‘’Financial statement analysis of Uttra bank’’

Daffodil University
Faculty of Business Studies

Department of Marketing

(B.B.A Program)

‘’Financial statement analysis of Uttra bank’’

Submitted to:
Mahbub Parvez

Associate Professor

Department of Business Administration

Daffodil University

Submitted by-
Name Code No Batch Signature
Kawsar Ahmed 171-11-1078 46nd

Date of Submission- 13 August 2020

 Letter of Submission

13 August 2020
To,

Mahbub Parvez

Associate Professor

Daffodil University

Subject: Submission of Term Paper.

Dear Sir,

It is my great pleasure to submit the Term Paper on ‘’Financial statement analysis of

Uttra bank’’ that you have assigned me. It has been a great experience for me to
prepare a Term Paper. I tried my level best to put meticulous efforts for the
preparation of this report. Any shortcomings or flaw may arise as I am novice in this
aspect.
I have tried to make each and every element relevant to my topic and discussed under
the context of whatever I have learned from the course. It would be pleasure for me, if
this report can serve its purposes.

Thanks, and Regards

Yours Faithfully

…………………………...
Kawsar Ahmed
B.B.A Program (46nd Batch)
Code No: 171-11-1078
Department of Marketing
Daffodil University
 Supervisor’s Certification

This is to certify that Kawsar Ahmed is a student of BBA (Marketing), Daffodil

University bearing Code No: 171-11-1078. He has completed his Term Paper entitled
‘’Financial statement analysis of Uttra bank’’. He has completed the Term Paper
under my supervision for the partial fulfilment of the award of BBA (Marketing)
degree.

As far as I know he tried his best to conduct this Term Paper successfully. I think this
study will help him in the future to build up his career.

I wish his every success in life.

With best wishes & regards

…………………………………....

Mahbub Parvez

Associate Professor

Department of Business Administration

Daffodil University
 Declaration

I affirmed that the Internship report titled ‘’Financial statement analysis of Uttra
bank’’ being submitted for the internship part of BBA program is the original work
carried out by me. I further declare that this Term Paper is based on my original work
and no part of this project has been published or submitted to anybody.

Thanks and Regards

Yours Faithfully

………………………............
Kawsar Ahmed
B.B.A Program (46nd Batch)
Code No: 171-11-1078
Department of Marketing
Daffodil University
 Acknowledgement

The Term Paper on ‘’Financial statement analysis of Uttra bank’’ has been
prepared to fulfill the requirements of BBA degree. I am very much fortunate that I
have received sincere guidance, supervision and co-operation from various respected
people while preparing this Term Paper.

At the very beginning I would like to express my gratitude to God for special blessing
in completing the Term Paper. Then, I would like to thank my academic supervisor of
the Internship Program Mahbub Parvez, Associate Professor, Department of
Business Administration, Daffodil University for giving me the opportunity to prepare
this Term Paper. He also provided me some important advices and guidance for
preparing this Term Paper. Without his assistance, this Term Paper would not be a
comprehensive one.

………………………….
Kawsar Ahmed
B.B.A Program (46nd Batch)
Code No: 171-11-1078
Department of Marketing
Daffodil University
 Table of Contents
‘’Financial statement analysis of Uttra bank’’
Particulars Page No
1.1 Introduction
1.2 Background of the Study
1.3 Summary
2.1 Background of Uttara Bank Ltd
2.2 Business Philosophy of Uttar Bank Ltd
2.3 Uttara Bank at a Present
2.4 Vision, Mission and Objectives of UBL
2.5 UBL at a Glance
2.6 Strategies of UBL
2.7 Function of Uttara Bank LTD
2.8 Core Business Units of UBL
3.1 Financial statement Analysis
3.2. Balance sheet
3.3 Income Statement
3.4 Ratio Analysis
3.5 Groups of Financial Ratios
3.6 Liquidity Ratio
4.1 Five year's progression of Uttara Bank Ltd
4.2 Analyzing Debt Ratio of Uttara Bank Ltd
4.3. Liquidity Ratio

5.1 Findings
5.2 Conclusion
5.3 Some Recommendation for Uttara Bank Limited
5.4 Reference
1.1 Introduction:
Generally, by the word “Bank” we can easily understand that the financial institution
deals with money. But there are different types of banks like; Central Banks,
Commercial Banks, Savings Banks, Investment Banks, Industrial Banks, Cooperative
Banks etc. But when use the term “Bank” without any prefix, or qualification it refers
to the „commercial banks‟. Commercial banks are the primary contributor to the
economy of a country. So, we can say commercial banks are a profit-making
institution that holds the deposit of the individuals & business in checking various
accounts like current, savings account and then uses these funds to make loans. For
these, people and government are very much dependent on these banks as the financial
intermediary. As banks are profit-earning concern; they collect deposit at the lowest
possible cost and provide loans and advances at higher possible cost. The differences
between two are the profit for the bank.

Banking sector is expanding its hand in different events every day. At the same time
the banking process is becoming faster, easier and the banking arena becoming wider.
As the demand for better service increases day by day, they are coming with different
innovative ideas and products. In order to survive in the competitive field of the
banking sector, all banking organization are looking for better service opportunities to
provide their fellow clients. As a result, it has become essential for every person to
have some idea on the bank and banking procedure.

Term Paper is very essential for every student, especially for the students of business
administration, which helps them to know real life situation. For this reason, a student
makes the paper at the last stage of the MBA degree, to launch a career with some
practical experience. To fulfill that requirement, I have selected the study topic
“Financial statement analysis of Uttra bank’’

1.2 Background of the Study:

Economic history shows that development has started everywhere with the banking
system and its contribution towards financial development of a country is highest in
the initial stage. As a mandatory requirement of the Bachelor of Business
Administration (BBA) program, I was assigned to do my internship in Uttara Bank
Limited for a period of three months. From practical knowledge, we will be able to
know real life situations and start a career with some practical experience. Uttara Bank
Limited (UBL) is banking company incorporated in the People’s Republic of
Bangladesh with limited liability.
This Term Paper, ‘’Financial statement analysis of Uttra bank’’ has been prepared to
fulfill the partial requirement of BBA program as a mean of Internship Program.
While preparing this Term Paper, I had a great opportunity to have an in-depth
knowledge of all the banking activities of Uttara Bank ltd.

1.3 Summary:

Uttara Bank is one of the largest and oldest private sector commercial bank in
Bangladesh, with years of experience. Adaptation of modern technology both in terms
of equipment and banking practice ensures efficient service to clients. Bank not only
oldest private banks but also surpassed almost all banks in terms of overall growth and
profit. Stability of the financial institute in terms of growth, profitability and
management is desirable for up-gradation of bank’s image in the market. Security of
the deposit maintained i.e. the level of efficiency and effectiveness of the investment
portfolio of the bank, as the deposit maintained is used for investment portfolio of the
bank, direct relationship over the customer loyalty and this is the prime factor
affecting the image of any financial sector in the market. The Bank should have
automated operations in the service windows to. New Products and Services add value
to the brand image of the Bank. Insurance on deposit and loan products protect not
only the bank’s interest but also the interest of the public. Limitations of operations are
to be minimized to have superior customer satisfaction. Liquidity of deposits has
direct impact on the public sentiment and hence has ample effect on the customer
loyalty. The report on ‘’Financial statement analysis of Uttra bank’’ This Term
paper gives an idea about the activities of Financial Performance of Uttara Bank
Limited. The objective of this Term paper is to analyze and focus on the over-all
financial operation. This report aims to providing financial performance evaluation of
Uttar Bank Limited. Here, all sorts of ratio analysis have been executed; on order to
analyze how efficient, liquid and desirables the bank is in terms of its finance. To start
with, the liquidity ratio of the bank reveals that Uttara Bank Limited has proven to be
quite liquid and financial strength over the past three years. The content of this report
is based on eight parts. In the First Two Parts a brief overview of background,
significance, methodology, and instruments used for analysis of making report is
discussed. The Companies history, its vision, mission, objective, goal, brand image,
core values, business principles etc. are discussed. To understand how Uttara Bank Ltd
is performing in the macro environment, financial highlights are also provided to
evaluates the financial condition of UBL. In the Third Part named Theoretical
Background show brief description about ratio analysis. In the Fourth Part or Analysis
Part I have discussed about Quantitative Analysis like different ratios of three years to
understand the financial condition for analyze properly and compare with another
bank like Pubali Bank and IFIC Bank Ltd. In next part Comparative Analysis is
discussed where I try to show comparison with another private commercial bank and
specially focus on Pubali Bank and IFIC Bank Ltd. Then I concluded my report
saying some recommendations and justifications, which may help Uttara Bank
Limited to improve more than its current position

Banking is now an essential part of our economic system. Modern trade and
commerce would almost be impossible without the availability of suitable banking
service. The health of the economy is closely related to the soundness of its banking
system. Modern banks play an important part in promoting economic development of
a country. Banks provide necessary funds for executing various programmers
underway in the process of economic development. They collect savings of large
masses of people scattered throughout the country, which in the absence of banks
would have remained ideal and unproductive. These scattered amounts are collected,
pooled together and made available to commerce and industry for meeting the
requirements. Economy of Bangladesh is in the group of world’s most underdeveloped
economies. One of the reasons may be its underdeveloped banking system.
Government as well as different international organizations have also identified that
underdeveloped banking system causes some obstacles to the process of economic
development. So they have highly recommended for reforming financial sector. Since
1990, Bangladesh Government has taken a lot of financial sector reform
measurements for making financial sector as well as banking sector more transparent,
and formulation and implementations of these reform activities has also been
participated by different international organization like World Bank, IMF etc.
2.1 Background of Uttara Bank Ltd:
The emergence of Uttara Bank Ltd. in the private sector is an important event in the
banking industry of Bangladesh. Uttara Bank Ltd. started its business as a public
limited company on August 8, 1992 with the primary objectives to carry on all kinds
of banking business in and outside of Bangladesh and also with a view to safeguard
the interest of the depositors of erstwhile BCCI (Bank of Credit and Commerce
International (Overseas)) under the Reconstruction Scheme, 1992, framed by
Bangladesh Bank.
In 1991, when BCCI had collapsed internationally, the operation of this bank had been
closed Bangladesh. After a long discussion with the BCCI employees and taking into
consideration the depositors‟ interest, Bangladesh Bank then gave permission to form
a bank named Uttara Bank Ltd. which would take over all the assets, cash and
liabilities of erstwhile BCCI in Bangladesh, with effect from 16th August 1992. So, it
can be said that UBL is a successor of BCCI. UBL started its business as a scheduled
bank with only four branches, which included Principal Branch, Dhaka; Motijheel
Branch, Dhaka; Agrabad Branch, Chittagong and Khulna Branch. UBL started its
business with a motto to grow as a leader in the banking arena of Bangladesh through
better counseling and efficient service to clients. UBL resumed its operational
activities initially with an authorized capital of Tk. 1000 million, divided into 10
million shares of Tk. 100 each and paid up capital of Tk. 310 million. The initial
shareholders were the NCBs, various govt. agencies, and some of the depositors who
had agreed to accept shares in the new bank in lieu of their deposits.
The first Board of Directors of UBL constituted under govt. supervision consisted of 7
directors from various business and professions. Uttara Bank Ltd. was under govt.
control until the end of 2000 and therefore, there were lots of deficiencies in the
Bank’s management. In 2001, the board of directors brought in new professional
management from various foreign banks who have been trying to modernize the bank
ever since. Uttara Bank Ltd. started with Paid-up Capital stood at Tk. 828 million but
the authorized capital remained unchanged at Tk. 1000 million. The general public
held 83.32% of its shares while institutional investors held the rest 16.58%. At present,
UBL is one of the fastest growing commercial banks in the country & the largest
capital-based bank in Bangladesh. It has 25 branches scattered all over the major cities
of the country in major business areas.
2.2 Business Philosophy of Uttar Bank Ltd:
The philosophy of UBL is to develop the Bank into ideal and unique banks. The
sponsor
perception is that UBL should be quite different from other product and managed
commercial banks operating in Bangladesh. UBL to grow as a industry lieder rather
than a follower. The leadership will be in the area of service as being made to add new
dimension so that clients can get “Additional” in the services to commensurate with
the needs and requirements of the country’s growth and developing economy.
Nevertheless, UBL is a commercial bank in the private sector. It is therefore next
world seek lair return on owner’s equity as its one of the main goals. This purpose
sought to be achieved by rendering maximum possible satisfaction to its client’s quick
and efficient services. Therefore, quality service to the clients is another goal of the
UBL.

2.3 Uttara Bank at a Present:

Uttara Bank is one of the largest and oldest private sector commercial bank in
Bangladesh, with years of experience. Adaptation of modern technology both in terms
of equipment and banking practice ensures efficient service to clients. 211 branches at
homo and 600 affiliates worldwide create efficient networking and reach capability.
Uttara is a bank that serves both clients and country.

Like clothes shops, candy shops, bake shops, food shops, Uttara Bank Limited is not a
“debt shop” the term being used by many to call the present say banks. It is now been
called a modern bank that undertakes all its operation at international standard.
Although Uttara Bank Limited faces some primary difficulties in past, it has now
emerged as a major player in the financial sector. It is listed in both Dhaka and
Chittagong bourses IPO that raised the paid-up capital of the bank to Tk.10 core. In 31
March 2006 reserve fund was Tk178.4 core. Uttara Bank Limited has built itself as
one of the pillars of Bangladesh’s financial sector and is playing a pivotal role in the
extending the role of the private sector of the economy. The bank has a branch
network nationwide with 211 branches
2.4 Vision, Mission and Objectives of UBL:
VISION
To become the bank of choice by transforming the way to do business and developing
a truly unique financial institution that delivers superior growth and financial
performance and are the most recognizable brand in the financial services in
Bangladesh.
MISSION
 To deliver service excellence to all customers, both internal and external.
 To take constant challenge of systems, procedures and training to maintain a
cohesive and professional team in order to achieve service excellence.
 To create an enabling environment and embrace a team-based culture where
people will excel.
OBJECTIVES
 To maintain a satisfactory deposit mix.
 To grow its credit extension service to the commercials as well as industry.
 To increase its diversifications of loan portfolio and geographical coverage.
 To curb present operating expenses further so as to increase earnings.
 To reduce burden of nonperforming assets.
2.5 UBL at a Glance:
 UBL is one of the largest private banks in Bangladesh.
 It operates through 211 fully computerized branches ensuring best possible and
fastest services to its valued clients.
 The bank has more than 600 foreign correspondents worldwide.
 Total number of employees nearly 3,562.
 The Board of Directors consists of 15 members.
 The bank is headed by the Managing Director who is the Chief Executive
Officer.
 The Head Office is located at Bank’s own 18-storied building at Motijheel, the
commercial center of the capital, Dhaka.
UBL Networks
Corporate Offices (Corporate Branch and Local Office )  2

Regional Office 12

Worldwide Affiliates 600

Total Branches (Including Corporate Branch and Local Office) 211

 Authorized Dealer Branches 38

Treasury and Dealing Room 1

Training Institute 1

Man Power 3562

2.6 Strategies of UBL:

UBL Bank Limited mainly follows top down approach to take necessary decisions for
the company. Basically, they follow the centralize strategy where the Head Office of
the Bank control and monitor all the activities of its branches. In case of marketing
strategy, they basically depend on ‘word of mouth’ as they are already well reputed for
its long-term service in the banking industry.

2.7 Function of Uttara Bank LTD:

Uttara Bank Limited performs all types of functions of a modern commercial bank,
which generally includes:
1) Mobilization of savings of the people and safe keeping of all types of deposit
account.
2) Making advances especially for productive activities and for the other commercial
and socio-economic needs.
3) Providing banking services to common people through the branches.
4) Introduce modern Banking services in the country.
5) Discounting and purchasing bills.
6) Various information, guidance and suggestions for promotion of trade and industry
keeping in view of the overall economic development of the country.
7) Finance for both capital machinery and working capital.
8) Relating to constructions of both commercial and residential.
9) Finance under small business of self-employed clients.
10) Finance of farming and non-farming activities to rural people including purchase
of agricultural equipment’s.
11) Ensuing proper utilization of credit disbursed.
12) Developing new products Market surveys before making any finance
13) Finance for small transport.
14) Monitoring and forecasting.
15) Developing marketing campaigns.
16) Finance for household durables.
17) Work simplification studies.
18) Monitoring diversification of portfolio among different sectors.

2.8 Core Business Units of UBL:

 Consumer Banking
 Corporate Banking
 SME banking
 Treasury
2.8.1 Consumer Banking
UBL Consumer Banking deals with the day-to-day financial wants of the consumer
clients. Consumer banking products are designed keeping in mind the financial
necessities and affordability of the clients. The new IT platform of UBL has enabled
its Consumer Banking to offer world class and comprehensive range of financial
products and services. These have been fashioned in a manner to fulfill the clients'
banking needs with dedicated Relationship Managers who are reaching out to the
customers to make sure that the job is done in a systematic manner within the client’s
time frame. And with Internet banking service, customers can now access the accounts
and services at the click of mouse.
2.8.2 Corporate Banking
Corporate Banking is an integrated specialized area of the Bank, which addresses the
diverse financial needs of Corporate Customers.
2.8.3 SME Banking
Small & Medium Enterprise (SME) remains the engine of growth in the emerging
economy. Uttar Bank limited has been putting its emphasis on small and medium
Enterprise financing in line with the prudential regulation/guidelines of Bangladesh
bank. The bank strategy was to provide working capital term loan to different small &
medium scale manufacturers, traders & service providers that fall under SME sector.
In the year 2010 the bank invested Tk 17,727.0 million in SME sector. The
outstanding balance of the same as on 31.12.2010 stood at Tk 26,366.7 million out of
which small enterprise Tk 13,890.3 million & medium enterprise Tk 12,576.3 million.
As a vision to diversity the credit portfolio as well as to minimize credit risk, the bank
is now focusing more on SME sector

2.8.3 Treasury
Treasury unit is a Core banking unit with its leading-edge technology and steadily
growing volume of activity in the markets, UCBL's treasury unit and currency dealing
desks have consolidated its position as a well-known and well-established counterpart
in the newly transformed Free-Floating rate, dealing daily with a wide circle of both
bank and non-bank customers all over Bangladesh. Our everyday business revolves
around participation in Money Market & Foreign Exchange Market in a substantial
volume.

3.1 Financial statement Analysis

Financial Performance is a subjective measure of how well a firm can use its assets
from business and generate revenues. Financial Performance term is also used as a
general measure of a firm's overall financial situation over a given period of time, and
can be used to compare with similar firms across the same industry or to compare
industries or sectors in aggregation.
Financial performance analysis refers to an assessment of the viability, stability and
profitability of a business, sub-business or project. It is performed by professionals
who prepare reports using ratios that make use of information taken from financial
statements and other reports. These reports are usually presented to top level
management as one of their bases in making business decisions. Based on these
reports, management may take decision. Financial performance analysis is a vital to
get a financial overview about a company. Generally, it is consisting of the
interpretation of balance sheet and income statement. Ratio analysis and trend analysis
can be done by using these two statements. These analyses are the major tools for
analyzing the company’s financial performance.

3.2. Balance sheet:

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

3.3 Income Statement:

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

3.4 Ratio Analysis

A tool used by individuals to conduct a quantitative analysis of information in a
company’s financial statements. Ratios are calculated from current year numbers and
are then compared to previous years, other companies, the Industry, or even the
economy to judge the performance of the company. The basic inputs to ratio analysis
are the firm’s income statement and balance sheet for the periods to be examined.
Ratio analysis is predominately used by proponents of fundamental analysis.
In finance, a financial ratio or accounting ratio is a ratio of two selected numerical
values taken from an enterprise’s financial statements. There are many standard ratios
used to try to evaluate the overall financial condition of a corporation or other
organization. Financial ratios may be used by managers within a firm, by current and
potential shareholders (owners) of a firm, and by a firm’s creditors. Security analysts
use financial ratios to compare the strengths and weaknesses in various companies. If
shares in a company are traded in a financial market, the market price of the shares is
used in certain financial ratios. In short, ratio analysis is essentially concerned with the
calculation of relationships which, after proper identification and interpretation may
provide information about the operations and state of affairs of a business enterprise.
The analysis is used to provide indicators of past performance in terms of critical
success factors of a business. This assistance in decision-making reduces reliance on
guesswork and intuition and establishes a basis for sound judgement.

3.5 Groups of Financial Ratios:

Financial ratios can be divided into four basic groups or categories:
i. Liquidity ratios
ii. Activity ratios
iii. Debt ratios and
iv. Profitability ratios -run operation of the firm. Debt ratios are useful primarily when
the analyst is sure that the firm will success
v. Liquidity, activity, and debt ratios primarily measure risk, profitability ratios
measure return. In the near term, the important categories are liquidity, activity, and
profitability, because these provide the information that is critical to the short fully
weather the short run.

Financial Ratios

Liquidity Activity Ratio Debt Ratio

Profitability
Ratio
Ratio

Net Working Inventory Gross Profit

Capital Turnover Margin
Degree of The Ability to
Indebtedness Service Debt

Average
Operating Profit
Collection
Margin
Current Period Debt
Time
Ratio Ratio
Interest
Earned
Ratio
Average Net Profit
Debt-
Payment Margin
Equity
Quick (Acid- Period
Ratio Fixed
Test) Ratio Payment
Coverage Returns on
Ratio Investment
Fixed Asset
Turnover

Return on
Equity

Total Asset
Turnover
Earnings per
Share
 Price/Earnings
Ratio

3.6 Liquidity Ratio:

a. Current ratio
The current ratio, one of the most commonly cited financial ratios, measures the firm’s
ability to meet its short-term obligations. The higher the current ratio, the better the
liquidity position of the firm. It is expressed as:
Current Ratio=Current Asset/Current Liabilities

year 2005 2006 2007 2008 2009

Current Ratio 0.77 1.04 1.11 1.04 0.98

Source: Annual Report of UBL

Graphical Presentation:

3.6.1.Net Working capital

Net working capital, although not actually a ratio is a common measure of a firm’s
overall Liquidity a measure of liquidity ratio calculated by
Net Working capital=Current Asset-Current Liabilities
year 2005 2006 2007 2008 2009
 Net Working -729.41 2085.43 3611.90 1540.70 -672.82
Capital(million)

Graphical Presentation:
4.1 Five year's progression of Uttara Bank Ltd:
Particulars 2013 2012 2011 2010 2009
INCOME STATMENT

Gross income 8,768.2 5,130.5 6,313.5 5,020.2 3,335.1

Gross Expenditure 5,701.3 2,513.9 3,007.9 3,553.0 3,153.2
Gross Profit 3,006.9 2,188.9 2,305.6 1366.2 1,281.9
Pre-tax profit 2,801.9 1,105.2 2,098.1 1133.7 866.8
Post Tax Profit 1,551.9 2,513.9 1,138.5 309.5 238.8
BALANCE SHEET
Authorized Capital 5000.0 3,200.0 1,600.0 1000.0 1,000.0
Paid-up-capital 2,396.0 1,597.3 798.6 399.3 199.7
Reserve Fund & other 6,213.8 3,609.6 2,890.2 2,053.2 1,885.2
Shareholders’ equity 8,610.8 6,206.9 3,688.8 2,353.5 2,085.2
Deposit 65,868,0 59387.3 50817.0 33,586.3 39,360.2
Advance 38,672.7 39,351.3 37,131.3 28,377.3 25,163.9
Investment 18,591.1 22,502.5 5 11,188.3 13,355.8 9,563.5
Guarantee Business 1,759.1 1,633.5 1,826.9 1,373.3 1,563.1
Export Business 12,986.7 15,096.9 15,039.6 13,783.5 18,133.9
Import Business 29,613.5 29,129.3 31,136.9 25,307.9 22,630.7
Foreign remittance 33,200.7 33,635.3 36,073.2 29,575.3 28,728.1
Fixed Assets 2,798.1 1,088.3 1,065.7 1,013.0 932.1
Total Assets 81,351.8 71,936.0 58,333.3 52,860.3 35,217.0
Loans & Advances 2,678.7 2,832.0 2,633.8 3,530.9 3,783.9
Total off-Balance 9,377.6 8,560.5 8,806.9 8,830.6 7,328.5
sheet Exposure
SHARE INFORMATON
Earnings Per Share 6.38 69.13 132.56 102.56 123.59
Market value per 1,660.75 1,350.25 3393.75 3,853.75 2,312.25
Share
Price earnings 25.63 20.96 23.81 37.33 18.56
Ratio(time)
Book Value Per 35.93 388.58 337.88 573.73 957.66
Share(NAV) after
split
4.2 Analyzing Debt Ratio of Uttara Bank Ltd:
1. Debt Ratio:

The debt ratio measures the preparation of total assets provided by the firm’s creditors.
Debt ratio= Total Liabilities/Total Assets

Year 2005 2006 2007 2008 2009

Debt Ratio 0.95 0.95 0.95 0.94 0.91

Table-7: Debt ratio

Source: Annual Report of UBL

Graphical Presentation:

2. Time Interest Earned Ratio:

The times interest earned ratio, sometimes called the interest coverage ratio, measures the firm’s ability to
make contractual interest payments.

Time Interest Earned Ratio =Earnings before interest and Taxes/Interest

Year 2005 2006 2007 2008 2009

Time Interest 1.11 1.49 1.61 1.95 1.78
Earned Ratio

Table-8: Time Interest Earned Ratio

Source: Annual Report of UBL

Graphical Presentation:

4.1.5 Analyzing Profitability Ratio Uttara Bank Ltd:

1. Investment to Deposit ratio:

Investment to Deposit Ratio=Total investment/Total Deposit

Year 2005 2006 2007 2008 2009

Investment 0.221 0.242 0.332 0.221 0.379

To Deposit
Ratio

Table-9: Investment to Deposit Ratio

Source: Annual Report of UBL

Graphical Presentation:

2. Net Profit Margin:

The net profit margin measures the percentage of each sales dollar remaining after all
expenses, including taxes, have deducted. The higher the firm’s net profit margin is
better. The net profit margin is a commonly cited measure of the company’s success
with respect to earnings on sales

Net Profit Margin=Net profit after tax/operating income

Year 2005 2006 2007 2008 2009

Net 0.04 0.09 0.13 0.28 0.24

Profit
Margin

Table-10: Net Profit Margin

Source: Annual Report of UBL
Graphical Presentation:
3. Return on Asset (ROA):

The return on asset (ROA), which is often called the firm’s return on total assets,
measures the overall effectiveness of management in generating profits with its
available assets. The higher the ratio is better

Year 2005 2006 2007 2008 2009

Return on 0.23% 0.55% 0.77% 1.95% 1.54%
Asset
Table-11: Return on Asset

Source: Annual Report of UBL

Graphical Presentation:

4. Return on Equity (ROE):

The return on equity measures the return earned on the owner’s (both preferred and
common stockholders’) investment. Generally, the higher the return, the better off the
owner’s. Return on Equity=Net Profit after Tax/ Shareholders equity

Year 2005 2006 2007 2008 2009

5.77% 11.92% 16.69% 30.86% 17.81%
Return on
Equity

Table-12: Return on Equity

Source: Annual Report of UBL

4.3. Liquidity Ratio:

a. Current Ratio

Year UBL IFICBL PBL

2007 1.11 1.04 0.97
2008 1.04 1.12 0.88
2009 0.98 1.19 0.96
Table-15: Current Ratio

Source: Annual Report (2007-2009) of UBL, IFICBL and PBL

Graphical Presentation:
5.1 Findings:
1. Operating income ratio decreased during the year by 1.56 % and stood at 39.80 %
as at 31 December 2013, which is lower than previous year. 2. Return on assets ratio
(ROA) decreased during the year by 0.55 % and stood at 1.07 % as at 31 December
2011.
3. UBL‟s gross profit margin is decreasing day by day.
4. Net working capital has gradually decreasing and in 2013 it was negative, which
was not good for the bank.
5. Return on equity decreased during the year by 15.93% and stood at 17.63% as at 31
December 2013.
6. Dividend per share decreased during the year by Tk-31 and stood at Tk-20 as at 31
December 2012.
7. Earnings per share decreased during the year by Tk 69.19 and stood at Tk-63.77 as
at
31 December 2013.
8. Capital adequacy ratio increased during the year by 0.3 % and stood at 13.30 % as
at
31 December 2013.
9. Net interest margin increased during the year by 1.23 % and stood at 3.33 % as at
31
December 2013.
10. Debt ratio of UBL is in satisfactory level as it is in trend.
11. The deposit mobilization data position of UBL is not good compare to CBL and
BRAC.
12. The variance of UBL is high so the risk is high.
13. The capital adequacy of UBL is most efficient that means depositors of UBL bear
less
risk than BRAC and CBL.
14. Classified total loans of UBL are higher than other bank that is alarming for the
bank.

5.2 Conclusion:

Uttara Bank Limited (UBL) setting new standards in the banking arena in the time of
turbulent economic conditions. As part of the long-term financial reform and
modernization plan of the government, the bank had been converted into a public
limited company. UBL helps to mobilize the resources to stay strong in the key areas
of operation. In the areas of treasury operation, UBL remains the key player in the
country’s foreign exchange and money market enhancing profitability through careful
pricing and assessment of risk and return on investment, the treasury dealing is being
strengthened to facilitate transactions requiring more sophisticated products and
services for larger institutional and corporate clients. Though it has a wide range of
network and confidence from the customers but it has some problems those problems
reduce it income. It is PLC but the authority is not that flexible and it takes time to
take decision.

From the practical point of view, I can declare boldly that I really have enjoyed my
Internship at this bank from the very first day. Moreover, this internship program that
is mandatory for my B.B.A program, although short-date, obviously has helped my
farther thinking about my career. I have tried my soul to incorporate the research
report with necessary relevant information in my report.

Although excellence in Banking is the Moto of Uttara Bank Limited meeting the
demand of the discerning customer is not the sole objective of the Bank. Customer
relation should be increased to give appropriate service to them. And treat them as an
asset of the company. Despite of these problems Uttara Bank Limited trying to
improve this condition and take some necessary measure to improve its condition.

5.3. Some Recommendation for Uttara Bank Limited:

It is not unexpected to have problems in any organization. There must be problems to

operate an organization. But there must be remedies to follow. The following
commendations can be suggested to solve the above-mentioned problems:

 As, it has seen that Current Ratio and Net working capital of UBL is not
satisfactory range so firstly, UBL should increase current asset for smoothly
operate their business.
  UBL`s Cost to income ratio were satisfactory range so they should try to
maintain this trend.
 As, Total Asset Turnover shows the efficiency of the bank, UBL should also try
to improve their Total asset turnover although their total assets turnover is
higher than that of Pubali Bank and IFIC bank.
 Although UBL net profit margin is increasing trend they should try to more for
increasing their operating efficiency.
 From the trend analysis it has seen ROA of UBL were fluctuating. So they
should try improving this and should take necessary steps to increase ROA.
 UBL’s investment to deposit and Loan to Deposit ratio both are increasing trend
that is the positive sign towards the profitability of the bank. So the bank should
work hard for maintaining this trend.
 As, UBL’s Time interest ratio is not satisfactory they should increase their
EBIT or reduces the debt capital in order to smoothly satisfy the interest
obligations.
 Uttara Bank Limited P/E ratio is satisfactory range they should try to maintain
this.
 From the trend analysis we have seen operating cost of UBL is increasing year
by year, it may adversely affect the profitability of the bank. So, they should
give more concentration to reduce operating cost.
 From the trend analysis it has seen ROE of Uttara Bank ltd were fluctuating, so
they should try improving this and should take necessary steps to increase ROE.

5.4 Reference:
1. Annual Reports (2009, 2010, 2011, 2012 & 2013) - Uttar Bank Ltd
2. Annual Report (2013) The City Bank Ltd
3. Annual Report (2013) Brac Bank Ltd
4. Financial Management by Prof. Shajahan Mina
5 Financial Institution Management, A Modern Perspective by Anthony Saunders
6. Brochures published by Uttara Bank Ltd.
7. Data provided by branch
8. Class Notes
9. www.bangladeshbank.org
10. www.uttarabank-bd.com