost up share market.
 The bank creates wealth for the shareholders.
 The bank believes in strong capitalization.
 It maintains high standard of corporate and business ethics.
 Jamuna Bank Limited extend highest quality of services, which attracts the
customers to choose them first.
 The bank creates wealth for the shareholders.

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  The bank maintains congenial atmosphere for which people are proud and eager to
word with Jamuna Bank Limited.
 Jamuna Bank Limited intend to provide better benefits to their customers and
good returns to their shareholders.
 The bank intends to meet the needs of their clients and enhance their profitability
by creating corporate culture.
Jamuna Bank Ltd will become most caring, focused for equitable growth based on
diversified deployment of resources, and nevertheless would remain healthy and gainfully
profitable Bank.

Objectives
 To earn and maintain CAMEL Rating 'Strong'
 To establish relationship banking and improve service quality through
development of Strategic Marketing Plans.
 To remain one of the best banks in Bangladesh in terms of profitability and assets
quality.
 To introduce fully automated systems through integration of information
technology.
 To ensure an adequate rate of return on investment.
 To keep risk position at an acceptable range (including any off balance sheet risk).
 To maintain adequate liquidity to meet maturing obligations and commitments.
 To maintain a healthy growth of business with desired image.
 To maintain adequate control systems and transparency in procedures.
 To develop and retain a quality work-force through an effective human Resources
Management System.
 To ensure optimum utilization of all available resources.
 To pursue an effective system of management by ensuring compliance to ethical
norms, transparency and accountability at all levels.

Strategies
 To rise up to Tk. 1000.00 million by March 2006.
 To manage and corporate the Bank in the most efficient manner to enhance
financial performance and control cost of fund.
 To strive for General banking activates through quality control and delivery of
timely services.
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  To identify customers‟ credit and other banking needs and monitor their
perception towards our performance in meeting those requirements.
 To review and update policies, procedures and practices to enhance the ability to
extend better services to customers.
 To train and develop all employees and provide them adequate resources so that
customers „can be reasonably addressed.
 To promote organizational effectiveness by openly communicating company
plans, policies, practices and procedures to employees in a timely fashion.
 To cultivate a working environment that fosters positive motivation for improved
performance.
 To diversify portfolio both in the retail and wholesale market.
 To increase direct contact with customers in order to cultivate a closer relationship
between the bank and its customers.

2.3 CORPORATE SLOGAN

“Your Partner for growth”

2.4 CORPORATE CULTURE OF JBL

Employees of JBL share certain common values, which help to create a JBL culture,
 The client comes first.
 Search for professional excellence.
 Openness of new ideas and new methods to encourage creativity.
 Flexibility and promote response.
 A sense of professional ethics.

2.5 Values

Customer Focus Integrity Quality Teamwork

Respect for the

Harmony Fairness Courtesy
individual

Respectable
Commitment Business Ethics Unique Culture
Citizenship

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2.6 ORGANIZATION STRUCTURE
The Management structure of Jamuna Bank Limited is given below with the chart:-

Managing Director (MD)

Deputy Managing Director

(DMD)

Senior Executive Vice Senior Executive Vice Senior Executive Vice

President President President

Executive Vice President Executive Vice President

SVP (Board SVP (HRD) SVP (Credit) SVP SVP

Secretary)

Vice
President

SAVP

Assistant Vice
President

First Assistant Vice President

Jr. Assistant Vice

President
Senior Executive
officer

Executive officer

First executive officer

Officer

First Officer

Figure 01: The Organization Structure of Jamuna Bank Limited

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2.6 SERVICE & PRODUCT OF JBL
The Bank has an array of tailor made financial products and services. Such, products are
DEPOSIT PRODUCT
 Transactional Accounts
 Current Deposit (CD) Account
 Short Notice Deposit (SND) Account
 Savings Bank (SB) Account
 Special Savings Bank Account
 Resident Foreign Currency Deposit (RFCD) Accounts

 Fixed Deposit Receipts

 Double Growth Deposit Schemes (DGDS)
 Triple Growth Deposit Schemes (TGDS)
 Monthly Benefit Scheme (MBS)

 Islamic Banking
 Mudaraba Monthly Savings Deposit Scheme
 Mudaraba Crorepoti Deposit Scheme
 Mudaraba Lakhopoti Deposit Scheme
 Mudaraba Double/Triple Growth Deposit Scheme
 Mudaraba Education Deposit Scheme
 Mudaraba Hajj Deposit Scheme
 Mudaraba Marriage Deposit Scheme
 Mudaraba Millionaire Deposit Scheme
 Mudaraba Monthly Benefit Deposit Scheme
 Mudaraba Rural Deposit Scheme
 Mudaraba Pension Deposit Scheme
 Mudaraba Car Deposit Scheme

 Deposit Schemes For NRB

 NRB Monthly Savings Scheme
 NRB Monthly Benefit Scheme
 NRB Double Growth Benefit Scheme(DBS)
 NRB Triple Growth Benefit Scheme (TBS)
 NRB Kotipoti Deposit Scheme

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  NRB Millionaire Deposit Scheme
 NRB Monthly pension Deposit Scheme
 NRB Pension Term Deposit Scheme
 NRB Home travel Deposit Scheme
 NRB Property Deposit Scheme(Land/ Apartment)
 NRB Wage Earners Deposit Scheme
 NRB Home Car Deposit Scheme
 NRB Education Saving Scheme
 NRB Student deposit Scheme
 NRB Women/ Housewife Deposit Scheme
 NRB Future Plan Deposit Scheme

LOANS AND ADVANCES

 Continuous Loan Products Cash Credit
 Hypothecation Cash Credit Pledge
 Overdraft (General)
 Secured Overdraft

 Demand Loan Products

 Payment against Document (PAD)
 Loan against EDF
 Loan against Trust Receipt (LTR)
 Loan against Imported Merchandize (LIM)
 Work Order Finance
 Packing Credit
 Export Credit
 Loan under Cash Assistance
 Export Bill Purchase and Discounting
 Time Loan

 Term Loan Products

 Term Loan
 Hire Purchase Loan
 Lease Finance
 Bridge Financing Loan

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  Syndicated loan financing

 SME Products
 Jamuna Jantrik -Lease Finance
 Jamuna Green -Term Loan
 Jamuna Sommriddhi -Term Loan with 25%

 FDR
 Jamuna Shachchondo- Term Loan & SOD
 Jamuna NGO Shahojogi -Term Loan
 Jamuna Swabolombi-Term Loan
 Jamuna Chalantika- Term Loan & CC (Hypo)
 Jamuna Nari Uddog- Term Loan for Women
 Jamuna Bonik -LC & LTR

 Retail Loan Products

 Personal Loan
 Auto Loan
 Any Purpose Loan
 Salary Loan
 Doctors Loan
 Education Loan
 Overseas Job Loan

 Agriculture Loan Products

 Crop Loan
 Fish Culture Loan
 Crop Warehouse & Marketing
 Poverty Alleviation/Income generating activities
 Irrigation Tools
 Livestock Development
 Agricultural Tools
 Nursery & Horticulture
 Income generating activities
 Other term loan activities

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  Loan Schemes For NRB
 NRB SME
 NRB Agriculture
 NRB Real Estate Financing
 NRB Retail Loan

2.8 CORPORATE BANKING

Jamuna Bank Ltd. offers a complete range of advisory, financing and operational services
to its corporate client groups combining trade, treasury, investment and transactional
banking activities in one package. The corporate Banking specialists will render high
class service for speedy approvals and efficient processing to satisfy customer needs.
Corporate Banking business envelops a broad range of businesses and industries. You can
leverage on the know-how in the following sectors mainly -
 Agro processing industry
 Industry (Import Substitute / Export oriented)
 Textile Spinning, Dyeing / Printing
 Export Oriented Garments, Sweater.
 Food & Allied
 Paper & Paper Products
 Engineering, Steel Mills
 Chemical and chemical products etc.
 Telecommunications.
 Information Technology
 Real Estate & Construction ·
 Wholesale trade
 Transport · Hotels, Restaurants ·
 Non Bank Financial Institutions
 Loan Syndication ·
 Project Finance. Investment Banking
 Lease Finance · Hire Purchase · International Banking

2.9 OTHER HIGHLY CUSTOMIZED SERVICES OF JBL

Q-Cash Round The Clock Banking
Jamuna Bank Q-Cash ATM Card enables you to withdraw cash and do a variety of

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banking transactions 24 hours a day. Q-Cash ATMs are conveniently located covering
major shopping centers, business and residential areas in Dhaka and Chittagong. ATMs in
Sylhet, Khulna and other cities will soon start be introduced. The network will expand to
cover the whole country within a short span of time.

With Jamuna Bank Q-Cash ATM card customer can:

 Cash withdrawal Round The Clock from any Q-Cash logo marked ATM booths.
 POS transaction (shopping malls, restaurants, jewallaries etc).
 Enjoy overdraft facilities on the card (if approved)
 Utility Bill Payment facilities
 Cash transaction facilities for selective branches nationwide

Online Banking
Jamuna Bank Limited has introduced real-time any branch banking on December 31,
2010. Now, customers can withdraw and deposit money from any of its 65 branches
located at Dhaka, Chittagong, Sylhet, Gazipur, Bogra, Naogaon, Narayanganj, Dinajpur,
Kushtia, Rajshahi, Bashurhat, Sirajganj and Munshigonj. The valued customers can also
enjoy 24 hours banking service through ATM card from any of Q-cash ATMs located at
Dhaka, Chittagong, Khulna, Sylhet and Bogra.

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Chapter - 3
Theoretical Aspects
3.1 FINANCIAL PERFORMANCE ANALYSIS
Financial performance is a subjective measure of how well a firm can use its assets from
business and generate revenues. Financial performance term is also used as a general
measure of a firms overall financial situation over a given period of time, and can be used
to compare with similar firms across the same industry or to compare industries of sectors
or in aggregation. Financial performance analysis refers to an assessment of the viability,
stability and profitability of business, sub – business or project. It is performed by
professionals who prepare reports using ratios that make use of information taken from
financial statements and other reports. This report is usually presented to top level
management as one of their bases in making business decisions.

3.2 BALANCE SHEET

In financial accounting a balance sheet or statement of financial position is a summary of
the financial balances of a sole proprietorship, a business partnership or company. Assets
liabilities and ownership equity are listed as of a specific date, such as the end of its
financial year. A balance sheet is often described as a snapshot of a company s financial
condition. Of the four basic financial statements, the balance sheet is the only statement
which applies to single point in time a business calendar year. A standard company
balance sheet has three parts: assets, liabilities and ownership equity.

3.3 INCOME STATEMENT

Income statement also referred as profit and loss statement, earning statement, operating
statement or statement of operations if a company s financial statement that indicates how
the revenue transformed into the net income. It displays the revenues recognized for a
specific period, and the cost and expenses charged against the revenues, including write-
offs (e.g. depreciation and amortization of various assets) and taxes. The purpose of the
income statements is to show managers and investors whether the company maid or lost
money during the period being reported.

3.4 RATIO ANALYSIS:

Ration analysis involves methods of calculation and interpreting financial ratios to assess
the banks performance and status. The basic inputs to ratio analysis are banks income
statement and balance sheet. Various devices are used in then analysis of financial
statement data to bring out the comparative and relative significance of the financial
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information presented includes ratio analysis comparative analysis, percentage analysis
and examination of related data.

3.5 SIGNIFICANCE OF USING RATIOS:

The significance of ratio can only truly be appreciated when:
1) It is compared with other ratios in the same set of financial statements.
2) It is compared with the same ratio in previous financial statements (trend
analysis).
3) It is compared with a standard of performance (industry average). Such a standard
may be either the ratio which represents the typical performance of the trade or
industry or the ratio which represents the target set by management as desirable
for the business.

3.6 TYPES OF RATIOS

Ratio analysis is not merely the application of a formula to financial data to calculate a
given ratio. More important is the interpretation of the ratio value. To answer such
questions as is it too high or too low? Is I god bad? Three types of ratio comparisons can
be made:
1. Time-series Analysis: Time series analysis evaluates performance over time,
Comparison it is progressing of current to post performance, using ratios, allows the
firm to determine whether it is progressing as planned. Additionally, time series
analysis is often helpful in checking the reasonableness of a firm projected financial
statement.
2. Cross–sectional Analysis: Cross sectional analysis evaluates performance of
different firm‟s financial ratios at the same point in time.
3. Combined Analysis: The most informative approach to ratio analysis is one
combines cross sectional and time series analysis. A combined view permits
assessment of the trend in the behavior of ratio in relation to the trend for the
industry.

3.7 CAUTIONS ABOUT RATIO ANALYSIS:

1) A single ratio does not generally provide sufficient information from which to
judge the overall performance of the firm.
2) Be sure the dates of the financial statements being compared are the same.
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 3) It is preferable to use audited financial statements for ratio analysis.
4) Be certain that the data being compared have all been developed in the same way.

3.8 GROUPS OF FINANCIAL RATIOS:

Financial ratios can be divided into five basic groups or categories:
(i) Liquidity ratios
(ii) Activity ratios
(iii) Debt ratios
(iv) Profitability ratios &
(v) Market ratios

3.8.1 Analyzing Liquidity Ratios

The liquidity of a business firm is measured by its ability to satisfy its short term
obligations as they come due. Liquidity refers to the firm‟s overall financial position. The
three basic measures of liquidity are-
a) Current ratio: One of the most general and frequently used of these liquidity
ratios is the current ratios. Organizations use current ratio to measure the firm‟s
ability to meet short term obligation.
Current ratio = Current Asset/ Current liabilities.

b) Net Working ratio: Current assets, commonly called working capital, represent
the portion of investment that circulates from to one form to another in the
ordinary conduct of business. And net working capital is commonly defined as the
difference the firm‟s current assets and its current liabilities.
Net working capital = Current asset – Total current liabilities.

3.8.2 Analyzing Active Ratios

Active ratio measure the speed with which accounts are converted into say or cash with
regard current accounts measures of liquidity are generally inadequate because
differences in the composition of a firm‟s current accounts can significantly affects its
true liquidity.
a) Total asset turnover: The total asset turnover indicates the efficiency with which
the firm is able to use or its assets to generate sales.
Asset turnover = Operating Income / Total Assets

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3.8.3 Analyzing Debt Ratio:
The debt position of that indicates the amount of other people‟s money being used in
attempting to generate profits. In general the more debt a firm uses in relation to its total
assets, the greater its financial leverage, a term use to describe the magnification of risk
and return introduce through the use of fixed cost financing such as debt and preferred
stock.
a) Debt ratio: Many new ventures will incur debt as a means of financing the startup
.the debt ratio helps the entrepreneur to asses. The firm‟s ability to meet all of its
obligations (short and long term). It is also a measure of risk because debt also
consists of a fixed commitment in the form of interest and principal repayments.
Debt ratio = Total liabilities / Total assets.

b) Time Interest Earned Ratio: This ratio measures the ability to meet contractual
interest payment that means how much the company able to pay interest from
their income.
Time interest Earned Ratio = EBIT / Interest.

c) Debt to Equity Ratio: This ratio assesses the firm‟s capital structure. It provides a
measure of risk to creditors by considering the funds invested by creditors (debt)
investors (equity). The higher percentage of debt is greater than degree of risk to
any creditor.
Debt to equity ratio = total liabilities / shareholders equity.

3.8.4 Analyzing Profitability Ratio:

These measures evaluate the bank‟ s earning with respect to given level of sales, a certain
level of assets, the owner‟ s investments, or share value. Without profits, a firm could not
attract outside capital. Moreover, present owners and creditors would become concern
about the company‟s future and attempt to recover their funds. Owners, creditors and
management pay close attention to boosting profits due to the great importance placed on
earnings in the market place.
(a) Return on asset (ROA): Return on asset measures the overall effectiveness of
management in generating profits with its available assets also called the return on
investment .the higher ratio is better.
Return on asset (ROA) = Net profit after taxes / total assets.

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 (b) Return on Equity (ROE): The return on equity measures the return earn on the
owners (both preferred and common stockholders) investment. Generally, the
higher this return, the better of the owners.
Return on Equity (ROE) = Net profit after taxes / stockholders equity.

(c) Net profit margin: The net profit margin measures the percentage of each sales
dollar remaining after all expenses, including taxes, have deducted. The higher the
net profit margin is better. The net profit margin is calculated as follows:
Net profit margin = net profit after taxes / revenue (operating income)

(d) Cost to income ratio: Measures the percentage of each sales dollar remaining
after the firm has for its goods. Cost income ratio is the ratio between operating
expenses and operating income it is measure of how cost are changing compared
to income. It is one of main key performance indicators of bank efficiency. The
lower the ratio the more efficient the bank.
Cost income ratio = operating cost / operating income

(e) Earnings per share. Calculated as the reported earnings of the business, divided
by the total number of shares outstanding (there are several variations on this
calculation). This measurement does not reflect the market price of a company's
shares in any way, but can be used by investors to derive the price they think the
shares are worth.
Earnings per share = Net Income / No. of share Outstanding

3.8.4 Market Value Ratios

Market value ratios are used to evaluate the current share price of a publicly-held
company's stock. These ratios are employed by current and potential investors to
determine whether a company's shares are over-priced or under-priced. The most
common market value ratios are as follows:
(a) Price/Earnings Ratio (P/E): Calculated as the current market price of a share,
divided by the reported earnings per share. The resulting multiple is used to
evaluate whether the shares are over-priced or underpriced in comparison to the
same ratio results for competing companies.
Price per Share
𝐏𝐫𝐢𝐜𝐞/𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐑𝐚𝐭𝐢𝐨 =
Earning Per Share

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Chapter - 4
Financial Performance Analysis
4.1 LIQUIDITY RATIOS
4.1.1 Current Ratio
One of the most general and frequently used of these liquidity ratios is the current ratios.
Organizations use current ratio to measure the firm‟s ability to meet short term obligation.
It shows the bank‟s ability to cover its current liabilities with its current assets
Current Ratio = Current Asset /Current Liabilities.

Table 4.1: Current Ratio (Tk. in millions)

Year 2012 2013 2014 2015 2016
Current Asset (Tk.) 53,959.73 61,412.87 71,648.34 79,203.65 99,904.75
Current Liability (Tk.) 85,650.365 73,991.409 95,531.12 85,165.215 86,873.695
Current ratio (Times) 0.63 0.83 0.75 0.93 1.15
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation

Current Ratio (Times)

1.40
1.15
1.20

1.00 0.93
0.83
0.75
0.80
0.63
0.60

0.40

0.20

0.00
2012 2013 2014 2015 2016

Figure 4.1: Current Ratio

Interpretation:
The graph shows that current ratio of the firm has increased over the years. Current ratio
of the firm has increased over the years from .63 in 2012 to 1.15 in 2016. This indicates
that the liquidity position of the firm has increased over the years.

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4.1.2 Net Working Capital
Current assets, commonly called working capital, represent the portion of investment that
circulates from to one form to another in the ordinary conduct of business.
Net Working Capital = Current Asset - Current Liabilities

Table 4.2: Net Working Capital (Tk. in millions)

Year 2012 2013 2014 2015 2016
Current Asset (Tk.) 53,959.73 61,412.87 71,648.34 79,203.65 99,904.75
Current Liability (Tk.) 85,650.37 73,991.41 95,531.12 85,165.22 86,873.70
Net Working Capital (Tk.) 31,650.64 12,578.54 23,882.78 59,61.57 13,030.31
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation

Net Working Capital (Tk.)

35000
31650.64
30000

25000
23882.78

20000

15000 15848.64
12578.54
10000

5000 5961.57

0
2012 2013 2014 2015 2016

Figure 4.2: Net working Capital

Interpretation:
From the graph it is seen that there is a fluctuating trend over the years from 2012 to 2016
in Net Working Capital. In 2012 the net working capital soared to the pick level that is
Tk. 31650.64. And the above figure shows that the net working capital plunged to Tk.
5961.57 in 2015.

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4.2 ACTIVITY RATIOS
4.2.1 Total Asset Turnover
The total asset turnover indicates the efficiency with which the firm is able to use or its
assets to generate sales.
Asset turnover = Operating Income / Total Assets

Table 4.3: Total Asset Turnover (Tk. in millions)

Year 2012 2013 2014 2015 2016
Operating Income 5,285.12 5,635.66 6,090.64 6,976.20 8,115.81
Total Assets 109,678.51 115,162.95 139,494.58 142,859.17 168,418.30
Total Asset
. 0.0481 0.0489 0.0437 0.0488 0.0482
Turnover (Times)
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Total Asset Turnover (Times)

0.06

0.05 0.0489 0.0489

0.0481 0.0482
0.0437
0.04

0.03

0.02

0.01
2012 2013 2014 2015 2016

Fig 4.3: Total Asset Turnover

Interpretation:
The total asset turnover indicates the efficiency with which firm is able to use all its assets
to generate revenue. The graph shows that total asset turnover ratio of JBL fluctuated
over the year of analysis. In 2012 it was 0.0481 times, whereas in 2016 it was 0.0482
times only.

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4.3 DEBT RATIOS
4.3.1 Debt Ratio
Debt ratio measures the degree of protection of total assets provided by the firm‟s
creditors. It is also a measure of risk because debt also consists of a fixed commitment in
the form of interest and principal repayments.
Debt Ratio = Total Liabilities / Total Assets.

Table 4.5: Debt Ratio (Tk. in millions)

Year 2012 2013 2014 2015 2016
Total Liability 101,353.68 106,282.011 128,683.91 127,150.82 152,569.66
Total Asset 109,678.51 115,162.95 139,494.58 142,859.17 168,418.30
Debt Ratio 92.41% 92.29% 92.25% 89.00% 90.59%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Debt Ratio
93.00% 92.41% 92.29% 92.25%
92.00%

91.00% 90.59%

90.00%
89.00%
89.00%

88.00%

87.00%
2012 2013 2014 2015 2016

Figure 4.5: Debt Ratio

Interpretation:
The debt ratio mesures the proportion of total assets provided by the firm creditors. This
graph shows that, the debt ratio of the bank has fluctuated from 2014 to 2016. The JBL
total debt ratio has decreased to 0.89 in 2015, again the debt ratio has increased to 0.90 in
2016.

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4.3.2 Debt to Equity ratio
This ratio assesses the firm‟s capital structure. It provides a major of risk to creditors by
considering the invested by creditors (debt) & investor (equity). The higher percentage of
debt is grater the degree of risk to any creditor.
Debt to Equity Ratio = Total Liability/ Shareholders Equity

Table 4.6: Debt to Equity Ratio (Tk. in millions)

Year 2012 2013 2014 2015 2016
Total Liability 101,353.68 106,282.011 128,683.91 127,150.82 152,569.66
Shareholders‟ Equity 8,324.83 8,880.94 10,810.67 15,708.35 15,848.64
Debt to Equity Ratio 12.17% 11.97% 11.90% 8.09% 9.63%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation

Debt to Equity Ratio

14.00%
12.17% 11.97% 11.90%
12.00%
9.63%
10.00%
8.09%
8.00%

6.00%

4.00%

2.00%

0.00%
2012 2013 2014 2015 2016

Figure 4.6: Debt to Equity Ratio

Interpretation
The graph shows that debt to equity ratio of JBL decreased over the year from 12.17% in
2012 to 9.63% in 2016. It indicates that JBL use of debt relative to equity has decreased
over the year.

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4.4 PROFITABILITY RATIOS
4.4.1 Return on Asset (ROA)
Return on asset measures the overall effectiveness of management in generating profits
with its available assets also called the return on investment the higher ratio is better.
Return on Asset (ROA) = Earnings Available for Common Stockholder / Total Assets.

Table 4.7: Return on Asset (Tk. in millions)

Year 2012 2013 2014 2015 2016
Net Profit After Taxes 1,042.05 1,135.19 1,347.12 1,642.46 1,876.36
Total Assets 109,678.51 115,162.95 139,494.58 142,859.17 168,418.30
Return on asset (ROA) 0.95% .98% 0.97% 1.15% 1.11%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Return on Asset (ROA)

1.40%

1.15%
1.20% 1.11%

0.95% 0.98% 0.97%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
2012 2013 2014 2015 2016

Figure 4.7: Return on Asset

Interpretation:
The graph shows that ROA of JBL increased over the year from 0.95% in 2012 to 1.11%
in 2016. This indicates a good sign of the bank performance and refers that management
was effective in generating profit by using its available assets.

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4.4.2 Return on Equity (ROE)
The return on equity measures the return earn on the owners (both preferred and common
stockholders) investment. Generally, the higher this return, the better of the owners.
Return on Equity (ROE) = Net Income / Stockholders Equity.

Table 4.8: Return on Equity (Tk. in millions)

Year 2012 2013 2014 2015 2016
Net Profit After Taxes 1,042.05 1,135.19 1,347.12 1,642.46 1,876.36
Stockholders’ Equity 8,324.83 8,880.94 10,810.67 15,708.35 15,848.64
ROE 13.35% 13.20% 13.68% 12.39% 11.89%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Return on Equity
14.00%
13.68%
13.50% 13.35%

13.00% 13.20%

12.39%
12.50%

12.00% 11.89%

11.50%

11.00%

10.50%
2012 2013 2014 2015 2016

Figure 4.8: Return on Equity

Interpretation:
The graph shows that ROE of JBL decreased over the year from 13.35% in 2012 to
11.89% in 2016, which indicates that the management was not efficient enough in
generating profit by using its equity capital.

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4.4.3 Net profit margin:
The net profit margin measures the percentage of each sales dollar remaining after all
expenses, including taxes, have deducted. The higher the net profit margin is better. The
net profit margin is calculated as follows:
Net profit margin = Net Profit after Taxes / Operating Income

Table 4.9: Net Profit Margin (Tk. in millions)

Year 2012 2013 2014 2015 2016

Net Profit After Taxes 1,042.05 1,135.19 1,347.12 1,642.46 1,876.36
Operating Income 5,285.12 5,635.66 6,090.64 6,976.20 8,115.81
Net Profit Margin 19.72% 20.14% 22.12% 23.54% 23.12%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Net Profit Margin

24.00% 23.54%
23.12%
23.00%
22.12%
22.00%

21.00%
20.14%
19.72%
20.00%

19.00%

18.00%

17.00%
2012 2013 2014 2015 2016

Figure 4.9: Net Profit Margin

Interpretation:
The graph shows the increasing trend in net profit margin from 2012 to 2015. In the year
of 2015 it is seen that the net profit margin reached the highest position and in 2012 it
marked the lowest figure among all of the years from 2012 to 2016.

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4.4.4 Cost to Income Ratio:
Cost income ratio is the ratio between operating expenses and operating income it is
measure of how cost are changing compared to income. It is one of main key performance
indicators of bank efficiency.

Table 4.10: Cost to Income Ratio: (Tk. in millions)

Year 2012 2013 2014 2015 2016
Operating Cost 2,078.22 2,666.75 3,021.83 3,347.33 3,936.30
Operating Income 5,285.12 5,635.66 6,090.64 6,976.20 8,115.81
Cost income ratio 39.32% 47.32% 49.61% 47.98% 48.50 %
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Cost to Income Ratio

60.00%
49.61% 48.50%
47.32% 47.98%
50.00%

39.32%
40.00%

30.00%

20.00%

10.00%

0.00%
2012 2013 2014 2015 2016

Figure 4.10: Cost to Income Ratio

Interpretation:
The graph shows that cost to income ratio of JBL fluctuated over the year. However, the
cost to income ratio has increased from 39.32% in 2012 to 48.50% in 2016. This indicates
that firm failed to reduce its cost relative to its income.

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4.4.5 Earnings Per Share (EPS):
The Organization EPS of interest to present or prospective stockholder & management.
The earnings per share represent the number of TK earned on behalf of each outstanding
share of common stock.
EPS= Earnings Available For Common Stockholder/ No. Of Common Stock Outstanding

Table 4.11: Earnings per share:

Year 2012 2013 2014 2015 2016
EPS(tk.) 2.32 2.53 2.61 2.67 3.06
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation

Earnings per Share

3.50
3.06
3.00 2.67
2.53 2.61
2.50 2.32

2.00

1.50

1.00

0.50

0.00
2012 2013 2014 2015 2016

Figure 4.11: Earning per share

Interpretation:
The graph shows an upward trend of EPS of Jamuna Bank Ltd. It increased from Tk. 2.32
in 2012 to Tk. 3.06 in 2016. Higher EPS indicates that the bank has more income to
distribute to its shareholders.

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4.5 MARKET RATIOS
4.5.2 Price Earnings Ratio (P/E):
Calculated as the current market price of a share, divided by the reported earnings per
share. The resulting multiple is used to evaluate whether the shares are over-priced or
underpriced in comparison to the same ratio results for competing companies.
Formula:
Price per Share
𝐏𝐫𝐢𝐜𝐞 𝐄𝐚𝐫𝐧𝐢𝐧𝐠𝐬 𝐑𝐚𝐭𝐢𝐨 =
Earning Per Share

Table 4.12: Price/earnings ratio (P/E): (Tk. in millions)

Year 2012 2013 2014 2015 2016
Price/earnings ratio ( Time) 9.34 6.44 5.61 4.52 5.11
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation

Price/Earnings Ratio (P/E)

10
9
9.34
8
7
6 6.44
5 5.61
5.11
4 4.52
3
2
1
0
2012 2013 2014 2015 2016

Figure 4.12: Price Earnings Ratio (P/E)

Interpretation:
The graph shows that price earnings ratio of the firm has decreased over the years. The
price earnings ratio has decreased from 9.34 times in 2012 to 5.11 times in 2016. This
indicates the investors‟ confidence on the firm‟s performance has decreased over the
years.

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Chapter - 5
Comparative Analysis
5.1 COMPARATIVE ANALYSIS OF RETURN ON ASSET
Table 5.1: Return on Asset

Year JBL Industry Average

2012 0.95% 0.60%
2013 0.98% 0.90%
2014 0.97% 0.60%
2015 1.15% 0.80%
2016 1.11% 0.40%
Source: Jamuna Bank Ltd. & Bangladesh Bank, Annual Report 2012-16

Graphical Presentation

COMPARATIVE ANALYSIS OF RETURN ON ASSET

1.40%
1.15% 1.11%
1.20%
0.95% 0.98% 0.97%
1.00%

0.80% 0.90%
0.80%
0.60%
0.60% 0.60%
0.40%
0.40%
0.20%

0.00%
2012 2013 2014 2015 2016

JBL Industry Average

Figure 5.1: Return on Asset

Interpretation:
The graph indicates the ROA of JBL is higher than the industry average. This indicates
that the management of JBL was more efficient in generating profit by using its assets
than most of the banks in the banking industry of Bangladesh.

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5.2 COMPARATIVE ANALYSIS OF RETURN ON EQUITY:
Table 5.2: Return on Equity (REO) (Tk. in millions)
Year 2012 2013 2014 2015 2016
JBL 13.35% 13.20% 13.68% 12.39% 11.89%
Industry Average 8.20% 11% 8.10% 6.6% 7.11%
Source: JAMUNA Bank Limited, Annual Report 2012-16

Graphical Presentation:

COMPARATIVE ANALYSIS OF RETURN ON EQUITY

16.00%
13.35% 13.20% 13.68%
14.00% 12.39% 11.89%
12.00%
10.00% 11.00%
8.00%
8.20% 8.10%
6.00% 7.11%
6.60%
4.00%
2.00%
0.00%
2012 2013 2014 2015 2016

JBL Industry Average

Figure 5.2: Return on Equity

Interpretation:
The graph indicates the ROE of JBL is higher than the industry average. This indicates
that the management of JBL was more efficient in generating profit by using its equity
capital than most of the banks in the banking industry of Bangladesh.

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5.3 COMPARATIVE ANALYSIS COST TO INCOME RATIO:
Table 5.3: Cost to Income Ratio (Tk. in millions)
Year 2012 2013 2014 2015 2016
JBL 39.32% 47.32% 49.61% 47.98% 48.50 %
Industry Average 74 % 77.80% 76.10% 78.30 % 79.80%
Source: Jamuna Bank Limited, Annual Report 2012-16

Graphical Presentation:

Comparative Analysis of Cost to Income Ratio

90.00%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2012 2013 2014 2015 2016

JBL Industry Average

Figure 5.3: Comparative Analysis of Cost to Income Ratio

Interpretation:
The graph shows that in comparison with industry average the cost to income ratio of the
JBL was lower than the industry average over the year.

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CHAPTER - 6
Findings, Recommendations & Conclusion
6.1 Major Findings:
 Current ratio of the firm has increased over the years from .63 in 2012 to 1.15 in

2016.

 ROA of JBL increased over the year from 0.95% in 2012 to 1.11% in 2016, and

ROA of JBL is higher than the industry average.

 ROE of JBL decreased over the year from 13.35% in 2012 to 11.89% in 2016, and

ROE of JBL is higher than the industry average.

 The cost to income ratio has increased from 39.32% in 2012 to 48.50% in 2016,

but the cost to income ratio of the JBL was lower than the industry average over

the years.

 The price earnings ratio has decreased from 9.34 times in 2012 to 5.11 times in

2016.

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6.2Recommendations:

 The bank should reduce its liquidity position by reducing current asset relative to

current liability to increase the profit.

 The bank authority should try to minimize the operating expenses to have an

effective cost to income ratio.

 As the leverage position of bank decreased over the years, the bank should try to

maintain an optimum leverage position to have an increasing trend in profit.

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6.3 CONCLUSION:
Now a day‟s all the banks are contributing to the growth and development of the country
that the previous years. The banking industry in now much organized because of strong
vigilance and supervision of Bangladesh Bank. Jamuna Bank Limited is one of the
pioneers in many criteria. JBL is committed towards the excellence in the Services with
efficiency, accuracy proficiency. Jamuna bank is one of the most Renowned privet banks
in the country and has been achieved many outstanding milestone take preventive steps to
smooth this lucrative path of business years to years. The reason for being a leading bank
is superior customer services by very qualified and energetic officers and staffs of the
bank. The working environment at the bank is exceptional which lead to provide best
services for the customers and clients. The man objective of the study is to evaluate the
performance of the Jamuna Bank Limited. The liquidity positions of JBL increased over
the years. The management of Jamuna Bank Ltd. was efficient enough in utilizing its
assets for the year of analysis. Asset turnover ratio and credit to deposit of JBL was
increased over the year of analysis. Leverage position of JBL was decreased over the year
which indicates that the major portion of Bank‟s total assets was financed by the firm‟s
creditors. ROA and ROE of JBL were fluctuated and increased over the year which
indicates that the bank management was efficient enough in using its assets and equity
capital to generate profit. Cost to income ratio of JBL was fluctuated and increased over
the year. However, ROA & ROE were higher and cost to income ratio was lower than the
industry average for over the year of analysis.

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BIBLIOGRAPHY

 Gitman, L. J. (2003), “Principal of Managerial Finance”, 12th Edition, Pearson

International Education. Pct. Ltd, Singapore.
 Kothari, C. R. “Research Methodology”, Second Edition, New Age International
Publishers.
 Jamuna Bank Ltd, 2013, Annual Report 2012, Dhaka, Bangladesh.
 Jamuna Bank Ltd, 2014, Annual Report 2013, Dhaka, Bangladesh.
 Jamuna Bank Ltd, 2015, Annual Report 2014, Dhaka, Bangladesh.
 Jamuna Bank Ltd, 2016, Annual Report 2015, Dhaka, Bangladesh.
 Bangladesh Bank, 2017, Annual Report 2015-16, Dhaka, Bangladesh.
 Jamuna Bank Ltd., JBL Bank: Knowing JBL Bank, viewed 1st May, 2017 from
http://www.JBLbank.com/about.php

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Appendixes