Internship Report On

Performance Analysis of Southeast Bank Limited.

ShAnu [Type the company name] 1/1/2013

Internship Report 0n

“Performance Analysis of Southeast Bank Limited”

SUBMITTED TO: Mr. Md. Ridwan Reza Senior Lecturer

SUBMITTED BY: Safinaz Amin Anni
ID: 0901010028 Major: Finance and Banking BBA Program

Department of Business Administration

LEADING UNIVERSITY, Sylhet
February 5, 2013

February 05, 2013

Mr. Md. Ridwan Reza Senior Lecturer Dept. of Business Administration Leading University, Sylhet.

Subject: Letter of Transmittal

Dear Sir, I have completed the Internship Report required to be submitted as a precondition for the completion of B.B.A. Program. The title of my report is “Performance Analysis Of Southeast Bank Limited”

The Internship Report is based on my 3 months attachment in Southeast Bank Limited. In this report I provide information about the performances analysis of SEBL in an integrated approach based on the information collected during the internship period.

It will be kind of you if you accept my report on the aforesaid topic. I hope you will be pleased with the report. I have given all my sincere effort in preparation of this report and will appreciate if you suggest anything about this report for any kind of rectification needed.

Sincerely yours,

…………………….. Safinaz Amin Anni ID No: 0901010028 Dept. of Business Administration Leading University, Sylhet.

LETTER OF CERTIFICATE

I am enormously pleased to declare that Safinaz Amin Anni, a students from the Department of Business Administration, 21th Batch, Leading University, Sylhet, has been completed her Internship in Southeast Bank Limited, Laldighir Paar Branch. She has completed her internship report on the topic “Performance Analysis Of Southeast Bank Limited”. She has provided good effort for collection of both primary and secondary data. I have supervised her throughout the preparation of the paper.

I also certify that the paper is an original one and has not been submitted elsewhere previously for publication in any form.

I wish her all the best in her effort.

……………………….. Mr. Md. Ridwan Reza Senior Lecturer Department of Business Administration Leading University, Sylhet-3100

TO WHOM IT MAY CONCERN

This is to assert that Safinaz Amin Anni, ID No: 0901010028, a student of BBA Program, Leading University, Sylhet, has consummated good & proper a 03 (three) month long Internship Program at our branch from 1 October,2012 to 31 December, 2012. She was assigned the topic “Performance Analysis Of Southeast Bank Limited” to Study on Southeast Bank Limited.

To my best Knowledge, it is clear crystal that he abode by the do’s & don’ts of the bank. Her conduct towards the branch, Executives and Officers, Staffs and Customers was very satisfactory.

I wish her glorious future.

………………………

Acknowledgement
First & foremost of all, I would like to convey my heartiest gratitude and total devotion to almighty Allah for blessing me with the ability, strength, patience as well as keeping me active in performing my internship tasks successfully.

A special debt is due to Mr. Md. Ridwan Reza, Senior Lecturer, Department of Business Administration, Leading University, who has been my academic supervisor. He was kind enough to allocate his valuable time to provide me with his humble guidance, motivating thoughts, ample & applicable directions for the successful preparation of this report.

I would especially like to convey my gratitude to my internship supervisor, Suranjit Bhushan Das Roy, Principal Officer, to guide me throughout my stay as an intern at SEBL Bank. Without his motivation, guidance & suggestions, this report would have remained incomplete.

Special note of mention will be awarded to all respected officers within the Southeast Bank Limited, Laldighirpaar Branch, Sylhet, who were not only helpful, but also supportive & co-operative towards a learner like me to understand the tasks & operations within the Southeast Bank Limited (SEBL).

And last but not least, I would finish off with extension of appreciation to my family & friends-namely my parents, whose moral support worked as the main driving force contributing to my successful completion of Internship & Internship Report and also worthy of mention are my friends for motivating me with their tips & suggestions on preparing my internship report.

Executive Summary
Commercial banks as the most important functionary of the financial system play a dynamic role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. The World of business has become increasingly complex and time driven. In the world of competition banks are trying to meet the demand of their clients, and seek to satisfy customer through their service. So in the competitive market they should try to find out present & future problems and try to discover how those problems can be solved. An attempt has been made in this paper to examine and evaluate the overall performance of SEBL.

In this report first I have tried most to provide overall information about SEBL, like mission & Vision of SEBL, its objectives & product/ services provided by SEBL. At the next I gave information about some particular functional performance of SEBL like their capital & reserves, shareholder’s equity, amount of deposits, loan & advances, assets portfolio and so on. After that I have tried most to provide information about the analytical data of financial statement of SEBL.

And finally I have highlights some important findings and tried to provide several suggestion regarding this problems.

Table of Contents
Serial Items Page No.

Chapter One
Introduction 1.01 1.02 1.03 1.04 1.05 Background Origin of the report Objectives Methodology Limitations of the report 2 2 3 4 5

Chapter Two
Overview of Southeast Bank Limited 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 Establishment OF Southeast Bank Limited Company Profile Vision Mission Business Objectives of Southeast Bank Commitments to the client Board of Directors Branches of SEBL Products and Services 7 8 9 9 9 9 10 11 11

Chapter Three
Functional Performance Analysis of Southeast Bank Limited. 3.01 3.02 3.03 3.04 Capital & Reserves Shareholder’s Equity Capital Market Scenario in 2011 SEBL Shares & its Owners I. Number of Shareholders II. Positive Earning Per Share (EPS) 13 13 14 14 14 15

III. Satisfactory Net Asset Value (NAV) IV. Authorized Capital & Paid-Up Capita V. Declaration of Dividend VI. Characteristics of Shares of SEBL 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 Deposits Loan & Advances Guarantee Business SME Finance Corporate Finance Environment & Green Banking Women Entrepreneurship Development

15 16 17 17 18 19 20 20 20 21 21

International Trade Operations by the Southeast Bank Limited in 22 2011 1.Import Trade 2. Export Trade 22 23 25 26

3.13 3.14

Assets Portfolio Information Technology

Chapter Four
Financial Statement Analysis of Southeast Bank Limited. 4.01 4.02 4.03 4.04 Financial statement Analysis Three years at a glance of SEBL Ratio analysis of SEBL SWOT Analysis 28 28 29 35

Chapter Five
Findings 5.01 Findings 37

Chapter Six
Conclusion & Recommendations 6.01 6.02 Conclusion Recommendations References Appendix

40 41 42

Chapter One
Introduction

1.01 Background 1.02 Origin of the report

Introduction

1.03 Objectives (i) Main Objective: (ii) Specific Objectives: 1.04 Methodology 1.05 Limitations of the report

1.01 Background
The prosperity of a country depends upon its economic activities and banking sector plays a vital role here. So banking as a profession has achieved huge popularity all over the world. The same concern immensely appeals me as well. By the grace of Almighty Allah I have been assigned to prepare an internship paper on ‘Performance Evaluation of Southeast Bank Limited’ - a very promising second generation bank of Bangladesh. I went through various functions and activities of the bank with an analytical point of view during the last few months and witnessed the dynamicity of their style. This inspired and helped me a lot to furnish my internship report with a great deal of enthusiasm.

I believe that I have tried all the way to follow the previous studies retaining my originality in writing the report. Any analytical criticism and creative suggestion on this concern will receive my heartiest welcome.

1.02 Origin of the report
Each professional degree needs practical knowledge of the respective field of discipline to be fruitful. Our BBA program also has an internship program, relating to the exchange of theoretical knowledge into the real life practical situation. The report entitled “Performance Evaluation of Southeast Bank Limited” originated from the partial fulfillment of the internship program. The main purpose of the preparation of the report is due to the partial fulfillment of the internship program period of the BBA Program conducted by the school of Management and Business Administration, Leading University, Sylhet, Bangladesh.

During the internship program, I was under the supervision and guidance of Mr. Md. Ridwan Reza, Senior Lecturer, Department of Business Administration, Leading University, Sylhet, Bangladesh.

1.03 Objectives
The General objective of the study is to provide an overview of learning of the intern during the internship program and fulfill the internship requirement. Beside the general objective, the report can be categorized into main objective and specific objectives. The objectives behind this report are mentioned below: (i) Main Objective: The main objective of this study is to prepare an internship paper (which is a partial requirement of the under graduation program) on the specified topic working within an organization implementing the knowledge that have been gathered over the past few years at Leading University, Sylhet, Bangladesh. (ii) Specific Objectives: The specific objectives of this report are as follows: • • • To analyze the functional area wise performance of Southeast Bank Limited. To gather knowledge about financial performance of the bank. Finding out the causes and several solutions of both analyses.

1.04 Methodology
This report is a descriptive one, which was administered by collecting primary and secondary data. The report tried to evaluate the performance of Southeast Bank Limited. Before going in to the deep study, conceptual structure visualized under which the whole study was conducted. 1.3.1 Sources of Data

This study covered two types of data, which are: • Primary data • Secondary data (i) Primary Data: Major sources of primary information were interviews with members of the staff of SEBL. (ii) Secondary Data: Going through different documents and papers developed by the Bank personnel and by others are the sources of secondary data. 1.3.2 Collection Procedure of Data Managers and officers of SEBL Bank from different divisions were the main sources of secondary data. Interview with the clients of SEBL Bank helped me a lot to understand their attitude towards SEBL Bank.

1.3.3 Analysis of Data Collected data are analyzed to draw the conclusion. All the data have shown in tabular form and graphical form.

1.05 Limitations of the report
The study is not free from some practical limitations. Following limitations have faced during the study and the time of working & data collection: • As I worked in branch office I didn’t get all the necessary data I required. This was the main problem that I faced in preparing the report. •
Performance measurement and assessment of the contribution of a particular department of a bank to the economy is a very difficult task and there is no universally accepted methodology for this.

• •

Some desired information could not be collected due to confidentiality of bank. Due to lack of practical experience, some errors might be occurred during the study. Therefore maximum efforts have given to avoid mistakes.

Chapter Two
Overview of Southeast Bank Limited

2.01 Establishment OF Southeast Bank Limited 2.02 Company Profile

Overview of Southeast Bank Limited

2.03 Vision 2.04 Mission 2.05 Business Objectives of Southeast Bank 2.06 Commitments to the client 2.07 Board of Directors 2.08 Branches of SEBL 2.09 Products and Services

2.01 Establishment OF Southeast Bank Limited
Southeast Bank Limited is a second-generation bank that was established in 1995 with a dream and a vision to become a pioneer banking institution of the country and contribute significantly to the growth of the national economy. The Bank’s journey began when it was incorporated as a Public Limited Company on March 12, 1995.In its arduous journey since, Southeast Bank has succeeded in realizing the dreams of those who established it. Today it is one of the country’s leading banks in the private sector contributing significantly to the national economy. Authorized Capital of the Bank today is Tk.10,000 million. Its Paid-Up-Capital and Reserve reached Tk. 19,000.06 million as on December 31, 2011. Bank had 1848 Staff of whom 152 were Executives, 1,374 were Officers and 322 were other staff as on December 31, 2011. Bank’s Managing Director is Mr. Mahbubul Alam, an eminent banker of the country with 43 years experience in both nationalized and local private sector banks to his credit. They take pride in the fact that the public and private face of the Bank is one and identical. They believe that transparency in decision-making, monitoring mechanism and full disclosure to shareholders and regulatory authorities are essential aspects of Bank’s corporate governance and that they create an intense pressure to rationalize Bank’s services and search for new competitive advantages. We work ceaselessly within these parameters.

A team of efficient professionals manages the Bank. They create and generate an environment of trust and discipline that encourages everybody in the Bank to work together for achieving the objectives of the Bank. Southeast Bank has become a synonym of quality banking services and products. It has a diverse array of products and services tailored carefully to cater to the needs of all segments of customers. Our operational strategies are structured to address the special and often complex needs of the customers.

In the growth graph, the Bank has generated profit of Tk.1912.19 million after provision and income tax in the year 2011. The curve keeps soaring upward everyday making it one of the leading and most successful banking institutions in Bangladesh with a total asset base of Tk.158,07.59 million as on December 31, 2011.

2.02 Company Profile
Name of the Company: Chairman: Vice Chairman: Managing Director: Company Secretary: Legal Status: Date of Incorporation: Registered Office: Southeast Bank Limited Alamgir Kabir, FCA Ragib Ali Mahbubul Alam Muhammad Shahjahan Public Limited Company March 12, 1995 Eunoos Trade Center 52-53, Dilkusha C?A ( Level 2,3 & 16) Dhaka - 1000 Banking TK 10,000.00 million TK 8317.01 million 1999

Line of Business: Authorized Capital: Paid Up Capital: Year of Initial Public Officer: Stock Exchange Listing: Phone: Fax: SWIFT: E-mail : Website:

April 10, 2000 (DSE) & April 24, 2000 (CSE) 9571115, 7160866, 7173793, 9555766 & 9550081 9550086, 9550093 &9563102 SEBDBDDHXXX info@southeastbank.com.bd http://www.southeastbank.com.bd/owa

2.03 Vision
To be a premier banking institution in Bangladesh and contribute significantly to the national economy.

2.04 Mission
High quality financial services with state of the art technology Fast customer service Sustainable growth strategy Follow ethical standards in business Steady return on shareholders’ equity Innovative banking at a competitive price Attract and retain quality human resource Commitment to Corporate Social Responsibility

2.05 Business Objectives of Southeast Bank
Make sound investments. Meet capital adequacy requirement at all the time. Ensure a satisfied work force. Ensure 100% recovery of all advances. Focus on fee-based income. Adopt an appropriate management technology

2.06 Commitments to the client
Southeast Bank Limited is a customer focused modern banking institution in Bangladesh. They deliver unparalleled financial services to Retail, Small and Medium Scale Enterprises (SMEs), Corporate, Institutional, Governmental and individual clients through branch outlets across the country. Their business initiatives center on the emerging demands of the market. Their commitments to the clients are the following:

Provide service with high degree of professionalism and use of modern technology. Create long-term relationship based on mutual trust. Respond to customer needs with speed and accuracy. Share their values and beliefs. Grow as our customers grow. Provide products and service at competitive pricing. Ensure safety and security of customers’ valuables in trust with them.

2.07 Board of Directors
Alamgir Kabir, FCA Ragib Ali o M. A. Kashem o Azim Uddin Ahmed o Bangla Capital Limited represented by o Tahnoun A. Harun o Jusna Ara Kashem o Duluma Ahmed o Syed Shahid Ali o Rehana Rahman o Md. Akikur Rahman o Monjur Miah o Sirat Monira o Karnafuli Tea Co. Limited represented by Abdul Hye o Dr. Zaidi Sattar o A.H.M. Moazzem Hossain Mahbubul Alam Zakir Ahmed Khan Muhammad Shahjahan Alamgir Kabir, FCA o Ragib Ali o M. A. Kashem o Azim Uddin Ahmed o Dr. Zaidi Sattar o A.H.M. Moazzem Hossain o Mahbubul Alam

Chairman Vice Chairman Directors

Managing Director Advisor Company Secretary Chairman Members

2.08 Branches of SEBL
To satisfy the customer demand & compete with the rivalry SEBL gradually increase their branches in different areas of Bangladesh. In present SEBL have 86 branches.

2.09 Products and Services
Offering customers with diversified products and services is one of the major goals of SEBL. In implementation of this, the Bank launched a new deposit product named Millionaire Deposits Scheme (MDS) in 2009 to extend its deposit product base. All application forms of various products and services were modified as per the guideline of Bangladesh Bank for customer’s convenience. The Bank also opened ten new branches and ten SME centers in 2009. The Bank also introduced SEBL Travel Card, Merchant Banking etc. to diversify product base and validated special scheme products with the changes of time catering to clients needs. The South East Bank Limited is offering a wide range of services to satisfy their customer need. Along with conventional Banking they provide,

• • • • • • • •

SME Banking Dual Currency VISA Credit Card Remittance Business Western Union SWIFT Services Locker Services SMS Banking ATM Service

Chapter Three
Functional Performance Analysis of Southeast Bank Limited.
3.01 Capital & Reserves 3.02 Shareholder’s Equity 3.03 Capital Market Scenario in 2011 3.04 SEBL Shares & its Owners 3.05 Deposits 3.06 Loan & Advances

Functional Performance Analysis of Southeast Bank Limited

3.07 Guarantee Business 3.08 SME Finance 3.09 Corporate Finance 3.10 Environment & Green Banking 3.11 Women Entrepreneurship Development 3.12 International Trade Operations by the Southeast Bank Limited in 2011 3.13 Assets Portfolio 3.14 Information Technology

3.01 Capital & Reserves
The Authorized Capital of the Bank was Tk. 10,000.00 million and paid up capital was Tk. 8,317.01 million as of December 31, 2011. The Capital & Reserves (Tier-1 Capital & Tier-II Capital) stood at Tk. 19,000.06 million as compared to17, 196.80 million in last year showing an increase of 10.49%.

Table1: Tier-1 Capital & Tier-II Capital

3.02 Shareholder’s Equity: (Tk. in 10000000)

2000 1500 2011 1000 500 0 2011 2010 2009 2010 2009

Figure1: Shareholder’s Equity

3.03 Capital Market Scenario in 2011
There was a “liquidity crisis” in the Capital Market of the country in the year 2011. The shortage of cash liquidity forced share prices of many companies to go down substantiating that their market prices were lower compared to their market fundamentals. Change in denomination of share face value from Tk. 100/- to Tk. 10/- failed to encourage small investors to invest more in those stocks traded in the bourses of the country in the year 2011. Investors’ confidence in the Stock Market was low almost throughout the year 2011. The year was not good for the DSE general Index. Consequently, at the end of 2011, DSE general Index closed at 5,257.61 points compared to 8,290.41 points of the previous year. The index lost 3,032.80 points or 36.58% in 2011. The lowest closing level of the Index during the year was 4,649.33 points as on November 15, 2011 according to DSE statistical report. The total market capitalization at the end of the year 2011 reached TK. 2.62 trillion compared to tk. 3.51 trillion of the previous years. The market capitalization is down by 25.40% in 2011.

In the year, 25 new companies offered part of their shares to the public as Initial Public Offering (IPOs). The total value of offered shares amounted to Tk. 18,791.53 million. All the 25 new companies were listed & their shares were traded in DSE in 2011. The total numbers of listed companies were 232 as at 31st December, 2011.

3.04 SEBL Shares & its Owners
All Stock Market indicators reflect sound financial base of our bank namely; Earning Per Share (EPS), Trend of dividend declaration, Net Asset Value Per Share (NAV), Cash Flow from Operation, General Reserve, Price Earning Ratio (PE) etc. The shareholders of Southeast Bank Limited look for satisfactory investment return for the long term & carefully evaluate the fundamentals of a company before making investment decisions.

I. Number of Shareholders A large number of shareholders repose their trust in our Bank’s Securities. The number of Bank’s registered shareholders rose to 68,039 on December 2011 from 66,989 of the

previous year showing an increasing of 1.7%. The trend of increase in the number of shareholders of the Bank for the last three years in shown below:

Table2: Shareholders number &

C ompany 's S ec urities in E lec tronic & P hy s ic al 0.89% form
E lec tronic S hares P aper S hares 99.11%

growth rate. Year 2011 2010 2009 Shareholders 68,039 66,898 22,152 Growth Rate 1.71% 202.00% 76.70%

Figure 2: Company’s Securities form.

II. Positive Earning Per Share (EPS) The total Paid-Up Shares of the Bank stood at 831,700,840 at the end of the year 2011. Since, they listed with two bourses of the country, the number of issued shares increased by 2,672.33%.They are generating substantial amount of profit through operational excellence for the last six years & allocated good rate of dividend against each outstanding share of the company. Their EPS which is a prime indicator of the Bank’s profitability is shown below for the last three years:

Year

Earning Per Share of Tk. 10 Tk. 2.33 Tk. 3.77 Tk. 3.24

2011 2010 2009

Table3: Earning Per Share of 3 years.

III. Satisfactory Net Asset Value (NAV) SEBL’s Net Asset Value Per share is always positive reflecting higher asset compared to liabilities. For their better NAV, a large number of investors subscribed to their shares. The Net Asset Value of the Bank since 2009 is given below:

Net Asset Value Year (NAV) per share of TK. 10 2011 2010 2009 Tk. 23.30 Tk. 24.73 Tk. 33.10

35 30 25 20 15 10 5 0 2011 2010 2009

Figure3: NAV of 3 years. Table4: Net Asset Value.

IV. Authorized Capital & Paid-Up Capita Their Authorized Capital & Issued Share Capital has considerably increased over the years. At present, their Authorized Capital is 10,000.00 million & Paid-Up Capital is Tk. 8317.01 million. The Bank’s year wise Authorized Capital & Paid-Up Capital since 2009 are shown below: Authorized Capital Year (Taka in million) Paid-Up Capital (Taka in million) 2011 2010 2009 10,000.00 10,000.00 10,000.00 8,317.01 6,930.84 3,422.63

Table 5: Amount of authorized capital & paid-up capital.

12,000.00 10,000.00 8,000.00 6,000.00 4,000.00 2,000.00 0.00

10,000.00 8317.01

10,000.00 6930.84

10,000.00

A uthoriz ed C apital 3422.63 P aid-Up C apital

2011

2010

2009

Figure 4: Authorized Capital & Paid-Up Capital of 3 years. V. Declaration of Dividend In the preceding years, their Board of Directors declared dividends out of profits to the company’s shareholders at good rates. The rates of Cash Dividend & Stock Dividend Declared by the Bank since 2009 are shown below: Year 2011 2010 2009 Cash Dividend 15% 10% Stock Dividend 5% 20% 35% Total 20% 30% 35%

Table 6: Rates of Cash Dividend & Stock Dividend

VI. Characteristics of Shares of SEBL

Now I would like to highlight some nature of shares of Southeast Bank Ltd. • • • • • • Large number of Shareholders. Good & satisfactory rate of dividend. Positive Earning Per Share (EPS). Good Net Asset Value per share (NAV) Continuous stay for a long time in DSE & CSE in top 20 Index. Traded in both the bourses of the country as an ‘A’ category share.

3.05 Deposits
The Bank mobilized total deposits of Tk. 127,178.22 million as of December, 2011 as compared to Tk 107,253.19 million in 2010. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the bank employees & confidence reposed by the customers in the Bank contributed to the notable growth in deposits. The Bank introduced a number of attractive deposit schemes to cater to the requirement of savers. This improved not only the quantum of deposits but also brought about qualitative changes in deposits structure. The deposit mix of the Bank as on December 31, 2011 was as follows:

Particulars Current & Other Deposits Saving Bank/ Mudaraba saving bank deposits Short Notice Deposits/ Mudaraba short notice deposits Fixed Deposits or Term Deposits Fund Under different deposit Schemes Bill payable Accounts Total

Taka in Million 9,306.75 6,657.24

Share in Total Deposits 7.32% 5.23%

9,212.61

7.24%

96,538.07 3,938.76 1,524.79 127,178.22

75.91% 3.10% 1.20% 100.00%

Table7: Sum of deposits of SEBL.

Depos it Mix
1.20% 7.32% 3.10% 5.23% 7.24% C urrent & O ther D epos its S av ing B ank/ Mudaraba s av ing bank depos its S hort Notice D epos its/ Mudaraba short notice deposits F ixed D eposits or T erm D epos its F und Under different deposit S chemes B ill payable A ccounts 75.91%

Figure5: Deposit mix of the Bank as on December 31, 2011.

3.06 Loan & Advances
Year 2011 was a very challenging year for Credit expansion in private sector.

Figure6: Allocation of loans & advances.

Liquidity constraint in the first half of the year restricted growth of loans & advances & in the second half due to development of government’s borrowing instruments & depreciation of Taka against foreign currencies lending activity was affected. Both capital & money market remained unstable throughout the year. Notwithstanding the situation, Loans & Advances portfolio of the Bank stood at Tk. 107,288.56 million as on 31December 2011 compared to Tk. 93,981.20 million as on 31 December 2010 registering a growth of 14.16%.

3.07 Guarantee Business
The Bank issued guarantees amounting to Tk. 25,673.90 million during the year 2011 compared to Tk. 22,781.19 million recorded in the previous year registering a growth of 12.70%. The guarantees were issued in favor of different Govt. Authorities, ministries, Autonomous Bodies, Corporations, Private Companies, Individuals & Multinational Companies, etc. on behalf of the valued clients of the Bank.

3.08 SME Finance
Fostering of a dynamic Small & Medium enterprise (SME) sector is considered as a priority in their Bank’s policies due to two distinct reasons. First, it is important for national economic development goals. They endorse Central Bank’s focus on SMEs, as they are a primary driver for job creation & GDP growth. Secondly, Bank recognized SME as a promising Business Sector because of its reasonable profitability & its ability to diversify Credit risk. In the year 2011, SEBL disbursed Tk. 15,779.50 million to 3110 clients through 84 Branches (Including 15 SME/ Krishi Branches). Outstanding Loan in SME Stood at Tk. 14,429.70 Million as on December 31, 2011 compared to Tk. 13,060.60 million as on December 31, 2010 resulting in 10.42% growth.

3.09 Corporate Finance
Acting as a trusted advisor to the corporate clients, Southeast Bank provides tailor-made comprehensive & innovative banking solutions to the corporate clients through its dedicated relationship-based platform. Based on superior product delivery, industry

benchmark service levels & strong customer orientation, Southeast Bank delivers optimal client services & focuses on the needs of the customers covering a broad range of strategic products & financial advisory services.

3.10 Environment & Green Banking
Environmental consciousness is not new in SEBL. Ethical principles of their Bank include the following: 1. Not to encourage projects which are not environment-friendly for financing by the Bank. 2. To provide material support for protection of environment. The Bank achieved some milestones in 2011 in its Green banking movement. During 2011, the Bank formed a Green Banking Unit. Moreover, Audit Committee of the Board took special responsibility of reviewing Bank’s environmental policies, strategies & Green banking matters as it recognized it as an important compliance & governance issue. Bank organized a workshop on “Green Banking & Environmental Risk Management (ERM)” on December 03, 2011 at its Training Institute to create green awareness among its executives & officers. Bank also introduced a Green Office Guide named “Southeast-Shobuj-Jibon” for optimum use of resources of the bank.

3.11 Women Entrepreneurship Development
Southeast Bank believes that empowerment of women can be truly achieved of they get opportunity to attain their economic emancipation. With this end in view, Southeast Bank in 2011 disbursed loans & advances of Tk. 98.10 million to 43 women SME entrepreneurs. Bank’s Clients availed Re-Financing Facilities from Bangladesh Bank & received the benefit of preferential interest rate. Most of their Branches have a Women Entrepreneur Dedicated Desk to cater to their needs.

3.12 International Trade Operations by the Southeast Bank Limited in 2011
Southeast Bank Limited since inception has been keeping pace with the growing need of its customers with especial focus on the corporate clients. A team comprising a number of vastly experienced professionals at their 21 Authorized Dealer Branches & International Affairs Division at Head Office is continuously striving to cater to the International Trade related needs of the customers.

1. Import Trade

Southeast Bank Limited has another successful year in Import Trade. This year total Import Business handled by the bank is Tk. 99,509.01 million (eqv. USD1,215.75 million). Deposit global & domestic economic slowdown Southeast Bank has been able to ensure its slice of total International Trade Business of Bangladesh. In 2011, beyond the traditional items some non-traditional items like Ocean going vessel & passenger Aircraft have enriched Southeast bank’s Import basket.

Year

Import Volume in eqvt. Us Dollars (in Million)

Import Volume in eqvt. Tk (in Million)

2011 2010 2009

1,215.75 1,466.10 1,004,51

99,509.01 103,726.70 69,582.92

Table8: Import Figure of the bank for the last three years

Import Volume in eqvt. Tk (in Million)
150,000.00 99,509.01 100,000.00 50,000.00 0.00 2011 2010 2009 103,726.70 69,582.92 Import Volume in eqvt. Tk (in Million)

Figure 7: Import Volume 2. Export Trade

Export Business which is the lifeline of the economy has been significantly contributing to our national economy in terms of foreign currency inflow and employment generation, Southeast Bank Limited since inception has been trying to facilitate export trade through offering well-tailored services to the exporters starting from financing backward-linkage industry to forward-linkage industry. Since 2009 the world economy has suffered huge meltdown & is still going through volatile condition which has adversely affected our economy. Despite all odds Southeast Bank Limited has been able to ensure a steady growth in Export business. This has been possible due to integrated efforts of all concerned from the management at head office and at the branches. Besides traditional items like Readymade Garments, Jute & Jute-made goods, Ceramics, Frozen Fish Southeast Bank Limited has made sufficient headway in exploring export of some new items as ship building. Despite the global meltdown, 2011 was another excellent year for Southeast Bank Limited in handling Export Business experiencing 31% growth.

Year

Export

Volume

in Export

Volume

in

eqvt. US Dollars (in eqvt. Tk (in Million) Million) 2011 2010 2009 928.31 822.02 674.53 75,982.06 58,158.06 46,724.47

Table 9: Export volume of last 3 years.

Export Volume in eqvt. Tk (in million)
80,000.00 70,000.00 60,000.00 50,000.00 40,000.00 30,000.00 20,000.00 10,000.00 0.00 2011 2010 2009 46,724.47 Export Volume in eqvt. Tk (in million) 75,982.06

58,158.06

Figure 8: Export Volume

3.13 Assets Portfolio
As on 31st December, 2011, the total assets of the Bank stood at TK. 158,078.59 million. The break-up of the total assets are given below:

Amount (Taka in Million)
2. Cash & Cash Equivalent 3. Investments 4. Loans & Advances 5. Fixed Assets 6. Other Assets

11,162.96 29,846.60 107,288.55 7,373.11 2,407.37

Total:

158,078.59

Table 10: Assets Portfolio

Growth in Total Assets (Taka in Million)
158078.59 160000 140000 120000 100000 80000 60000 40000 20000 0 2011 2010 2009 131943.47 112676.98

Figure 9: Growth of Total assets

3.14 Information Technology
Information Technology infrastructure of the Bank has been setup with cost effective as will as cutting edge technology. Emphasis has been given to bring quality in banking services through technology driven efficient delivery channels. Core objectives of investment in IT infrastructure are to; (i) provide a high performing, reliable and secure infrastructure that provides anywhere, anytime access to Bank services, (ii) improve operational efficiency & communication through automation, (iii) expand & enhance banking service through use of technology, (iv) maintain and encourage creative technology partnership that realize cost efficiency through innovation & collaboration & (v) value for money in all technological investments.

The bank has developed its own ATM network in a limited scale. It also shares the network of DBBL and OMNIBUS. Internet Banking services has already been developed by which clients are getting account information and statements.

The Bank has gone live with BEFTN (Bangladesh Electronic Fund Transfer Network) since February 28, 2011. BEFTN is a faster, safer and a more efficient means of interbank fund transfer. After introducing BEFTN, the Bank has got the capability to offer a wide range of electronic products that helps to improve payment services for its customers. Moreover, BEFTN dramatically lowered the operational cost, reduced risk and increased the efficiency of the overall payment process. The Bank has since been using the BEFTN Channel for disbursement of inward Foreign Remittance and receiving payments against SEBL Visa Credit Card.

The year 2011 was a constructive year for technological growth of the Bank & the Bank has realized its technology with business objectives and brought about changes for greater customer convenience and satisfaction.

Chapter Four:
Financial Statement Analysis of Southeast Bank Limited.

4.01 Financial statement Analysis

Financial Statement Analysis of Southeast Bank Limited.

4.02 Three years at a glance of SEBL 4.03 Ratio analysis of SEBL 4.04 SWOT Analysis

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

4.02 Three years at a glance of SEBL (in million taka)

Table 11: SEBL Bank at a glance

From the above table we see that the trend of paid up capital is upward. This upward trend indicates that investors are buying more and more shares at high price.

Investment is also showing an upward trend. This indicates that borrowers of SEBL Bank are taking more loans and the bank is also extending its range of loans. As the export business handled by SEBL Bank is increasing, but import business in 2011 slightly goes down. The growth of operating profit is fairly good than year 2009. From the above table it is very much clear that operating profit of SEBL has been increased at a good rate in 2010. This indicates that the operating efficiency of the bank is increasing at a rapid pace and the bank is able to reduce its operating cost. But in 2011 it fall a bit. Their net profit after tax and provision has been decrease in 2011. But fixed assets increased in a good rate.

4.03 Ratio analysis of SEBL
1. Return on Assets (ROA): An important Profitability indicator is Return on Asset which indicates how capable management has been in converting assets into net earnings.
2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2011 2010 2009

Year 2011 2010 2009

ROA 1.23% 2.09% 1.66%

Figure 10: ROA

Table 12: Return on Assets

Comments: The above figure represents the Return on Assets (ROA) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in highest profitable position. In 2011 the Bank was in lowest profitable position.

2. Return on Equity (ROE): Return on Equity is a measure of the rate of return flowing to shareholders.
20.00% 15.00% 10.00% 5.00%

Year 2011 2010 2009

ROE 9.87% 19.41% 16.51%

0.00% 2011 2010 2009

Figure 11: ROE Comments:

Table 13: Return on Equity

This ratio tells us the earning power on shareholders’ book value investment. The ROE of SEBL Bank was high in 2009and 2010 and it reflects the bank’s acceptance of strong investment opportunity and effective expense management. But in 2011 it fall down, it’s a negative side for this bank.

3. Profit coverage Ratio: Coverage ratios are designed to relate the financial charges of a firm to its ability to service, or cover, them.
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2011 2010 2009

Year 2011 2010 2009

Ratio .37 .65 .46

Figure12: Profit coverage ratio

Table 14: Profit coverage Ratio

Comment: The profit coverage ratio of SEBL Bank is very low. This low ratio is a danger signal that the bank is using excessive debt and greater the likelihood that the bank could not cover its profit payment without difficulty.

4. Equity Multiplier (EM): This ratio shows a company's total assets per taka of stockholders' equity.
10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2011 2010 2009

Year 2011 2010 2009
Figure13: EM

Ratio 8.15% 7.70% 9.95%

Table 15: Equity multiplier.

Comments: A lower calculated number indicates lower financial leverage and vice versa. We can see that a lower percentage in 2010 and higher in 2009. Generally, a lower equitymultiplier is desired because it means a company is using less debt to fund its assets. 5. Stockholders' Equity Ratio: Relative financial strength and long-run liquidity are approximated with this calculation.

14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2011 2010 2009

Year 2011 2010 2009

Ratio 12.27% 12.99% 10.05%

Table 16: Stockholders' Equity Ratio

Figure14: Stockholders' Equity Ratio of last 3 years.

Comment: A low ratio points to trouble, while a high ratio suggests you will have less difficulty meeting fixed interest charges and maturing debt obligations. SEBL still now a good position on it.

6. Loans to Deposits (LTD): The loan to deposit ratio can be used by investors and internally by the company to determine the financial institutions short term viability.

86.00% 85.00% 84.00% 83.00% 82.00% 81.00% 80.00% 79.00% 78.00% 77.00% 2011 2010 2009

Year 2011 2010 2009

Ratio 84.54% 85.82% 80.17%

Figure15: LTD

Table 17: Loans to Deposits

Comments: If the ratio is too high, it means that banks might not have enough liquidity to cover any unforeseen fund requirements; if the ratio is too low, banks may not be earning as much as they could be. In the figure we can see that the bank still now standing on a good position.

7. Return on Deposits (ROD): This ratio shows that, what is the proportion of Net income in against of total deposit.
3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2011 2010 2009

Year 2011 2010 2009
Figure16:ROD

Ratio 1.50% 2.56% 1.93%

Table 18: R

Figure 16: ROD

Table 18: Return on Deposits

Comments: The above figure represents the Return on Deposit (ROD) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in most profitable position. In 2011 the Bank was in lowest profitable position.

8. Operating expenses to revenue (OER):
1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 2011 2010 2009

Year 2011 2010 2009

Times 1.39 1.73 1.52

Figure17: OER

Table 19: Operating expenses to revenue

Comments: The above figure represents the Operating expenses to revenue (OER) Ratio of SOUTHEAST Bank Limited & we see that in the year 2010 was in most efficient position. In 2009 & 2011 the Bank was in lowest efficiency position.

9. Loan Ratio (LR): The loan ratio represents that what proportion of loan and advance is provided against of total assets.
70.50% 70.00% 69.50% 69.00% 68.50% 68.00% 67.50% 67.00% 2011 2010 2009

Year 2011 2010 2009

Ratio 68.09% 70.07% 68.78%

Figure 18: LR

Table20: Loan Ratio

Comments: The above figure represents the Loan Ratio (LR) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in most loan position. In 2011 the Bank was decrease loan position. 10. Earning Per Share (EPS): EPS is the ratio between net profit after tax to number of shares outstanding at the end of the year as shown in balance sheet and its relevant notes to accounts.

50 40 30 20 10 0 2011 2010 2009

Year 2011 2010 2009

Taka(100) 23.37 45.20 32.44

Figure 19: EPS

Table 21: Earning Per Share

Comments: The above figure represents

the Earning Per Share (EPS) of Southeast Bank

Limited & we see that in the year 2010 Southeast Bank was in most earning position. In 2011 the Bank was decrease earning position. SEBL have positive EPS but it is not good enough rather than other bank

4.04 SWOT Analysis
SWOT is a short form that is used to describe the particular strengths, weakness, opportunities and threats that are strategies factors for a specific company. For the Southeast Bank Limited I found it as follows:

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

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

Weakness:
Conservative loan facility. Profit rate is less than others. Poor EPS. Lack of sufficient own ATM booths.

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

Chapter Five:
Findings & Conclusion

Findings & Conclusion
5.01 Findings 5.02 Conclusion

5.01 Findings
While working at Southeast Bank, Laldighir Paar Branch, I have attained to the newer kind of experience. After collecting and analyzing of data I have got some findings. These findings are completely from my personal point of view. Those are given below:

Southeast Bank Limited has already established a favorable reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth the profits and deposits sectors. The bank successfully stepped in to the 17th year of operations having enjoyed the complete confidence of the depositors and achieving significant growth in the entire areas of banking operations. The bank follows the online banking system to provide the customer better services. The consistent and increasing growth trend of the above mentioned performance indicators has increased depositors' confidence as well as good will/reputation of the bank to a great extent and these have contributed to increase the shareholders’ value. The number of Bank’s registered shareholders rose to 68,039 on December 2011 from 66,989 of the previous year showing an increasing of 1.7%. SEBL’s Net Asset Value Per share is always positive reflecting higher asset compared to liabilities. Loans & Advances portfolio of the Bank stood at Tk. 107,288.56 million as on 31December 2011 compared to Tk. 93,981.20 million as on 31 December 2010 registering a growth of 14.16%. 2011 was an excellent year for Southeast Bank Limited in handling Export Business experiencing 31% growth. Bank proactively diversified its portfolio in assorted sectors, industries & regions to avert high concentration in any specific area. Export oriented garments, textile,

spinning, food & food processing, ship breaking & ship building, ceramics, pharmaceuticals, sugar, chemicals, electrical & electrical & electronics are the industries that took a larger pie of the investment bucket. SME accounted for 13.42% and retail 0.17% of the total loans & advances portfolio. To facilitate SME financing awareness, bank also participated in a good number of fairs & supported a business plan competition arranged by SME foundation. The Bank’s Human resources Development strategy is to build up quality manpower with conceptual/managerial Knowledge, skills through

designing/arranging of continuous in-house and outside training programs. The company philosophy to workout best solutions for customers and clients as a business and customer friendly Bank. South East bank has an interactive corporate culture the working environment is very friendly, interactive and informal. And there are no hidden barriers or boundaries while communication between die superior and the subordinate. This corporate culture provides as a great motivation factor to the employees. The number of branches of SEBL is also increasing. This increasing number of bank branch indicates that SEBL’s geographical coverage is increasing and the bank is expanding its operation.It indicates that asset efficiency of the bank is increasing and assets are utilized in efficient way. To successfully operate SME business, the bank is formulating an SME- specific strategy & implementation plan which will reflect an understanding of the bank’s goals & aspirations, target market segments, value proposition & competitive advantage, build internal capabilities required to implement, and manage the SME business. An important part of this strategy is to create a bank definition of the SME sector based on the target market segments. In 2011 Bank introduced a new SME definition based on financial limit and also adopted Bangladesh Bank’s definition based on number of employees & fixed asset. In 2011 Bank introduced “SME dedicated desk” in each of their branches to ensure dedicated service to SMEs. Other findings regarding financial performances is given in the financial performance analysis chapter as a comment.

5.02 Conclusion
Southeast Bank Limited had some difficulties in the past, but in the last few years, it experienced growth in their operations. The company observes growth in its entire sector. Investment is increasing rapidly and it is getting a good response from the clients in different investment scheme. The Bank was also able to increase its investments significantly, which in turn led to significant investment income for the bank.

Turning on to the financial ratios, it can be observed that most of the ratio indicators are showing a satisfactory performance of the Southeast bank, especially in 2010. The performance of the bank at 2009 & 2010 was indeed good, but in 2011, some had a negative growth rate. This may be due to some reasons which have been described in the earlier sections.

We have seen earlier that SEBL have some positive sides like great customer loyalty, positive EPS during last 3 year, increasing number of shareholders, providing new attractive products & services and so on.

Southeast Bank Limited is making huge contribution to the national economy by investing on different sector. Nevertheless, this Bank is still performing below satisfactory level in some financial aspect. So if Southeast Bank Limited properly takes care of the above mentioned discussed issues, it might help them to improve their financial performance and contribute more to the national economy.

Chapter Six
Recommendations

6.01 Recommendations
Through this study I myself gained some practical knowledge about banking general activities and other related matter. I want to put some suggestion here which I think if followed would definitely help Southeast Bank Ltd.

1) To attract more clients Southeast Bank Ltd. should sought new marketing strategy, which will help to increase market share in the competitive market. 2) Introduction of various incentives to increase remittance. 3) SEBL should have their own ATM booth, which is necessary for giving prompt service to clients. 4) Adding some promotional offers to large balance bearing clients. 5) Bank should grant investment portfolio to new entrepreneurs /new businessmen new companies etc. with trouble-free conditions. 6) They need to promote SEBL massively, which will help them to gain more valuable clients. 7) Effective training is very much essential for the foreign exchange officials & customer relationship officers than others. 8) Computerized Banking system and latest communication devices are the most important elements for the coming year. Online banking is there but still now customer can not do transaction or get access without going to the bank physically. So, they need to modernize on this.

Southeast Bank with its strong corporate image and organization strength can successfully utilize the presented based on the findings.

References
I studied the documents of SJIBL and visited the following websites for gaining necessary information and data that helped me to prepare the report.

Documents:
1. Booklet of Southeast Bank Limited. 2. Supporting documents related to performance measurement.

Websites:
1. www.southeastbank.com.bd/ 2. www.investopedia.com/ 3. www.scribd.com/doc/37981573/Financial-Ratio-Analysis 4. www.sbp.org.pk/departments/stats/FSA-2007-11.pdf 5. www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html 6. www.ledgers.com/guides/Financial%20Ratios.pdf 7. wms-soros.mngt.waikato.ac.nz/NR/Personal/Ed%20Vos/.../chap7p.pd 8. www.rmahq.org/.../Statement%20Studies/2011_12_FRB_Definition

Appendixes

Formulas used in Ratio Analysis 1. Return on Assets = Net income/Total Assets 2. Return on Equity= Net Income/ Share Holders Equity 3. Return on Deposits = Net Income/ Total Deposits 4. Equity Multiplier = Total Assets/ Total Equity 5. Earning Per Share= Earning After Tax/ Number of Share Eligible 6. Operating expenses to revenue= Operating Income/ Operating Expense 7. Loans to Deposits= Total Loan and Advance/ Total Deposits 8. Stockholders' Equity Ratio= Shareholder’s equity/ Total Assets 9. Loan Ratio= Total Loan And Advance/ Total Assets 10. Profit coverage ratio=Earning Before Tax/ Profit Paid on Deposits, Borrowings

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