NET INTEREST MARGIN YEAR 2017 YEAR 2018 YEAR 2019

INTEREST INCOME 50,316,283 60,743,247 105,617,207

INTEREST EXPENSE 24,384,711 29,838,696 64,412,998
1,048,726,36
TOTAL ASSESTS 919,547,560 0 1,299,138,956
NET INTEREST MARGIN% 3% 3% 3%

NET INTEREST MARGIN%

4%

3%

3%

2%

2%

1%

1%

0%
YEAR 2017 YEAR 2018 YEAR 2019

ILLUSTRATION
Net interest margin of a bank is a profitability ratio that interprets that how a
bank is investing. It basically means how much money the bank is making on its
operations of investment. In each of these three years the net interest margin is
constant. A positive figure in 2017, 2018 and 2019 shows that the BANK AL HABIB
has been making money on its investment operations. The ratio is constant in
each year, it may be because of the interest income, interest expense and total
assets have a slight difference in each of the years.
LIQUIDITY COVERAGE RATIO YEAR 2017 YEAR 2018 YEAR 2019
360,946,77
HIGH QUALITY LIQUID ASSEST 333,948,742 2 363,806,793
111,556,29
NET CASH FLOW 89,343,417 6 132,953,270
LCR% 374% 324% 274%

ILLUSTRATION
LC% measures the liquidity for a bank. It measures the ability of a bank to meet
the short term needs of its customers. In order to be in compliance the bank
needs to have 100% LCR. As from the above table we can interpret that the bank
has been in compliance in all three years. There is a change in each of these years
and there is a decreasing pattern. In year 2018 and 2019 the LCR is decreasing
which indicates that the ability to meet short term demand is slightly decreasing.

EFFICIENT RATIO YEAR 2017 YEAR 2018 YEAR 2019

NON INTEREST EXPENSE 20,271,007 23,712,241 28,327,950
REVENUE 34,323,134 38,238,804 50,767,770
ER% 59% 62% 56%

ER%
64%

62%

60%

58%

56%

54%

52%
YEAR 2017 YEAR 2018 YEAR 2019

ILLUSTRATION
Efficiency ratio of a bank assess the efficiency of a bank. It indicates how well a
bank uses its assets and liability. It is calculated by dividing non-interest expense
by revenue. In theory, the ER% should be 50% or more. From the above table we
can interpret that in all three years AL HABIB BANK has been efficient enough in
using its assets and liabilities. In 2018 the efficiency ratio increases to 62% which
shows a positive attitude but it decline in 2019 which means its ability to use its
assets and liability is declining.
LEVERAGE RATIO YEAR 2017 YEAR 2018 YEAR 2019
TIER 1 CAPITAL 46,951,508 50,028,088 59,651,572
1,497,222,42
TOTAL ASSESTS 919,547,560 4 1,230,510,528
LR% 5% 3% 5%

LR%
6%

5%

4%

3%

2%

1%

0%
YEAR 2017 YEAR 2018 YEAR 2019

ILLUSTRATION
The leverage ratio measures the ability of a bank to cover its exposure with tier 1
capital. Tier 1 capital is a liquid asset which can be easily converted into cash to
cover exposure and saves bank from insolvency. As a rule the leverage ratio
should be 3% or more. For AL HABIB BANK LR% in 2017, 2018 and 2019 is up to
the mark, which means the tier 1 capital is covering the bank’s exposure. In 2018
it declines to 3% which means that the ability of a bank to cover its exposure has
declined but it again increases to 5% as in 2017 which is a positive attitude.
OPERATING LEVERAGE YEAR 2017 YEAR 2018 YEAR 2019
GROWTH RATE OF REVENUE 13% 11% 33%
GROWTH RATE OF NON INTEREST
EXPENSE 17% 17% 19%
OL -5% -6% 13%

OPERATING LEVERAGE
15%

10%

5%

0%
YEAR 2017 YEAR 2018 YEAR 2019

-5%

-10%

ILLUSTRATION
This ratio is another measure of efficiency of a bank. It is a comparison between
growth rate of revenue and growth rate of non-interest expense. In 2017 and in
2018 it is negative which indicates that bank is accumulating expenses faster than
revenue. It is negative in 2019 which indicates that bank is earning revenue faster
than expenses. There is a positive attitude in 2019 which is a good thing for the
bank. There is an increase because the bank in 2019 may be have a high growth
rate of revenue than the growth rate of non-interest expense.