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EXIM Bank Ltd
Together Towards Tomorrow

1.01 INTRODUCTION
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 Export Import Bank Bangladesh Ltd’ - a very promising third 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 Export Import Bank of Bangladesh 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, Shahjalal University of Science and Technology, Sylhet, Bangladesh.

Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

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EXIM Bank Ltd
Together Towards Tomorrow

During the internship program, I was under the supervision and guidance of Fazle Elahi Mohammed Faisal, Lecturer, Department of Business Administration, Shahjalal University of Science and Technology, 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 Shahjalal University of Science and Technology, Sylhet, Bangladesh. (ii) Specific Objectives: The specific objectives of this report are as follows: • To analyze the performance of Export Import Bank of Bangladesh Limited (EXIM Bank).

1.04 METHODOLOGY
This report is a descriptive one, which was administered by collecting primary and secondary data. Descriptive Research has an important objective: gives description of something marketing characteristics of function (Malhotra, 2001) and also the description of phenomenon or

Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

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EXIM Bank Ltd
Together Towards Tomorrow

characteristic associated with an object population (who, what, when, where and how of a topic, Copper, 2001). The report tried to evaluate the performance of Export Import Bank of Bangladesh Limited. Before going in to the deep study, conceptual structure visualized under which the whole study was conducted. 1.4.1 Sources of Data This study covered two types of data, which are: • Primary data • Secondary data (i) Primary Data Primary data collected through interview with the clients of EXIM Bank Sylhet Branch, constructed specially for this report. (ii) Secondary Data Going through different documents and papers developed by the Bank personnel and by others are the sources of secondary data. 1.4.2 Collection Procedure of Data Managers and officers of EXIM from different divisions were the main sources of secondary data. Interview with the clients of EXIM Bank helped me a lot to understand their attitude towards EXIM Bank.

1.4.3 Analysis of Data

Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

05 LIMITATIONS OF THE REPORT The study is not free from some practical limitations. 1.01: ESTABLISHMENT OF EXIM BANK Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .06 TIME LINE FOR THE RESEARCH July 2005-September 2005 (in Bangladesh) 2. • Due to lack of practical experience. • • Some desired information could not be collected due to confidentiality of bank. 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. Work load during the internship program at the bank was also a barrier to prepare this report. 1. some errors might be occurred during the study.4 EXIM Bank Ltd Together Towards Tomorrow Collected data are analyzed to draw the conclusion. Therefore maximum efforts have given to avoid mistakes. This was the main problem that I faced in preparing the report. All the data have shown in tabular form.

By their pragmatic decision and management directives in the operational activities. which is designed to help the fixed income group in raising standard of living is competitively priced and has been widely appreciated by the customers. which is 46% higher than that of preceding year. Nazrul Islam Mazumder became the honorable chairman after the demise of the honorable founder chairman. The bank has achieved success in all sectors and ended up with the highest ever-operating profit. term finance. The Bank conducts all types of commercial banking operations.5 EXIM Bank Ltd Together Towards Tomorrow Export Import Bank of Bangladesh Limited is a third-generation private commercial bank in the country with commendable operating performance. This bank starts functioning from 3rd August 1999 with Mr. services related to local and foreign remittance and several products related services. working capital finance and corporate finance. FCA as the advisor and Mr. 2. The scheme of the Bank. growth. Alamgir Kabir. He had a long experience as a good banker. A group of highly qualified and successful entrepreneurs joined their hands with the founder chairman to materialize his dream. The bank was established in 1999 under the leadership of Late Mr. Among them. The core business of the Bank comprises of trade finance. all of them proved themselves in their respective business as most successful star with their endeavor.02: CORPORATE MISSION OF EXIM BANK Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . In deed. and excellent management. this bank has earned a secured and distinctive position in the banking industry in terms of performance. Mr. Both of them have long experience in the financial sector of our country. hard working and talent entrepreneurship. Mohammad Lakiotullah as the Managing Director. intelligence. The Bank is also providing personal credit. the founder chairman. Shahjahan Kabir.

To provide excellent quality customer service. 2. objects and situation in a distinctive way. To display team spirit and professionalism. Their people can see and understand events. it has rather been achieved through their corporate conduct. shared understanding and shared sense making. To have a Sound Capital Base.03: CORPORATE CULTURE OF EXIM BANK This bank is one of the most disciplined Banks with a distinctive corporate culture. To become a trusted repository of customers' money and their financial advisor. character individually to suit the purpose of the Bank and the needs of the customers who are of paramount importance to us. The people in the Bank see themselves as a tight knit team/family that believes in working together for growth. activities. The corporate culture the bank belongs has not been imposed. To maintain Corporate and business ethics. They mould their manners and etiquette.04 SPECIAL FEATURES OF EXIM BANK Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . The bank believes in shared meaning. 2.6 EXIM Bank Ltd Together Towards Tomorrow • • • • • • • To provide high quality financial services in export and import trade. To make our stock superior and rewarding to the customers/share holders.

7 EXIM Bank Ltd Together Towards Tomorrow • Though EXIM Bank is engaged in conventional commercial banking. • The operations of the Bank are computerized oriented to ensure prompt and efficient services to the customers. • The bank is committed to continuous research and development so as to keep pace with modern Banking. it also considers inherent desire of the religious Muslims. • The bank has introduced customer relations management system to assess the need of various customers and resolve any problem on the spot. • For uplifting the standard of living of the limited income group of the population the Bank has introduced Monthly Saving Scheme to encourage the common and fixed income group of people. The Islamic Banking Branches perform their activities under the guidance and supervision of a body called “Shariah Council.” • It is the pioneer in introducing and launching different customers friendly deposit schemes to tap the savings of the people for channeling the same to the productive sectors of the economy.05: SPONSORS / DIRECTORS OF EXIM BANK Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . • The bank has also decided to go for Online Banking facility for the customers in near future. and has launched Islamic banking system and inaugurates two Islamic Banking Branches in the year 2002 and one Branch in 2003. 2.

8 EXIM Bank Ltd Together Towards Tomorrow EXIM Bank is sponsored by a group of businessmen from various business sectors of the country. Late Shahjahan Kabir Founder Chairman Md. EXIM Bank’s present Chairman Mr. He is also the Chairman of NASA group of companies. Nazrul Islam Mazumder Chairman Alamgir Kabir. The maximum directors are involved in RMG business and they are also renowned among the business community of the country. Nazrul Islam Mazumdr has long experience in garments business. FCA Former Advisor Mohammed Lakiotullah Managing Director Director Sponsors Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

Rabeya Khatoon Mrs. Md. Mohammad Abdullah Mr.Mr. Sabira Sultana Mrs.Md. Nurul Amin Mrs.Md. Mamtaj Begum Mr. Fahim Zaman Pathan Mrs.Md.Md. Rubina Shahid Al-Haj Mr.M. Abdul Mannan • • • • • • • • • • • • • • • Mrs.Md. Mazakat Harun Mr. Meer Joynal Abedin Mr. Abdullah Al-Mamun Mrs. A. Nasima Akhter Engr. Zubayer Kabir Mrs. Muhammed Shahidullah Mr. Nazrul Islam Swapan Mr. Nur Hussain Mr.Md. Aminur Rahman Khan Mr. Hasina Akhter Mrs. Nurul Amin Mr. Habibullah Mr. Nasreen Islam Mrs.K.Md. Asma Begum Mrs. Abdullah Al-Zahir Sawpan • • • 2. Shaiful Alam Mrs.Md.Md. Nurul Fazal Bulbul Mr.Md.9 EXIM Bank Ltd Together Towards Tomorrow • • • • • • • • • • • • • • Mr. Nahida Akter Mr. Anjan Kumar Saha Mr.06: BRANCHES OF EXIM BANK Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .Md. Faiz Ullah Mr.Md. Riza Mr.Md. Mahmuda Begum Mrs. Altaf Hossain Mr. Hamida Rahman Mr.Md. Rizwana K.Md.

Dhaka Comolla Dhaka Chittagong Dhaka Dhaka Bogra Jessore Dhaka Dhaka Ashugonj The Bank also carries out international business through a Global Network of Foreign Correspondent Banks. 2.10 EXIM Bank Ltd Together Towards Tomorrow The Bank operates through its Head Office at Dhaka and its 25 branches. Branch Name Motijheel Branch Panthapath Branch Agrabad Branch Khatungonj Branch Gazipur Branch Imamgonj Branch Gulshan Branch Sonaimuri Branch Sylhet Branch Nawabpur Branch Narayangonj Branch Shimrail Branch Islami Banking Branch Eskaton Branch Islami Banking Branch Laksham Branch Mirpur Branch Jubilee Road Branch Elephant Road Branch Mawna Bogra Jessore Malibag Ashulia Ashugonj Location Dhaka Dhaka Chittagong Chittagong Gazipur Dhaka Branch Noakhali Sylhet Dhaka Narayangonj Dhaka Mothijheel. The branches are located in the following regions.07: USE OF PROCEEDS Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Dhaka Dhaka Uttara.

00 per share) amounting to Tk.113.50% of Tk. 204. 1% of Tk.00 10.000. 408.00 Manager to the issue fee Securities & Exchange Commission fees Underwriting Commission (0.037.130.875+408.60 million) Banker to the Issue (0. 81.11 EXIM Bank Ltd Together Towards Tomorrow The public issue is the compliance of statutory requirement of the bank.500.25% on Tk. 721.00 816.019 million) Fees of Securities & Exchange Commission (0.020.00 would be utilized in the normal lending and investment business of the bank.00 1.781.094.00 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .037 million) Listing fee to DSE or CSE (0.037 million) Printing of Prospectus (Estimated or at actual) 140..094.000.00 1.e. 408.00 1.037 million) Brokerage Commission (assumed 20% of IPO. The proceeds of the present issue of 31. IPO EXPENSES: Detailed of estimated Public Issue expenses are shown below: Particulars Amount (in Tk) 650.000.000.30% of Tk.000.075.912 (313.804.38.224.750 ordinary share at Tk. i.00 1.00 400. 30. 408.25% of Tk.00 100. The proceed will strengthen the capital base of the bank and augment business expansion.020.00 each (including a premium of Tk.

00 31.00 650.78 93.23% 100.46 2003 100.30 1228.96 726.00 8.15 2002 100. advances) Investment Foreign Exchange Business (import) Foreign Exchange Business (export) 744.90 1315.78 1524.000.31 11.09 39.00 25.08: DESCRIPTION OF BUSINESS (1) EXIM Bank at a Glance 2001 Authorized Capital Paid up Capital Reserve Fund Deposits Investment (Loan.00 25.91 851.682.91 2004 100.97 141.000.01 154.099.84 1909.22 1008.22 Growth 0% 100% 68.29 2678.00 Table 1: Initial Public Offering expense of EXIM Bank Source: EXIM Bank Prospectus 2.46 2241.17 .57 1768.70 1926.52 795.37 531. (Estimated or at actual) Arrangement of lottery CDBL related expenses Post Issue Expenses (Estimated or at actual) Total 60.31 22.05% Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .39 55.00 62.95 994.35.85 48.83 1512.00 204.12 EXIM Bank Ltd Together Towards Tomorrow Advertisement in one daily newspaper (full prospectus) (cost or at actual) Advertisement of abridged version of prospectus and notices etc.89% 82.28% 43.23% 25.525.25 237.

28 28.08% 23.9.09% 14.56 15.70% 3. • Foreign exchange business handled by the bank is also showing an upward trend. • The growth of operating profit is fairly attractive.50 60.14% Table 02: EXIM Bank at a glance Source: EXIM Bank Prospectus • From the above table we see that the trend of paid up capital is upward.64 12.76 40.57% 46. This indicates that borrowers of EXIM Bank are taking more loans and the bank is also extending its range of loans.95% 356 10 9.44% 26. As the export and import business handled by EXIM Bank is increasing.36% 3. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . • Investment is also showing an upward trend. Return on Assets 40.25% 11.38 88.89% 23.10 79.77 80.08 92. This upward trend indicates that investors are buying more and more shares at high price.29% .9.39% 774 24 8.13 EXIM Bank Ltd Together Towards Tomorrow Remittance Operating Profit Fixed Assets Investment as % of Total Deposit Number of Foreign Correspondents Number of Employees Number of Branches Cost of Fund Cost of Fund with E. so it is contributing in the national economy through international business.29% 11.62 11.8.86% 175 178 185 196 5.C.51.30% 3.32% .32% .40% 10. From the above table it is very much clear that operating profit of EXIM is increasing at a decent rate in every successive year.43 70.38 9.65% 27.60 .71% 3.18% 500 16 9.37% 627 19 9.09% 18.26% 11.40 11.

876 272. Exchange & Brokerage Gain on sail of investment in shares Other operating income 2003 1.610 24.474 9.157 940.864.929.735 379.396.381 54. This increasing number of bank branch indicates that EXIM’s geographical coverage is increasing and the bank is expanding its operation.615.866.696.069 2001 621.049. • It indicates that asset efficiency of the bank is increasing and assets are utilized in efficient way.241.186 68.256 1.723 35.081.669.777 7.118 28.14 EXIM Bank Ltd Together Towards Tomorrow 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. • The number of branches of EXIM is also increasing.331.912.961.507 1.555.316.802 2002 932.915 54.759 211.422 121.282.974.761.626.673.535. (2) Business Operations: (i) Main Products of Services: Contribution to Revenues: Revenue income from the main products/services during the past years as follows: Description Interest income Income from investment Commission.325 Table 03: Sources of income of EXIM Bank Source: EXIM Bank Prospectus (iii) Special Products and Services: Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

Among the are Monthly Savings Scheme. Any individual. Smart Saver Scheme. Monthly Savings Scheme: The prime objective of this scheme is to encourage people to build up a habit of saving. which eventually creates wealth. Super Savings Scheme: Under this scheme. To create more awareness and motivate people to save EXIM Bank offers Multiples Savings Scheme. This is why savings are treated as the very foundation of development. educational institution. All of these have received wide acceptance among the people. trust. Multiplus Savings Scheme. government organization.15 EXIM Bank Ltd Together Towards Tomorrow Export Import Bank of Bangladesh Limited launched several financial products and services since its inception. company. ten or twelve years. he will receive the benefits on monthly basis. Benefits start right from the first month of opening an account under the scheme and will continue up to five years when the depositor will get refund of his deposit. one can save a fixed amount of money every month and receive substantial lump sum of money after five. Multiples Savings Scheme: Savings help to build up capital and capital is the prime source of business investment in a country. customer has to deposit a fixed amount of money for five years and in return. In this scheme. This scheme is a sure investment for a steady return. Education Savings Scheme. NGO. Investments take the country towards industrialization. eight. Super Savings Scheme. society tee SWIFT Service: Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

406.390 35.963. 2002 17. Furniture and Fixtures 2. Books Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . especially those having strongly professionally managed operations. Competitive Conditions in the Business The bank sector comprises of monolith public sector consisting of four major commercial banks. The bank has brought 6 branches under SWIFT network.333. 2003 18.532 29.036 Table 04: Description of property As at Dec 31.406. the private sector banks are earning significantly increasing profit.436.645 173.527 1. Despite stiff competition.986 194. They severally compete for savings/deposits and are in search of sound investment/lending targets.305.955 As at Dec 31.271 114.021. and three DFI and a large number private commercial banks including about a dozen foreign owned private banks. Vehicles 5.16 EXIM Bank Ltd Together Towards Tomorrow The SWIFT Service help in sending and receiving the messages and instructions related to NOSTRO Account operations and L/C related matters.709.874. The bank’s business is principally operates through its Head Office at Dhaka and its branch offices on different locations on rented premises.751 6. Office Equipment 3. 2001 13.740 53. the bank owns the following operating assets at written down value as given value. 2.740 3.09: DESCRIPTION OF PROPERTY 1. As at Dec 31. However.843 3.148.221 59. Interior Decoration 4.116 45.417 45.624.991.

However. commendable knowledge and expertise in convention with modern banking. 4. It provides a wide range of commercial services. 2. With all its resources. 3. Directed by the mission to provide prompt and efficient services to clients. The liquidity risk also arises if liabilities Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . The Bank has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience.10: RISK FACTORS AND MANAGEMENT PERCEPTION REGARDING RISKS Export Import Bank of Bangladesh Limited is a third generation private commercial bank in the country with commendable operating performance. There is no mortgage or lien on the property.17 EXIM Bank Ltd Together Towards Tomorrow Source: EXIM Bank Prospectus 2. the prospective risk factors and the plan of the management to reduce such risks are given below: 01. There is no leasehold property by the bank – except premises of the Head Office and Branches on lease/rental basis. the management of the bank firmly believes that the bank would be able to encounter problems that may arise both at micro and macro economic levels. EXIM Bank has successfully celebrated its sixth year of operation. The bank itself owns the entire fixed assets. Liquidity risk usually arises if the customers lose confidence in the financial institute/bank or if they find a more attractive investment opportunity.

Government of Bangladesh has also emphasized to reduce the spread of interest rate. which will effectively reduce the earnings of the banks. EXIM Bank might also be a subject to such risk. import construction. transport. # The management of the Bank is prudently monitoring the market situation to keep the deposit interest rate at minimum and also trying to invest at a reasonable rate to increase the profitability of the Bank. Change of interest rate in the international market situation is also likely to affect the bank interest rate in Bangladesh. consumer. In order to avoid asset liability mismatch the management of the bank is constantly monitoring the bank’s business portfolio.18 EXIM Bank Ltd Together Towards Tomorrow are not matched with the advances made or exposure is concentrated in a particular sector. which at the end will sustain the earnings of the Bank. The liquidity risk is minimized to maximum extent. trade & commerce. If any bank takes deposits at high interest rate then the risk becomes greater. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Interest rate is free floating and different banks offer different interest rates. export. garments. The bank has a Well-diversified and balanced advance portfolio consisting of agriculture. # The management of the bank is maintaining an efficient portfolio in order to have a healthy growth and retain customer satisfaction. and other sectors. EXIM Bank might face such risk like other banks. The present instability and slump in the world economy may affect the overall economy of the country and the banking system as well. Also efficient management of portfolio would reduce the amount of classified loans to a minimum level. industrial. 02. Interest rate risk arises due to interest rate fluctuation in the financial market. 03.

inadequate/inappropriate documentation secured by the banks and other form of management deficiencies. This could be a local issue for a relatively new bank. slack monitoring of outstanding debts by them. Its present classified portfolio stands very low of the total loan portfolio in the year 2003. if the situation does not permit to meet the requirement. # The management of the Bank is planning to meet the required capital adequacy within the stipulated time frame. all Commercial Banks working in Bangladesh are required to maintain Paid-up Capital and reserves at least Tk. the bank has option to declare stock dividend instead of cash dividend. 2005 provided at least 50% of the required adequacy will have to be met by March 10. dated March 30. 06. As per requirement of the Bangladesh Bank. Bangladesh Bank’s present stipulation in classification of loans and consequent provisioning requirement after four years of operation of any bank is evident. BRPD Circular no-10. If the requirement of the Capital adequacy as mentioned above cannot be met by the Bank within the stipulated time. 04. Bank will not be eligible to pay dividend to the shareholders. This demonstrates the Bank’s professional management ability. Increased provisioning requirement arising out of creeping classified debts resulting in less than anticipated distributable profits and eventual lower dividend payout. 2004. 05. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .19 EXIM Bank Ltd Together Towards Tomorrow # EXIM Bank is engaged in modern banking. It is expected that EXIM Bank by its efficient Asset and Liability management will be able to maintain its trend of growth and thus overcome the threat. Deteriorating asset quality originating from inadequate/inappropriate risk appraisal by the banks. For any reason. 2003. # EXIM Bank has been able to maintain a very low classified portfolio over the last six years of operations.00 crore by March 10. 100.

money changers. since its inception. and it plans to remain innovative in future also by way of creating new markets for its products. a general lack of confidence in the market may affect EXIM’s business negatively. 09. EXIM Bank has. which has always been adequately addressed. the profitability of a bank maybe affected negatively? # EXIM Bank carries contingent liability in its books as a natural course of business and the quality of contingent liability carried by the bank at any point of time is not significantly high compared to the size of its balance sheet in general and reserves in particular. unauthorized syndication. the Bank has declared 8% cash dividend and 24% stock dividend. 08. as it is generic to the nature of their business. Should any significant portion of such contingent liability become actual? Liability at any point of time due to client default. it has so far demonstrated its ability to maintain a very low classified portfolio and thus very low provisioning requirement.e. Unfair and hostile competition in the banking industry leading to price-cutting and entrance of other financial institution in the traditional banking and quasi-banking services. Moreover. Should one or more banks in the country fail to perform or become bankrupt at any point of time. including formal banking. This strategy has been rewarding for EXIM. In 2002. money lenders and brokers. focused on diversified client base with an innovative and differentiated product base. underwriters etc. the bank has declared 25% cash dividend and 12.20 EXIM Bank Ltd Together Towards Tomorrow # While the management of the bank recognizes this risks. # Recognizing these risks.50% stock dividend in 2001. i. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Every bank carries some contingent liabilities in their books. 07.

except its reputation and image. innovativeness in product development and skilled human resources. The products are well received by the market. EXIM Bank having small and targeting niche markets is likely to be less affected by restrictive monetary and/or fiscal policy. # Neither EXIM Bank nor any other commercial bank can effectively combat this risk. However.21 EXIM Bank Ltd Together Towards Tomorrow # This risk is absolutely external to the Bank and could affect any financial institution operating in the country. Many products are introduced in the market in recent days and more innovative and diversified products are in the offering. Inability to cope with competitiveness faced from other banks due to lack of up-to-date technology. # Foreign exchange risks originating from transactions have always been professionally managed. EXIM does not have any specific antidote to this risk. A bank’s ability to operate profitability is directly related to the monetary and fiscal policy of the country at any given point of time. which is evident from the growth pattern of those products. Side by Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . # Although EXIM Bank is yet to be fully automated the Bank has adequate technology to meet its present requirement and it proceeding aggressively to enhance its technology level. Deep and frequent exchange rate fluctuation negatively impacting on import and/or export business of the clients. The bank is recruiting fresh university graduates on regular basis and arranging training for them both from its own and other training institutions. 11. 10. 12. The Bank carries out all of its activities in such a way as will help create a lasting confidence among the public. Imposition of restrictive monetary and/or fiscal policy by the government at any time may affect a bank’s profitability negatively.

it is expected that the loan loss provisioning in future will be within tolerable limit having little material impact on future profitability as well as net worth. The bank has also introduced various welfare schemes for its employees with a view to retain its trained and experienced human resources on longer term basis and to create a sense of belongingness. maintaining required capital adequacy. The bank Management believes that lower employee turnout ratio will improve productivity of the banking future. But in future. moderate profitability. any increase in loan loss provisioning might have adverse impact on probability as well as net worth. The bank has been rated by the CRISL on September 08. superior asset quality. 14. # The risk is inherent to all equity securities and is not specific to the security of EXIM Bank.22 EXIM Bank Ltd Together Towards Tomorrow side the Bank is hiring experienced and skilled human resource in an effort to balancing out the need of the Bank in various fields of its operation. Therefore. This level of indicates Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . 2003 under Credit Rating Rules. 1996 of the Securities and Exchange Commission. 15. moderate liquidity and limited market share. Investors should keep in mind that equity security entails un-quantified risk and reward possibility. CRISL assigns ‘BBB’ rating to Export Import Bank of Bangladesh Limited in the long term and ST-3 rating in the short term on the basis of the bank’s good fundamentals. including leading towards total erosion of investment in extreme cases. 13. which will be continued in future. The Bank has made adequate provision on loans and advances as per Bangladesh Bank’s circular. Financial institutions rated in this category fall under the CRISL category of investment grade and are adjusted to offer moderate degree of safety for timely repayment of financial obligations. # The Management has been following a Loan and Advance Policy.

23% infection in its loan portfolio. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Although ongoing funding need may enlarge total financial requirements. 9.92 billion. 2003. the management of the Bank is also expecting god result in Islami banking operation. 17. 10.23 EXIM Bank Ltd Together Towards Tomorrow that the bank has yet to overcome weakness in some areas of operation but has the capability to overcome the abovementioned limitations with persistent efforts. # Risk factors are more variable inn period of economic stress than those rated in the higher categories. Liquidity factors are sound in the short run. 18.43 million during the same period. the Bank has capital inadequacy (7. Bangladesh Bank granted approval to EXIM Bank to operate as Islamic Bank. the EXIM Bank may face competition for its conversion into Islamic banking after five years of operation. The short-term rating indicates good certainty of timely payment. 16. 2003. As there are other Islamic Banks operating in the country. With 0.04 million from the capital market is good to mitigate on going finance need. 2003 EXIM’s loans and advances stood at Tk.25%) in terms of Risk weighted Assets (RWA) whereas standard requirement is 9%. The bank did not distribute any dividend for the year ended on December 31. 408. # on completion of IPO the bank will meet its capital adequacy. 109. EXIM is a third generation private bank in the country and performing above average as compared to the peer banks. EXIM earned Tk.48 million total deposit of Tk. # As EXIM Bank is performing well in traditional general banking and there is a good demand for Islamic Banking. As per audited accounts of December 31. As on June 30. EXIM’s recent move to issue shares to raise Tk.

The dividend will be distributed in due course with the approval of Bangladesh Bank. As per international practice long term remains valid for one year and short term remains valid for six months. Hence the shortterm rating is no longer valid. 2003. 2003 to Export Import Bank of Bangladesh Limited in the long term and ST. 19. 3. 2003.01 ANALYSIS OF PROFIT AND LOSS ACCOUNT Profit and Loss Account Export Import Bank of Bangladesh Limited For the year 31st December 2004 Notes 2004 2003 2002 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .3 rating in the short term. # The management is in the opinion that the performance 9of the bank is getting much better than that period of CRISL rating dated September 08.24 EXIM Bank Ltd Together Towards Tomorrow # The sponsoring shareholders are entitled to avail dividend out of the retained profit and balance shown in premium account as per audited financial of December 31. CRISL assigned ‘BBB rating on September 08.

147 11.074 41.068 = 394.241.695.511.325.613.219.500 3.000 26.974.929.865 9.587 22 78.411 181.014 2.643.734 183.084 Salaries and allowance Rent.127. borrowings etc Net Investment Income Income from investment in -shares/securities Commission.632 30 31 32 76.993.470 95.501 121.332 156.053.121.275 = 274.500 2. stamp.256 7.223.615.365.000 317.938 1.022 2.507 = 588.089.004.677.696.145.462.25 EXIM Bank Ltd Together Towards Tomorrow Investment income Profit paid on deposits.547 2. insurance.875.186 21 1.354 728.157 134.710 260.453 74.422 Taka 932.987 = 840.138.772.456.723 35.733. lighting etc Legal expenses Postage.396.876 23 597.592 49.330 150.574 50.184 28 20.130.006.184.740.777 24 73.627.982 522.561 13.772.000 292.639.607.673.742.081.750 14.735 68. advertisements etc Managing Director’s remuneration Managing Director’s fees Director’s fees Depreciation on and repairs to bank’s property Other expenses 25 26 27 =1.076.500 16.893 379.299.750 13.987 29.603.897 1.076.381.699 30.820. printing.599 = 203.189.535.669.000 2. telegram and telephone Audit fees Stationery.474 272.283.915 54.666 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .622 1. exchange and -brokerage Gain on sale of investment in shares Other operating income Total Operating Income 20 Taka Taka 1.049.526 168.000 29 18.309.400.672 19.694.090. taxes.

810 = 201.715.924 84.661.840.550.807.000) (12.413 190.013 29.258 = 190.693.574 = 277.337 = 217.738 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .169.039 223.775.774.114.953 = 387.621.798.137.316.131.422.792.000) (35.181 - = 48.600.080.418 - 386.022.785 17.000 (125.506 263.154.269.228 = 338.154.638.560.26 EXIM Bank Ltd Together Towards Tomorrow Total Operating Expense = 383.625 - 5.163 = 254.169.999 = 219.600.575.350 = 381.941.226.323.000) (62.468.785 136.211 = 84.418 = 645.672 16.457 Profit before Provisions Provisions for investment For diminution in value of investment in share Total Provisions Profit before Tax Provision for tax Profit after Tax Retained earnings brought forward Transfer from share premium 40% cash dividend for 2003 10% dividend distribution tax Transfer to dividend equalization account Adjustment for (under)/over provision for -tax made in earlier years Profit Available for Appropriation 33 835.211 - 562.819) 1.507.970 19.392.202 = 478.000 = 201.000) 2.836 (37.088.156 123.836 82.555.797.

587 Tk.27 EXIM Bank Ltd Together Towards Tomorrow Appropriations: Statutory reserve Proposed cash dividend Proposed issue of bonus shares (@ 10 -shares per 25 shares held ) Share premium on bonus share 13 129.354 Tk and in 2004 it further increased to 394.640 = 95701. In 2003 it increased to 840.772.82 123.603.181 79.557 20.557 Retained Earnings Carried Forward 6.000 66.127.14 Earnings Per Ordinary Share Table 5: Profit & Loss Account of EXIM Bank Source: EXIM Bank Prospectus • From the above table we see that in the year 2002 net investment income were 203.470 Tk.18 2.501 67.275 Tk.000 = 215. It indicates that the bank is earning more profit from investment at every subsequent year.250.501 60.227.076. • From the above table it is evident that total operating income of the bank is also increasing.987 Tk.825.621.734 Tk and in 2004 it further increased to 1.219.750.359 60. In the year 2003 it increased to 274.701.836 81.875.000 251.189.429. Thus we see that total operating income of the bank has increased more than 100% in the last three years Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .887. In the year 2002 total operating income of the bank were 588.640 95.772. Here we see that investment income has increased at every year.604.100.131.000 = 380.

875 440. 3.02 ANALYSIS OF BALANCE SHEET Export Import Bank of Bangladesh Limited Balance Sheet at 31st December 2004 Notes 2004 2003 Taka Property and Assets Cash: In hand (including foreign currencies) With Bangladesh Bank and Sonali Bank (including foreign currencies) 1.28 EXIM Bank Ltd Together Towards Tomorrow • Earning per share (EPS) of a bank is an important indicator of profitability.885.672.719 Taka 2002 Taka Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .146.152.793.871.505 563.334 129. From the above table we see that EPS of EXIM has decreased significantly in the year 2004 by about 20 Tk per share.038 3 190.019. which is a dangerous signal for the bank.767 163.

124.001.414 2.191 =1.997.176 Fixed assets Other assets 8 9 150.481.781 1.109 964.696.885 127.209.295.775 605.816 1. financial institutions and agents Deposits and other accounts: Current deposits and other 24.072 =12.256 11.210.589 = 1.289.751.067 7.000.702.377.374.436 25.187 360.509.500.641.814 =1.436.000 Money at call and short notice Investment (shares and bonds): Government Securities others 5 6 1.991.888.395 319.324.529.298.487 671.557.600 42.985.839.689.200 176.532 =7.000.581 =2.993.751 =550.542.241.964 461.525 110.591.230.073.983.607.360.29 EXIM Bank Ltd Together Towards Tomorrow = 1.426.036 =19.665.380 = 1.562.052.386 11.103 Non-banking assets Total assets Liabilities and Capital Liabilities Borrowing from other banks.504 473.376.781.120.005.719.757 805.415 - - - 10 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .954.360.419.100 188.948.200.716.326.553 - = 693.041 374.451 17.839 Balance with other banks and financial institutions: In Bangladesh Outside Bangladesh 4 748.332.713.822.657.291 Loans and advances: General Investment Bills discounted and purchased 7 18.135.355.000 524.724.642 = 604.688 909.

451 17.619 51.000.789.657.831 15.000 94.000 251.244.775.711 627.789 =15.000 60.140.494 253.162.226.945.000 357.241 123.836 748.239.297.359 1.131.920.054.716.159.702.962 10.082 888.575.386 11.460.750.500 62.30 EXIM Bank Ltd Together Towards Tomorrow accounts Bills payable Savings bank deposits Bearer certificates of deposits Term deposits Call deposits Foreign currency deposits 2.175.125.050.535 12.000 21.202.000 82.226.405 Other liabilities Total liabilities Capital/shareholders’ Equity Paid up capital Proposed issue of bonus shares Share premium Dividend equalization account Statutory reserve Retained earnings Total shareholders’ equity Total liabilities and shareholders’ equity Off Balance Sheet Items 11 3.414.370.887.615.670.740 1.932 =9.740 2.787 60.078.750.630 998.249 1.274.955.196.242.897.875.921 12 13 14 15 16 17 24.374.532 =19.000.329.000 82.888.005.331.012.575.268 101.415 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .100.135.355.500.751.662.047.746.077 878.759 1.181 551.922 22.027.425 221.000 37.707 613.621.309 313.890 820.823.904 17.004.570.881 6.383.637 138.422.143.000 228.968.877.258.000 132.470.943 1.400.432 7.

243 Other commitments - - - Total off balance sheet items 8.218.457.970 4.383. • Besides assets.970 208.478.011 521. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .385 2. Both current and fixed assets have increased significantly.999.041.999.561. • From the above table we also see that total shareholders’ equity of EXIM has increased very rapidly.577 2.187 451.386.507.303 4.814.126.009.572 2.31 EXIM Bank Ltd Together Towards Tomorrow Contingent liabilities: Acceptance and endorsementsLetters of guarantee Irrevocable letters of credit Bills for collection Other contingent liabilities Total contingent liabilities 18 859.820 7.275 536.218.249.115. Increase of total asset means additional investment by the bank.931.243 Table 6: Balance sheet of EXIM Bank Source: EXIM Bank Prospectus • In the above table we see that total asset of EXIM has increased over the last three years. total liability of the bank has also increased significantly.679.897. Increase of shareholders’ equity means there are more owners as well as more stake of the shareholders in the operational and financial activities of the bank.561.607.500 8.355.615 220.612 1.747 5.631 4.610.011 7. Increase of fixed assets indicates investment in long term for future operation.399. Increase of liability reduces the bank’s solvency both in short and long term.107.610.478. Increase of current assets such as cash indicates more liquidity of the bank.897.007.788.

42.13 The current ratio of a firm measures its short term salary that is its ability to meet short term obligations.42.78 Current ratio for EXIM Bank for year end 2004 was: 2.99.03 FINANCIAL RATIO ANALYSIS Analysis of Balance Sheet Ratios 01.898 = 1.00.392 2. much insight can be obtained into present cash solvency of the firm and the firm’s ability to remain solvent in the event of adversity.30. Now we should analyze various liquidity ratios of EXIM Bank:a) Current Ratio One of the most general and frequently used of these liquidity ratios is current ratio:Current Asset Current Liability Current ratio for EXIM Bank for year end 2003 was: 2.08. Liquidity Ratios Liquidity ratios are used to measure a firm’s ability to meet short term obligations. As a measure of current financial liquidity it indicates Taka of current assets Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .32 EXIM Bank Ltd Together Towards Tomorrow 3.15.417 1.37.70.42. They compare obligations to short term resources available to meet these obligations. From these ratios.396 =1.80.35.

Tk.12 of current assets was available to meet Tk. In both the year current ratio is more than 1 which means that the Bank is able to meet its current obligation.00 of current liability. The ratio measures the capital structure of the Bank. this ratio was: 17140383309 748274077 = 22. 2. we may use several different debt ratios. so the margin of safety to the short term creditor is not much larger. 1. 1. The long term solvency would judge the Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .78 of current asset was available to meet Tk.33 EXIM Bank Ltd Together Towards Tomorrow available for each Taka + current liability. The debt to equity ratio is computed by simply dividing the debt of the firm by its shareholder’s equity. 2004 year-end ratio was: 22955746711 1400004740 = 16.90 D/E ratio is the ratio amount invested by investor to the amount invested by the company. In the year 2003. LEVERAGE RATIO: (a) Debt to Equity Ratio: To assess the extant to which the firm is using borrowed money.00 of current liability. In 2004. but as it is less than 2 or not much larger than 1.39 At the year-end 2003. 1. Total debt Shareholder’s Equity For EXIM Bank.1. Tk.

Moreover. The long term solvency of a firm can be examined by using leverage ratios.39 for each Tk. In the year 2003. A high proportion of debt in the capital structure would lead the inflexibility in the operations of the firm as creditors would exercise pressure and interfere in management. with a small financial stake in the firm. 22.00 being provided by shareholders and in the year 2004.34 EXIM Bank Ltd Together Towards Tomorrow soundness of a firm on the basis of the long term financial strength measured in terms of its ability to pay the interest regularly as well as repay the installment of the principle on due dates or in one lump sum at the time of maturity. 1. The greater the D/E ratio. (b) Debt to Asset Ratio The debt to asset ratio is defined by dividing a firm’s total debt by its total assets: Total Debt Total Assets For EXIM Bank this ratio for 2003 was 17140383309 17888657386 = 0. the creditors will lose heavily. 1. the greater is the risk to the creditors.00 being provided by shareholders of the Bank. A high D/E ratio has equally serious implication from the firm’s point of view also. the creditors of EXIM Bank provided Tk. The leverage ratio of EXIM Bank is very high and it is a danger signal for the creditors because the owners are putting up relatively less money of their own.90 for each Tk. the owners may behave irresponsibly and indulge in speculative activity. creditors provide Tk. 16. If the project of the Bank fails financially.95 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

or times interested earned. make extensive use of these ratios.42 Profit coverage ratio of EXIM Bank in 2004 was: Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . We see that in 2003. The bank’s debt to equity ratio is very high. them. As the percentage of financing provided by shareholder’s equity is very small so the cushion of protection to the bank’s creditors is very low. Earning Before Tax Profit Paid on Deposits. Coverage Ratio (a)Profit coverage ratio: Coverage ratios are designed to relate the financial charges of a firm to its ability to service. 95% of bank’s assets are financed with debt of various types and the remaining 5% of the financing came from shareholders’ equity. 3. or cover.35 EXIM Bank Ltd Together Towards Tomorrow This ratio for 2004 was 22955746711 24355751451 = 0. One of the most traditional of the coverage ratios is the interest coverage ratio. Borrowings Profit coverage ratio of EXIM Bank in 2003 was: 1599816574 1121309068 = 1. Bond rating services. In 2004. Because of this high ratio the bank is in high financial risk. such as Moody’s Investors Service and Standard & Poor’s.94 The above ratio measures the share of total asset financed by outside funds. 94% of assets are financed by debt and only 6% came from shareholders’ equity.

ROI is: Net Profit After Taxes Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . PROFITABILITY RATIO (a) Return on Investment (ROI) This ratio is measured in terms of the relationship between net profits and assets.36 EXIM Bank Ltd Together Towards Tomorrow 2071149824 1425511622 = 1.42 times in 2003 appears to provide a very low margin of safety.45 times in 2004 and 1. 4.45 This ratio serves as one measure of firm’s ability to meet its profit payment and thus avoid bankruptcy. The profit coverage ratio of EXIM 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. (b)Dividend Coverage Ratio This ratio measures the ability of a firm to pay dividend on shares which carry a stated rate of returns.04 This ratio is high and it reveals safety margin available to the shareholders. Earning After Tax (EAT) Cash Dividend This ratio for EXIM Bank in 2004 was 381798163 125550000 = 3. EXIM Bank’s to cover annual profit payment 1.

56% X 100 X 100 X 100 Here we see that although ROI of 2004 has slightly increased from previous year but it is still very low.37 EXIM Bank Ltd Together Towards Tomorrow Average Total Assets ROI for EXIM in 2003 was 242792156 17888657386 = 1.24% (c) Return on Equity (ROE) This profitability ratio carries the relationship of return to the sources of funds yet another step further.35% For the 2004 ROI was 381798163 24355751451 = 1. (b) Return on Capital Employed (ROCE) ROCE = Net Profit After Taxes Average Total Capital Employed ROCE for EXIM Bank for the year 2003 was: 254792156 7841685077 = 3. X 100 X 100 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

X 100 EPS = Net Profit Available to Equity holders Number of Ordinary Shares Outstanding Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .05% This ratio tells us the earning power on shareholders’ book value investment. (d) Earning Per Share (EPS) It measures the profit available to the equity shareholders’ on a per share basis that is the amount they can get on every share held.38 EXIM Bank Ltd Together Towards Tomorrow ROE = Net Profit After Taxes Shareholders’ Equity ROE for EXIM Bank in 2004 was 381798163 1400004740 = 27. The ROE of EXIM Bank is high and it reflects the bank’s acceptance of strong investment opportunity and effective expense management.27% ROE for 2003 was 254792156 748274077 = 34.

53 81. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .39 EXIM Bank Ltd Together Towards Tomorrow EPS for EXIM Bank for the year 2003 was Tk. 81.82 per share.18 per share and for the year 2004 the EPS was Tk. In other words the P/E ratio measures investors’ expectations and the market appraisal of the performance of the bank.18 = 5. 60. DPS = Dividend Paid to Ordinary Shareholders Number of ordinary shares outstanding DPS for the year 2003 was 12550000 3138750 = 3. (e) Dividend per Share (DPS) This ratio reveals the dividends paid to shareholders on a per share basis.02 The P/E ratio reflects the price currently being paid by the market for each taka of currently reported EPS.99 (f) Price Earning (P/E) Ratio P/E Ratio = Market Price of Share EPS P/E ratio of EXIM Bank for the year 2003 was 407.

634 times higher than that of 2003. iii.78 = 0.72 (Approx) So.634 From the above calculation we can see that current ratio of 2004 is . It reflects that the bank accumulated to reduce its debt. Liquidity Ratio (i) Current Ratio: The current ratio that asset liability ratio is upward sloping.72 times lower than that of 2003.90 = 0. the debt-equity ratio in 2004 is 0. 02. Debt to Asset ratio: The debt to asset ratio is almost same in FY 2003 and 2004 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .04 TREND ANALYSIS 01. Debt to Equity Ratio In 2004 debt is lower than 2003.40 EXIM Bank Ltd Together Towards Tomorrow 3. D/E Ratio 2004 D/E Ratio 2003 16.13 1. Current Ratio 2004 Current Ratio 2003 1.39 12.

41
EXIM Bank Ltd
Together Towards Tomorrow

0.94 0.95 Debt to asset ratio is 0.99 times lower in 2004 than that 2003. iv. Coverage Ratio: The ratio is upward. 1.45 (2004) 1.42 (2005) =1.02 Coverage ratio shows the positiveness in the growth of the task. The coverage ratio is 1.02 times higher in 2003 than 2003. Dividend coverage ratio is 3.04 in FY 2004.

3.05 FINANCIAL CONDITION
Profit and Operating Results The Bank has earned an operating profit of taka 562.66 million during 2003 after all provisions including the 1% General Provision on unclassified Loans and Advances. Provision for Income Tax for the year amounted to taka 223.71 million resulting in a net profit, after tax, of 254.79 million. The growth in net profit over the previous year is 26.5%. Deposit A strong deposit base is necessary for the success of a bank. During the year 2003 the Bank mobilized a substantial amount of deposits from mid-level income group people under Deposits Savings Scheme.

Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

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EXIM Bank Ltd
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After critical handling the bank mobilized total deposit of taka 15242.97 million as at December 31, 2002. Advance The Bank’s Loans and Advances portfolio also indicates an impressive growth. Total Loans and Advances amounted to Tk 12289.12 million in 2003 as against Tk 7,954.56 million in 2002 and the growth rate is 54.49%. This is due to increased commercial and trade financing, term lending and working capital support. The classified loan position is almost nil. This was achieved by rendering due attention and monitoring high-risk advances. As a result, classified advance is amounted to Tk 298.03 MILLION IN 2003. The Bank is trying to operate its credit activities with the target of achieving Zero classified loans. The sectors financed include Manufacturing, Trading, Construction, Transport, Agriculture, Fishing & Forestry, Edible Oil, Pharmaceuticals, Information Technology, and Customer Credit amongst others. Foreign Exchange Business International trade constitutes the main stream of business activities of EXIM Bank. It offers a full range of trade finance and services namely Issue, Advice and Confirmation of documentary credit; arranging forward exchange coverage; Pre-shipment and post-shipment finance; Negotiation and Purchase of Export Bills; Discounting bill of exchange; collection of bills, inward and outward remittance etc.

Import Business The total Import Business handled by the Bank during 2003 was Tk 19,260.01 million compared to Tk 13,152.50 million in the previous year showing an increased rate of 46.44%. Export Business

Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

43
EXIM Bank Ltd
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The total export business handled by the Bank during 2003 was Tk 15,124.60 million compared to Tk 10,088.30 million in the previous year showing an increased rate of 49.92%. Foreign Correspondents EXIM Bank has correspondents banking relationships with over 78 Banks spread across 68 countries to facilitate cross border trade and payment related services. So far, the Bank’s total correspondents are 180. The bank has maintained an excellent relationship with leading international banks and has successfully established credit lines with major banks to support global foreign trade business. Investment The total investment of the bank stood at Tk. 23, 77.073million as on 31st December, 2003 as against 1419 million in the previous year showing an increase of 67.52%. The notable investments represent developments in the treasury bills, shares, prize bonds and others. Capital and Reserve Fund The authorized capital of the bank is Tk. 1,000.00 million. Total shareholders equity at the end of December, 2003 stood at Tk 748.27 million. The paid up capital represents the face value of 3138750 ordinary shares of Tk 100/= each fully paid by the sponsor share holders. The capital adequacy ratio was 7.25% as on 31st December 2003.

Dividend EXIM Bank is continuously updating itself with a view to be competitive and to remain the leader of the banking industry. It has distributed a substantial amount of dividends in the preceding years and also strengthens the platform of the bank. The percentages of distributions of dividends are as follows.
Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’

377.000.000.073. CAPITAL ADEQUACY RATIO 2002 641.150.5%).713.000.000 176.230.291 On demand More than 3 Months but less than 1 year More than 1 year but less than 5 years More than 5 years Total Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .191 1. The duration of majority of the bank investment is 1 to 5 years.781 Table 8: Maturity Grouping of Investment Source: EXIM Bank Prospectus • From the above table we can understand that EXIM is emphasizing more on long term investment rather than short term investment.50% 24% 2000 2001 2002 Table 7: Dividend payment of EXIM Bank Source: EXIM Bank Prospectus • EXIM Bank distributes both cash and stock dividend to its shareholders.360.200 50.000 188.001.100 1.44 EXIM Bank Ltd Together Towards Tomorrow Year Cash Dividend (%) 14% 25% 8% Stock Dividend (Bonus Share) 12. From the above table we see that in 2001 cash dividend was higher (25%) than the stock dividend (12. Maturity Grouping of Investment 2003 360. But in 2002 stock dividend is higher than cash dividend by 16%.581 2.000 2.419.

13 - 748.62 31. 2003 313.87 82.58 228.25% at the end December 31. the bank adopted BIS (Basle Committee on Banking Supervision) risk adjusted capital standards to measure capital adequacy. 12. higher than the previous year.57 132.45 EXIM Bank Ltd Together Towards Tomorrow In accordance with the Instruction of Bangladesh Bank.75 82. Banks in Bangladesh are required to maintain the ratio of 9% at the minimum against risk weighted assets.27 551. 2002 253. • The bank reinvested heavily in the year 2003 which is 121 million Tk. (Tk.33 Table 9: Capital Adequacy Ratio Source: EXIM Bank Prospectus The bank’s capital adequacy ratio stood at 7. 2003.20 31. More reinvestment means more capability of the bank for earning profit in the future.12 60.50 20. 12. in Million) CORE CAPITAL (TIER-1) A Paid up Capital Proposed Issued as Bonus Share B C D E F G H Share Premium Account Statutory Reserve (SR) Proposed Cash Dividend Other Reserve (OR) Retained Earnings Minority Interest in Subsidiaries Non-cumulative Irredeemable Preference Shares Total Core Capital 123. LOANS AND ADVANCES Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .25 2.

12. Classified Substandard Doubtful Bad & Loss Total 1% 20% 50% 100% Provision 119.933 7. Type of Loan 31.562 100% Table 10: Loans and Advances Source: EXIM Bank Prospectus • An important feature of EXIM’s loan is that its classified loan is only 0.051 31st December 2003 Base for Rate Amount A. B.350 12. D.910.131 164.989 5.289.291 7.10% A.10% which is very negotiable. No.954.90% 0. Total Unclassified Classified I) Substandard ii) Doubtful iii) Bad & Loss Loans and Advances 11.107 1.120 7.17% 100% 31.629 7.05% 0.991.2002 % of Total Loan & Advance 99.757 21.2003 % of Total Loan & Advance 97.57% 2.331 1% 20% 50% 100% 79.720 32.070 80. C.46 EXIM Bank Ltd Together Towards Tomorrow Classification of Loan & Advances Amount in ‘000 Sl.946 12.177 Table 11: Provision for Classified Loans & Advance Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .21% 0.12.089 271. It indicates that the Bank is efficient in loan recovery.946.051 164.217 12.057 5.929. B. The Bank has no doubtful as bad/losses. Provision for Classified Loans & Advance: 31st December 2003 Base for Rate Amount Provision 11.

000 82.500.250.836 31-12-2002 253.202.226. B.000 64. it is maintaining a good amount of provision for bad debt.47 EXIM Bank Ltd Together Towards Tomorrow Source: EXIM Bank Prospectus • Although the bank has no doubtful or bad debt.131.125.177 Paid up Capital Proposed Issue of Bonus Shares Share Premium Statutory Reserve Proposed Cash Dividend Retained Earnings 31-12-2003 313.331 Table 12: Position of Provision Source: EXIM Bank Prospectus • From the above table we see that EXIM’s required provisions equals the actual provisions made by the bank. Position of Provision (Amount in ‘000) SL.12.000 132.621.740 20.750.125.000 228. Particulars Provision Required Provision Made 31.183 56.000.181 31-12-2001 225.000 15.625 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .000 17.000 82.177 80. A.2003 164.575.000 2.250.241 123.875.2002 80.750.12. It indicates that the bank adopts sound strategy regarding provisions. SOURCES OF CASH (i) Internal Sources 31.000 60.331 164.575.000 28.896.

147.263 7.968.496.255.274. it is to be mentioned that the only external source of EXIM is deposits from clients.453 31-12-2001 7.921 407.071 Table 14: External Sources of Cash Source: EXIM Bank Prospectus • External source of cash includes deposits and borrowings.226. 3.06 COMAPARATIVE CASH FLOW STATEMENT: Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .968.331.405 15.48 EXIM Bank Ltd Together Towards Tomorrow Total 748.255.016.808 Table 13: Internal Sources of Cash Source: EXIM Bank Prospectus • From the above table we see that the dominant internal sources of cash are paid-up capital.242.242.532 9.662. (ii) External Sources Deposits Borrowing Total Grand Total 31-12-2003 15.482 31-12-2002 9.263 7.242.077 551.405 15.945.558.945. statutory reserve and retained earnings.532 10.264. It reflects internal efficiency of the bank.016.991.226.

530 11.811.463.642 89.153 65.001.717 124.969.49 EXIM Bank Ltd Together Towards Tomorrow Comparative cash flow statement of the bank is as follows: 2004 Tk.318.958 68.864.417.013 147.721 597.157 158.141 17.548 4.648.520 (1.168.052 212.459 178.118 1.505.999 2.767 5.697 872.569 75.087 Interest Payment Dividend Receipts Fees and Commission Receipts Recovery on loans previously written off Cash payment to employees Cash payment to suppliers Income taxes paid Receipts from other operating activities Payment for other operating activities Operating profits before changes in operating assets 594.921 272.309.639.117.172 2.031 301.002.012.252.804 153.180 379.633 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .971 1.674.374.566 19.823.709) 14.085 36.909.940. A.886.887 211.599) - - - - 168.893 2003 Tk.365.192 - 77.121.290.802.961.646.634.113.924.777 660.995.014.929.414.973.862. Cash flows from operating activities Interest Receipts 1.977 12.318 136.253 (521.696.558.626.140 2.341.256 240.860.596.334.399 54.615.673. 1.474 983.853.256 97.574 399..576.068) (728.289 358.836.499. 2001 Tk.596 and liabilities (A) Changes in operating assets and liabilities (Increase)/decrease in operating assets: Statutory Deposit Trading security-shares Fund advanced to other banks Fund advanced to customers 134.607.188.198.610 - 109. 2002 Tk.306.581 24.

622.500 9.500.015 - Increase/(decrease) in Operating Liabilities: 1.516 121.514 780.698 318.390.000.543.000.062.412.628.043 2.000 94.320 229.000.915 35.330.112.009.000.834 861.875.000 1.055.700.000.921.801.691.897.000 50.539 347.615.610 994.000 2.000 970.540 1.146.250.947 1. Cash flows from financing activities Issue of ordinary shares Share premium Dividend paid in cash 313.669.694.408.174 1.675 28.000 1.556.396.234.617.603.125 504.901.326 - 35.000 56.873 3.162.721.207.401.556.269 - 455.000 480.000 20.075 86.761.105.721 673.000 31.500.232. Cash flows from investing activities Receipts from sale of securities Payment for purchase of securities Purchase of fixed assets Sale proceeds of fixed assets Gain on sale of investment in shares Net cash from investing activities 1.000 1.723 55.999 - 85.885.250.465 670.363 B.000 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .244 1.163 456.198.450.500 138.277.450.000.750.912.50 EXIM Bank Ltd Together Towards Tomorrow Other assets Deposits from other banks Deposits from customers Liabilities on account of customers Trading Liabilities Other Liabilities Net cash from operating activities 47.065 C.452.293 402.082.157 7.000 47.615 5.600.000.025.924.000 1.892.000 3.

105.000 56.086.491. Cash and cash equivalent at the end of the year (D+E) Cash and cash equivalent Cash Balance with other banks & financial institutions Money at call and short notice Prize bonds 2.625 907.044 1.700 1.516.423.000.769.757 550.632.769.992 2.402.212.617 1.393 F.577.250.000 582.423.000 641.298.600 2.402. Cash and cash equivalent 2.000 31.647 373.557.124.617 at the begging of the year 1.674.577. In the above table we see that net cash from operating activity increase in one year and decrease in the subsequent year.423.000 D.200 360.573 158.691 2.044 Table 15: Comparative Cash Flow Statement Source: EXIM Bank Prospectus • If cash inflow is larger than cash outflow it indicates that the bank is operating efficiently.000.516.402.691 1.100 495.426 689. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .51 EXIM Bank Ltd Together Towards Tomorrow Net cash from financing activities 269.000.516.565 772.500.781.775 604.000 360.500 20.577.301.376.209.298 E.420.187 406.190.992 605.420.190.839 1.553 693.210.617 1. Net increase in cash and cash equivalent (A+B+C) 2.991.387.889.674.190.691 1.642 1.674.044 1.932.250.665. Operating activities include all these activities which are undertaken by the bank to perform successful operation.

Fixed Deposits.500. In 2001 net cash from financing activity was 31. Multiplus Savings (Thirteen Years deposit-More than Triple). the bank has introduced several schemes e. Education Saving Scheme. 1991 and directives as received from Bangladesh Bank from time to time which include among other the followings: Deposit Schemes Armed with two Islamic banking branches. different security certificates. and Monthly Savings Scheme.000 Tk and in 2004 it increased to Tk 269. 3.07 MARKETING ASPECTS The bank renders selected types of commercial banking services within the stipulation laid down by the Bank Companies Act. In line with this trend of product diversification. EXIM Bank’s net cash from investing activity is increasing at every year. Besides conventional deposits e. Secured Overdraft against FDR.g.500. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . the bank offers both conventional and Islamic saving schemes. Super Savings (Eight Years deposit-More than Double). So far. Real Estate Finance. Loans and Advances Portfolio In recent years a varied type of loans are swelling rapidly. • In the last the bank has rapid progress in financial performance.52 EXIM Bank Ltd Together Towards Tomorrow • Increase of net cash from investing activity indicates that the bank is undertaking more investment activities. Saving Bank Deposit and Current Account Deposits etc. Monthly Income Scheme. EXIM offers different conventional credit/investment schemes and the Islamic Banking products added a new momentum for the bank to increase opportunities for investment. Smart Saver (A high return investment scheme).932. EXIM’s loan and advances portfolio includes Project Finance in the form of Term Loan.g.

Small Loan in the form of general loan.53 EXIM Bank Ltd Together Towards Tomorrow working capital in the form of Cash Credit Hypothecation/Pledge.08 MARKET FOR SECURITIES BEING OFFERED Dhaka Stock Exchange Limited (DSE) 9/F.000 b.1000. Initial Public Offering (IPO) ( including a premium of Tk.037.00 per share) 408.K.. 3. Consumer Credit Schemes. 3. Agrabad C/A.R. Motijheel C/A. Mujib Road. Izara. Murabaha T. Financial Structure a.500 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Murabaha post import.875. Higher Purchase & Lease Finance. 30. Chittagong. Bai Muazzal both for local trade and export. Export finance in the form of Foreign Documentary Bill Purchased/Packing Credit/Local Foreign Bill Purchased.09 FINANCIL STRUCTURE 1. Import Trade Finance in the form of PAD/LIM/TR etc. EXIM Bank has been introducing new products in the market to increase its market base. Or Chittagong Stock Exchange Limited (CSE) CSE Building. Murabaha. Bai Salam. 1080 S. Issued and fully Paid up Capital as on 31st December 2003 (Sponsor Holding) 313. Dhaka.

which are subscribed by the sponsors as described in the prospectus. shall be subject to a Lock-in Period as under: 1. “Three years in case of companies intended/intending to go for Initial Public Offering (IPO) from the Date of its approval thereof by the Commission or from the start of its commercial operation. branch of the bank should be intimated to the commission. Jumbo share certificates of the sponsors/directors shall be in the custody of a scheduled bank (other than their own Bank).912.54 EXIM Bank Ltd Together Towards Tomorrow Total Capital Structure after IPO Table 17: Financial Structure Source: EXIM Bank Prospectus 721.500 As required in the Public Issue 1998 all the sponsors shares as detailed in the section “Ownership of the Company’s Securities” will be subjects to a ‘Lock-in’ provision for a period of 3 (three) years. Availability of Securities (i) Details of IPO Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Their share holing may be converted into market lots only after the expiry of the lock-in-period of three years. A ‘Jumbo’ Share Certificate (One for each existing Sponsors/Directors/existing Shareholder) is to be issued covering his respective total holdings. The name. as follows: The shares.” 2. whichever is later. 3. No splitting of share shall be made without prior intimation to the commission.

875 100 100 30 30 03. Total IPO 10% of IPO reserved for Non-Resident Bangladeshis 3.23% gross NPL ratio although 0% for the same ratio in the peer group is Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .138. Overall asset quality of EXIM is good though not the best in the peer group. 30.750 shares @ Tk 130.35% is financed by shareholders’ fund and 82. 02. 90% of IPO are offered to the general public 2.750 Table 18: Details of IPO Source: EXIM Bank Prospectus 3.803.037. 2003 of which 5.824.750 01.750 313.00 per share) in the following manner: Number Par Value Premium Total Amount Tk 408.55 EXIM Bank Ltd Together Towards Tomorrow IPO will be of 3.6 billion on June 30.233.00 each (including a premium of Tk. EXIM has steeped into the fifth year of operation with only 0.22% is financed by the depositors.500 40. 13.875 100 30 367.10 ASSET QUALITY Total asset of EXIM stood at Tk.138.

non performing loans of EXIM stood at Tk. However.56 EXIM Bank Ltd Together Towards Tomorrow available. 21.38% of the PCBs as on June 2002.23%) cannot sufficiently speak all about the quality of assets of the bank. Decomposition of NPL (Million Tk) 1H 2003 Dec. 2001 Dec.42%. As the above portfolio of EXIM has been developing for more than 3. During EFY 2002 infection started in its loan portfolio.23%.48 billion which is only 0. This growth rate was 42% for the year 2001. EXIM attained faster growth considering the ongoing economic scenario of this country. During FY 2002. EXIM is maintaining a better asset quality considering the peer average for gross NPL ratio (2002: 0. (i) Non Performing Loans (NPL) As on 30th June 2003.80 million against its total loans and advances of Tk. But comparing to peer group average. small gross NPL ratio (0. 2002 2004 Dec. 9. EXIM’s total asset increased by 20% compared to that of EFY 2001. During EFY 2002 the same ratio was 0. Peer Group Gross NPL ratio for EFY 2002 was 0. This seems to be commendable when compared to the industry average of 31.42%). 2000 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .10%.37% of the total banking sector and 17. The bank’s total loan portfolio further increased by 19% as at 1H 2003. 3rd generation banks are often criticized for their fast banking practice and EXIM seems to be keeping pace with the peers in this respect where the bank is supposed to be more cautious in selecting borrowers to maintain the quality of its assets. the bank is in a better position.5 years. These high growth rates in peer average for the earlier years are in fact inflated because of small base effect. However. As at EFY 2002 EXIM’s total loans and advances increased by 55% as against the industry and peer growth rate 17% and 44% respectively for the year 2002.

keeps reserve for only what is required. The bank.45 7. Major portion of these loans come from a few RMG manufacturers whose Back-to-Back LC and pre-shipment finance liability forcedly converted to uncovered term loan.63 0 0 0 0 0 0 0 0 Table 19: Non Performing Loans (NPL) Source: EXIM Bank Prospectus Movements in the non performing loans (NPL) demonstrate slow but active infection in the bank’s financial health for the last two years. Although such infection is insignificant considering the size of its loan portfolio. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . (iii) Loan Loss Reserve and Policy EXIM keeps provisions for its loans and advances as prescribed by the central bank.28 million which is 7. with its existing provisioning policy.20% of the bank’s outstanding loans and advances as on June 30. 2003. 419. (ii) Rescheduled Loan & Rescheduled Policy The bank seems to follow liberal rescheduling policy to keep the NPL ratio minimum. During the last one year EXIM’s top 20 rescheduled loans amount a total of Tk.34 5.01 3. Since it is not keeping any access reserves in good times.02 million is uncovered. it may fall in trouble in bad times if it has to maintain a significant portion of fund as reserve for nonperforming loans and advances in future.57 EXIM Bank Ltd Together Towards Tomorrow Substandard Doubtful Bad/Loss 13. out of this rescheduled amount. This has been done by changing the mode. 682. unless the bank maintains proper monitoring of the existing portfolio and remains conscious about its future exposure it may cause a real trouble in future. Tk. conversion of non-funded loan to force term loans and enhancement of repayment period.

03% respectively of its total funded exposure.58 EXIM Bank Ltd Together Towards Tomorrow (iv) Sectoral Exposure of Loans EXIM’s funded exposure was highest in trade finance followed by working capital finance with 45.73% and 24. 4.54 billion forming 32. (vi) Risk-Weighted Assets (RWA) Risk-Weighted Assets (RWA) is calculated as per the Bangladesh Bank Circular.20 million respectively as on June 30.50 million and Tk. Such a high exposure to a single sector reveals the level of concentration risk for the bank where the local garments industry is struggling to survive in the international market. In case of term financing only. as on the end of 1H 2003.09 billion) as on June 30.40% respectively reflecting a rising trend of concentration. which requires 100% weight to be assigned to all loans and advances to the private sector. At present directors’ loan is nil as per the document submitted by EXIM. Of its total exposure EXIM is more concentrated in export finance for garments products followed by import trade financing.11% of the bank’s total term financing. The bank’s exposure to export trade finance for garments products was Tk.23% of its total exposure (Tk. Leasing companies received 10.10%).02% during EFY 2002 and 2001 respectively. 14. Import trade finance constitutes 24.83% and 31. 2002.61%) followed by transport industry (12. 711. 1. The RWA Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .51% and 12..91% and 17% respectively as on EFY 2002. 2003 which are 7. (v) Large Loan Exposure and Directors’ Loan EXIM’s top 10 and top 20 term loans amounted Tk. highest exposure goes again to the garments industry (40.140. For EFY 2001 and 2002 this exposure was 30.03% of the bank’s total exposure (both funded and non-funded) which is 26.

59 EXIM Bank Ltd Together Towards Tomorrow amounted to Tk. In terms of risk weighting. EXIM keeps mainly treasury bills (88% of total investment in securities) of different maturity schedule considering the flexibility and return. Off-Balance Sheet (OBS) assets reportedly formed 2. 3. EXIM’s OBS exposure appears satisfactory. overall liquidity position deemed to be moderate for EXIM. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . and high cost of fund.46% loss and the diminution value stood at 19.38 million (as on June 2003) including off balance sheet exposure and this amount is in increasing trend keeping pace with the growth of its loans and advances.05% of the bank’s total investment.D ratio. as whole. EXIM has to maintain a good number of interest bearing bills and government securities in its investment portfolio. (viii)Investment in Securities In order to maintain the Statutory Liquidity Requirement (which is 20% of total deposit liability excluding for inter-bank deposits). which is 11.36 million. Customer deposit. 46% of the bank’s contingent are made up of irrevocable commitments to extended credits.98% of the bank’s total risk-weighted assets as at December 2001. Letter of Guarantee contributed 6% of EXIM’s total offbalance sheet assets. and 42% of total assets. Market value of these quoted securities was 168. total contingent liabilities accounts for 29.78% of total footing (assets with contra).11 FUNDING & LIQUIDITY Considering Better deposit base. (vii) Off Balance Sheet Exposure As on June 2003. and relatively tight liquid asset ratio. 8181.69 million. 188. higher L . As on EFY 2002.67 as on the same date reflecting 10. investment quoted securities amounted to Tk.

50% of total deposits and borrowings in FY 2002.12 ASSET LIABILITY MANAGEMENT There is no set Asset Liability Management Committee (ALMCO) of EXIM Bank and no other particular committee is assigned with the duty to do such job. In FY 2002. 2003 shows that the assets and liabilities of the bank are somehow matched except for the 8 days – 3 Months time span. the asset-liability position is currently managed by an officer in consultation with DMD-1 and MD of the bank. 3.33 billion which is 87. the Bank’s deposit composition showed 70% of Time Deposits and 30% of Demand Deposits which were 75% and 25% respectively during the preceding year. which comprises of a significant 83. Increasing trend in customer deposit reflects a good funding base for EXIM.30 billion (FY 2001: Tk. EXIM’s total customer deposit increased to Tk 8. The asset liability maturity of EXIM as on June 30. As on June 2003. The asset liability Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . In 2002.04% of the Bank’s total deposits and borrowings. In absence of such committee.50 billion). The Bank’s major funding source is customer deposits. More than 90% L-D ratio signifies the Bank’s aggressive attitude in offering loans and advances. customer deposit increased to 10. 5.60 EXIM Bank Ltd Together Towards Tomorrow the base deposit for a bank. has been increasing over the years.

740.390 Industry 2002 Mil Tk. Being a Third Generation Bank in the private sector with an age of less than 6 years. 3.35 million against the liabilities of Tk.481 Growth EXIM % 35 Industry % 12 Deposits % 1 % 0.61 EXIM Bank Ltd Together Towards Tomorrow maturity structure shows that EXIM is mainly dependent on short term liabilities represent to 63. 2. in the 8 days – 3 months time span.08% in the asset. it showed commendable growth of deposits of 35% in EFY 2002.066.96 billion which is 0.945 2001 Mil Tk. much higher than the growth trends in the industry. 4 specialized banks.13 MARKET SHARE OF EXIM BANK The banking industry of Bangladesh had deposit of Tk 996. However.83 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .474 2001 Mil Tk.99% of all total market loans and advances. 886.40 billion as on December 2002.95 billion which is 1% of total market deposits and share of loans and advances is Tk 7. 7.19 million which means there is a deficit of 61. 1. 10 foreign banks. the bank has assts worth Tk. 9. This seems to be the main reason for its dependency in the call money market to tap the temporary asset liability mismatch. 996. shared among 49 banks including 5 NCBs. 25 private commercial banks and 5 Islamic banks. Market Share of EXIM Bank EXIM Bank 2002 Mil Tk.64% of the bank’s total liabilities. Out of the above EXIM’s share of deposit is taka 9.47 billion and loan and advances of Tk 802.

491 55 10 Advances Table 20: Market Share of EXIM Bank Source: 1.28 100 68 2004 124 75 72 293 112 78 Growth 9% -19% 11% 34% 12% 15% Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .99 5.955 0.6 45 2003 114.396 727.05 93 65 218. Comparative Profit Position of Private Banks (crore taka) Sl 01 02 03 04 05 06 Bank Name Uttara Bank Pubali Bank Basic Bank Islami Bank National Bank IFIC Bank 2002 135.71 802. October-December 2001 2. Bangladesh Bank.62 EXIM Bank Ltd Together Towards Tomorrow Loans and 7.14 COMPARATIVE PROFIT POSTIONS OF PRIVATE BANKS IN BANGLADESH Comparative Profit Position of Private Banks in Bangladesh in the last three years is shown below. May 2003.08 157.26 92.58 125 50. 3. This will help to have a clear picture of the profit positions of the private banks working in Bangladesh. Scheduled Bank Statistics.132 0. Economic Trend.

00 88.00 93 49 52 39 28 12 32 13% 42% 46% 63% 53% 132% 85% 37% 63% 211% -38% 129 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .02 52.00 60 72 69.10 22.00 40.00 64 61.00 19.82 45 17.10 60.40 12.35 14 72 87.5 38 24 9 19.15 42.68 22.63 EXIM Bank Ltd Together Towards Tomorrow 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Arab-Bangladesh Bank UCBL Bank City Bank Prime Bank Southeast Bank Dhaka Bank Dutch-Bangla Bank Al Arafa Bank Social Investment Bank Eastern Bank NCC Bank Mercantile Bank EXIM Bank Standard Bank Bank Asia Premier Bank ONE Bank Mutual Trust Bank First Security Bank Trust Bank Shahjalal Bank Jamuna Bank 54 46 55 81.02 18 13 11 9.03 62.71 3.00 20% 25% 38% 25% 24% 35% 42% 18% -18% 59.15 26.45 48.56 49 66.09 110 71.37 51.64 30 43.03 63 48 31.20 72 90 95 137 88 85 68 37 42.05 40.

24 21 548% Table 21: Comparative Profit Position of Private Banks in Bangladesh Source: EXIM Bank Prospectus The above table shows the comparative profit positions of different banks in Bangladesh. The banks which have higher growth rate than EXIM Bank are Standard Bank (63%). The growth rate of EXIM is 46% which is better than many other private banks. During Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .64 EXIM Bank Ltd Together Towards Tomorrow 29 Brac Bank 3. In the year 2002. Net Interest Margin (NIM) increased to 2. EXIM’s pre-tax return on average assets (ROAA) decreased to 3.56 crore Tk in 2004.00 3. First Security Bank (63%). ROAA & NIM OF EXIM BANK EXIM’s operating performance found to be satisfactory among the competing banks of the third generation and also performing above average comparing with the whole banking sectors. Premier Bank (132%). The bank’s profitability parameters show a mixed picture except pre-tax return on average equity (ROAE). The profitability of EXIM Bank does not fluctuate too much. net profit of EXIM Bank was 40.52%).15 ROAE. which indicates a steady growth since its inception till EFY 2002.06% in the preceding year (EFY 2002: 2. Jamuna Bank (129%) and BRAC Bank (548%).64 crore Tk in 2003 and 88. One Bank (85%). Bank Asia (53%). these are vulnerable because of instability and inherent risk. 3. and it increased to 60. As on December 2002. Although some private banks show very high profit rate.67% during EFY 2002 which was 2.48% from 3.96% in EFY 2001 due to faster growth rate of assets than that of profit. Trust Bank (211%).4 crore Tk.

69% respectively.44%.67 3. Table 22: Key Performance Indicators Source: EXIM Bank Prospectus • EXIM’s operating income increased by 40% while it’s operating expenses increased by 38% in 2002 comparing that of the preceding year. As on EFY 2002 net profit increased by 27. 3.69* 2002 2.36 2002 % of Total 34. which further increased at an annualized growth rate of 8.96 64.85 million of the preceding year.32 Components of Income Net Interest Income Investment Income Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . ROAA and ROAE declined and stood at 2.37 9. it enjoyed a pretax and pre-provision profit of Tk.06 3. Key Performance Indicators EXIM Bank 1H2003 NIM (%) ROAA (%) ROAE 2.19* 61.72 2001 2.6% during the end of 1H 2003.08%.58 *Annualized un-audited figure.08* 3.48 66.16 INCOME OF EXIM BANK Breakdown of Total Income By Activities 1H 2003 % of Total 30.52 2.94 2000 % of Total 31.19% and 61.84 12. which rose by 41% from Tk.66 11.72 30.26 14. 386.73 2001 % of Total 23. 3.65 EXIM Bank Ltd Together Towards Tomorrow the end of 1H 2003 annualized NIM. During this period.80 million.39 2000 2. 273.

97 million in the following year.67% during EFY 2002 which was 2. interest rate fluctuation shall have a lesser discomposing effect on the profitability of EXIM compared to the other banks of the generation. In 2002. EXIM’s investment income increased by 27.50 12. 68.36 7.17 OPERATING PERFORMANCE Key Cost Ratios EXIM Bank 1H 2003 2002 2001 Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . exchange and brokerage of export and import business.94 6. As the bank’s major income stems from non interest based commission.73 45. The bank’s NIM is average with its peers.67 million.25 50. 54. 272.07% from Tk.94% of total operating income as a result of its concentration on exports import financing. Free income grabs larger portion in the total income pie of the bank followed by its net interest income. 3.66 EXIM Bank Ltd Together Towards Tomorrow Fee Income Other Income 48.99 Table 23: Breakdown of Total Income by Activities Source: EXIM Bank Prospectus EXIM’s net interest margin (NIM) increased to 2. the bank’s fee income increased by 28.06% during EFY 2001. It is worth noting that as on June 2003 EXIM’s share of fee income is the highest in the peer group representing 48.45 46. any slump in country’s international trade might cause an adverse impact on its profit earning ability. However.28 million in 2001to Tk.32 13.70% to Tk.

23% in 2002 to Tk. cost-to-income ratio decreased to 34.67 EXIM Bank Ltd Together Towards Tomorrow Efficiency Ratio Personnel Expenses to Average Assets (%) Operating Expenses to Average Assets (%) Yield per 100 Tk.) * Annualized figure 34.91 1.63 (in 2001: Tk.14 per share of Tk. 95. mainly because of the higher growth of income compared to that of the cost. In terms of costs. 79.69 million). 145. 3.59%.39 million (in 2001: Tk.36 397. It is worth mentioning here that Bangladesh Bank (BB) has instructed the scheduled banks of the country to raise their capital (including reverses) up to Tk.00 million which caused these banks to retain a major portion of their profit.24 0.23 Table 24: Key Cost Ratios Source: EXIM Bank Prospectus EXIM’s cost efficiency is more or less similar to its peer average.5% bonus shares for FY 2001 and for FY 2002 it has declared 8% cash dividend and 24% bonus share as against its earnings of Tk.94 million).59 0. Other non-interest expenses have also increased by 37.75 million during the preceding period. 76.84 380.73). to Tk.73 1. operating expenses increased by 38.76 million from Tk. 68. But positively. 100 each. 105.000.18 COMPARISON WITH PEER GROUP Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . 201.80%. 1.12 2. EXIM Bank has paid 25% cash dividend and 12. During 1H 2003 this ratio slightly increased to 34.48 34. Staff Cost (Tk. Personnel expenses have increased by 38.08 404.24% (EFY 2001: 34.3 34.99 2.71% in 2001 to Tk.

58 72. 3.44 77.14 82.14 Tk which was higher than that of Mutual Trust Bank and Bank Asia.44 Tk respectively.19 YEAR WISE NET PROFIT EXIM BANK Year wise net profit of EXIM Bank is shown in the following figure: 2001 66. In the same year EXIM’s cash dividend and EPS was 25% and 62.72 25.75 39.51 103.45 48. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .95 2002 98.13 13.43 47.86 29.26 199.57 2004 % of Growth 189.24 19.45% 19.33 Tk respectively.05% Profit Income Less: Profit Expenses Net Profit Income Add: Exchange. • In 2002 the EPS of EXIM was 79.86 2003 151.11 27.54 25.6 Tk respectively and in 2001 Bank Asia’s cash dividend and EPS was N/A and 29.68 EXIM Bank Ltd Together Towards Tomorrow Dividend and Earnings Per Share of the Peer Group Cash Dividend Stock Dividend 2002 EXIM Bank Mercantile Bank Mutual Trust Bank The Trust Bank Bank Asia 8% 35% 20% Nil 20% 2001 25% 30% 18% Nil N/A 2002 24% 5% Nil 14% 8% 2001 12.32 111. This is a positive sign of EXIM.33 Table 25: Dividend and Earnings per Share of the Peer Group Source: EXIM Bank Prospectus • The above table shows comparison of EXIM with its peer group. In 2001 Mercantile Bank’s cash dividend and EPS was 30% and 77.08 52.26% 142.51 EPS 2001 62.65 24.5% 10% Nil Nil N/A 2002 79.

04% Table 26: Year wise Net Profit of EXIM Bank Source: EXIM Bank Prospectus • Increase of net profit income indicates that the bank is able to distribute more dividends to its shareholders as well as able to meet its outstanding liabilities.40 29.56 37.27 45.61 60.57 28.28 64.38 18. 4. It further indicates that the bank is able to reinvest its earning for more generation of future profit.44% 13.17 122.01 FINDINGS Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .56% 43.69 EXIM Bank Ltd Together Towards Tomorrow Commission & Others = Less Administrative Expenses Net Position 28 41.41 59.87 40.64 33.02% 46.25 75.72 88.95 33.68 85.

Directed by the mission to provide prompt and efficient services to clients. industrial. commendable knowledge and expertise in convention with modern banking. The bank has a Well-diversified and balanced advance portfolio consisting of agriculture. Also efficient management of portfolio would reduce the amount of classified loans to a minimum level.70 EXIM Bank Ltd Together Towards Tomorrow Export Import Bank of Bangladesh Limited is a third generation private commercial bank in the country with commendable operating performance. The management of the Bank is prudently monitoring the market situation to keep the deposit interest rate at minimum and also trying to invest at a reasonable rate to increase the profitability of the Bank. export. consumer. The management of the bank is maintaining an efficient portfolio in order to have a healthy growth and retain customer satisfaction. transport. and other sectors. The Bank has achieved success among its peer group within a short span of time with its professional and dedicated team of management having long experience. garments. trade & commerce. EXIM Bank is engaged in modern banking. EXIM Bank has successfully celebrated its sixth year of operation. import construction. which at the end will sustain the earnings of the Bank. It is expected that EXIM Bank by its efficient asset and liability management will be able to maintain its trend of growth and thus overcome the threat. In order to avoid asset liability mismatch the management of the bank is constantly monitoring the bank’s business portfolio. It provides a wide range of commercial services. The liquidity risk is minimized to maximum extent.    Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .

which is evident from the growth pattern of those products. since its inception. Recognizing the risks of unfair and hostile competition in the banking industry EXIM Bank has. Although EXIM Bank is yet to be fully automated the Bank has adequate technology to meet its present requirement and it proceeding aggressively to enhance its technology level. Many products are introduced in the market in recent days and more innovative and diversified products are in the offering. This demonstrates the Bank’s professional management ability.71 EXIM Bank Ltd Together Towards Tomorrow  EXIM Bank has been able to maintain a very low classified portfolio over the last six years of operations. The bank has also introduced various welfare schemes for its employees with a  Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . focused on diversified client base with an innovative and differentiated product base. The bank is recruiting fresh university graduates on regular basis and arranging training for them both from its own and other training institutions. This strategy has been rewarding for EXIM. Side by side the Bank is hiring experienced and skilled human resource in an effort to balancing out the need of the Bank in various fields of its operation. Its present classified portfolio stands very low of the total loan portfolio in the year 2003. Foreign exchange risks originating from transactions have always been professionally managed in EXIM Bank.    EXIM Bank having small and targeting niche markets is likely to be less affected by restrictive monetary and/or fiscal policy. and it plans to remain innovative in future also by way of creating new markets for its products. The products are well received by the market.

it is expected that the loan loss provisioning in future will be within tolerable limit having little material impact on future profitability as well as net worth. Therefore. As EXIM Bank is performing well in traditional general banking and there is a good demand for Islamic Banking. which will be continued in future. The Management has been following a Loan and Advance Policy. the management of the Bank is also expecting god result in Islamic banking operation.72 EXIM Bank Ltd Together Towards Tomorrow view to retain its trained and experienced human resources on longer term basis and to create a sense of belongingness.02: SWOT ANALYSIS Strengths  Strong non-interest earning base  Wide branch network among the third generation banks  Low infection in loan exposure  Wide product line Weakness  High cost of fund  Highly exposed to volatile garment business Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ .   4. The bank Management believes that lower employee turnout ratio will improve productivity of the banking future.

96% reflecting the bank’s decreasing dependency on other banks for funding and liquidity needs. However. during the end of 1H 2003 this ratio further declined to 28.73 EXIM Bank Ltd Together Towards Tomorrow  Excessive dependency on term deposits  Inadequate delegation of power  Inadequate IT infrastructure Opportunities  Credit card business  Scope of market penetration through diversified products and wide banking network  Regulatory environment favoring private sector development Threats  Increased competition in the market for public deposits  Market pressure for lowering the interest rate  Deteriorated export. import and guarantee business due to indecent competition as well as economic slump. This account for about 16. EXIM relies on inter-bank borrowings and bank deposits for funding of its assets. its portion in the total funding as on 30 th June of 2003 stood at 12. It can be noted here Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . Apart from the customer deposit.52% reflecting deteriorating liquidity position of the bank.51% during EFY 2002 (EFY 2001: 34%) against peer average of 39.48% (EFY 2001: 44% approx). The bank’s liquid asset ratio was 29.50% of the bank’s total interest bearing funds in FY 2002.

62% during the end of 1H 2003. At the end of 1H 2003 it further decreased to 23. 100 million and above increased to Tk 1. 2. the industry average for the same during EFY 2003 remained slightly below 7%. 100 million totals Tk.54 billion at the end of 1H 2003 (EFY 2002: Tk. Of the banks total deposits (including call) 42.51 billion in the preceding year. This reveals relatively tight liquidity position of the bank.39% will mature within 6 months.32 billion which was Tk. EXIM Bank showed the high dependency on fixed deposits for funds with about 80% concentration. But it is in a poorer liquidity position compared to its peers. The bank seems to be heavily dependent on term deposit and volatile call money market in order to meet its funding need.67% will mature within 1 year. This ratio stood at 91.22% will mature within 3 months. During EFY 2002.75. top 50 deposits comprised 28.05 billion.54% for the last two and a half year. 1. Its saving deposit collection shows a rising trend whereas current deposits remain steady over the years. Comparing to the figure of EFY 2002. Cost of funding of EXIM during EFY 2003 was 9.52% of the bank’s total deposit which as 47. 10 million and less than Tk. Compared to the overall industry EXIM’s sources of funds are costly.72% is more than one year. 2. 12. and the remaining 33.74 EXIM Bank Ltd Together Towards Tomorrow that the average liquidity position of the 3rd generation banks also declined during recent years and EXIM is not an exception. The bank’s net loans to customer deposit ratio hovered around 93.51 billion) its contribution to total deposits found to be decreasing over the recent years. Though the total amount coming from top 50 deposits increased to Tk. 11. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . deposits amounting to Tk. Comparing with its peer group n FY 2002. Deposits having balance more than Tk.28%. 2.22 billion from 1.83% during the preceding year.

EXIM Bank’s position in respect of this inter-bank money market was of net borrower at the end of 1 H 2003.75 EXIM Bank Ltd Together Towards Tomorrow It may be noted that money market remained volatile during the recent past.50 million against placement of Tk. 325.49%against average lending per month was Tk. dependency on the money market declined during the second quarter of this year. local money market has been liberalized to a great extent and the availability of fund has increased. However.15%. 5. after successful implementation of floating exchange rate. The recommendations given below are not decisions. Some recommendations regarding bank’s betterment are described below. Since the beginning of 2 H 2002 to the end of 1 H 2003 EXIM’s average borrowing per month was Tk. 891. rather they are only suggestions to improve the performance in order to fulfill the customer satisfaction so that clients give more Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . During end of the second quarter of this year this condition was acute. 962.58 million @ 8. Adoption of floating exchange rate in the country followed by strict monetary control by the Bangladesh Bank caused the tight situation in the money market.20 million. with borrowing Tk.41 million @ 9.01 RECOMMENDATIONS EXIM Bank is a third generation private commercial bank in the country with commendable operating performance. However. 254.

Taking initiative to increase foreign remittance.76 EXIM Bank Ltd Together Towards Tomorrow preference to EXIM Bank. The recommendations are made on the basis of survey findings and analysis and these are: 1. 9. 3. Increasing branch number to increasing wide geographical coverage throughout the country. ATM booth is necessary for giving prompt service to clients. To fulfill the vision of "mass banking" this Bank should grants investment portfolio to new entrepreneurs /new businessmen new companies etc. Implementing adequate IT infrastructure to provide international service standard to customers. 4. 2. 8. To gain success in the programs like "Poverty Alleviation” and "Self Reliant" especially in rural areas.02 CONCLUSION Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . 6. this bank should provides investment facilities on the basis of individual. 10. 7. 5. Introducing online banking for providing advanced technological facilities to customers. Adding some promotional offers to large balance bearing clients. Sponsorship in different social programs can flourish bank image. EXIM should go aggressive advertising and promotional activities to get a broad geographic coverage. Emphasis on corporate social responsibility is also necessary. 5. Special consideration to Sylhet zone can be profitable for the bank.

Although it is a third generation bank facing government deposit restrictions. it has all the potentials to penetrate in the market. Internship Paper on ‘Performance Evaluation of Export Import Bank Bangladesh Ltd’ . If the weakness are addressed appropriately and opportunities are explored keeping in view the threats behind with a stable and adroit management having regard to appropriate corporate governance and modern automation technology.77 EXIM Bank Ltd Together Towards Tomorrow EXIM Bank is a private sector bank having a small market share of the industry. it is expected that EXIM advance up in the ladder of success in the coming years.

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