Thesis Report

Thesis Report on
Financial Performance Analysis of Five Commercial Banks
Prepared By:
Humayra Salsabil Siddique Taqee
ID BBA 06518852
BBA 65th Batch
Bachelor of Business Administration (Accounting)
Department of Business Administration
Stamford University Bangladesh
Supervised By:
Shymoli Biswas
Assistant Professor (AIS)
Date of submission: June 24, 2023

Letter of Transmittal
Date: …………………….
To,
Subject: Submission of thesis Report
Dear mam,
It is a great opportunity to submit thesis report on Financial Performance Analysis of five

Commercial Banks as a requirement of the Bachelor of Business Administration (BBA)
program. I have prepared this thesis report according to your instructions.
In this process I came to know different financial information of commercial banks. These
informative analysis and findings are presented in this thesis report.
In affairs of preparing report I tried be specific as much as possible. I am so thankful for your
guidance and effort. I would appreciate any query regarding this report.
Sincerely yours,
………………………..

ID BBA 06518852
BBA 65th Batch
ii
Student’s Declaration
I hereby declared that the thesis report Financial Performance Analysis of five Commercial
Banks Submitted to Shymoli Biswas, Assistant Professor (AIS), Department of Business
Administration, Stamford University Bangladesh. As a part of the requirement of BBA
degree. This thesis report have not been submitted any part of this report to any other places.
I also confirm that this report is uniquely prepared by me.
…………………………….

ID BBA 06518852l
BBA 65th Batch
iii
Letter of Certification
This to certify that Humayra Salsabil Siddique Taqee BBA 06518852 BBA 65th Batch on
BBA program major Accounting has prepared the thesis report financial Performance
Analysis of five Commercial Banks as a part of the requirement of BBA degree. So far as I
know from her declaration she didn’t submit any part of this report to any other places.
I wish best wishes.
……………………………
Supervisor,
Shymoli Biswas
iv
Acknowledgement
Through the thesis report program has to be done individually in a sense of completion the
credit hour but it is quite impossible to do alone without the sincere and outmost co-operation
of some individuals. I express an appreciation for their sincere and wholehearted co-operation
in preparing in this report.
I express my deep gratitude to almighty Allah for giving me the strengths & composure to
finish the task within the schedule time.
I would like to thank my supervisor Shymoli Biswas, Assistant Professor (AIS), Department
of Business Administration, Stamford University Bangladesh. For his guidance, inspiration
and constructive suggestion with the report as well as the period of my thesis report
submission in the university.
v
Executive Summary
The thesis report is a basic course requirement of the BBA program. The proposed topic is
financial performance analysis of five commercial Banks.
Financial statement analysis reduces our uncertainty in decision making. But it does not
lessen the need or expert judgment. Instead, it provides us an effective and systematic basis
for business decisions. It gives an insight about the company’s operating performance and
financial health both to the internal and the external users of financial information.
From 43 private commercial banks I have selected five Islamic Banks. In this report analyze
and compare Cash ratio, Current ratio, Quick ratio/ Acid test ratio, Debt ratio, Equity ratio,
Return on equity (ROE), Return on assets (ROA), financial leverage percentage, Quality of
income ratio, Price earnings ratio, Dividend yield ratio means overall financial performance
of five commercial banks to see financial performance of these banks in different years from
2017 to 2021. Descriptive statistics was used in analysis.
vi
Table of Content
Description Page No.
Letter of Transmittal ii
Student Declaration iii
Letter of Certification iv
Acknowledgement v
Executive Summary vi
Chapter-One : Introduction
1.1 Background of the study 01
1.2 Scope of the study: 01

1.3 Objectives of the study 01
1.4 Methodology: 01
1.4.1 Data Sources: 01
1.5 Limitations of the study: 02
Chapter-Two : Overview of the Company
2.1 Al-Arafah Islami Bank Ltd
2.1.1. Background of Al-Arafah Islami Bank Ltd 03
2.1.2. Mission 03
2.1.3. Vision 04
2.1.4 Objectives 04
2.1.5. Board of directors: 04
2.1.6. Functions in Brief 05
2.2. Islami Bank Bangladesh limited
2.2.1. Background of Islami Bank Bangladesh Limited 06
2.2.2. Mission 06
2.2.3. Vision 06
2.2.4. Objectives 07
2.2.5. Board of Directors 07
2.3. Social Islami Bank Ltd. (SIBL)
2.3.1. Background of Social Islami Bank Ltd. (SIBL) 08
2.3.2. Mission Social Islami Bank Ltd. (SIBL) 09
vii
2.3.3. Vision 09
2.3.5. Board of directors 10
2.4. Shahjalal Islami Bank Limited (SJIBL)
2.4.1. Background of Shahjalal Islami Bank Limited (SJIBL) 11
2.4.2. Mission 11
2.4.3. Vision 11
2.4.4 Objectives 11
2.5. ICB Islamic Bank
2.5.1. Background of ICB Islamic Bank 13
2.5.2. Mission 13
2.5.3. Vision 14
2.5.6 Functions in Brief 14
Chapter- Three: Theoretical Background of Financial
performance Analysis 16
3.2. Objectives of financial analysis 16

3.3. Sources of financial information: 17
3.4. Reasons 17
3.5. Methods of financial statement analysis 17
3.5.1.RATIO ANALYSIS: 17
Chapter- Four: Analysis 22
4.1. Introduction: 22
4.2 Ratio analysis 24
4.2.1. Al-arafah islami bank ltd 24
4.2.2 Islami bank bangladesh ltd. 31
4.2.3 Social islami bank 38
4.2.4. Shahjalal islami bank 44
viii
4.2.5 ICB islamic bank ltd. 51
4.3. Comparative analysis 57
Chapter- Five
5.1 Findings: 64
5.2 Recommendations: 66
5.3 Conclusion: 66
REFERENCE: 67
List of Tables

Table 4-1: Cash Ratio of Al-Arafah Islami Bank Ltd 25
Table 4-2: Current Ratio of Al-Arafah Islami Bank Ltd 25
Table 4-3: Debt Ratio Al-Arafah Islami Bank Ltd 26
Table 4-4: Equity Ratio of Al-Arafah Islami Bank Ltd 27
Table 4-5: Return on equity (ROE) of Al-Arafah Islami Bank Ltd. 27
Table 4-6: Return on assets (ROA) of Al-Arafah Islami Bank Ltd. 28
Table 4-7: Quality of income Ratio of Al-Arafah Islami Bank Ltd. 29
Table 4-8: Price earnings Ratio of Al-Arafah Islami Bank Ltd 29
Table 4-9. Financial leverage percentage of Arafah Islami Bank Ltd 30
Table 4-10: Dividends yield Ratio to Arafah Islami Bank Ltd 31
Table 4-11 Cash Ratio of Islami Bank Bangladesh 31
Table 4-12: Current Ratio of Islami Bank Bangladesh Ltd. 32
Table 4-13: Debt Ratio of Islami Bank Bangladesh Ltd. 33
Table 4-14: Equity Ratio Islami Bank Bangladesh Ltd. 33
Table 4-15: Return on equity (ROE) of Islami Bank Bangladesh Ltd. 34
Table 4-16: Return on assets (ROA) of Islami Bank Bangladesh Ltd. 34
Table 4-17: Quality of income Ratio of Islami Bank Bangladesh Ltd. 35
Table 4-18: Price earnings Ratio of Islami Bank Bangladesh Ltd. 36
Table 4-19: Financial leverage percentage of Islami Bank Bangladesh Ltd. 36
Table 4-20: Dividends yield Ratio Islami Bank Bangladesh Ltd. 37
Table 4-21: Cash Ratio of Social Islami Bank 38
ix
Table 4-22: Current Ratio of Social Islami Bank 38
Table 4-23: Debt Ratio of Social Islami Bank 39
Table 4-24: Equity Ratio of Social Islami Bank 40
Table 4-25: Return on equity (ROE) of Social Islami Bank 40
Table 4-26: Return on assets (ROA) of Social Islami Bank 41
Table 4-27: Quality of Income Ratio of Social Islami Bank 42
Table 4-28: Price earnings Ratio of Social Islami Bank 42
Table 4-29: Financial leverage percentage of Social Islami Bank 43
Table 4-30: Dividends yield Ratio of Social Islami Bank 44
Table 4-31: Cash Ratio of Shahjalal Islami Bank 44
Table 4-32: Current Ratio of Shahjalal Islami Bank 45
Table 4-33: Debt Ratio of Shahjalal Islami Bank 46
Table 4-34: Equity Ratio of Shahjalal Islami Bank 46
Table 4-35: Return on equity (ROE) of Shahjalal Islami Bank 47
Table 4-36: Return on assets (ROA) of Shahjalal Islami Bank 47
Table 4-37: Quality of income Ratio of Shahjalal Islami Bank 48
Table 4-38: Price earnings Ratio of Shahjalal Islami Bank 49
Table 4-39: Financial leverage percentage of Shahjalal Islami Bank 49
Table 4-40: Dividends yield Ratio of Shahjalal Islami Bank 50
Table 4-41: Cash Ratio of ICB Islamic Bank Ltd. 51
Table 4-42: Current Ratio of ICB Islamic Bank Ltd 51
Table 4-43: Debt Ratio of ICB Islamic Bank Ltd 52
Table 4-44: Equity Ratio of ICB Islamic Bank Ltd 53
Table 4-45: Return on equity (ROE) of ICB Islamic Bank Ltd 53
Table 4-46: Return on assets (ROA) of ICB Islamic Bank Ltd 54
Table 4-47: Quality of income Ratio of ICB Islamic Bank Ltd 55
Table 4-48: Price earnings Ratio ICB Islamic Bank Ltd 55
Table 4-49: Financial leverage percentage of ICB Islamic Bank Ltd 56
Table 4-50: Dividends yield Ratio of ICB Islamic Bank Ltd 57
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List of Figures

Figure 4-1: Cash Ratio of Al-Arafah Islami Bank Ltd 25
Figure 4-2: Current Ratio of Al-Arafah Islami Bank Ltd 26
Figure 4-3: Debt Ratio Al-Arafah Islami Bank Ltd 26
Figure 4-4: Equity Ratio of Al-Arafah Islami Bank Ltd 27
Figure 4-5: Return on equity (ROE) of Al-Arafah Islami Bank Ltd. 27
Figure 4-6: Return on assets (ROA) of Al-Arafah Islami Bank Ltd. 28
Figure 4-7: Quality of income Ratio of Al-Arafah Islami Bank Ltd. 29
Figure 4-8: Price earnings Ratio of Al-Arafah Islami Bank Ltd 30
Figure 4-9. Financial leverage percentage of Arafah Islami Bank Ltd 30
Figure 4-10: Dividends yield Ratio to Arafah Islami Bank Ltd 31
Figure 4-11 Cash Ratio of Islami Bank Bangladesh 32
Figure 4-12: Current Ratio of Islami Bank Bangladesh Ltd. 32
Figure 4-13: Debt Ratio of Islami Bank Bangladesh Ltd. 33
Figure 4-14: Equity Ratio Islami Bank Bangladesh Ltd. 33
Figure 4-15: Return on equity (ROE) of Islami Bank Bangladesh Ltd. 34
Figure 4-16: Return on assets (ROA) of Islami Bank Bangladesh Ltd. 35
Figure 4-17: Quality of income Ratio of Islami Bank Bangladesh Ltd. 35
Figure 4-18: Price earnings Ratio of Islami Bank Bangladesh Ltd. 36
Figure 4-19: Financial leverage percentage of Islami Bank Bangladesh Ltd. 36
Figure 4-20: Dividends yield Ratio Islami Bank Bangladesh Ltd. 37
Figure 4-21: Cash Ratio of Social Islami Bank 38
Figure 4-22: Current Ratio of Social Islami Bank 39
Figure 4-23: Debt Ratio of Social Islami Bank 39
Figure 4-24: Equity Ratio of Social Islami Bank 40
Figure 4-25: Return on equity (ROE) of Social Islami Bank 41
Figure 4-26: Return on assets (ROA) of Social Islami Bank 41
Figure 4-27: Quality of Income Ratio of Social Islami Bank 42
Figure 4-28: Price earnings Ratio of Social Islami Bank 43
Figure 4-29: Financial leverage percentage of Social Islami Bank 43
Figure 4-30: Dividends yield Ratio of Social Islami Bank 44
xi
Figure 4-31: Cash Ratio of Shahjalal Islami Bank 45
Figure 4-32: Current Ratio of Shahjalal Islami Bank 45
Figure 4-33: Debt Ratio of Shahjalal Islami Bank 46
Figure 4-34: Equity Ratio of Shahjalal Islami Bank 46
Figure 4-35: Return on equity (ROE) of Shahjalal Islami Bank 47
Figure 4-36: Return on assets (ROA) of Shahjalal Islami Bank 48
Figure 4-37: Quality of income Ratio of Shahjalal Islami Bank 48
Figure 4-38: Price earnings Ratio of Shahjalal Islami Bank 49
Figure 4-39: Financial leverage percentage of Shahjalal Islami Bank 50
Figure 4-40: Dividends yield Ratio of Shahjalal Islami Bank 50
Figure 4-41: Cash Ratio of ICB Islamic Bank Ltd. 51
Figure 4-42: Current Ratio of ICB Islamic Bank Ltd 52
Figure 4-43: Debt Ratio of ICB Islamic Bank Ltd 52
Figure 4-44: Equity Ratio of ICB Islamic Bank Ltd 53
Figure 4-45: Return on equity (ROE) of ICB Islamic Bank Ltd 54
Figure 4-46: Return on assets (ROA) of ICB Islamic Bank Ltd 54
Figure 4-47: Quality of income Ratio of ICB Islamic Bank Ltd 55
Figure 4-48: Price earnings Ratio ICB Islamic Bank Ltd 56
Figure 4-49: Financial leverage percentage of ICB Islamic Bank Ltd 56
xii
Chapter One: Introduction
1.1 Background of the study
The preparation of this report is part of our academic curriculum suggests theoretical
background as well as practical. This thesis provides practical knowledge. This program has
three credit hours. Duration of this program is 6 months. It is a good technique for total
curriculum. To maintain this curriculum I have selected financial performance analysis of
five commercial banks as my thesis topic.
1.2 Scope of the study:
We have total 43 listed commercial banking organizations. I have selected five commercial
banks within these 43 listed commercial banks. My topic is financial performance analysis.
The report covers five commercial Islamic banks financial performance analysis of five
years.
1.3 Objectives of the study

Main objective to know the financial performance of five Commercial Islamic Bank
The goals of this study to know Cash ratio, Current ratio, Quick ratio/ Acid test ratio, Debt
ratio, Equity ratio, Return on equity (ROE), Return on assets (ROA), financial leverage
percentage, Quality of income ratio, Price earnings ratio, Dividend yield ratio.
1.4 Methodology:
This is a descriptive study.
1.4.1 Data Sources:
There are two data sources Primary Data Sources and secondary data sources which can be
apply of the analysis of the report. In this study I have chosen the secondary data sources
Secondary data were acquired from several sources. The information came from a range of
sources, including books, journal articles, research, websites, newspapers and annual reports.
1
1.5 Limitations of the study:
The feedback and material that was taken from online was used in the preparation of the
report, along with the learning that occurred over the course of the study program’s duration
of drawn-out months. The information is extremely sensitive to maintaining its privacy and
secrecy at all times.
Authorized to discuss the information that pertains to this division. The information is
confidential and may not be shared with any other parties. Even though these banks may
benefit greatly from the report, the information contained inside it is too sensitive to be
shared with the outside world.
The limited amount of time available was another issue. This amount of time is insufficient to
conduct an in-depth and comprehensive study. Despite the fact that there were a lot of
restrictions, I did my best to provide the report.
2
Chapter Two: Overview of the Company
2.1 Al-Arafah Islami Bank Ltd
2.1.1. Background of Al-Arafah Islami Bank Ltd
With the objective of achieving success here & hereafter by pursuing the way directed by
Allah and the path shown by His Rasul (SM), Al Arafah Islami Bank Ltd was established
(registered) as a private limited company on 18 June 1995. The inaugural ceremony took
place on 27 September 1995. The authorized capital of the Bank is Tk.15000.00 million and
the paid up capital is Tk. 10440.22 million as on 31.12.2018. Renowned Islamic Scholars and
pious businessmen of the country are the sponsors of the Bank. 100% of paid up capital is
being owned by indigenous shareholders.
The equity of the bank stood at Tk. 2348.32 crore as on 31 December 2018, the manpower
was 3682 as on 31 December 2018 and the number of shareholders was 25793 as on 31
December 2018. It has achieved a continuous profit and declared a good dividend over the
years. High quality customer service through the integration of modern technology and new
products is the tool of the bank to achieve success. The bank has a diverse array of carefully
tailored products and services to satisfy customer needs.
The Bank is committed to contribute significantly to the national economy. It has made a
positive contribution towards the socio economic development of the country with 184
branches of which 25 is AD throughout the country.
2.1.2. Mission
Achieving the satisfaction of Almighty Allah both here & hereafter. Proliferation of Shariah
Based Banking Practices. Quality financial services adopting the latest technology. Fast and
efficient customer service. Maintaining high standard of business ethics. Balanced growth.
Steady & competitive return on shareholders’ equity. Innovative banking at a competitive
price. Attract and retain quality human resources. Extending competitive compensation
packages to the employees. Firm commitment to the growth of national economy. Involving
more in Micro and SME financing
3
2.1.3. Vision
To operate based on Islamic principles of transactions along with ensuring justice and equity
in the economy. To be a pioneer in Islami Banking in Bangladesh and contribute significantly
to the growth of the national economy. To improve Banker- Customer relationship through
improving customer service. To develop new and innovate product/service through
integration of technology and policy and principle.
2.1.4 Objectives
Al-Arafah Islami Bank Limited is Islamic Banking institutions that operates with the
objectives implement and materialize the economic and financial principles of Islamic in the
banking arena. The objectives of AIBL are not only to earn profit, but also to do good and
welfare to the people. The objectives of AIBL are listed below-
1. To establish participatory banking instead of banking on debtor creditor relationship.
2. To invest through different modes permitted under Islamic Shariah.
3. To accepts deposits on profit loss sharing basis.
4. To establish as welfare –oriented banking system.
5. To extend co-operation to the poor, the helpless and the low income group for their
economic up liftmen.
6. To play a vital role in human development and employment generation.
7. To contribute towards balances growth and development of the country through
investment operations particularly in the less developed areas.
8. To contribute in achieving the ultimate goal of Islamic economic System.
9. To conduct interest free banking
2.1.5. Board of directors:
1. Alhajj Salim Rahman CHAIRMAN,

BOARD OF DIRECTORS
2. Alhaj Abu Naser Md. Yeahea VICE CHAIRMAN,
BOARD OF DIRECTORS
3. Alhajj Abdus Samad CHAIRMAN,
EXECUTIVE COMMITTEE
4
4. Alhajj Mohammad Abdus Salam VICE CHAIRMAN,
EXECUTIVE COMMITTEE
5. Alhajj Badiur Rahman CHAIRMAN,
RISK MANAGEMENT COMMITTEE
6. Alhajj Mahbubul Alam INDEPENDENT DIRECTOR &
CHAIRMAN,
BOARD AUDIT COMMITTEE
7. Alhajj Nazmul Ahsan Khaled DIRECTOR
8. Alhajj Abdul Malek Mollah DIRECTOR
9. Hafez Alhajj Md. Enayet Ullah DIRECTOR
10. Alhajj Ahamedul Hoque DIRECTOR
11. Alhajj Niaz Ahmed DIRECTOR
12. Alhajj Mohammed Emadur Rahman DIRECTOR
13. Alhajj Engr. Khandaker Mesbah Uddin Ahmmed DIRECTOR
14. Alhajj Liakat Ali Chowdhury DIRECTOR
15. Alhajj Md. Anowar Hossain DIRECTOR
16. Alhajj Md. Rafiqul Islam DIRECTOR
17. Alhajj Anwar Hossain DIRECTOR
18. Alhajj M. Kamal Uddin Chowdhury INDEPENDENT DIRECTOR
19. Farman R Chowdhury MANAGING DIRECTOR
2.1.6. Functions in Brief
Proliferation of Shariah Based Banking Practices. Rendering quality financial services by

leveraging latest technology. Fast and efficient customer service. Maintaining high standard
of business ethics. Balanced growth. Steady and competitive return on shareholders’ equity.
Innovative banking at a competitive price. Attract and retain quality human resources.
Extending competitive compensation packages to the employees. Firm commitment to the
growth of national economy. Involving more in Micro and SME financing.
5
2.2. Islami Bank Bangladesh limited
2.2.1. Background of Islami Bank Bangladesh Limited
Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company engaged in
commercial banking business based on Islamic Shari'ah with 63.09% foreign shareholding
having largest branch network ( total 389 Branches, 228 Sub-Branches and 2705 Agent
Outlets) among the private sector Banks in Bangladesh. It was established on the 13th March
1983 as the first Islamic Bank in the South East Asia.It is listed with Dhaka Stock Exchange
Ltd. and Chittagong Stock Exchange Ltd. Authorized Capital of the Bank is Tk. 20,000
Million and Paid-up Capital is Tk. 16,099.91 Million having 33,686 shareholders as on 31st
December 2021.
2.2.2. Mission
To establish Islamic Banking through the introduction of a welfare oriented banking system
and also ensure equity and justice in the field of all economic activities, achieve balanced
growth and equitable development in through diversified investment operations particularly
in the priority sectors and least developed areas of the country. To encourage socio-economic
and financial services to the loss-income community particularly in the rural areas.
2.2.3. Vision
To always strive to achieve superior financial performance, be considered a leading Islamic
Bank by reputation and performance. To establish and maintain the modern banking
techniques, to ensure soundness and development of the financial system based on Islamic
principles and to become the strong and efficient organization with highly motivated
professional, working for the benefit of people, based upon accountability, transparency and
integrity in order to ensure stability of financial systems. To encourage savings in the form of
direct investment. To encourage investment particularly in projects which are more likely to
lead to higher employment.
6
2.2.4. Objectives
1. To ensure customers' satisfaction.

2. To ensure welfare oriented banking.
3. To establish a set of managerial succession and adopting technological changes to
ensure successful development of an Islamic Bank as a stable financial institution.
4. To prioritize the clients welfare.
5. To emerge as a healthier & stronger bank at the top of the banking sector and continue
stable positions in ratings, based on the volume of quality assets.
6. To ensure diversification by Sector, Size, Economic purpose & geographical location
wise Investment and expansion need based Retail and SME/Women entrepreneur
financing.
7. To invest in the thrust and priority sectors of the economy.
8. To strive hard to become an employer of choice and nurturing & developing talent in
a performance-driven culture.
9. To pay more importance in human resources as well as financial capital.
10. To ensure lucrative career path, attractive facilities and excellent working
environment.
11. To ensure zero tolerance on negligence in compliance issues both sharia’h and
regulatory issues.
12. To train & develop human resources continuously & provide adequate logistics to
satisfy customers’ need.
13. To be excellent in serving the cause of least developed community and area.
14. To motivate team members to take the ownership of every job.
15. To ensure development of devoted and satisfied human resources.
16. To encourage sound and pro-active future generation.
17. To achieve global standard. To strengthen corporate culture.
18. To ensure Corporate Social Responsibilities (CSR) through all activities.
19. To promote using solar energy and green banking culture and ecological balancing.
2.2.5. Board of Directors

1. Mohammad Nazmul Hassan CHAIRMAN
2. Yousif Abdullah A AlRajhi VICE CHAIRMAN
3. Mohammed Shahabuddin VICE CHAIRMAN
7
4. Md Salim Uddin DIRECTOR
5. Mohammad Solaiman INDEPENDENT DIRECTOR
6. Abdul Matin DIRECTOR
7. Areef Suleman DIRECTOR
8. Mohammad Sirajul Karim DIRECTOR
9. Md Kamal Uddin INDEPENDENT DIRECTOR
10. Mohammad Joynal Abedin DIRECTOR
11. Dr Qazi Shahidul Alam DIRECTOR
12. Musaid Abdullah A AlRajhi DIRECTOR
13. Syed Abu Asad DIRECTOR
14. Tanveer Ahmad DIRECTOR
15. Mohammad Quamrul Hasan DIRECTOR
16. Dr Mohammad Saleh Jahur INDEPENDENT DIRECTOR
17. Md Fashiul Alam INDEPENDENT DIRECTOR
18. Khurshid Ul Alam DIRECTOR

19. Mohammed Nasir Uddin FCMA DIRECTOR
20. Md Kamal Hossain Gazi DIRECTOR
21. Mohammed Monirul Moula EX-OFFICIO DIRECTOR
22. Mr. J Q M Habibullah, FCS COMPANY SECRETARY

Deposit Procurement & management under Shariah. Financial Services i.e. Letter of
Guarantee, Money Transfer. Investment using Islamic Financial Contract. Corporate Social
Responsibilities (CSR).
2.3. Social Islami Bank Ltd. (SIBL)
2.3.1. Background of Social Islami Bank Ltd. (SIBL)

Founded in 1995, Social Islami Bank Ltd. (SIBL) is the country’s leading value-added
financial institution based on Shariah' Principles. SIBL comprises of SIBL Securities Ltd,
SIBL Investment Ltd, and SIBL Foundation Hospital. The three-tier banking model (Formal,
Non-formal & Voluntary), the first of its kind in the banking arena of Bangladesh, brings a
new dynamism in welfare banking targeting eradication of poverty of the country with a
8
motto of “Working Together for a Caring Society”. Working closely with our valued clients
and stakeholders to provide them one-stop services, access to the very latest products using
technology. Unrivaled customer services has made us unparalleled in the industry. Build a
long-term business partnership with our clients helping them grow profitable. Always ready
to serve you with 4000 employees in 177 branches and 145 sub branches across the country.
It has also 290 Agent Banking Outlets to cater financial services to the remotest parts of the
Land. The strong conviction to create a caring society is the cornerstone of SIBL’s all
activities. Strong affinity to the emotions of people. Believe that only banking activities can’t
usher our society to a just and equitable stage. Thus extensively engaged in CSR activities on
humanitarian grounds. Work in the fields such as from poverty eradication to family
empowerment. Unlike others, the Bank’s criteria for success are not only the key objective to
make profit but also landmarks to become the country’s most humanitarian and complete
Bank.
2.3.2. Mission Social Islami Bank Ltd. (SIBL)

Establishing Three Sector Banking Model Transformation to a service oriented technology
driven profit earning Bank Fast, accurate and satisfactory customer service Balanced &
sustainable growth strategy Optimum return on shareholders’ equity Introducing innovative
Islamic Banking Products Attracting and retaining high quality human resources Empowering
real poor families and creating local income opportunities Providing support for social benefit
organizations by way of mobilizing funds and social services
2.3.3. Vision
Working together for a caring society
2.3.4. Objectives
1. Transformation into a service-oriented technology-driven profit earning bank.
2. Ensure fast, accurate and best-in-class customer services with customers’ satisfaction.
Balanced and sustainable growth strategy.
3. Optimum return on shareholders’ equity.
4. Introducing innovative Islamic Banking Products.
5. Attract, motivate and retain high quality human resources.
6. Empowering real poor families and create local income opportunities.
9
7. Providing support for social benefit organizations-by way of mobilizing funds and
social services.
8. To achieve global standards in Islamic Banking.
9. To invest in the priority sector for the overall economic development.
10. Ensure best CSR (Corporate Social Responsibilities) practices.
11. Ensure Green Banking.
2.3.5. Board of directors

Dr. Md. Mahbub Ul Alam CHAIRMAN
Mr. Belal Ahmed VICE CHAIRMAN
Mr. Md. Sayedur Rahman VICE CHAIRMAN
Mr. Md. Kamal Uddin DIRECTOR
Mrs. Nargis Mannan DIRECTOR
Dr. Md. Jahangir Hossain DIRECTOR
Mrs. Jebunnessa Akbar DIRECTOR
Mr. Ali Hasan Md. Mahmud Ribon DIRECTOR
Mr. Arshadul Alam DIRECTOR
Mr. Mahmudul Alam DIRECTOR
Professor A J M Shafiul Alam Bhuiyan, Ph.D INDEPENDENT DIRECTOR
Professor Mohammed Mizanur Rahman, Ph.D INDEPENDENT DIRECTOR
Mr. Zafar Alam MANAGING DIRECTOR & CEO
As Riba is prohibited in the Holy Quran, the most unique feature of IBBL is that its business
functions/operations are completely free from interest. IBBL is the precursor of introducing
welfare-oriented banking system by ensuring equity and justice in all of its activities. Unlike
conventional financial institutions, profit or wealth maximization has never been among the
prime objectives of IBBL.
10
2.4. Shahjalal Islami Bank Limited (SJIBL)
2.4.1. Background of Shahjalal Islami Bank Limited (SJIBL)
Shahjalal Islami Bank Limited (SJIBL) commenced its commercial operation in accordance
with principle of Islamic Shariah on the 10th May 2001 under the Bank Companies Act,
1991. During these years SJIBL has diversified its service coverage by opening new branches
at different strategically important locations across the country offering various service
products both investment & deposit. Islamic Banking, in essence, is not only INTEREST-
FREE banking business, it carries deal wise business product thereby generating real income
and thus boosting GDP of the economy. Board of Directors enjoys high credential in the
business arena of the country, Management Team is strong and supportive equipped with
excellent professional knowledge under leadership of a veteran Banker Mr. Muhammed
Shahidul Islam.
2.4.2. Mission
Uncompromised quality service and customer care. Setting high standards of integrity.
Inclusive and innovative banking. Sustainable value for all stakeholders. Continuous
development of professionals and system up gradation to face the challenges and drive for
excellence. System Automation and digitization adopting the state-of art technology with full
proof security to ensure fast and accurate customer service. Human Resources Development
based on morality and ethics.
2.4.3. Vision
Most admirable brand of shariah banking & investment in Bangladesh ensuring sustainable
value for all our stakeholders embodied with human development based on morality and
ethics.
2.4.4 Objectives
Most admirable brand of shariah banking & investment in Bangladesh ensuring sustainable
value for all our stakeholders embodied with human development based on morality and
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ethics. Uncompromised quality service and customer care. Setting high standards of integrity.
Inclusive and innovative banking.
Mr. Mohammed Younus CHAIRMAN

Mr. Mohiuddin Ahmed VICE CHAIRMAN
Dr. Anwer Hossain Khan, MP DIRECTOR
Mr. Md. Sanaullah Shahid DIRECTOR
(Rep. of Electra International Ltd.)
Mr. Abdul Karim (Nazim) DIRECTOR
(Rep. of Shamsuddin Khan & Harun Miah Ltd.)
Mr. Md. Abdul Barek DIRECTOR
Mr. Abdul Halim DIRECTOR
Mr. Akkas Uddin Mollah DIRECTOR
Mr. Khandaker Sakib Ahmed DIRECTOR
Engr. Md. Towhidur Rahman DIRECTOR
Mr. A.K. Azad DIRECTOR
Mr. Mohammed Nasir Uddin Khan DIRECTOR
(Rep: Anwer Khan Modern Hospital Ltd.)
Mr. Fakir Akhtaruzzaman DIRECTOR
Mr. Md. Moshiur Rahman Chamak DIRECTOR
(Rep. of Fresh Export Import Limited)
Mrs. Tahera Faruque DIRECTOR
Mrs. Jabun Nahar DIRECTOR
(Rep. of Daffodils Trading International)
Mr. Fakir Mashrikuzzaman DIRECTOR
(Rep. of Fakir Knitwears Ltd.)
Mr. Ekramul Haque INDEPENDENT DIRECTOR
Mr. K. A. M. Majedur Rahman INDEPENDENT DIRECTOR
Mr. Nasir Uddin Ahmed INDEPENDENT DIRECTOR
Mr. Mosleh Uddin Ahmed MANAGING DIRECTOR
12
Shahjalal Islami Bank maintains sound defenses against money laundering, terrorist financing
and proliferation financing on weapons of mass destruction. In order to ensure strong and
sustainable regulatory compliance in its operations. Facilitate trade across the markets, enable
customers of all walks of life to conduct business transactions happily. Provide easy solution
of complex business situation. Capture the unbanked population of the country.
2.5. ICB Islamic Bank
2.5.1. Background of ICB Islamic Bank
The Bank has been incorporated on April, 1987 as a public limited company under the
Companies Act, 1913 to undertake and carry out all kinds of banking, financial and business
activities, transactions and operations in strict compliance with the principles of Islamic Law
(Shariah) relating to business activities in particular avoiding usury in credit and sales
transactions and any practice which amounts to usury. Certificate for commencement of
business has been issued to the bank on April, 30, 1987. The Bank has been authorized by the
Bangladesh Bank to carry on the banking business in Bangladesh with effect from May 4,
1987. However, actual banking operations commenced on May 20, 1987.
2.5.2. Mission
To constantly meet and exceed our customers’ expectations by challenging status quo and
crafting innovative Shariah compliant Islamic products and services to cater the diverse
requirements of our customers by constantly framing and refreshing transparent policies and
processes to keep our customers delighted. To ensure sustainable values: For people by
constantly creating difficult yet achievable challenges and providing means of achieving
them in the form of appropriate coaching, guiding and training and fostering a competitive
but meritocratic culture. For our partners by guaranteeing a soothing coexistence. For
shareholders by delivering them optimum returns on their investments. For the society
operate in by making meaningful impacts on the wellbeing of the underprivileged of the
society.
13
2.5.3. Vision
ICB Islamic Bank is committed towards creating and maximizing sustainable values for all
its customers, employees, partners and shareholders and especially for the society it operates
in by delivering excellence in its offerings in all areas of banking and financial services
complying Islamic Shariah.
2.5.4. Objectives
Help various small and medium sized imports oriented business to meet their trade finance
requirements. The management of the Bank is committed to turn the Bank into a modern
banking institution, vibrant in actions, progressive in programs, honest in dealings, just in
judgment, innovative in attitude, fair in approaches and devoted to high quality service to
customers. There are charted plans aimed at boosting modern management, advanced
technology, good profitability, sound financial strength and fair image of the Bank. The Bank
is firmly committed to transparent, responsible and accountable corporate governance with
the participation of our strong and most capable team of professionals and under the policy
directives and guidance of the Board of Directors of the Bank.
Mohd. Nasir Bin Ali CHAIRMAN

Mr. Md. Fariduddin Ahmed INDEPENDENT DIRECTOR
Ms.Hashimah Binti Ismail DIRECTOR
Ms. Lee Ooi Kim DIRECTOR
Mr. Aklif Bin Amir INDEPENDENT DIRECTOR
2.5.6 Functions in Brief
The Bank provides high quality customer service through the integration of the latest and
state of the art banking technology and product tools to achieve its success. Since the
customers are given first priority, the Bank is trying hard to provide a spectrum of services to
individual customers, small business entities and corporate clients. The aim is to deliver the
best service by meeting the unique and specific needs in a professional, ethical and friendly
14
manner. The Bank has thirty three (33) branches located at prominent and convenient places
across the country. ICB Islamic Bank Limited carries out business activities in keeping with
its values and norms and with an understanding of the importance of a large financial
institution has for the society and the environment. It is taking steps towards Green Banking.
In line with the vision and mission, the Bank always works for the customers’ satisfaction
and for the satisfaction of all stakeholders
15
Chapter Three
3.1. Theoretical Background of Financial performance Analysis
Financial statement analysis is the application of analytical tools to financial statements and
related data for business decisions. It involves transforming accounting data into useful
information. Financial statement analysis reduces our reliance on hunches, guesses and inion.
It also reduces our uncertainty in decision making. But it does not lessen the need or expert
judgment. Instead, it provides us an effective and systematic basis for business decisions. It
gives an insight about the company's operating performance and financial health both to the
internal and the external users of financial information.
3.2. Objectives of financial analysis
Objectives of financial statement analysis:
The purpose of financial statement analysis is to help users make better business decision
these users include decision makers both internal and external to the company. Internal we of
accounting information are those involved in managing and operating the company. They
include managers, officers, internal auditors, consultants, and many other important internal
decision makers. Internal users make the strategic and operating decision of a company. The
purpose of financial statement analysis for these users is to provide information helpful in
improving the company's efficiency and effectiveness in providing products and services.
External users of accounting information are not directly involved in running the company.
They include shareholders, lenders, directors, customers, supplier, regulators, lawyers,
brokers, and the press. Yet these users are affected by, and sometimes affect, the company's
activities. External users rely on financial statement analysis to make better and more
informed decisions in pursuing their own goals. We can identify many examples of how
financial statement analysis is used. Shareholders and creditors assess future company
prospects for investing and lending decisions. A board of directors analyses financial
statements in monitoring management's decisions Employees and unions use financial
statements in labor negotiations Suppliers use financial statements in establishing credit terms
Customers analyze financial statements in deciding whether to establish supply relationships
Public utilities set customer rates by analyzing financial statements. Auditors use financial
statements in assessing the "fair presentation" of their clients' financial statement numbers.
The common goal of all these users is to evaluate company performance. This includes
16
evaluation of (1) Past and current performance. (2) Current financial position, and (3) Future
performance and risk.
3.3. Sources of financial information:
The external analyst is often limited to publicly available information about a company. The
major sources of information about publicly held companies are annual report published by
the company, SEC reports, business journals or periodicals. Of them, annual report is the
most common source. Annual report reveals the financial performance of the company in the
form of financial statements each year.
3.4. Reasons
The goal of financial analysis is to analyze whether an entity is stable, solvent, liquid, or
profitable enough to warrant a monetary investment. It is used to evaluate economic trends,
set financial policy, build long-term plans for business activity, and identify projects or
companies for investment.
3.5. Methods of financial statement analysis
There are several techniques used by analysts to develop a fair understanding of a company’s
financial performance over a period. The three most commonly practiced methods of
financial analysis are – horizontal analysis, vertical analysis, and ratio and trend analysis
here:
• Horizontal analysis: To compare financial performance of a company across time.
• Vertical analysis: To compare financial performance of a company to a base period

amounts.
• Ratio analysis: To compare financial performance by measuring key relations in financial

statement items.
Ratio analysis is the most widely used and popular technique to analyze financial statement
over the world.
3.5.1.RATIO ANALYSIS:
There have different types of Ratios and their use in the following section.
a. Liquidity and efficiency
b. Solvency
17
c. Profitability
d. Market
a.Liquidity and efficiency

Liquidity refers to the ability to meet short-term obligations and efficiency refers to the
ability of being productive m using the assets.
1. Cash Ratio
2. Current Ratio
3. Accounts receivable turnover
4. Inventory turnover
5. Days sales uncollected
6. Inventory turnover
7. Days’ sales in Inventory
8. Total assets turnover
1. Cash ratio:
Cash is the lifeblood of a business. Without cash, a company cannot pay its employees or
meet obligations to its creditors. A measure of the adequacy of available cash is called the
cash ratio.
It is computed as follows:
Cash ratio= Cash plus cash equivalents/ Current liabilities
Some analysts do not use this ratio, because it is very sensitive to small events such as the
collection of a large accounts receivable may have a significant impact on the cash ratio.
2. Current ratio:
The current ratio measures the relationship between total current assets and total current
liabilities at a specific date. To properly use the current ratio, analysts must understand the
nature of a company's business. It is computed as follows:
Current ratio = Current assets / Current liabilities
3. Quick ratio/ Acid test ratio:
The quick ratio is similar to the current ratio except that it is a mere stringent test of short-
term liquidity. This ratio focuses on current assets composition. The computation is as
follows: · ·
18
Quick ratio = Quick assets / Current liabilities
Quick assets are readily convertible into cash at approximately their book values.
Quick assets composition:
They include the following:
Cash, Short-term investments, Accounts receivable (net), Current notes receivable
4. Accounting receivable turnover:
We can measure how frequently a company converts its receivables into cash by computing
accounts receivable turnover. The ·ratio is computed as follows:
Receivables -turnover = Net credit sales/ Average accounts receivable
Where,
Net credit sales= Gross credit sales - Sales discounts - Sales returns & allowances
Average accounts receivables~ Opening NR+ Ending A/R/2
5. Days' sales uncollected:
This is another measure developed to tell after how many days we are collecting from our
accounts receivable on an average in a financial year. -
Days' sales uncollected are calculated as follows:
Days' sales uncollected= Days in year/ Receivable turnover
This is also known as average age of receivables.
6. Inventory turnover:
Inventory turnover measures the liquidity of the inventory. If reflects the relationship of the
Inventory to the volume of goods sold during the period.
Inventory turnover= Cost of goods sold/ Average inventory.
Where,
Cost of goods sales = Net sales - gross profit
Average inventory = Opening inventory + Ending inventory/ 2
7. Days sales in inventory
The turnover ratio is converted to a time basis expression which is called days’ sales
inventory. This measures how days’ inventory remains as inventory before sales is made.
Days’ sales in inventory=Days in year / inventory turnover
b. Solvency:
Solvency refers to a company’s long run financial viability and its ability to meet long term
obligations.
1. Debt ratio
19
2. Equity ratio
3. Pledged assets to secured liabilities
4. Times interest earned
5. Cash coverage
1. Debt ratio:
Debt ratio measures the portion of a company's assets contributed by creditors. The ratio
calculated as follows:
Debt ratio = Total liabilities / Total assets
2. Equity ratio:
Equity ratio measures the portion of a company's assets contributed by its owners. The
computation is as follows:
Equity ratio = Total equity/ Total assets
3. Pledged assets to secured liabilities:
This ratio is computed to evaluate the risk of non-payment faced by secured creditors. The
ratio is also relevant to unsecured creditors.
Pledged assets to secured liabilities= Book value of pledged assets /Book value of
secured liabilities.
4. Times interest earned:
Interest payments are a company's fixed obligations. Importance of interest payments, analysts
often compute a ratio called interest earned-
Times interest earned =Income before interest and income tax / interest expense
A higher coverage ratio is better for the solvency of the business while a lower coverage ratio
indicates debt burden on the business.
5. Cash coverage:
It is easy to understand why the cash coverage ratio is important.
Cash coverage= Cash flows from operating activities before interest and taxes/
interest paid
c. Profitability:
1. Profit margin ratio
2. Gross margin ratio
3. Return on equity (ROE)
4. Return on assets (ROA)
20
5. Financial leverage percentage
6. Earnings per share (EPS)
7. Book value per share
8. Quality of income
9. Fixed asset turnover ratio.
1. Profit margin ratio: Profit margin = Net income / Net sales*100

2. Gross margin ratio:
The ratio calculates the profitability of a company but not in stringent term. It is computed
follows as
Gross margin ratio =Gross margin/ Net sales x 100
Where, gross margin = Net sales - cost of goods sold
3. Return on equity (ROE):
Return on equity or simply ROE is a fundamental test of profitability. Perhaps the most
important goal in operating a company is to earn net income for its owners. The return on
equity measures the success of a company in reaching this goal.
The computation is:
ROE = Net income / Average owners' equity
It is to be noted that net income excludes preferred dividends (if any).
Average owners’ equity= Opening owners’ equity+ Ending owners' equity/ 2
Here, owners’ equity is used to refer to the total stockholders equity, not the paid up capital.
4. Return on assets (ROA):
Another view of the return on investment concept relates income to total assets invested.it is a
Better measure in the way that how efficiently management utilizes its resources to generate
return.
The computation is like this: ·
ROA = Net income/ Average total assets
Where,
Average total assets =opening owners’ equity +Ending owners’ equity/2
21
The following computation shows the important relation between profit margin, total asset
turnover and return on total assets:
Profit margin x Total asset turnover = ROA
Or, Net income/ Net sales x Net sales/ Average total assets = net income / Average
total assets.
5. Financial leverage percentage:
Basically the company borrows capital or debt at one rate and invests the borrowed capital at
higher rate. Therefore, most companies have positive leverage. When the return on
investments (total assets) is greater than the interest on borrowed funds, the difference i.e. the
benefits accrue to the shareholders.
Financial leverage= Return on equity - Return on assets
6. Earnings per share (EPS):
EPS is based on the number of shares outstanding instead of the balance sheet amount
(Historical data). Investors can easily interpret EPS individually.
Basically, the EPS is computed as follows:
EPS = Net income * / Average number of equity/common stock outstanding
* Net income means net income after deducting preferred dividends
7. Book value per share:
It measures the book value (balance sheet amount) per common stock outstanding in the
market. It is computed as follows:
Book value per share= Shareholders equity applicable to common shares/
Number of common shares outstanding
8. Quality of income ratio:
Quality of income measures the extent to which the company is generating revenue by its
Operation as there is scope of generating revenue by following accounting method or
estimates (such as inventory valuation method or depreciation method). A ratio higher than 1
is considered to indicate higher quality earnings ratio. This is computed as follows:
Quality of income ratio = Cash flows from operating activities/ Net income
9. Fixed asset turnover ratio:
A. key indicator of management effectiveness is the ability to effectively utilize available
resources. The fixed asset turnover ratio measures management’s ability to generate revenues
given an investment in fixed assets. The term fixed assets is synonymous with property, plant
and equipment.
Fixed asset turnover = Net sales / Average net fixed assets.
22
Where,
Average net fixed assets = Opening net fixed assets + Ending net fixed assets / 2
Net fixed assets refers to the fixed assets after deducting accumulated depreciation.
d. Market:
1. Price earnings ratio

The price earnings ratio measures the relationship between the current market price of the
stock and its earnings per share.
PE ratio= Current market price per share / Earing per share.
2. Dividend yield ratio
When investors buy shares, they expect return s from two sources: price appreciation and
dividend income. The dividend yield ratio measures the relationship between the dividends
per share paid the current market price of the stock. Stock with low growth potential often
offer much dividend yields than do stocks with high growth potential.
Dividends yield ratio = Annual dividends per share / Market price per share
23
Chapter Four: Analysis
4.1. Introduction:
These ratios are selected for financial performance analysis
4.1. a. Liquidity and efficiency
Liquidity refers to the ability to meet short-term obligations and efficiency refers to the
ability of being productive m using the assets.
1. Cash ratio:
2. Current ratio:
3. Quick ratio/ Acid test ratio:
4.1. b. Solvency:
Solvency refers to a company’s long run financial viability and its ability to meet long term
obligations.
4. Debt ratio:
5. Equity ratio:
4.1. c. Profitability:
6. Return on equity (ROE):
7. Return on assets (ROA):
8. Financial leverage percentage:
9. Quality of income ratio:
4.1. d. Market:
10. Dividend yield ratio
24
4.2. Ratio analysis
Determine the financial position of five Commercial Banks by ratio analysis (within
different time, year, generally last five years).
4.2.1. AL-ARAFAH ISLAMI BANK LTD
Cash Ratio:
( amount in million)
Ratio 2021 2020 2019 2018 2017

Cash plus cash 23,688.60 31,559.11 30,758.09 25,710.00 39,765.74
equivalent (a)
Current liabilities (b) 353,287.96 326,023.41 297,525.77 266,346.61 245,642.23
Cash Ratio (a/b) 6.70% 9.68% 1.03% 9.65% 16.18%
Table 4-1: Cash Ratio of Al-Arafah Islami Bank Ltd
2021 2020 2019 2018 2017
16.18%
9.68%
9.65%
6.70%
1.03%
CASH RATIO
Fi gure 4 -1: C ash R at i o
Interpretation: In 2017 to 2021 Cash and cash equivalent is less than current liabilities this
means the firm has utilized its assets well to earn profits.
Current Ratio:
Ratio 2021 2020 2019 2018 2017
Current asset (a) 448,003.03 407,224.74 371,649.33 328,767.35 308,076.21
Current liability (b) 353,287.96 326,023.41 297,525.77 266,346.61 245,642.23
Current Ratio (a/b) 1.26 1.24 1.24 1.23 1.25
Table 4-2: Current Ratio of Al-Arafah Islami Bank Ltd
25
2021 2020 2019 2018 2017
1.26
1.25
1.24
1.24
1.23
CURRENT RATIO
Fi gure 4 -2: C urrent R at i o
Interpretation: Al-Arafah Islami Bank Ltd has less current liabilities than current assets
Ratio is greater than 1.0 a desirable situation to be in. In 2021 more liquid and is better
positioned to pay off its liabilities.
Debt Ratio:
Ratio 2021 2020 2019 2018 2017
Total liabilities (a) 429,447.80 389,374.53 353,603.78 311,673.06 293,920.34
Total assets (b) 453,473.30 413,058.62 376,001.26 333,261.96 314,596.97
Debt Ratio(a/b) 0.94 0.94 0.94 0.93 0.93
Table 4-3: Debt Ratio Al-Arafah Islami Bank Ltd
2021 2020 2019 2018 2017

0.94
0.94
0.94
0.93
0.93
DEBT RATIO
Fi gure 4 -3: Debt R at i o
Interpretation: The value indicates Al- Arafah Bank Ltd. has financed closer of its assets. In
2017 to 2021 here, the value states that less than 1 has a good debt ratio. Hence, the investors
would be fine with investing in it.
26
Equity Ratio:
Ratio 2021 2020 2019 2018 2017
Total equity (a) 24,025.50 23,684.09 22,397.47 21,588.90 20,676.63
Total assets (b) 453,473.30 413,058.62 376,001.26 333,261.96 314,596.97
Equity Ratio(a/b) 0.52 0.57 0.59 0.64 0.65
Table 4-4: Equity Ratio of Al-Arafah Islami Bank Ltd
2021 2020 2019 2018 2017
0.65
0.64
0.59
0.57
0.52
EQUITY RATIO
Fi gure 4 -4: Equi t y R at i o
Interpretation:In 2017 to 2021 Al-Arafah Islami Bank Ltd. have equity ratio greater than
50% is called a are less conservative company, Conservative companies risky as compared to
leveraged companies. Whereas a company that has this ratio of less than 50% is called a
leveraged firm.
Return on equity (ROE):
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,023.35 2,550.78 2,413.56 2,406.52 3,076.67
Average owners’ equity (b) 25,678.09 24,802.02 23,815.71 23,001.95 21,929.08
ROE(a/b) 7.87% 10.28% 10.13% 10.46% 14.03%
Table 4-5: Return on equity (ROE) of Al-Arafah Islami Bank Ltd.
2021 2020 2019 2018 2017

14.03%
10.46%
10.28%
10.13%
7.87%
ROE
Fi gure 4 -5: R at e Of Equi t y (R OE )
27
Interpretation: Till 2017, it shows increase in the trend. But after that, there is a fluctuation
in 2017 and 2021. The net income affected the ROE due to reasons like instruction of
Bangladesh Bank to limit the Credit Deposit Ratio within 85%. So the banks have to take
deposit in higher competitive rates.
Return on assets (ROA):
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,023.35 2,550.78 2,413.56 2,406.52 3,076.67
Average total asset (b) 433,265.95 394,529.93 354,631.61 323,929.46 290,965.81
ROA(a/b) 0.46 % 0.64% 0.68% 0.74% 1.05%
Table 4-6: Return on assets (ROA) of Al-Arafah Islami Bank Ltd.
2021 2020 2019 2018 2017
1.05%
0.74%
0.68%
0.64%
0.46%
ROA
Fi gure 4 -6: R et urn On Asset s
Interpretation: It shows how capable the management of the bank has been in converting
the institution’s assets into net earnings, as it calculates how much a bank earns using Tk. 1
of assets. Here the return in asset has a fluctuating trend. It varies between Tk. 0.46% to Tk
1.05% between 2017 and 2021 and being its highest in 2017. When a firm achieves 20% or
above, it is considered healthy. And more than 40% means the firm is doing quite well.
28
Quality of income Ratio:
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,023.35 2,550.78 2,413.56 2,406.52 3,076.67
Cash flows from operating (9,866.38) 10,043.22 12,498.72 (13,330.64) 12,376.74
activities (b)
Quality of income (0.20) 0.25 0.19 (0.18) 0.24
Ratio(a/b)
Table 4-7: Quality of income Ratio of Al-Arafah Islami Bank Ltd.
2021 2020 2019 2018 2017

0.25
0.24
0.19
QUALITY OF INCOME RATIO -0.18

-0.2
Figure 4-7: Quality Of Income Ratio
Interpretation: In 2017, 2019, 2020 ratios of less than 1.0 indicates low-quality. In 2018
and 2021 negative ratios means the Al-Arafa Islami Bank had negative earnings or is losing
money
Price earnings Ratio:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Current market price per share (a) 26.60 22.20 17.20 19.90 24.10
Earing per share (b) 1.96 2.41 2.28 2.35 3.15
Price earnings Ratio(a/b) 13.57 9.22 7.56 8.48 7.64
Table 4-8: Price earnings Ratio of Al-Arafah Islami Bank Ltd
29
2021 2020 2019 2018 2017
13.57
9.22
8.48
7.64
7.56
PRICE EARNINGS RATIO
Fi gure 4 -8: P ri ce Earni ngs R at i o
Interpretation: In 2021 higher PE suggests high expectations for future growth, perhaps
because the company is small or is a rapidly expanding market. For others, a low PE is
preferred, since it suggests expectations are not too high and the company is more likely to
outperform earnings forecasts.
Financial leverage percentage:
Ratio 2021 2020 2019 2018 2017
Return on equity (a) 7.87% 10.28% 10.13% 10.46% 14.03%
Return on assets (b) 0.46 % 0.64% 0.68% 0.74% 1.05%
Financial leverage (a-b) 7.41% 9.64% 9.45% 9.72% 12.98%
Table 4-9. Financial leverage percentage of Arafah Islami Bank Ltd
2021 2020 2019 2018 2017

12.98%
9.72%
9.64%
9.45%
7.41%
FINANCIAL LEVERAGE
Fi gure 4 -9: Fi ni anci al Leverage P ercent age
Interpretation:
The ratio of a bank's retained earnings and assets to its paid-in capital is known as its leverage
ratio. The leverage ratio would improve financial sector stability by assisting banks in cutting
import expenses. Better quality capital, as a result of a lower leverage ratio, means a greater
buffer against losses. The leverage ratio has been decreasing across the board for banks rated
by BB, but because to the high leverage ratios of private commercial banks and foreign
commercial banks, the banking sector as a whole has remained substantially above the
30
minimum regulatory level. The Financial leverage percentage of Arafah Islami Bank is quite
fine, it indicates that in future it may not have face risk or crisis in such debt or interest for
Arafah Islami Bank.
Dividends yield Ratio:
Ratio 2021 2020 2019 2018 2017
Annual dividends per share (a) 15 13 15 15 20
Market price per share (b) 26.60 22.20 17.20 19.90 24.10
Dividends yield Ratio(a/b) 56.39% 67.56% 75.58% 75.37% 82.98%
Table 4-10: Dividends yield Ratio to Arafah Islami Bank Ltd
2021 2020 2019 2018 2017
82.98%
75.58%
75.37%
67.56%
56.39%
DIVIDENDS YIELD RATIO
Fi gure 4 -10: Di vi dends Yi el d R at i o
Interpretation: In 2017 investors are getting 82.98% return on their investment which is
higher than any other year.in 2021 investors are getting a 56.39% return on investment which
is lower than 2017 to 2020.
4.2.2. ISLAMI BANK BANGLADESH LTD.
Cash Ratio:
Ratio 2021 2020 2019 2018 2017
Cash plus cash 246,163.38 213,784.32 75,853.65 67,463.91 83,597.08
equivalent (a)
Current liabilities(b) 1,381,979.52 1,178,656.79 946,291.52 822,573.12 755,022.24
Cash Ratio (a/b) 17.81% 18.13% 8.01% 8.20% 11.07%
Table 4-11 Cash Ratio of Islami Bank Bangladesh
31
2021 2020 2019 2018 2017
18.13%
17.81%
11.07%
8.20%
8.01%
CASH RATIO
Fi gure 4 -11: C ash R at i o
Current Ratio:
Ratio 2021 2020 2019 2018 2017
Current asset (a) 1,617,614.34 1,399,812.20 125,306.29 982,083.18 884,123.73
Current Liability (b) 1,381,979.52 1,178,656.79 946,291.52 822,573.12 755,022.24
Current Ratio (a/b) 1.170 1.187 1.324 1.193 1.170
Table 4-12: Current Ratio of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

1.324
1.193
1.187
1.17
1.17
CURRENT RATIO
Fi gure 4 -12: C urrent R at i o
Interpretation: In 2017 to 2021 Islami bank Bangladesh Ltd. has less current liabilities than
current assets Ratio is greater than 1.0 a desirable situation to be in. In 2018 more liquid and
is better positioned to pay off its liabilities. In 2019 current ratio is less than 1 a problem
situation at hand as Islami Bank Bangladesh Ltd. did not have enough to pay for its short
term obligations.
32
Debt Ratio:
Ratio 2021 2020 2019 2018 2017
Total liabilities (a) 1,571,431.50 1,355,012.16 1,082,841.29 942,533.29 848,935.01
Total assets (b) 1,635,992.79 1,417,622.10 1,141,492.97 997,429.60 899,599.14
Debt Ratio (a/b) 0.96 0.95 0.94 0.94 0.94
Table 4-13: Debt Ratio of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

0.96
0.95
0.94
0.94
0.94
DEBT RATIO
Fi gure 4 -13: Debt R at i o
Interpretation: The value indicates Islami Bank Bangladesh ltd. has financed closer of its
assets. In 2017 to 2021 here, the value states that less than 1 has a good debt ratio. Hence, the
investors would be fine with investing in it.
Equity Ratio:
Ratio 2021 2020 2019 2018 2017
Total equity (a) 64,561.29 62,609.94 58,651.67 54,896.30 50,664.12
Total assets (b) 1,635,992.79 1,417,622.10 1,141,492.97 997,429.60 899,599.14
Equity Ratio (a/b) 0.39 0.44 0.51 0.55 0.56
Table 4-14: Equity Ratio Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

0.56%
0.55%
0.51%
0.44%
0.39%
EQUITY RATIO
Fi gure 4 -14: Equi t y R at i o
33
Interpretation: In 2017, 2018, 2019 Islami Bank Bangladesh Ltd. have equity ratio greater
than 50% is called a conservative situation, Conservative are less risky as compared to
leveraged . Whereas in 2020 and 2021 equity ratio is less than 50% is called a leveraged
situation.
Ratio 2021 2020 2019 2018 2017
Net income (a) 4,639.20 4,795.52 5,328.39 6,075.14 4,920.60
Average owners’ equity (b) 63,087.08 60,132.27 56,773.98 52612.64 48,757.13
ROE (a/b) 7.19% 7.38% 9.08% 11.07% 9.63%
Table 4-15: Return on equity (ROE) of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

11.07%
9.63%
9.08%
7.38%
7.19%
ROE
Fi gure 4 -15: R et urn On Equi t y
Interpretation: Higher values are generally favorable meaning that the bank is efficient in
generating income on new investment.
Ratio 2021 2020 2019 2018 2017
Net income (a) 4,639.20 4,795.52 5,328.39 6,075.14 4,920.60
Average total 1,526,807.45 1,204,525.85 779,577.53 948,514.37 848,649.39
asset (b)
ROA (a/b) 0.30% 0.35% 0.50% 0.64% 0.55%
Table 4-16: Return on assets (ROA) of Islami Bank Bangladesh Ltd.
34
2021 2020 2019 2018 2017
0.64
0.55
0.5
0.35
0.3
ROA
Quality of income Ratio:
Ratio 2021 2020 2019 2018 2017
Net income (a) 4,639.20 4,795.52 5,328.39 6,075.14 4,920.60
Cash flows from 66,680.26 132,733.61 46,398.07 (5,325.67) 1,835.78
operating activities (b)
Quality of income Ratio 0.06 0.03 0.11 (1.14) 2.68
(a/b)
Table 4-17: Quality of income Ratio of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

2.68
0.11
0.06
0.03
QUALITY OF INCOME RATIO

-1.14
Fi gure 4 -17: Qual i t y On Incom e R at i o
Interpretation: In 2017 ratio of greater than 1.0 indicates high-quality income, while in
2019, 2020, 2021 ratios are less than 1.0 indicates low-quality. In 2018 negative ratio means
Islami Bank Bangladesh Ltd. had negative earnings or is losing money.
35
Ratio 2021 2020 2019 2018 2017
Current market price per share(a) 34.00 28.90 28.40 37.50 49.30
Earnings per share (b) 2.88 2.81 3.31 3.77 2.91
Price earnings Ratio (a/b) 11.11 9.54 5.77 6.42 11.62
Table 4-18: Price earnings Ratio of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017
11.62
11.11
9.54
6.42
5.77
Fi gure 4 -18: pri ce Earni ng R at i o
Interpretation: In 2017 higher price earnings ratio suggests high expectations for future
growth, perhaps because Islami Bank Bangladesh a rapidly expanding market. For others, a
low price earnings ratio is preferred, since it suggests expectations are not too high and the
company is more likely to outperform earnings forecasts
Ratio 2021 2020 2019 2018 2017
Return on assets (b) 0.30% 0.35% 0.50% 0.64% 0.55%
Table 4-19: Financial leverage percentage of Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

10.43%
9.08%
8.58%
7.03%
6.89%
FINANCIAL LEVERAGE
Figure 4-19:Fiancial Leverage percentage
36
Interpretation:
minimum regulatory level. The Financial leverage percentage of Islami Bank Bangladesh is
quite fine, it indicates that in future it may not have face risk or crisis in such debt or interest
for Islami Bank.
Dividends Yield Ratio:
Ratio 2021 2020 2019 2018 2017
Dividends yield Ratio (a/b) 29.41% 34.60% 35.21% 26.66% 20.28%
Table 4-20: Dividends yield Ratio Islami Bank Bangladesh Ltd.
2021 2020 2019 2018 2017

35.21%
34.60%
29.41%
26.66%
20.28%
Figure 4-20: Dividend Yield Ratio

Interpretation: In 2017 investors are getting a 35.21% return on their investment which is
37
4.2.3. SOCIAL ISLAMI BANK
Cash Ratio :
Ratio 2021 2020 2019 2018 2017
Cash plus cash 23,491.24 33,373.48 31,898.44 26,080.06 23,826.66
equivalent (a)
Cash Ratio (a/b) 6.87% 10.35% 11.08% 10.52% 10.41%
Table 4-21: Cash Ratio of Social Islami Bank
2021 2020 2019

11.08% 2018 2017
10.52%
10.41%
10.35%
6.87%
CASH RATIO
Figure 4-21: Cash Ratio
Current Ratio :
Ratio 2021 2020 2019 2018 2017
Current asset (a) 403,955.36 380,568.70 341,450.19 303,741.79 272,868.14
Current Liability (b) 341,661.06 322,383.51 287,936.65 248,324.48 228,798.90
Current Ratio (a/b) 1.18 1.18 1.19 1.22 1.19
Table 4-22: Current Ratio of Social Islami Bank
38
2021 2020 2019 2018 2017
1.22
1.19
1.19
1.18
1.18
CURRENT RATIO
Figure 4-22: Current Ratio

Interpretation: Social Islami Bank Ltd has less current liabilities than current assets Ratio is
greater than 1.0 a desirable situation to be in. In 2018 more liquid and is better positioned to
pay off its liabilities.
Debt Ratio:
Ratio 2021 2020 2019 2018 2017
Total assets (b) 408,203.15 384,999.71 345,056.23 307,305.32 276,348.95
Debt Ratio (a/b) 0.95 0.953 0.949 0.948 0.948
Table 4-23: Debt Ratio of Social Islami Bank
2021 2020 2019 2018 2017

0.953
0.95
0.949
0.948
0.948
DEBT RATIO
Figure 4-23:Debt Ratio

Interpretation: The value indicates Social Islami Bank has financed closer of its assets. In
2017 to 2021 Here, the value states that less than 1 has a good debt ratio. Hence, the investors
would be fine with investing in it.
39
Equity Ratio:
Ratio 2021 2020 2019 2018 2017
Total equity (a) 19,237.42 18,038.38 17,271.33 15,749.87 14,166.44
Total assets (b) 408,203.15 384,999.71 345,056.23 307,305.32 276,348.95
Equity Ratio (a/b) 0.47 0.46 0.50 0.51 0.51
Table 4-24: Equity Ratio of Social Islami Bank
2021 2020 2019 2018 2017
0.51
0.51
0.5
0.47
0.46
EQUITY RATIO
Figure 4-24: Equity Ratio
Interpretation: In 2017 to 2019 Social Islami Bank ltd. have equity ratio greater than 50%
is called a conservative company, Conservative companies are less risky as compared to
leveraged companies. Whereas in 2020, 2021 year this ratio of less than 50% is called a
leveraged firm.
Return on equity:
Ratio 2021 2020 2019 2018 2017
Net income (a) 1,659.70 1,550.93 1,521.45 1,583.43 1,455.24
ROE (a/b) 8.90% 8.78% 9.21% 10.58% 15.85%

Table 4-25: Return on equity (ROE) of Social Islami Bank
40
2021 2020 2019 2018 2017
15.85%
10.58%
9.21%
8.90%
8.78%
ROE
Figure 4-25:Return On Equity
Return on assets:
Ratio 2021 2020 2019 2018 2017
Net income (a) 1,659.70 1,550.93 1,550.93 1,583.43 1,455.24
Average total asset (b) 396,601.43 365,027.97 326,180.77 291,827.13 252,026.56
ROA (a/b) 0.41% 0.42% 0.47% 0.54% 0.57%
Table 4-26: Return on assets (ROA) of Social Islami Bank
2021 2020 2019 2018 2017

0.57%
0.54%
0.47%
0.42%
0.41%
ROA
Figure 4-26:Return On Assets
Interpretation: it shows how capable the management of the bank has been in converting the
institution’s assets into net earnings, as it calculates how much a bank earns using Tk. 1 of
assets. Here the return in asset has a fluctuating trend. It varies between Tk. 0.41% to Tk
0.57% between 2017 and 2021 and being its highest in 2017. when a firm achieves 20% or
41
Quality of Income Ratio:
Ratio 2021 2020 2019 2018 2017
Net income (a) 1,659.70 1,550.93 1,521.45 1,583.43 1,455.24
Cash flows from operating (1,702.15) 3,612.82 11,485.57 (15,629.28) (603.60)
activities (b)
Quality of income Ratio 0.975 0.429 0.132 (0.101) (2.411)
(a/b)
Table 4-27: Quality of Income Ratio of Social Islami Bank
2021 2020 2019 2018 2017

0.975
0.429
0.132

-0.101
-2.411
Figure 4-27:Quality Of Income Ratio
Interpretation: In 2019, 2020, 2021 ratios of less than 1.0 indicates low-quality. In 2017 and
2018 negative ratios means Social Islami Bank had negative earnings or is losing money.
Price earning Ratio:
Ratio 2021 2020 2019 2018 2017
Table 4-28: Price earnings Ratio of Social Islami Bank
42
2021 2020 2019 2018 2017
12.33
8.78
7.86
8.1
7.9
Figure 4-28: Price Earnings Ratio
growth, perhaps because Social Islami Bank rapidly expanding market. For others, a low
price earning ratio is preferred, since it suggests expectations are not too high and the
company is more likely to outperform earnings forecasts.
Financial Leverage Percentage:
Ratio 2021 2020 2019 2018 2017
Return on assets (b) 0.41% 0.42% 0.47% 0.54% 0.57%
Table 4-29: Financial leverage percentage of Social Islami Bank
2021 2020 2019 2018 2017

15.28%
10.04%
8.74%
8.49%
8.36%
FINANCIAL LEVERAGE
Figure 4-29: Financial Leverage Percentage

Interpretation:
43
minimum regulatory level. The Financial leverage percentage of Social Islami Bank is quite
fine, it indicates that in future it may not have face risk or crisis in such debt or interest for
Social Islami Bank.
Dividends Yield Ratio:

Ratio 2021 2020 2019 2018 2017
Dividends yield Ratio (a/b) 33.78% 38.46% 00 00 82.30%
Table 4-30: Dividends yield Ratio of Social Islami Bank
2021 2020 2019 2018 2017
82.30%
38.46%
33.78%
Figure 4-30: Dividend Yield Ratio
higher than any other year.in 2021 investors are getting a 33.78% return on investment.in
2019 and 2020 have no dividend.
4.2.4. SHAHJALAL ISLAMI BANK
Cash Ratio:
Ratio 2021 2020 2019 2018 2017
Cash plus cash 4,031.06 15,165.77 17,748.25 13,565.83 13,189.21
equivalent (a)
Cash Ratio (a/b) 1.85% 6.94% 8.72% 7.67% 9.01%
Table 4-31: Cash Ratio of Shahjalal Islami Bank
44
2021 2020 2019 2018 2017
9.01%
8.72%
7.67%
6.94%
1.85%
CASH RATIO
Figure 4-31:Cash Ratio
Current Ratio:
Ratio 2021 2020 2019 2018 2017
Current asset (a) 308,653.78 288,777.20 261,488.56 239,664.43 203,923.26
Current Liability (b) 217,288.98 218,442.94 203,384.14 176,861.51 146,348.22
Current Ratio (a/b) 1.42 1.32 1.28 1.35 1.39
Table 4-32: Current Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017

1.42
1.39
1.35
1.32
1.28
CURRENT RATIO
Interpretation: Shahjalal Islami Bank Ltd has less current liabilities than current assets Ratio
is greater than 1.0 a desirable situation to be in. In 2021 more liquid and is better positioned
to pay off its liabilities.
45
Debt Ratio:
Ratio 2021 2020 2019 2018 2017
Total assets (b) 313,731.10 293,517.85 266,103.70 243,659.89 207,886.37
Debt Ratio (a/b) 0.93 0.93 0.94 0.92 0.94
Table 4-33: Debt Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017
0.94
0.94
0.93
0.93
0.92
DEBT RATIO
Figure 4-33:Debt Ratio

Interpretation: The value indicates Shahjalal Islami Bank has financed closer of its assets.
In 2017 to 2021 here, the value states that less than 1 has a good debt ratio. Hence, the
investors would be fine with investing in it.
Equity Ratio:
Ratio 2021 2020 2019 2018 2017
Total equity (a) 19,802.99 17,948.75 16,507.26 14,788.96 13,317.78
Total assets (b) 313,731.10 293,517.85 266,103.70 243,659.89 207,886.37
Equity Ratio (a/b) 0.63 0.61 0.62 0.60 0.64
Table 4-34: Equity Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017

0.64
0.63
0.62
0.61
0.6
EQUITY RATIO (A/B)
Figure 4-34:Equity Ratio

46
Interpretation: In 2017 to 2021 Shahjalal Islami bank have equity ratio greater than 50% is
called a conservative company, Conservative companies are less risky as compared to
leveraged companies. Whereas a company that has this ratio of less than 50% is called a
leveraged firm.
Return on equity:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,585.23 1,908.19 1,718.30 1,471.18 1,195.89
ROE (a/b) 13.70 % 11.08% 10.98% 10.47% 9.14%
Table 4-35: Return on equity (ROE) of Shahjalal Islami Bank
13.70%
2021 2020 2019 2018 2017

11.08%
10.98%
10.47%
9.14%
ROE
Figure 4-35:Return On Equity
Return on assets:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,585.23 1,908.19 1,718.30 1,471.18 1,195.89
Average total asset (b) 303624.47 279755.19 254881.80 225773.13 187565.56
ROA (a/b) 0.85 % 0.68% 0.67% 0.65% 0.64%
Table 4-36: Return on assets (ROA) of Shahjalal Islami Bank
47
2021 2020 2019 2018 2017
0.85%
0.68%
0.67%
0.65%
0.64%
ROA
Figure 4-36 Retun On Assets
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income (a) 2,585.23 1,908.19 1,718.30 1,471.18 1,195.89
Cash flows from operating 632.06 16,618.30 9,016.42 2,514.65 (2,869.01)
activities (b)
Quality of income Ratio (a/b) 4.09 0.11 0.19 0.58 (0.41)
Table 4-37: Quality of income Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017

4.09
0.58
0.19
0.11

-0.41
Figure 4-37:Quality Of Income Ratio
Interpretation: In 2018, 2019, 2020 ratios of less than 1.0 indicates low-quality. In 2017
negative ratios means shahjalal Islami Bank had negative earnings or is losing money.
48
(amount in million)
Ratio 2021 2020 2019 2018 2017
Table 4-38: Price earnings Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017
21.29
17.51
13.35
12.35
8.68
Figure 4-38: Price Earnings Ratio
growth, perhaps because Shahjalal Islami Bank rapidly expanding market. For others, a low
price earnings ratio is preferred, since it suggests expectations are not too high and the
company is more likely to outperform earnings forecasts
(amount in million)
Ratio 2021 2020 2019 2018 2017
Return on equity (a) 13.70 % 11.08% 10.98% 10.47% 9.14%
Return on assets (b) 0.85 % 0.68% 0.67% 0.65% 0.64%
Table 4-39: Financial leverage percentage of Shahjalal Islami Bank
49
2021 2020 2019 2018 2017
12.85%
10.40%
10.31%
9.82%
8.50%
FINANCIAL LEVERAGE
Figure 4-39: Financial Leverage

Interpretation:
minimum regulatory level. The Financial leverage percentage of Shahjalal Islami Bank is
quite fine, it indicates that in future it may not have face risk or crisis in such debt or interest
forShahjalal Islami Bank.

(amount in million)
Ratio 2021 2020 2019 2018 2017
Dividends yield Ratio (a/b) 32.11% 21.83% 0 0 30.30%
Table 4-40: Dividends yield Ratio of Shahjalal Islami Bank
2021 2020 2019 2018 2017

32.11%
30.30%
21.83%
Figure 4-40:dividend Yield Ratio
50
4.2.5 ICB ISLAMIC BANK LTD.
Cash Ratio:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Cash in hand at Bank(a) 922.99 808.78 883.47 863.77 855.78
Total deposit (b) 12,925.58 12,434.11 11,960.38 11,518.75 11,293.57
Cash Ratio(a/b) 7.14% 6.50% 7.38% 7.22% 7.57%
Table 4-41: Cash Ratio of ICB Islamic Bank Ltd.
2021 2020 2019 2018 2017
7.57
7.38
7.22
7.14
6.5
CASH RATIO
Figure 4-41: Cash Ratio
Current Ratio:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Current asset (a) 11,295.44 11,235.08 11,207.34 11,388.93 11,733.93
Current 12,925.58 12,434.11 11,960.38 11,518.75 11,293,.57
Liability(b)
Current Ratio (a/b) 0.87 0.90 0.93 0.98 1.03
Table 4-42: Current Ratio of ICB Islamic Bank Ltd
51
2021 2020 2019 2018 2017
1.03
0.98
0.93
0.9
0.87
CURRENT RATIO
Interpretation: ICB Bank Ltd has less current assets than current liabilities Ratio is less than
1 a problem situation at hand does not have enough to pay for its short term obligations.
Debt Ratio:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Total assets(b) 11,583.03 11,260.02 11,240.14 11,429.69 11,785.22
Debt Ratio (a/b) 2.04 2.03 2.01 1.95 1.88
Table 4-43: Debt Ratio of ICB Islamic Bank Ltd
2021 2020 2019 2018 2017

2.04
2.03
2.01
1.95
1.88
DEBT RATIO
Figure 4-43: Debt Ratio
52
Interpretation: The value indicates ICB Islami Bank In 2017 to 2021 the value is 1 or more,
the investors know that the total amount of debt is too much for the companies to pay back,
so they decide not to invest in it. Liabilities exceed its assets.
Equity Ratio:
(amount in million)
Ratio 2021 2020 2019 2018 2017
Total equity (a) (12,054.06) (11,659.25) (11,374.37) (10,950.62) (10,451.58)
Total assets (b) 11,583.03 11,260.02 11,240.14 11,429.69 11,785.22
Equity Ratio (a/b) (1.04) (1.03) (1.02) (0.95) (0.89)
Table 4-44: Equity Ratio of ICB Islamic Bank Ltd
2021 2020 2019 2018 2017
EQUITY RATIO
-0.95
-1.02
-1.03
-1.04
-1.5
Figure 4-44:Equity Ratio

Interpretation: In 2017 to 2021 ICB Islamic Bank Ltd. in risky position. Negative equity is
a major red flag to lenders and investors. Liabilities exceed its assets.
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income (a) (394.81) (187.27) (423.75) (485.63) (405.00)
Average owners’ equity (b) 118,566.66 11,516.81 11162.49 10701.10 10248.33
ROE (a/b) (0.33) (1.62) (3.79) (4.53) (3.95)
Table 4-45: Return on equity (ROE) of ICB Islamic Bank Ltd
53
2021 2020 2019 2018 2017
ROE
-0.33
-1.62
-3.79
-3.95
-4.53
Fi gure 4 -45: R et urn On Equi t y
Interpretation: From 2017 to 2021 ICB Islamic Bank Ltd has been generating loss. These
negative return on equity implies that shareholders are losing on their investment in the
company.
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income (a) (394.81) (187.27) (423.75) (485.63) (405.00)
Average total asset 1346.30 310.86 1597.53 2063.92 1393.20
(b)
ROA (a/b) (3.41) (1.66) (3.77) (4.25) (3.44)
Table 4-46: Return on assets (ROA) of ICB Islamic Bank Ltd
2021 2020 2019 2018 2017
ROA
-1.66
-3.41
-3.44
-3.77
-4.25
Interpretation: ICB Islamic Bank Ltd is not obtaining the expected benefits, it is generating
loss. The higher the value of this ratio is better. This holds true as long as the ROA value is
positive. A negative value indicates that ICB Islamic Bank Ltd is incurring losses, not
generating profits.
54
(amount in million)
Ratio 2021 2020 2019 2018 2017
Net income(a) (394.81) (187.27) (423.75) (485.63) (405.00)
Cash flows from 295.37 (44.62) 11.38 (162.52) 211.66
operating activities(b)
Quality of income (1.34) 4.19 (37.23) 2.98 (1.91)
Ratio(a/b)
Table 4-47: Quality of income Ratio of ICB Islamic Bank Ltd
2021 2020 2019 2018 2017

4.19
2.98
-1.34
-1.91
-37.23
Fi gure4 -47: Qual i t y Of Incom e R at i o
Interpretation: Negative ratios means ICB Islamic Bank Ltd had negative earnings or is
losing money.
(amount in million)
Ratio 2021 2020 2019 2018 2017
Current market price per 5.1979 1.3188 3.0144 5.0954 5.1057
share(a)
Earing per share(b) (0.59) (0.28) (0.64) (0.73) (0.61)
Price earnings Ratio(a/b) (8.81) (4.71) (4.71) (6.98) (8.37)
Table 4-48: Price earnings Ratio ICB Islamic Bank Ltd
55
2021 2020 2019 2018 2017
-4.71
-4.71
-6.98
-8.37
-8.81
Fi gure 4 -48: pri ce Earni ng R at i o
Interpretation: From 2017 to 2021 ICB Islamic Bank Ltd have negative price earnings ratio
means ICB Islamic Bank Ltd is losing money.
(amount in million)
Ratio 2021 2020 2019 2018 2017
Return on equity(a) (0.33) (1.62) (3.79) (4.53) (3.95)
Return on assets(b) (3.41) (1.66) (3.77) (4.25) (3.44)
Financial leverage(a-b) 47.80% 48.50% 48.50% 45.50% 45.60%
Table 4-49: Financial leverage percentage of ICB Islamic Bank Ltd
2021 2020 2019 2018 2017

48.50%
48.50%
47.80%
45.60%
45.50%
FINANCIAL LEVERAGE
Fi gure 4 -49: Fi nanci al Leverage P ercent age
Interpretation:
minimum regulatory level. Financial leverage percentage of ICB Islamic Bank Ltd is not so
56
good here, it indicates that this company may suffer if it takes on too much additional debt
and interest.
(amount in million)
Ratio 2021 2020 2019 2018 2017
Annual dividends per share(a) 0 0 0 0 0
Market price per share(b) 5.22 6.87 4.63 2.85 4.60
Dividends yield Ratio(a/b) 0 0 0 0 0
Table 4-50: Dividends yield Ratio of ICB Islamic Bank Ltd
Interpretation: The Board recommends no dividend for the year ended on 31 December
2021. There was no declaration of Bonus Share/Stock Dividend for the year as interim
Dividend. The Bank is not in the state of generating sufficient income to pay such dividends
4.3. Comparative analysis
Year 2021
Al- Islami Social Shahjalal ICB
arafah Bank Islami Islami Islamic
Islami Bangladesh Bank Bank Ltd Bank
Bank Ltd Ltd.
Cash ratio Cash plus cash 6.70% 17.81% 6.87% 1.85% 7.14%
equivalents/
Current
liabilities
Current Current assets / 1.26 1.170 1.18 1.42 0.87
ratio Current
liabilities
Debt Total liabilities 0.94 0.96 0.95 0.93 2.04
Ratio / Total assets
Equity Total equity/ 0.52 0.39 0.47 0.63 (1.04)
Ratio Total assets
57
Return on Net income / 7.87% 7.19% 8.90% 13.70% 0.33%
equity Average
(ROE) owners' equity
Return on Net income/ 0.46 % 0.30% 0.41% 0.85% 3.41%
assets Average total
(ROA) assets
Financial Return on 7.41% 6.89% 8.49% 12.85% 47.80%
leverage equity - Return
percentage on assets
Quality of Cash flows (0.20) 0.06 0.975 4.09 (1.34)
income from operating
ratio activities/ Net
income
Price Current market 13.57 11.11 8.78 8.68 (8.81)
earnings price per share
ratio / Earing per
share
Dividend Annual 56.39% 29.41% 33.78% 32.11% 0
yield ratio dividends per
share / Market
price per share
Year 2020
Al-arafa Islami Social Shahjalal ICB
Islami Bank Islami Islami Islami
Bank Bangladesh Bank Bank Bank
Ltd Ltd
equivalents/
Current
liabilities
58
ratio Current
liabilities
Ratio Total assets
equity Average
Return on Net income/ 0.64% 0.35% 0.41% 0.11% 3.41%
(ROA) assets
Quality of Cash flows 0.25 0.03 0.429 0.11 1.34
income
ratio / Earing per
share
Dividend Annual 67.56% 34.60% 38.46% 21.83% 00
share / Market
price per share
59
Year 2019
Al-arafa Islami Social Shahjalal ICB
Islami Bank Islami Islami Islami
Bank Bangladesh Bank Bank Bank
Ltd Ltd
equivalents/
Current
liabilities
ratio Current
liabilities
Ratio Total assets
equity Average
(ROA) assets
Quality of Cash flows 0.19 0.11 0.132 0.19 (37.23)
income
ratio / Earing per
share
60
Dividend Annual 75.58% 35.21% 00 00 00
share / Market
price per share
Year 2018
Al-arafa Islami Bank Social Shahjalal ICB
Islami Bangladesh Islami Islami Islami
Bank Ltd Bank Bank Bank
Ltd
equivalents/
0.60Current
liabilities
ratio Current
liabilities0.95
Debt Total 0.93 0.94 0.948 0.92 1.95
Ratio liabilit4.53ies /
Total assets
Ratio Total assets
equity Average
(ROA) assets
Financial Return on 9.72% 10.43% 10.04 9.82 45.50%
Quality of Cash flows (0.18) (1.14) 0.101 0.58 2.98
61
income
ratio / Earing per
share
Dividend Annual 75.37% 26.66% 00 00 00
share / Market
price per share
Year 2017
Al-arafa Islami Bank Social Shahjalal ICB
Islami Bangladesh Islami Islami Islami
Bank Ltd Bank Bank Bank
Ltd
equivalents/
Current
liabilities
ratio Current
liabilities
Ratio Total assets
equity Average
62
(ROA) assets
Quality of Cash flows 0.24 2.68 0.411 0.41 (1.91)
income
ratio / Earing per
share
Dividend Annual 82.98% 20.28% 82.30% 30.30% 00
share / Market
price per share
By this comparative analysis of five banks study it gives us an idea that Al Arafah Islami
Bank has the strongest position amongst them. And ICB Islami bank is not in a stable
position since 2017. There is a deficiency of trained and qualified personnel in shariah
banking, a lack of a uniform shariah ruling system, a lack of an Islamic interbank money
market, and a lack of a capital market. Many clients have shifted their savings to shariah-
based banks because of the higher rates of return on deposits and the lower interest rates on
classified loans. These financial institutions should lessen their reliance on credit sale
instruments or face potential danger if market interest rates were to rise sharply.
63
Chapter Five
5.1 Findings:
 In 2017 to 2021 Cash and cash equivalent is less than current liabilities this means the
firm has utilized its assets well to earn profits. Al-Arafah Islami Bank Ltd has less
current liabilities than current assets Ratio. Al- Arafah Bank Ltd. has financed closer
of its assets. So, the investors would be fine with investing in it. In 2017 to 2021 Al-
Arafah Islami Bank Ltd. have equity ratio greater than 50%, thats mean it is a less
conservative company. , there is a fluctuation in 2017 and 2021. Its capable to the
management of the bank has been in converting the institution’s assets into net
earnings. Quality of income fluctuated varies in years.They have high expectations for
future growth (PE) as they rapidly expanding market. Dividends yield Ratio to
Arafah Islami Bank Ltd are decreased nowadays.
firm has utilized its assets well to earn profits. Islami Bank Ltd has less current
liabilities than current assets Ratio. Islami Bank Ltd. has financed closer of its assets.
So, the investors would be fine with investing in it. In 2017 to 2021 Islami Bank Ltd.
have equity ratio greater than 50%, thats mean it is a less conservative company.
Return on equity (ROE) of Islami Bank Bangladesh Ltd, there is a fluctuation in 2017
to 2021.Islami Bank Bangladesh Ltd. had negative earnings or is losing money.
Dividends yield Ratio to Islami Bank Ltd are decreased nowadays.there is a
fluctuation in 2017 and 2021. Its capable to the management of the bank has been in
converting the institution’s assets into net earnings. Quality of income fluctuated
varies in years.They have high expectations for future growth (PE) as they rapidly
expanding market. Dividends yield Ratio to Islami Bank Ltd are decreased
nowadays.
 Social Islami Bank Ltd has less current liabilities than current assets. In 2018 more
liquid and is better positioned to pay off its liabilities. Social Islami Bank has financed
closer of its assets. In 2017 to 2021 here, the value states that less than 1 has a good
debt ratio. Hence, the investors would be fine with investing in it.In 2017 to 2021
Social Islami Bank Ltd. have equity ratio greater than 50%, thats mean it is a less
conservative company. The bank is efficient in generating income on new investment.
64
The return in asset of Social Islami Bank has a fluctuating trend. It varies between Tk.
0.41% to Tk 0.57% between 2017 and 2021 and being its highest in 2017. Quality of
income fluctuated varies in years.They have high expectations for future growth (PE)
as they rapidly expanding market. Dividends yield Ratio to Social Islami Bank Ltd are
decreased nowadays. In 2017 investors are getting a 82.30% return on their
investment which is higher than any other year.
 Shahjalal Islami Bank Ltd has less current liabilities than current assets. In 2018 more
liquid and is better positioned to pay off its liabilities. Shahjalal Islami Bank has
financed closer of its assets. The return in asset has a fluctuating trend. The result
indicates low-quality. In 2017 negative ratios means Shahjalal Islami Bank had
negative earnings or is losing money. Current Price Rearning Ratio suggests
expectations are not too high and the company is more likely to outperform earnings
forecasts. In 2017 investors are getting a 35.21% return on their investment which is
higher than any other year.
firm ICB Islamic Bank Ltd has utilized its assets well to earn profits. Value shows
Islami Bank In 2017–2021, investors know that the entire debt is too large for the
companies to pay back, therefore they don't invest. Liabilities exceed assets. ICB
Islamic Bank Ltd. in a precarious situation between 2017 and 2021. Lenders and
investors will be very wary of a property with negative equity. ICB Islamic Bank Ltd
expects to lose money until at least 2021. If a corporation has a negative return on
equity, it means that its shareholders are losing money. As opposed to profit, ICB
Islamic Bank Ltd is really losing money. This is a ratio that should be as high as
possible. As long as ROA is positive, this is the case. If ICB Islamic Bank Ltd's net
income is negative, then the bank is losing money. It has a negative quality of income
means ICB Islamic Bank Ltd had negative earnings or is losing money. Negative
price earnings ratio for ICB Islamic Bank Ltd from 2017 to 2021 indicates losses.
This yields a recommendation from the Board of Directors that no dividend be paid
out for the fiscal year ending 31 December 2021. No interim Bonus Share/Stock
Dividend was declared for the year. Bank earnings currently do not permit dividend
payments at this time.
65
5.2 Recommendations:
i. In order to improve their financial performance, Islamic banks need to implement new
techniques for better business in future.
ii. The Bangladesh Bank has to establish a dedicated channel for dealings with Islamic
financial institutions and develop Islamic monetary and savings instruments.
5.3 Conclusion:
Total Islamic banking deposits increased from Tk 1,57,492 crore in 2015 to Tk 4,21,375
crore by the end of September 2022, according to data from the Bangladesh Bank. This is up
significantly from Tk 1,13,360 crore in 2013. In September of 2022, Islamic banks accounted
for 26.8 percent of all bank deposits in the country. From Tk 1,35,061 crores at the end of
September 2015 and Tk 97,530 crores at the end of December 2013, the total investment
(loans and advances) under Islamic banking grew to Tk 3,86,221 crores by the end of
September 2022. Many problems, including money laundering and non-performing loans
(NPLs), plague the banking industry because of bad management, inadequate governance, a
lack of strong leadership, and a failure to adhere to ethical norms. A country's economic
growth potential can be gauged by looking at its banking industry. However, it is worrisome
that our country's banks are experiencing various difficulties that slow the banking sector's
and the country's rate of development. This study therefore attempted using secondary data
gleaned from the banks' annual reports, compare the effectiveness and efficiency of five
different financial institutions serving the people of Bangladesh.
66
REFERENCE:
 Book: James Bakul Sharkar and Farjana Yeashmin –Brothes Publication- Accounting
Principles – (Third Edition) May2009
 Report: Annual Report (2017-2021) Al-Arafa Islami Bank, Islami Bank Bangladesh
ltd., Social Islami Bank,Shahjalal Islami Bank,ICB Islami Bank.
 Ibrahim, M., Deen Mohammad, K., Hoque, N., & Aktaruzzaman Khan, M. (2014a).
Investigating the Performance of Islamic Banks in Bangladesh. Asian Social Science,
10(22), p165. https://doi.org/10.5539/ass.v10n22p165
 Islam, S. N., Amin, D. R., & Molla, S. (n.d.). The impact of banking sector financial
performance on the economic growth in Bangladesh.
 Pinto, P., Hawaldar, I. T., Rahiman, H. U., & Sarea, A. (n.d.). An Evaluation of
Financial Performance of Commercial Banks.
 Economic growth in Bangladesh and the role of banking sector. (n.d.). The Financial
Express. Retrieved May 17, 2023, from
https://thefinancialexpress.com.bd/views/views/economic-growth-in-bangladesh-and-
the-role-of-banking-sector-1547220114
 Islamic banking thrives in Bangladesh. (n.d.). New Age | The Most Popular
Outspoken English Daily in Bangladesh. Retrieved May 17, 2023, from
https://www.newagebd.net/article/193134/islamic-banking-thrives-in-bangladesh
67

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Thesis Report on

Financial Performance Analysis of Five Commercial Banks

Stamford University Bangladesh

Date of submission: June 24, 2023

Subject: Submission of thesis Report

It is a great opportunity to submit thesis report on Financial Performance Analysis of five

Humayra Salsabil Siddique Taqee

Humayra Salsabil Siddique Taqee

I wish best wishes.

1.2 Scope of the study: 01

3.2. Objectives of financial analysis 16

Description Page No.

Description Page No.

1.1 Background of the study

1.2 Scope of the study:

1.3 Objectives of the study

1.4.1 Data Sources:

2.1 Al-Arafah Islami Bank Ltd

2.1.1. Background of Al-Arafah Islami Bank Ltd

2.1.5. Board of directors:

1. Alhajj Salim Rahman CHAIRMAN,

2.1.6. Functions in Brief

Proliferation of Shariah Based Banking Practices. Rendering quality financial services by

2.2.1. Background of Islami Bank Bangladesh Limited

1. To ensure customers' satisfaction.

2.2.5. Board of Directors

18. Khurshid Ul Alam DIRECTOR

2.2.6. Functions in Brief

2.3. Social Islami Bank Ltd. (SIBL)

2.3.1. Background of Social Islami Bank Ltd. (SIBL)

2.3.2. Mission Social Islami Bank Ltd. (SIBL)

2.3.5. Board of directors

2.3.6. Functions in Brief

2.4.1. Background of Shahjalal Islami Bank Limited (SJIBL)

2.4.5. Board of Directors

Mr. Mohammed Younus CHAIRMAN

2.5. ICB Islamic Bank

2.5.1. Background of ICB Islamic Bank

2.5.5. Board of Directors

Mohd. Nasir Bin Ali CHAIRMAN

2.5.6 Functions in Brief

3.2. Objectives of financial analysis

Objectives of financial statement analysis:

3.3. Sources of financial information:

3.5. Methods of financial statement analysis

• Horizontal analysis: To compare financial performance of a company across time.

• Vertical analysis: To compare financial performance of a company to a base period

• Ratio analysis: To compare financial performance by measuring key relations in financial

a.Liquidity and efficiency

1. Profit margin ratio: Profit margin = Net income / Net sales*100

Gross margin ratio =Gross margin/ Net sales x 100

Where, gross margin = Net sales - cost of goods sold

3. Return on equity (ROE):

The computation is:

ROE = Net income / Average owners' equity

It is to be noted that net income excludes preferred dividends (if any).

Average owners’ equity= Opening owners’ equity+ Ending owners' equity/ 2

4. Return on assets (ROA):

1. Price earnings ratio

These ratios are selected for financial performance analysis

4.1. a. Liquidity and efficiency

3. Quick ratio/ Acid test ratio:

6. Return on equity (ROE):