Internship Report On

Financial performance Analysis of

National bank limited.
Internship Report On
Financial performance Analysis of
National bank limited.
(This Internship Report Is Submitted For the Partial Fulfillment of the Degree of
Bachelor of Business of Administration with a Maor in Finance!
Prepared By
Supervised By
Lecturer
Faculty of Business Studies
Premier University
Submission Date!"
t#
Au$ust%&'!!

P()*+)( UN+,)(S+-.
/0+--A12N1
National Bank Limited
1.1. INTRODUCTION:
As a fully operational /ommercial Bank% National Bank Limited started its operation
3it# a vision to be t#e market leader t#rou$# providin$ financial supports to corporate
and small entrepreneurs as 3ell as individuals all over t#e Ban$lades#.
National Bank be$an its operations 3it# a mind to provide formal bankin$ services to all
levels of people in t#e urban% semi4urban and rural spectrum% and t#rou$# t#e nearly !&!
branc#es across t#e country% t#e Bank #as seen t#at $oal a lon$ 3ay t#rou$# 5 providin$
Ban$lades# 3it# a de$ree of service and professionalism t#at
t#e traditionally underserved class could ever dream of. -#e Bank operates under a
double bottom line6 a$enda 3#ere profit and social responsibility $o #and in #and as it
strives to3ards a poverty4free% enli$#tened Ban$lades#.
1.1 Origin of the Report
As a mandatory part of t#e BBA pro$ram% all t#e students of Department of Business
Administration% University of D#aka% #ave to under$o a t#ree4mont# lon$ interns#ip
pro$ram to $ain some practical e7posure about corporate 3orld. Upon t#e completion of
t#is pro$ram% t#e students #ave to submit an interns#ip report% 3#ic# reflects t#eir
kno3led$e as 3ell as activities durin$ t#e pro$ram. +n relation to t#at + 3as assi$ned to
prepare a report on A Case t!d" of National Bank Limited. -#e topic of t#e report
3as assi$ned by t#e faculty supervisor and accepted by t#e #ost or$ani8ation as par
necessity to fulfill t#e interns#ip re9uirement.
+n t#is re$ard% + #ave 3orked as a report analysis in National Bank Ltd :NBL;% 2n t#e
basis of 3orkin$ e7perience in t#is period and + #ave tried my level best to relate t#e
t#eoretical kno3led$e 3it# t#e practical 3ork situation


1.# O$%e&ti'es of the t!d"
(rimar" o$%e&ti'e:
-#e primary ob<ective of t#is report is to fulfill t#e re9uirement of BBA pro$ram contains
NBL report analysis. For t#is reason + #ad to be attac#ed 3it# an 2r$ani8ations different
department% my 3orkin$ station fulfill t#e re9uirement to ac#ieve t#e Bac#elor de$ree. +
#ave $ained some practical e7periences alon$ 3it# all academic kno3led$e= #ere my
main focus is understood about corporate life > culture% professionalism and punctuality.

e&ondar" o$%e&ti'e


1.). *ethodolog" of the t!d":

)ssential data sources bot# primary and secondary 3ere used to complete t#e pro<ect.
(rimar" o!r&es:
Primary data are collected t#rou$# t3o 3ays. -#ey are4

a+ ,!estionnaire- Inter'ie.: Some primary data are collected by takin$ intervie3
of t#e employees of NBL and of some clients.
$+ O$ser'ation: 0ere primary data are collected t#rou$# spendin$ t#ree mont#s in t#e
NBL durin$ t#e 3orkin$ #our. 0ere + observe t#e total bankin$ process of NBL.

The other so!r&es are/
? -eac#ers of our department
? +ntervie3 3it# t#e e7ecutives and officers of NBL

e&ondar" so!r&es:
? Annual (eport of National Bank Limited
? 2perational manual of S*) bankin$ of National Bank Limited.
o ? Different 3ebsite materials.
? 2fficial files
? (elevant Books% ne3spapers and <ournals and publis#ed
documents

Data Anal"sis Te&hni0!e:
@ -ables
@ Fi$ures
@ SA2- Analysis
@ (atio Analysis
@ -rend Analysis
@ -ime series Analysis
@ (e$ression Analysis
1.1 Limitation2s of the t!d":
As t#e officers 3ere very busy 3it# t#eir daily 3ork% t#ey could provide very
little time.
Limitation of time 3as one of t#e most important factors t#at s#ortened t#e
present study. Due to time limitation many aspect could not be discussed in t#e
present study.
(us# #ours and business 3as anot#er reason t#at acts as an obstacle 3#ile
$at#erin$ data.
/onfidentiality of data 3as anot#er important barrier t#at 3as faced durin$ t#e
conduct of t#is study. )very or$ani8ation #as t#eir o3n secrecy t#at is not
revealed to ot#ers.
Sufficient books% publications and fi$ures 3ere not available. +f t#ese limitations
3ere not been t#ere% t#e report 3ould #ave been more useful.
+t 3as very difficult to collect data from suc# a bi$ or$ani8ation. + #ave collected
information from my branc#% but for better interpretation + #ad to collect some
information from t#e #ead office



Chapter- Two
OVERVIEW OF THE ORGAI!ATIO
&.! 0istorical Back$round
&.& -ypes of Business
&.B ,ision
&.C *ission
&.D Products and Services Nation bank Ltd
&.E -ar$et customers
&.FNBL4At Present

Or"a#i$atio#a% Overview o& B'

National Bank Limited is one of t#e leadin$ private commercial bank #avin$ a spread
net3ork of total !EF service locations across Ban$lades# and plans to open fe3 more
branc#es to cover t#e important commercial areas in D#aka% /#itta$on$% Syl#et and ot#er
areas in &'!B. National Bank Limited #as been licensed by t#e 1overnment of
Ban$lades# as a Sc#eduled commercial bank in t#e private sector in pursuance of t#e
policy of liberali8ation of bankin$ and financial services and facilities in Ban$lades#. +n
vie3 of t#e above% t#e Bank 3it#in a period of &D years of its operation ac#ieved a
remarkable success and met up capital ade9uacy re9uirement of Ban$lades# Bank.
National Bank Limited is a customer oriented financial institution. +t remains dedicated to
meet up 3it# t#e ever $ro3in$ e7pectations of t#e customer because at National Bank%
customer is al3ays at t#e center.
#.1. 3istori&al Ba&kgro!nd:
National Bank Limited :NBL; is a Public /ompany Limited by s#ares in t#e /ountry%
3it# commendable operatin$ performance. Directed by t#e mission to provide prompt
and efficient services to clients% NBL provides a 3ide ran$e of commercial bankin$
services also. Bank #as ac#ieved success amon$ its peer $roup 3it#in a s#ort span of time
3it# its professional and dedicated team of mana$ement #avin$ lon$ e7perience%
commendable kno3led$e and e7pertise in convention 3it# modern bankin$. Ait# all its
resources% t#e mana$ement of t#e Bank firmly believes t#at t#e Bank 3ould be able to
encounter problems t#at may arise bot# at micro and macro economic levels.
NBL incorporated in Ban$lades# under company Act !""C. +t is also $uided by -#e Bank
/ompany Act !""! :and its subse9uent amendments; and Ban$lades# Bank 2rdinance
!"F&% so as to enable t#e company for doin$ bankin$ business.
#.#*ission 4 5ision of NBL:
*ission of NBL:
+n line 3it# its vision% NBL #as developed a mission statement% 3#ic# reads as follo3s
and is self4e7planatory
a; -o deliver service e7cellence to all t#e customers% bot# internal and e7ternal.
b; NBL 3ill constantly c#allen$e its systems% procedures and trainin$ to maintain a
co#esive and professional team in order to ac#ieve service e7cellence.
c; -o create an enablin$ environment and embrace a team based culture 3#ere people
3ill e7cel.
d; -o ma7imi8e s#are#olderGs value.
#.). 5ision:
-#e vision of NBL is to become A Bank for Performance 3it# Potential6 by
transformin$ t#e 3ay t#ey do business and developin$ a truly uni9ue financial institution
t#at delivers superior $ro3t# and financial performance and be t#e most reco$ni8able
brand in t#e financial service in Ban$lades#.
#.1. *ission:
+n line 3it# its vision% NBL #as developed a mission statement% 3#ic# reads as follo3s
and is self4e7planatory
a; -o deliver service e7cellence to all t#e customers% bot# internal and e7ternal.
b; NBL 3ill constantly c#allen$e its systems% procedures and trainin$ to maintain a
co#esive and professional team in order to ac#ieve service e7cellence.
c; -o create an enablin$ environment and embrace a team based culture 3#ere people
3ill e7cel.
d; -o ma7imi8e s#are#olderGs value.

#.6T"pes of B!siness
NBL 3as licensed as a sc#eduled bank. +t is en$a$ed in pure commercial bankin$ and
providin$ services to all types of customers ran$in$ from small and medium enterprises
to lar$e business or$ani8ations. +t is 3orkin$ for t#e economic 3elfare by transferrin$
funds from t#e surplus economic unit to t#ose 3#o are in deficit.
7!n&tions of the NBL:
-#e main task of t#e NBL is to accept deposited from various customers t#rou$#
various accounts.
Provides loans on easy terms and condition.
+t creates loan deposit.
-#e bank invest it fund into profitable sector
+t transfers money by Demand Draft :DD;% Pay 2rder :P2; and -ele$rap#ic
-ransfer etc.

Core 5al!es of NBL:
NBLGs core values consist of E elements. -#ese values bind our people to$et#er 3it# an
emp#asis t#at our people are essential to everyt#in$ bein$ done in t#is bank.

B!siness (hilosoph" of NBL:
-#e p#ilosop#y of NBL is to develop t#e bank into an ideal and uni9ue bankin$
institution. -#e perception is t#at NBL s#ould be 9uite different from ot#er privately
o3ned and mana$ed commercial bank operatin$ in Ban$lades#. NBL is to $ro3 as a
leader in t#e industry rat#er t#an a follo3er.

(a#a"e)e#t Hierar*hy o& B'
*anaging dire&tor
Dep!t" managing dire&tor
enior e8e&!ti'e 'i&e president
98e&!ti'e 'i&e president
enior 'i&e president
5i&e president
enior assistant 'i&e president
Assistant 'i&e president
enior prin&iple offi&er
(rin&e offi&er
enior offi&er
Offi&er
Assistant offi&er
:!nior offi&er
#.; (rod!&ts and er'i&es National Bank Ltd:

Special Deposit Sc#eme
*ont#ly Savin$s Sc#eme
/redit /ard
(etail Bankin$
-rade Finance
NBL 0ousin$ Loan
Lease finance
+nvestment Bankin$
(emittance > collection
Loan Syndication
Deposit Sc#emes
-ravelerGs /#eck
Aestern Union *oney -ransfer
Small *edium )nterprise Loan

pe&ial Deposit &heme
For most of t#e people on fi7ed income t#e opportunity to supplement t#eir mont#ly
earnin$ is a $olden one. And NBL Special Deposit Sc#eme $ives a customer <ust t#at.
Under t#is sc#eme% customers can deposit% money for a term of B years. -#e deposited
money is fully refundable at t#e e7piry of t#e term. At t#e same time% durin$ t#e term
period t#ey can en<oy a mont#ly profit correspondin$ to t#eir deposited amount.

Deposited Amo!nt *onthl" Benefit
-k. D'%'''H4 -k. CD'H4
-k. !%''%'''H4 -k. "''H4
-k. &%''%'''H4 -k. !%I''H4
-k. B%''%'''H4 -k. &%F''H4
-k. D%''%'''H4 -k. C%D''H4
-k. !'%''%'''H4 -k. "%'''H4
-k. D'%''%'''H4 -k. CD%'''H4

National Bank *onthl" a'ings &heme:
National Bank Limited offers mont#ly savin$s sc#eme for its retail customers.

trategies:
*ont#ly amount can be D'' and multiple of it.
Premature encas#ment is available for ur$ent need.
Loan facility can be available up to I'J a$ainst N*S account balance.
)asy installment basis deposit startin$ from -k.!''4D'''.
*onthl" Installment Ret!rn after ) "ears Ret!rn after 6 "ears Ret!rn after < "ears
D'' &'%E&F BF%I"E F'%IC"
!%''' C!%&DD FD%F"! !%C!%E"F
&%''' I&%D!' !%D!%DIB &%IB%B"C
B%''' !%&B%FED &%&F%BFC C%&D%'"!
C%''' !%ED%'&' B%'B%!EE D%EE%FII
D%''' &%'E%&FC B%FI%"DF F%'I%CID
!'%''' C%!&%DC" F%DF%"!C !C%!E%"F'

Credit Card
Safe% +nstant and Universal *oney.
/redit /ard comes in bot# local and international forms% $ivin$ t#e client po3er to buy
all over t#e Aorld. No3 en<oy t#e conveniences and advanta$es of /redit /ard as 3e step
into t#e ne3 millennium.

trategies:
D'J /as# 3it#dra3al facility.
No #idden costs.
Credit Card 7ees
T"pe of Card
Card 7ree
=old il'er
Old Ne. Old Ne.
+ntGl KF'.'' KD'.'' KBD.'' K&D.''
Local -k.D''H4 -k.B''H4 -k.BD'H4 -k.&''H4


Cons!mer Credit:
NBL offers consumer credit facility for retail customers.
7inan&ing items:
)lectronics consumer products.
/omputer or /omputer accessories.
trategies:
Fast processin$.
/ompetitive interest rate.
No application or processin$ fee.
)asy mont#ly installment.

Trade 7inan&e
NBL provides a 3ide ran$e of bankin$ services to all types of commercial concerns suc#
as +mport > )7port Finance and Services% +nvestment Advice and ot#er speciali8ed
services as re9uired 3it# C!D correspondents in FD countries of t#e 3orld as 3ell as 3it#
B& overseas )7c#an$e /ompanies.

+mport Business
National Bank Limited supports its customers by providin$ facilities t#rou$#out t#e
import process to ensure smoot# runnin$ of t#eir business. -#e facilities are
+mport Letter of /redit
+mport collection services > S#ippin$ 1uarantees

)7port Business
NBL offers e7tra cover to its customers for t#e entire e7port process to speed up receipt
of proceeds.

3ome Loan
NBL offers #ome loan facility for purc#asin$ flats or construction of #ouse.

trategies:
Financin$ amount e7tends upto F'J or -k. FD%''%''' 3#ic# is #i$#est of total
construction cost.
/ompetitive interest rate.
No application or processin$ fee.
+nterest rate of !B.FDJ.

9ligi$ilit"
Any Ban$lades#i citi8en or N(B% 3#o is capable of repayment% can apply for t#is loan.

Lease 7inan&e
NBL provides lease financin$ for all types of manufacturin$ and service e9uipment.
Lease rental is determined based on ac9uisition cost and lease term. Lease term ran$e
from & to D years. (epayment t#rou$# mont#ly lease rental is t#e most common%
#o3ever% 9uarterly% or #alf yearly payment can also be considered.

trategies:
/ompetitive mont#ly rental.
-a7 benefit.
Fast processin$.
)asy #andover after leasin$ period.

>estern Union *one" Transfer
*oney transfer from any3#ere in t#e Aord to Ban$lades# in minutes. Loinin$ 3it# t#e
3orldGs lar$est money transfer service Aestern Union6% NBL #as introduced Ban$lades#
to t#e faster track of money remittance. No3 money transfer bet3een Ban$lades# and
any ot#er part of t#e $lobe is safer and faster t#an ever before. National bank #as made an
arran$ement 3it# Aestern Union (emittance services% 3#ic# #as over !&F years
e7perience for speedy remittance of money 3it# more t#en !C' countries.
>I7T ?o&iet" for >orld @>ide 4 7inan&ial Tele&omm!ni&ation+
For t#e benefit of t#eir client% NBL $ives opportunity by providin$
-raveler /#e9ue to t#ose 3#o 3ant $o abroad. For t#at t#ey 3ork as an a$ent of
American )7press Bank and sell travel c#e9ue of A*)M to t#eir clients. NBL #as
become t#e member of SA+F-. -#e activates of SA+F- #ave been started from last
December &'''.Loinin$ 3it# one of t#e 3orldGs lar$est money transfer services *oney
1ram6% NBL #as introduced Ban$lades# to t#e faster track of money remittance. No3%
money transfer bet3een Ban$lades# and any ot#er part of t#e $lobe is safer and faster
t#an ever before. -#is simple transfer system% bein$ on line% eliminates t#e comple7
process and makes it easy and convenient for bot# t#e sender and t#e receiver. -#rou$#
NBL 5 *oney 1ram *oney -ransfer Service% your money 3ill reac# its destination
3it#in a fe3 minutes.

Bran&hes
NBL #as Divided t#e 3#ole Ban$lades# is to Seven divisions.
/#itta$on$ Division !B branc#es
D#aka Division !B branc#es
N#ulna Division 'F Branc#es
(a<s#ai Division !! Branc#es
Syl#et Division !B Branc#es
Barisal Divisin 'F Branc#es
(an$pur Division 'E Branc#es
Total AB Bran&hes
/#apter B
-#eoretical Aspects
(atio analysis is a met#od of analy8in$ data to determine t#e overall financial stren$t# of
a business. Financial analysts take t#e information off t#e balance s#eets and income
statements of a business and calculate ratios t#at can t#en be used to make assessments of
t#e operatin$ ability and future prospects of t#at business. -#ese ratios are useful only
3#en compared to ot#er ratios% suc# as t#e comparable ratios of similar businesses or t#e
#istorical trend of a sin$le business over several business cycles. -#ere are various ratios
t#at measure a companyOs efficiency% s#ort4term stren$t#% profitability% and solvency.
Balance s#eet ratio analysis is useful in determinin$ t#e solvency of a business and t#e
amount of reliance it #as on its creditors. Specific ratios included in t#is $roup are current
ratio% 3#ic# measures financial stren$t# by dividin$ a companyOs assets by its liabilities%
and 9uick ratio% 3#ic# takes t#e essence of t#e current ratio but e7cludes inventory. By
focusin$ on t#e li9uid assets of a business% a 9uick ratio can measure its stren$t# even in a
3orst4case scenario 3#ereby all of its fundin$ 3as suddenly removed.
+n contrast% income statement analysis is more concerned 3it# t#e profitability of a
business. Amon$ t#is type of ratio analysis% $ross mar$in ratio measures t#e profit from
sales available to pay over#ead% 3#ile net profit mar$in ratio is an indicator on t#e
companyOs financial return on sales. (atios kno3n as mana$ement ratios can also be
calculated from balance s#eet information. -#ese ratios measure efficiency in terms of
collectin$ accounts receivable and mana$in$ inventory% t#e ability to turn assets into
profit% and #o3 muc# of a return t#e o3ners of t#e business are $ettin$ on t#eir
investment.
When it comes to investing, analyzing financial statement information (also known as quantitative
analysis), is one of, if not the most important element in the fundamental analysis process. At the
same time, the massive amount of numbers in a companys financial statements can be
bewildering and intimidating to many investors. !owever, through financial ratio analysis, you will
be able to work with these numbers in an organized fashion.
"he ob#ective of this tutorial is to provide you with a guide to sources of financial statement data,
to highlight and define the most relevant ratios, to show you how to compute them and to e$plain
their meaning as investment evaluators.
+n analy8in$ Financial Statements for t#e purpose of $rantin$ credit (atios can be
broadly classified into t#ree cate$ories.
Li9uidity (atios
)fficiency (atios
Profitability (atios
Li0!idit" Ratios:
Li9uidity (atios are ratios t#at come off t#e t#e Balance S#eet and #ence measure t#e
li9uidity of t#e company as on a particular day i.e t#e day t#at t#e Balance S#eet 3as
prepared. -#ese ratios are important in measurin$ t#e ability of a company to meet bot#
its s#ort term and lon$ term obli$ations.
FIRST 'I+,I-IT. RATIO
C!rrent Ratio -#is ratio is obtained by dividin$ t#e O-otal /urrent AssetsO of a company
by its O-otal /urrent LiabilitiesO. -#e ratio is re$arded as a test of li9uidity for a company.
+t e7presses t#e O3orkin$ capitalO relations#ip of current assets available to meet t#e
companyOs current obli$ations.
The formula"
/urrent (atio P -otal /urrent AssetsH -otal /urrent Liabilities
'I+,I-IT. RATIO
,!i&k Ratio -#is ratio is obtained by dividin$ t#e O-otal Quick AssetsO of a company by
its O-otal /urrent LiabilitiesO. Sometimes a company could be carryin$ #eavy inventory as
part of its current assets% 3#ic# mi$#t be obsolete or slo3 movin$. -#us eliminatin$
inventory from current assets and t#en doin$ t#e li9uidity test is measured by t#is ratio.
-#e ratio is re$arded as an acid test of li9uidity for a company. +t e7presses t#e true
O3orkin$ capitalO relations#ip of its cas#% accounts receivables% prepaids and notes
receivables available to meet t#e companyOs current obli$ations.
The formula"
Quick (atio P -otal Quick AssetsH -otal /urrent Liabilities
Quick Assets P -otal /urrent Assets :minus; +nventory
'I+,I-IT. RATIO
De$t to 90!it" Ratio -#is ratio is obtained by dividin$ t#e O-otal Liability or Debt O of a
company by its O23ners )9uity a.k.a Net Aort#O. -#e ratio measures #o3 t#e company is
levera$in$ its debt a$ainst t#e capital employed by its o3ners. +f t#e liabilities e7ceed t#e
net 3ort# t#en in t#at case t#e creditors #ave more stake t#an t#e s#areo3ners.
The formula"
Debt to )9uity (atio P -otal Liabilities H 23ners )9uity or Net Aort#
9ffi&ien&" Ratios:
)fficiency ratios are ratios t#at come off t#e t#e Balance S#eet and t#e +ncome Statement
and t#erefore incorporate one dynamic statement% t#e income statement and one static
statement % t#e balance s#eet. -#ese ratios are important in measurin$ t#e efficiency of a
company in eit#er turnin$ t#eir inventory% sales% assets% accounts receivables or payables.
+t also ties into t#e ability of a company to meet bot# its s#ort term and lon$ term
obli$ations. -#is is because if t#ey do not $et paid on time #o3 3ill you $et paid paid on
time. .ou may #ave per#aps #eard t#e e7cuse O+ 3ill pay you 3#en + $et paidO or O*y
customers #ave not paid meRO
FIRST EFFICIEC. RATIO
DO ?Da"s ales O!tstanding+ -#e Days Sales 2utstandin$ ratio s#o3s bot# t#e
avera$e time it takes to turn t#e receivables into cas# and t#e a$e% in terms of days% of a
companyOs accounts receivable. -#e ratio is re$arded as a test of )fficiency for a
company. -#e effectiveness 3it# 3#ic# it converts its receivables into cas#. -#is ratio is
of particular importance to credit and collection associates.
Best (ossi$le DO yields insi$#t into delin9uencies since it uses only t#e current portion
of receivables. As a measurement% t#e closer t#e re$ular DS2 is to t#e Best Possible
DS2% t#e closer t#e receivables are to t#e optimal level.
Best Possible DS2 re9uires t#ree pieces of information for calculation
/urrent (eceivables
-otal credit sales for t#e period analy8ed
-#e Number of days in t#e period analy8ed
Formula"
Best Possible DS2 P /urrent (eceivablesH-otal /redit Sales M Number of Days
The formula"
Reg!lar DO P :-otal Accounts (eceivablesH-otal /redit Sales; 7 Number of Days in
t#e period t#at is bein$ analy8ed
EFFICIEC. RATIO
In'entor" T!rno'er ratio -#is ratio is obtained by dividin$ t#e O-otal SalesO of a
company by its O-otal +nventoryO. -#e ratio is re$arded as a test of )fficiency and
indicates t#e rapiditity 3it# 3#ic# t#e company is able to move its merc#andise.
The formula"
+nventory -urnover (atio P Net Sales H +nventory
+t could also be calculated as
+nventory -urnover (atio P /ost of 1oods Sold H +nventory
(rofita$ilit" Ratios:
Profitability (atios s#o3 #o3 successul a company is in terms of $eneratin$ returns or
profits on t#e +nvestment t#at it #as made in t#e business. +f a business is Li9uid and
)fficient it s#ould also be Profitable.
FIRST PROFITIBI'IT. RATIO
Ret!rn on ales or (rofit *argin ?C+ -#e Profit *ar$in of a company determines its
ability to 3it#stand competition and adverse conditions like risin$ costs% fallin$ prices or
declinin$ sales in t#e future. -#e ratio measures t#e percenta$e of profits earned per
dollar of sales and t#us is a measure of efficiency of t#e company.
The formula"
(eturn on Sales or Profit *ar$in P :Net Profit H Net Sales; 7 !''
Ret!rn on Assets -#e (eturn on Assets of a company determines its ability to utiti8e t#e
Assets employed in t#e company efficiently and effectively to earn a $ood return. -#e
ratio measures t#e percenta$e of profits earned per dollar of Asset and t#us is a measure
of efficiency of t#e company in $eneratin$ profits on its Assets.
The formula"
(eturn on Assets P :Net Profit H -otal Assets; 7 !''
Ret!rn on Assets -#e (eturn on Assets of a company determines its ability to utiti8e
Ret!rn on 90!it" or Net >orth -#e (eturn on )9uity of a company measures t#e
ability of t#e mana$ement of t#e company to $enerate ade9uate returns for t#e capital
invested by t#e o3ners of a company. 1enerally a return of !'J 3ould be desirable to
provide dividents to o3ners and #ave funds for future $ro3t# of t#e company
The formula"
(eturn on )9uity or Net Aort# P :Net Profit H Net Aort# or 23ners )9uity; 7 !''
Net Aort# or 23ners )9uity P -otal Assets :minus; -otal Liability
Ret!rn on ales or (rofit *argin ?C+ -#e Profit *ar$in of a company determines its
ability to 3it#stand competition and adverse conditions like risin$ costs% fallin$ prices or
declinin$ sales in t#e future. -#e ratio measures t#e percenta$e of profits earned per
dollar of sales and t#us is a measure of efficiency of t#e company.
The formula"
(eturn on Sales or Profit *ar$in P :Net Profit H Net Sales; 7 !''
Ret!rn on Assets -#e (eturn on Assets of a company determines its ability to utiti8e t#e
Assets employed in t#e company efficiently and effectively to earn a $ood return. -#e
ratio measures t#e percenta$e of profits earned per dollar of Asset and t#us is a measure
of efficiency of t#e company in $eneratin$ profits on its Assets.
The formula"
(eturn on Assets P :Net Profit H -otal Assets; 7 !''
I#*o)e State)e#t
+ncome
+nterest income :$ross or netS; is adversely affected by fallin$ lon$ and s#ort4
term interest rates.

+nterest e7pense
Subtracted from +nterest +ncome 2nly
-#e cost of funds t#e company borro3s on a s#ort4 and lon$4term basis% buys
in t#e money markets% or takes in from depositors. /ompetition for customer
fundin$ 3ill increase interest e7pense% placin$ pressure on mar$ins. Some banks
and financial services companies 3ill also break out t#e avera$e annual interest
rate paid on t#e various sources of funds.
+f interest e7pense is increasin$ is competition forcin$ t#e bank to pay more
for depositsS +s mana$ement relyin$ on #i$# cost funds instead of alternative
lo3er4cost funds to meet t#e bankGs fundin$ needsS

Net +nterest +ncome
-#is is interest income minus interest e7pense.
)ven a small decline in net interest income can result in a lar$e decline in net
income if not offset by a decline in e7penses.
See #o3 to determine Net +nterest *ar$in belo3.

Non4interest +ncome
+t is important t#at banks developHincrease revenues derived from non4interest
sources :bank services% fees suc# service c#ar$es on deposits% trust income%
mort$a$e servicin$ fees% securities processin$ and brokera$e services% results of
tradin$ operations; t#at #ave more stable $ro3t# rates and are not tied to loan
$ro3t# cycles% and can provide an offset if loan $ro3t# slo3s.

2t#er +ncome
Dividend income from t#ird party investment or subsidiaryHaffiliateS
NetH$ain loss from securities tradin$ volatility from year to year.
Forei$n e7c#an$e based on customer activity and volatility in t#e market.
Sale of investments is it e7ceptionalS
Net commissionHfee income= based on transactions suc# as insurance
brokerin$% stock4brokin$
(elated party transaction:s;
Aatc#4out for financial institutions t#at utili8e T$ain on saleT accountin$
3#ic# means t#at t#e company records t#e sale of a loan immediately but t#e
actual profit is received over t#e life of t#e loan. -#e profit is t#e difference
bet3een t#e spread t#at t#e loan is sold at to t#e investor and 3#at t#e seller
receives from t#e 2bli$or. -#e problem is t#at t#e application of estimated future
interest rates :and default rates; is incorrect and t#e loans are over4valued
compared to 3#ere interest rates may actually be durin$ t#e life4time of t#e loan
and 3#et#er it 3ill prepay if rates decline% andHor if t#e loan 3ill default and
become un4collectible.

Non4interest e7pense
Personnel costs

As part of t#e KFIF billion U.S. economic stimulus packa$e passed in February
&''"% t#ere is a stipulation t#at all banks t#at receive infusions from t#e
$overnmentOs KF'' billion financial rescue fund must restrict e7ecutive
compensation to t#ose persons earnin$ K! million or more per year in salary may
receive only KD''%''' in additional bonus compensation. -#e pro#ibition does not
apply to bonuses t#at 3ere ne$otiated as part of an e7ecutiveOs compensation
contract si$ned prior to Feb. !!% &''". 333.ustreas.$ovHpressHreleasesHt$!D.#tm

Premises H branc# operatin$ e7penses :rent;.
Systems development costs% mer$er of net3orks as companies must compete
based on t#e ability to provide state4of4t#e art tradin$% retail access and
information service% t#ese costs #ave risen.
2verseas e7pansion as t#e percenta$e of non4U.S. income rises% t#is cost
increases as facilities e7pand.

2peratin$ income
After e7penses but before provisions and ta7es and e7traordinary items.

)7traordinary H Non4recurrin$ +tems
*aterial events and transactions t#at are unusual and infre9uent.
Profit :$ains; or loss on sale of fi7ed assets.

Provision :for loan losses;
/#an$in$ market conditions 3#ere t#e bank operates may result in a
deterioration of loan and lease assets% 3#ic# may result in actual and anticipated
losses :3rite4do3n or 3rite4off of t#e assetOs value;. -#e accumulated loss may
e7ceed t#e e7istin$ Loan (eserve t#us earnin$s may #ave to added to t#e Loan
(eserve account to eit#er increase or replenis# t#e amount to meet an acutal or
anticipated loss.

-a7ation
/urrent ta7ation :ta7 payable on reco$ni8ed income for t#e fiscal year% 3#ic#
3as paid to federal% state and local% and forei$n revenue aut#orities;.
Deferred ta7ation
Footnotes
Allo3ance for losses :Loan Loss Account; 4 is a reserve account t#at is set aside
by mana$ement to cover an estimate of losses :c#ar$e4offs; in t#e loan portfolio.
-#e loan loss account #as an openin$ balance at t#e be$innin$ of t#e year% it
receives additional provisions based on actual losses and anticipated losses for t#e
comin$ year= #as actual c#ar$ed4off loans subtracted from t#e account and t#en
#as a closin$ balance for t#e year;.

/lassified Loans 4 loans t#at #ave been determined to be not collectable for t#e
full amount due to t#e deterioratin$ performance andHor condition of t#e borro3er.
-#e TclassificationT is based upon internal e7amination and ratin$ system :based
on $enerally accepted industry practices; suc# as non4performin$ accrual% non4
accrual. -#e 2ffice of t#e /omptroller of t#e /urrency :2//; also rates loans are
classified as substandard% doubtful% and loss.
Asset / 'ia0i%ity (a#a"e)e#t

+deally% banks 3ant to matc# t#e maturity of assets :loans% investments; 3it# t#e maturity
of liabilities :demand deposits% timed deposits% borro3ed funds;. (elated to t#e maturity
structure% t#e interest rate paid on liabilites to borro3 t#e fundin$ must be less t#an t#e
interest rate on earned on t#e assets :interest rate c#ar$ed to t#e borro3er;. -#e failure to
carefully man$a$e t#is situation can result in asset5liability mismatc#% interest rate risk%
li9uidity risk.
Ca%% Report

+n t#e United States% banks must file on a 9uarterly basis a /onsolidated (eport of
/ondition and +ncome :/all (eport= Form Number FF+)/ 'B! for banks 3it# domestic
and forei$n offices and FF+)/ 'C! for banks 3it# domestic offices only;. -#ese
information collections are mandatory !& U.S./. !E! :for national banks;% !& U.S./. B&C
:for state member banks;% and !& U.S./. !I!F :for insured state nonmember commercial
and savin$s banks; and are submitted by t#e banks to t#eir respective re$ulator% 3#ic#
includes t#e 2ffice of t#e /omptroller of t#e /urrency :2//;% Board of 1overnors of t#e
Federal (eserve and t#e Federal Deposit +nsurance /orporation :FD+/;. -#e -#rift
Financial (eport :Form Number 2-S !B!B; t#at used to be submitted to t#e 2ffice of
-#rift Supervision :U.S. -reasury; is no lom$er utili8ed since t#e mer$er of t#e 2-S into
t#e 2//. -#e a$encies are proposin$ several c#an$es to t#e FF+)/ /all (eport.
/onsolidated (eport of /ondition and +ncome edocket.access.$po.$ovH&''"HpdfH)"4
!""!!.pdf
A#at #appens to a bank 3#en a re$ulator steps in and sei8es a financial istitution and
appoints t#e FD+/ as (eceiver of t#e failed institutionS
All creditors must submit t#eir claim in 3ritin$% 3it# proof of t#e claim% to t#e
(eceiver by a specific date :referred to as t#e Bar Date;.
-#e FD+/ arran$es for a transfer of t#e deposits to anot#er insured institution
:deposits normally are sold at percenta$e of t#eir notional amount;.
U.S. Federal la3 !& U.S./. Section !I&&:e; re9uires t#at depositors must claim
o3ners#ip of t#e deposit transferred to t#e ne3 institution 3it#in !I mont#s :failure to do
so 3ill result in t#e funds bein$ transferred to t#e FD+/;.
-#e deposits can be claimed by simply makin$ a deposit or 3it#dra3al from t#e
account% e7ecutin$ a ne3 si$nature card and enterin$ into a ne3 deposit account 3it# t#e
ne3 institution% providin$ t#e ne3 institution 3it# a c#an$e of address card% or 3ritin$ to
t#e ne3 institution and indicatin$ t#at one 3is#es to keep t#e account active.
Any c#ecks :cas#ier c#eck% money order% interest c#eck% e7pense c#eck; issued by t#e
failed institution must also be claimed 3it#in !I mont#s.
-#e FD+/ 3ill attempt to sell assets% primarily outstandin$ loans% to t#e institution
purc#asin$ t#e deposits and H or branc#es :t#e institution purc#ases t#e real estate or t#e
institution 3ill assume t#e lease obli$ation for t#e branc# and may retain some of t#e
employees; at par or at a reasonable discount.
-#e FD+/ 3ill allo3 borro3ers 3#ose loan #as not been purc#ased by anot#er
institution t#e opportunity to find anot#er bank 3#o 3ill take over t#e loan.
-#e FD+/ may bundle any left over loans and conduct an on4line auction and t#e
loans are t#en sold to t#e #i$#est bidder. -#ose borro3ers 3#o are current merely send
t#eir mont#ly payment to t#e ne3 institution. -#ose borro3ers 3#o are in default under
t#e terms of t#e loan documentation may #ave t#e loan accelerated :demand for payment
in full; and H or #ave t#e collateral sei8ed if t#e loan cannot 9uickly be 3orked out.
CA(E'S

-#e /A*)LS approac# 3as developed by bank re$ulators in t#e United States as a
means of measurement of t#e financial condition of a financial institution. :Uniform
Financial +nstitutions (atin$ System establis#ed by t#e Federal Financial +nstitutions
)7amination /ouncil;
-#e acronym /A*)LS stands for
/apital Ade9uacy
Asset Quality
*ana$ement
)arnin$s :Profitability;
Li9uidity > Fundin$
Sensitivity to *arket (isk :losses arisin$ from c#an$es in market prices;
/A*)LS analysis re9uires
financial statements :t#e last t#ree years and interim statements for t#e most
recent !&4mont# period;
cas# flo3 pro<ections
portfolio a$in$ sc#edules
fundin$ sources
information about t#e board of directors
operationsHstaffin$
macroeconomic information
+n revie3in$ ratios t#e credit analyst needs to keep & concepts in mind
Level or 3#et#er t#e ratio for a $iven fiscal period is eit#er e9ual to or e7ceeds
:3#ic# can be bot# positive or ne$ative dependin$ on t#e ratio; t#e establis#ed
parameters of 3#at is considered a $enerally acceptable position for t#at specific ratio.
-rend or 3#et#er t#e fiscal to fiscal comparison period indicates t#at t#e level of t#e
ratio is improvin$ or deterioratin$.
+n addition% individual ratios must not be revie3ed in isolation to ot#er ratios and 3#at is
t#e present strate$y of t#e mana$ement of t#e financial institution.
Capita% Ade1ua*y
2n Septmber B% &''"% t#e U.S. Department of -reasury proposed t#at capital
re9uirements for all bankin$ firms s#ould be increased% and capital re9uirements for
financial firms t#at could pose a t#reat to overall financial stability s#ould be #i$#er t#an
t#ose for ot#er bankin$ firms.
333.treas.$ovHpressHreleasesHdocsHcapital4statementU'"'B'".pdf
-#e 2ffice of t#e /omptroller of t#e /urrency alon$ 3it# ot#er a$encies are re9uestin$
comments re$ardin$ a proposal to modify $eneral risk4based and advanced risk4based
capital ade9uacy frame3orks to eliminate t#e e7clusion of certain consolidated asset4
backed commercial paper pro$rams from risk43ei$#ted assets due to t#e implementation
of t#e Financial Accountin$ Standard BoardGs :FASB; Statement of Financial Accountin$
Standards No. !EE% Accountin$ for -ransfers of Financial Assets% an Amendment of
FASB Statement No. !C' and Statement of Financial Accountin$ Standards No. !EF%
Amendments to FASB +nterpretation No. CE:(;.333.occ.$ovHftpHreleaseH&''"4!'!a.pdf
+n Au$ust &''"% t#e FD+/ approved $uidelines to allo3 private4e9uity investors to
ac9uire t#e deposit liabilities and assets of failed banks operatin$ under FD+/
receivers#ip :includes a *inimum -ier ! levera$e ratio of !'.'J;.
333.fdic.$ovHne3sHboardHAu$&Eno&.pdf
/apital Ade9uacy is a measurement of a bank to determine if solvency can be maintained
due to risks t#at #ave been incurred as a course of business. /apital allo3s a financial
institution to $ro3% establis# and maintain bot# public and re$ulatory confidence% and
provide a cus#ion :reserves; to be able to absorb potential loan losses above and beyond
identified problems. A bank must be able to $enerate capital internally% t#rou$# earnin$s
retention% as a test of capital stren$t#. An increase in capital as a result of restatements
due to accountin$ standard c#an$es is not an actual increase in capital.
-#e Capital =ro.th Rate% 3#ic# is calculated by subtractin$ prior4period e9uity capital
from current4period e9uity capital% t#en dividin$ t#e difference by prior4period e9uity
capital% indicates t#at eit#er earnin$s are e7tremely $ood% minimal dividends are bein$
e7tracted or additional capital funds #ave been received t#rou$# t#e sale of ne3 stock or
a capital infusion% or it can mean t#at earnin$s are lo3 or t#at dividends are e7cessive.
-#e capital $ro3t# rate $enerated from earnin$s must be sufficient to maintain pace 3it#
t#e asset $ro3t# rate.
-#e !"II Basel /ommittee /apital Accord establis#ed a benc#mark for measurin$ bank
capital :and for correctly calculatin$ H risk 3ei$#tin$ assets% 3#ic# became t#e
denominator of t#e capital ratio;
B+S -ier ! :core capital; total o3n funds :allotted% called up and fully paid%
ordinary s#are capitalHcommon stock net of any s#ares #eld= perpetual% non4
cumulative% preferred s#ares% includin$ suc# s#ares redeemable at t#e option of
t#e issuer= disclosed e9uity reserves in t#e form of $eneral and ot#er reserves
created by appropriations of retained earnin$s% s#are premiums and ot#er surplus=
publis#ed interim retained profits verified by e7ternal auditors% minority interests
arisin$ on consolidation from interests in permanent s#are#olderOs e9uity= fund for
$eneral bankin$ risks; must be at least CJ of total risk 3ei$#ted positions.
1ermany% Bel$ium% t#e Net#erlands% and t#e UN maintain #idden reserves.

-#e only intan$ibles t#at t#e FD+/ allo3s to be included in -ier ! re$ulatory
capital are purc#ased mort$a$e servicin$ ri$#ts and purc#ased credit card
relations#ips :cannot account for more t#an D'J of an institutionOs -ier ! capital
unless t#ose $randfat#ered in from February !"% !""&;.

B+S -ier & :supplemental; total o3n funds :plus value ad<ustments= reserves
arisin$ from t#e revaluation of tan$ible fi7ed assets and financial fi7ed assets=
#ybrid capital instruments; must be at least IJ of total risk 3ei$#ted positions.

+n t#e United States% /apital Ade9uacy is re$ulated by 2ffice of t#e /omptroller of t#e
/urrency :2//;% t#e Board of 1overnors of t#e Federal (eserve System% and t#e Federal
Deposit +nsurance /orporation :FD+/; and t#e 2ffice of -#rift Supervision :2-S;.
-#e 2// supervises t#e capital ade9uacy of national banks and federal branc#es of
forei$n bankin$ or$ani8ations.
-#e Federal (eserve Board supervises t#e capital ade9uacy of state4c#artered banks
t#at are members of t#e Federal (eserve System :state member banks;.
-#e FD+/ supervises t#e capital ade9uacy of state4c#artered banks t#at are not
members of t#e Federal (eserve System.
-#e 2ffice of -#rift Supervision :2-S; supervises t#e capital ade9uacy of all
federally c#artered and many state4c#artered savin$s associations.
-#e !"II Basel Accord serves as t#e basis for current U.S. capital re$ulations. -#e !"II
Accord re9uired t#at internationally active bankin$ or$ani8ations adopt t#e ne3 capital
rules% but some countries% includin$ t#e United States% c#ose to apply t#e !"II Basel
frame3ork to all banks and t#rifts. As indicated above% in t#e United States -ier + capital
must constitute at least D'J of a bankGs total capital. -otal of -ier & capital is limited to
!''J of -ier ! capital. -#e add4back of t#e allo3ance for loan and lease losses is limited
to !.&DJ of 3ei$#ted4risk assets.
-#e Basel H U.S. bakin$ re$ulation $uidelines for a TAell /apitali8ed institutionT
DJ or better -ier ! Levera$e (atio :t#e ratio of -ier ! capital to avera$e total
assets;
EJ or better -ier ! risk4based ratio :t#e ratio of -ier ! capital to total risk4
ad<usted assets% 3it# assets cate$ori8ed by risk level;
!'J or better total risk4based ratio :t#e ratio of total capital to total risk4
ad<usted assets;.

FD+/ $uidelines for a TAde9uately /apitali8ed institutionT
CJ or better -ier ! Levera$e (atio
CJ or better -ier ! risk4based ratio
IJ or better total risk4based ratio
+n t#e United States% a bank is e7pected to meet a minimum ratio of 9ualifyin$ total
capital to risk43ei$#ted assets of I.'J% of 3#ic# at least C.'J s#ould be in t#e form of
core capital :-ier !;. Any bank t#at does not meet t#e minimum risk4based capital ratio%
or 3#ose capital is ot#er3ise considered inade9uate% $enerally 3ill be e7pected to
develop and implement a capital plan for ac#ievin$ an ade9uate level of capital :usually
under t#e terms of an FD+/ 2rder to /ease and Desist;. -#e concept of prompt corrective
action by t#e FD+/ 3as introduced 3it# t#e Federal Deposit +nsurance /orporation
+mprovement Act of !""! :FD+/+A;. A#en a bank becomes Undercapitali8ed6 :belo3
TAde9uately /apitali8edT; in many cases it means t#at unless it can rapidly turn t#e
operation around it 3ill be s#ut do3n by t#e respective supervisors. A#ile
TUndercapitali8edT a bank
must cease payin$ dividends
is $enerally pro#ibited from payin$ mana$ement fees to a controllin$ person
must file and implement a capital restoration plan
cannot accept% rene3 or roll over any brokered deposit. )ffective yield on deposits
solicited by t#e bank cannot be more t#an FD basis points or .FDJ over local market
yields for comparable si8e and maturity deposits.
A#en a bank becomes /ritically Undercapitali8ed6 in many cases it means t#at unless it
can rapidly turn t#e operation around it 3ill be s#ut do3n by t#e respective supervisors.
A critically undercapitali8ed bank must be placed in receivers#ip 3it#in "' days unless
t#e FD+/ and t#e bankGs primary federal re$ulator concur t#at ot#er action 3ould better
ac#ieve t#e purposes of prompt corrective action. Additionally% a T/ritically
Undercapitali8edT bank is pro#ibited% unless it obtains prior 3ritten FD+/ approval% from
enterin$ into any material transaction not in t#e usual course of business
e7tendin$ credit for any #i$#ly levera$ed transaction :any transaction in 3#ic# t#e
borro3er #as very little e9uity;
payin$ e7cessive compensation or bonuses
payin$ interest on ne3 or rene3ed deposits t#at 3ould increase t#e bankGs 3ei$#ted
avera$e cost of funds si$nificantly above prevailin$ interest rates in its normal markets.
FD+/ &''' (ules and (e$ulations% Part B&D 4 /apital *aintenance :!& /.F.(. Part B&D;
333.fdic.$ovHre$ulationsHla3sHrulesH&'''4CC''.#tml
FD+/ &''' (ules and (e$ulations% Appendi7 A to Part B&D 4 Statement of Policy on
(isk4Based /apital 333.fdic.$ovHre$ulationsHla3sHrulesH&'''4CE''.#tml
+n t#e United States% !pplemental or Tier # Capital consists% 3it#in certain specified
limits% of suc# t#in$s as t#e allo3ance for loan losses% #ybrid capital instruments% and
subordinated debt. -#ese supplemental items are often forms of debt t#at are subordinate
to claims of depositors and t#e FD+/. As suc#% t#ey provide depositor protection and are
included in bank capital.
-#e re$ulatory treatment of -ier & capital is suc# t#at securities issued in a subordinate
position for re$ulatory capital purposes #ave t#eir capital value amorti8ed over t#e last
five years of t#e security. -#is 3as solved in !""F t#rou$# a T!' non4call fiveHseven step4
up.T A call provision is put in from one day after year five or year seven and t#e bank is
allo3ed to call it 3it# five full years as !''J capital treatment. A coupon step4up is put
in at t#e end of year five or seven to allo3 for t#e bond to roll over for a furt#er five year
period.
-#e sum of -ier + and -ier & capital% less certain deductions% represents a bankGs total
capital.
+t s#ould be noted t#at in t#e United States% -#e 1ramm4Leac#4Bliley Act :1LB Act;
currently re9uires a bank #oldin$ company :B0/; to keep its subsidiary depository
institutions 3ell capitali8ed6 and 3ell mana$ed6 in order to 9ualify as a financial
#oldin$ company :F0/;. F0/ status allo3s a B0/ to en$a$e in riskier financial
activities suc# as merc#ant bankin$% insurance under3ritin$% and securities under3ritin$
and dealin$. -#e 1LB Act does not% #o3ever% re9uire an F0/ to be 3ell capitali8ed6 or
3ell mana$ed6 on a consolidated basis.
#hapter" $
(erforman&e of NBL at a glan&e
(erforman&e of NBL at a glan&e
NBL. #as a consistent dividend policy. +n line 3it# t#at Stock Dividend of D& percent
3as declared for t#e year &''I 3#ic# stren$t#ened paid4up capital base and it stood at
-k.&%ICE.DB million &''" a$ainst aut#ori8ed capital of F%CD'.'' million. -#e statutory
reserve en#anced by BD."D percent to -k.&% C!I.BF million in &''" after transferrin$ &'
percent on pre4ta7 profit 3#ile it 3as -k.!%FFI.IF million in &''I. At t#e end of &''"
s#are#oldersG e9uity increased by CD.DD percent to -k.I% "!E.FE million from -k.E%
!&E.&F million of &''I.
Capital Ade0!a&" ratio:
NBL al3ays maintain a prudent balance bet3een -ier4 ! and -ier4& capital. -#e Bank
#as maintained overall capital ade9uacy at !B.DE percent in &''" of 3#ic# !'.I" percent
and &.EF percent as -ier4! and -ier4& capital respectively a$ainst Ban$lades# BankGs
re9uirement of !' percent.
Deposit:
-#e deposit base of t#e bank re$istered a $ro3t# of &F.EE percent in &''" year over t#e
last year and stood at -k.FE% IBI.EC million. )7pansion of branc# net3ork% competitive
interest rate and deposit products contributed to t#e $ro3t#.
In'estment:
-#e daily avera$e investment of t#e treasury in local currency 3as -k !'%E&".!' million
in t#e from of /all Lendin$% -erm Lendin$% (everse (epo% Debentures and 1ovt.
Securities. -#e yield 3as !.!F percent #i$#er t#an previous year. Like previous year%
inflo3 of forei$n currency of t#e current year 3as #i$#er t#an t#e previous year.
Import 4 98port Trade:
-#e Bank opened a total number of &C%BID L/s amountin$ USD !%!!F.E! million in
import trade in &''". -#e main commodities 3ere scrap vessels% rice% 3#eat% edible oil%
capital mac#inery% petroleum products% fabrics > accessories and ot#er consumer items.
+n &''" it #andled !I%FE! e7ports &''" it #andled !I%FE! e7port documents valuin$ USD
DD".FI million 3it# a $ro3t# of D.C! percent over t#e last year. )7port finances 3ere
made mainly to readymade $arments% knit3ear% fro8en food and fis#% tanned leat#er%
#andicraft% tea etc.
Remittan&e:
As a contributor of national economy% NBL is relentlessly 3orkin$ to ease t#e flo3 of
in3ard forei$n remittance. -#e bank introduced different products and tec#nolo$y
includin$ SA+F-% :-k.E&'.E"crore; #i$#er t#an t#at of &''E ac#ievin$ a $ro3t# rate of
&".'F percent. +ntroduction of products like 0ome Delivery Sc#eme % )lectronic Fund
-ransfer:)F-; and different instant payment system and modern tec#nolo$ies like
SA+F- and online services #ave stren$t#en t#e position of t#e bank devices for more
speedy payments.
Net (rofit after Ta8:
National Bank Limited $enerated profit before provision of -k.B%B"F.F' million in &''"
3#ic# 3as -k.B% !&B.I& million in &''I re$isterin$ a $ro3t# of I.FF percent. Net Profit
after ta7 $re3 by BE.CDJ to -k.&%'F'.CF million in &''" after makin$ provision for loan
loss and income ta7 for -k.&''.''million and -k.!%!D'.'' million respectively.
9arning (er hare:
)arnin$ per s#are increased by BE.CDJ to -k. F&.FC in &''" from -k.DB.B! of &''I.

Offi&e A!tomation
-ec#nolo$y% /omputer% +nternet t#ose t#in$s a ne3 $eneration of bankin$ service to t#e
customer ei$#t to ten years a$o customers canGt t#in$ about t#at t#ey can 3it#dre3 or
deposit money from t#eir account at least 3it#in one #our. But no3 it takes only at best
five minutes for 3it#dra3 t#eir money. -#is is t#e simple e7ample 3#at tec#nolo$y
brin$s to bankin$ sector. +n before bakers #ad to maintain #u$e led$er book for t#eir daily
or any sorts of bankin$ record. But no3 t#ey can do it by one click and by strike of fe3
buttons. 2nline bankin$ is no3 $ettin$ more and more necessary part of bankin$ sector.
National Bank Ltd #as also reali8ed t#e current fact and t#ey also try to serve online
bankin$ service to t#eir valued customer. -#ou$# t#ey do not lunc# online bankin$
service e7tremely but 3it#in t#is year and ne7t year t#ey are to introduce online bankin$
service at least primary for t#e branc#es of D#aka and some ot#er key areas. No3 t#ey
#ave all branc#es under online bankin$ services. So customer can $et online bankin$
service only form all branc#es. NBL #as its o3n soft3are named FL2(ABAN. -#ey
#ave 3eb pa$e :333.nblbd.com;. customer can $et detail information from t#e 3eb
pa$e. NBL also #as credit card and A-* mac#ine.
At glan&e of NBL ?ta$le 1+
Particular &'!' &'!! &'!&
Aut#ori8ed capital !FD''.'' FCD'.'' &CD'.''
Paid up capital CC!&.!B &ICE.DC !IF&.F&
(eserve fund and
2t#er reserve
"&EC.DC DBB".&' C&ID.BI
)9uity fund !BEFE.EC I!ID.FC E!DI.!'
Deposits "E&IB.I! FBICD.DI DDCIB.CB
Loans and advances IE&I&.F! DI!E'.F! CI'E!.D!
+nvestment &&BF!.!D !&III.!' IDDD.B!
+mport business EF"II.II DE"DC.F' EDC&B."&
)7port business BB!EI.CD &IDD!.DC &FIE&.EB
-otal income !!B!F.E" F%&E!.C' EE'D.!!
-otale7penses EE&B.'" D!'I.CB BF"F.F!
2peratin$ profit CE"C.E' &%!D&."F &I'F.C'
operatin$ profit CE"C.E' &!D&."F &I'F.C'
Net Profit after ta7 BB!C.E' !!'&."E !DDE.EB
(etained profit I.!B D.BC CE.CF
-otal
assets:)7cludin$
contra;
!&BCC!.IE II"'C.&B EE"BC.FI
Fi7ed assets &EE'.&C &&CF.!' !"!".FC
Number of branc#es !BC !!! !'!
AdvanceHdeposit
ratio:J;
I".E! FI.FE IE.E&
/ost of fund:J; I.E& !'.'! ".IC
(eturn on Assets C.!' !.F" B.&&
Price )arnin$ (atio I.B" !!.!I &'.ID
)arnin$ per s#are !'.'! B.BB C.F!
Net Assets ,alue
Per S#ares
B!.'' &I.FE B&.II
*arket Price Per
S#are
"B.EEJ "I.FIJ "B.CIJ
Number of
S#are#older
BCFIF BDE!& !IIII
Number of
)mployees
)1D6 #<6B #;1<
Number of
Forei$n
correspondents
116 116 1B6
/redit ratin$ AA) A1 A1
S#ort -erm T/1 T/1 T/#
Provision
(e9uired a$ainst
advances
#1A#.<B 1<<<.1B 11A<.<B
Provision kept
a$aint advance
#1<1.#1 1D1A.;B 11A<.<B

2ff4site Supervision :/A*)LS (atin$;

Ban$lades# Bank #as introduced a number of reportin$ forms and returns to be submitted
by t#e commercial banks re$ularly. 2n t#e basis of t#ose returns% Ban$lades# Bank
prepares a composite ratin$ on yearly basis for eac# bank. -#is ratin$ is kno3n as
/A*)LS ratin$. Based on t#e /A*)LS ratin$% Ban$lades# Bank $ives )arly Aarnin$
Si$nal :)AS; to a particular bank 3#ic# is facin$ problems. /A*)LS comprises of t#e
follo3in$ five performance measures and t#ese components are e7plained belo3

Credit Information B!rea! ?CIB+
Before considerin$ any loan proposal% a bank #as to kno3 t#e status of t#e loan applicant
in re$ard to #isH#er liabilities outstandin$ 3it# any ot#er banksHbranc#es. Ban$lades#
Bank #as establis#ed /+B in Au$ust !""&. /+B report is considered as one of t#e basic
information for consideration of a loan. -#e aim of t#e report is to avoid duplication of
credit facilities% avoid credit facilities to defaulters and <ustify t#e status of t#e borro3ers.
+t 3as made mandatory for all banks to collect data from /+B before sanctionin$ any loan
proposal above -aka D.'' million. Apart from t#is% to maintain record of t#e borro3ersG
performance% N/Bs #ave to submit report to Ban$lades# Bank re$ularly on t#eir pro$ress
in collection of t#e lar$er overdue loans and on lar$er loans sanctioned since Lanuary !%
!""'.

Large Loan Reporting "stem ?LLR+
Lar$e Loan (eportin$ System 3as introduced by t#e Ban$lades# Bank to keep a control
and supervision on a re$ular basis in t#e process of sanctionin$ loans #avin$ bi$$er
amount. By Luly !""D% FIJ of ne3 lar$e loans of N/Bs #ave been reported by LL(S.
No3% almost all lar$e loans are reported by LL(S. +n t#e meantime% Ban$lades# bank #as
formed a separate section in t#e Department of Bankin$ 2peration and. Development
:DB2D;. -#e commercial banks #ave to seek permission from t#e section prior to
sanction any lar$e loan. -#is section closely monitors and revie3s t#e issues of lar$er
loans of t#e banks. -#e responsibility of t#e section is to advise t#e concerned bank to
take immediate appropriate actions if any loan is assumed undue risky.




Chapter: 6
7indings 4 Con&l!sion








7indings
A#ile 3orkin$ at National bank L-D. Para$oti Saroni Branc#% + 0ave attained to a ne3er
kind of e7perience. After t#e collection and analysis of data% + #ave $ot some findin$s.
-#ese findin$s are completely from my personal point of vie3. -#ose are $iven belo3
National bank Limited #as already ac#ieved a #i$# $ro3t# rate accompanied by
an impressive profit $ro3t# rate in &''I t#e number of deposit and investment are
also increasin$ rapidly.
National Bank Limited #as already establis#ed a favorable reputation in t#e
bankin$ industry of t#e country. +t is one of t#e leadin$ private sector commercial
banks in Ban$lades#. -#e bank #as already s#o3n a tremendous $ro3t# in t#e
profits and deposits sector.
National Bank #as an interactive corporate culture. -#e 3orkin$ environment is
very friendly% interactive and informal. And t#ere are no #idden barriers or
boundaries 3#ile communication bet3een t#e superior and t#e subordinate. -#is
corporate culture provides as a $reat motivation factor to t#e employees.
-#ey face troubles 3it# t#ose clients 3#o #ave not any kno3led$e in bankin$
transactions and bankin$ rules.
From t#e clients vie3 introducer is one of t#e problems to open an account. +t is
$eneral problem to all commercial bank.
National Bank #as o3n trainin$ institution for its employees% so t#ey donGt re9uire
to train t#em from ot#er trainin$ +nstitutions.
National Bank #as insufficiencies of aut#ori8ed Dealer Branc# in respect of t#e
total forei$n e7c#an$e business is very small in respect of total market.
-#e number of branc#es is not sufficient to cover t#e country most.
Banks peons are not a so effective t#atGs 3#y officer of bank transfer papers and
documents from one desk to ot#er% it consumes time of officer and also clients.
-#e bank failed to provide standard re9uirement polices in lo3er level like
assistant officer to <unior officer. As a result t#e services of t#e bank face
problems in recent days.
NBL is not usin$ data base net3ork in information tec#nolo$y department. so
t#ey #ave to transfer data from branc# to #ead office by usin$ pen drive% for
e7ample% clearin$ c#e9ue.
-#e bank does not $o for rural bankin$% but rural people are bankable.
Proper documentation rules sometimes create serious problems for t#e clients.
-#e portfolio of bank is not t#at muc# diversified because it inverts ma<or portion
of its fund on $overnment securities.
Sometimes investment operations of NBL are #ampered due to increase%
dis#onest% indirect% #ypocritical nature of people.
-#e Bank #as disbursed a #i$#est amount investment in urban areas and tiny
amount of investment in rural areas of Ban$lades#.
-#e bank mostly invests in t#e industrial and commercial sectors.
)mployees are not enou$# efficient and smart 3#ic# t#e ot#er private bank #as.
-#ey do not #ave sufficient po3er $enerate service on lots of electricity.
-#e entire $eneral bankin$ procedure is not fully computeri8ed.

Con&l!sion
-odayGs business is very competitive and comple7. -o survive in t#e related sector t#e
or$ani8ation need competitive people and #as to take some effective policy. )very
country must #ave a plan for important role in economic activities. Ban$lades# is no
e7ception of t#at. /ommercial banks financial development and economic developments
are closely related. -#atGs 3#y t#e private commercial banks are playin$ si$nificant role
in t#is re$ard.
-#e national credit commercial bank Limited :NBL; is one of t#e best banks in respect of
service% profitability and stren$t# amon$ t#e private commercial banks in our country and
also to play a catalyst role in t#e formation of capital market. National bank Limited
bears a uni9ue #istory of its o3n. -#e bank #as set up a ne3 standard in financin$ in t#e
+ndustrial% -rade and forei$n )7c#an$e business. +ts various deposit and credit products
#ave also attracted t#e clients4bot# corporate and individuals 3#o feel comfort in doin$
business 3it# t#e bank.
NBL is no3 been called a modern bank t#at undertakes all its operations at an
international standard. 2ver t#e years% NBL #as built itself as one of t#e pillars of
Ban$lades#Gs financial sector and is playin$ a pivotal role in e7tendin$ t#e role of t#e
private sector of t#e economy.
Re&ommendations
For t#e probable solution of t#e identified problems ensure better pro$ress to National
Bank in future% some necessary steps are recommended bello3 on t#e basis of collected
data% observation %e7pert staffs opinion and my Nno3led$e and <ud$ment.
National Bank s#ould $ive more attention to advertisement for creatin$ more
attraction amon$ its customers% 3#ic# is #elpful to collect more deposits and
increase investments scope. -#atGs 3#y bank s#ould $ive emp#asis on public
relation% e4marketin$= $enerate 3ord of mout# and referrals.
-#e entire department s#ould be 3ell informed re$ardin$ t#eir $oals and
ob<ectives. +t is essential to e7ecute company ob<ective into individual tar$et.
Lob description s#ould be clarified and proper trainin$ facilities s#ould ensure to
improve t#e performance of bottom line mana$ement.
-#e bank #as t#e provision of interns#ip but t#ere is on or$ani8ed pro$ram for
interns#ip. So t#ey s#ould or$ani8e pro$rams for interns#ip.
+t 3as observed t#at t#e officers of National Bank #ave to spend more time in
preparin$ vouc#ers= t#is can be avoided by t#e automation.
Automated -eller *ac#ine :A-*; s#ould be introduced as soon as possible
because of present market demand of t#e customer and educated customer no3
3ants tec#nolo$y based bankin$.
Attractive incentives packa$es for t#e e7porters 3ill #elp to increase t#e e7port
and accordin$ly it 3ill diminis# t#e balance of payment $ap of National bank.
National Bank 3ill #ave to encoura$e entrepreneurs% businessmen% ric# people
and 1overnment to come for3ard to establis#ed ancillary or$ani8ations.
National Bank is to be concentratin$ in al3ays monitorin$ t#e performances of its
competitors in t#e field of forei$n trade.
Bank can provide forei$n market reports t#at 3ill enable t#e e7porter to evaluate
t#e demand for t#eir products in forei$n countries.
Due to lack of proper kno3led$e about t#e operation procedure and service
provide to t#e customers by SA+F- certain customers are facin$ problem as t#ey
#ave to 3ait for certain time to $et service. And sometimes personnel arenGt bein$
able to operate SA+F- 3it#out any confutation. -#ey are not fully independent
#andin$ SA+F-. 2fficial trainin$ is t#e solution of t#is problem.
Ban$lades# bank s#ould take initiative to from a #i$# 5po3ered committee
consistin$ sc#olars and e7perts from different discipline and professions suc# as
academicians% economistGs banker% la3yers etc. -o desi$n an appropriate and
useful le$al frame3ork for +slami S#aria# based bankin$. -#is type of committee
may be #elpful for t#e necessary correction of $overnment policies in +slami
bankin$.
Branc#es of National bank are not sufficient as per demand of t#e people. So
National Bank s#ould setup ne3 branc#es.
-#ey s#ould also focus on t#e marketin$ aspect by informin$ t#e customers about
its product and offerin$ services c#ar$es.
National Bank Ltd. S#ould focuses on t#eir promotional activities on its
marketable products.
NBL can operate one or more Branc#es based on +slamic S#aria# because no3 a
dayGs +slamic S#aria# based bank and financial institutions performed 3ell in
business.
Arran$ement of mont#ly H9uarterly trainin$ courses H 3orks#op for t#e client
selected by t#e branc#es in order to promote investment client of t#e desire level.
-#e bank s#ould improve t#eir interior desi$n and decoration in order to create
more customer attraction.
National Bank s#ould more concern about e4bankin$.






Referen&es:
Annual (eport of National Bank Limited% &''F%&''I% &''"%&'!'%&'!!.
Quarterly daily statement of affairs of NBL <atrabari Branc#
Block.stanley. B > 0irt. 1eoffrey.
1ordon. ) > Natara<an. Bankin$ t#eory% la3 and Practice% )levent# )dition%
0imalaya Publis#in$ #ouse% P.!I'% !I!.
Ban$lades# Bank% Annual Report" %&&$'%&&(. Statistics Department% Ban$lades#
Bank% D#aka.
Ban$lades# Bank% )conomic Trends* various issues% Statistics Department%
Ban$lades# Bank% D#aka.
Ban$lades# Bank% Quarterly publication of Scheduled Ban+s Statistics% various
issues% Statistics Department% Ban$lades# Bank% D#aka.
Barai *.N .and *. Liakat 0ossain% Financial 1lobali8ation Bankin$ sector in
Ban$lades#6. Aorkin$ paper% presented on *arc# F% &''&% -S/ Auditorium%
University of D#aka.