Ratio analysis

1.Return on equity(ROE)- Return on equity (ROE) is the amount of net income returned as
a percentage of shareholders equity. Return on equity measures a corporation's profitability
by revealing how much profit a company generates with the money shareholders have
invested.

ROE
0.17114873412671
0.18 6 0.15658729685034
5
0.16
0.13206839680292
0.14 8
0.11095942258965 0.10614104329800
0.12 1 0.104075260058230.10164058675950
0.09010780863404 5 5 8
0.09072269757540
0.1 46 0.08172180855423 53
72
0.08
0.06
0.04
0.02
0
2015 2016 2017 2018 2019

Dhaka Bank Mercantile Bank

Dhaka Bank: Over here Dhaka Bank attained a significant amount of profit from their
shareholder in 2015 and it was 0.11096 which later decreased and became 0.10 in year 2016,
0.102 in year 2017 and in year 2019 some increase than 2018 but lower than year 2015.

Mercantile Bank: Mercantile Bank has a profit of 0.09 at 2015 after that profit started
increasing and at 2017 it was 0.17 but at 2018 and 2019 profit decreased.

Comparative Analysis: Though Dhaka Bank profits fluctuates more .When profit fluctuates
like above it can be risky and dangerous for the bank. So in that case Mercantile Bank
maintain more stable profit than Dhaka bank.
2. Return on assets (ROA) - Return on assets (ROA) is an indicator of how profitable a
company is relative to its total assets. ROA gives an idea as to how efficient management is
at using its assets to generate earnings.

ROA

0.011553219925
0.010865954495

0.009984714272
8972
0.008585215054

Dhaka Bank Mercantile Bank

1964
0.007636283936
0.007632927281

65672

0.006995257824
0.006969482580
83567

0.005668154665
95998
41118

0.005118531826
33787

7257
83954
33907
2015 2016 2017 2018 2019

Dhaka Bank: Initially in 2015 ROA was 0.009 .After that it decreases in year 2016 to 2018
but 2019 it increase than 2018.

Mercantile Bank: ROA of Mercantile Bank in 2015 was less in 2016, 2017and 2018 but
higher than 2019 .In 2017 is the highest ROA and it was 0.012.

Comparative analysis: Mercantile Bank has the higher and stable return on assets
comparing to Dhaka Bank. So in that case Mercantile Bank maintain more stable profit than
Dhaka bank.
3. Net Interest Margin- NIM measurers how efficiently asset is used to generate interest
income. It is usually expressed as a percentage of what the financial institution earns on loans
in a time period.

Net interest margin

0.02018838910281
0.01831047275687

0.01584737289353
0.01572793743182
0.01518911730992 Dhaka Bank Mercantile Bank

97
0.01467583407877

0.01425981118601
0.01371753856507

0.01312445145721
85
0.01141020626244

92
22
11

79

82
78

8
2

2015 2016 2017 2018 2019

Dhaka Bank: NIM was 0.0114 at 2015 but after that it was increased in year 2016 to 2018.
In 2019 NIM decreased and it was 0.02 but it higher than 2015.

Mercantile Bank: NIM was 0.014 at 2015 and it has increased a little bit of 0.015 at the year
of 2016 but after it was decreased. In 2019 NIM is higher than other and it was 0.016.

Comparative Analysis-Among these two Dhaka Bank has the highest NIM .So Dhaka bank
is more efficient in generating interest income by utilizing assets. Graph from the above
shows that it is stable than other.
4. Net Non Interest Margin: Net non-interest margin indicates how efficiently bank is using
its assets to generate non-interest income.

0.03492947289553
Net non interest margin

97
Dhaka Bank Mercantile Bank

0.01236925702443
0.00957349577762

0.00912395132047

0.00899871592651
0.00782849216987

0.00764255487649
0.00741473829029

0.00586648245818
0.00399922214738
16
744

432

554
276

199
061

886
613
2015 2016 2017 2018 2019

Dhaka Bank: It has a higher NNIM in 2015 which was 0.0096.Then it falls to 0.009 in 2016
after that it was decreased more than 2016.

Mercantile Bank: It has a higher NNIM in 2016 it was 0.035 but after that it was decreased
overtime.

Comparative Analysis: Mercantile bank has the heights NNIM comparing with other one. It
suggested that Mercantile bank is more efficient in terms of utilizing assets to generate non-
interest income.
5. Operating Margin Ratio: It indicates how efficiently asset is used to generate net
operating income. It also measures how efficiently operating expenses are managed and the
profitability of the bank.

0.02743442407735

0.02549370848164
NET OPERATING MARGIN

0.02418761125020
0.02367455000529

0.02348992777003
0.02194435808589

0.02167454947630

0.02159441989001
0.02154603073495
0.02098370204006

28

96
Dhaka Bank Mercantile Bank

58
35

12
93

88

11
06
95

2015 2016 2017 2018 2019

Dhaka Bank: The highest Net operating margin of Dhaka Bank is 0.03 at 2016 and it was
fluctuate year by year.

Mercantile Bank: In 2015 operating margin ratio was 0.02.After that it increased for next 2
years and in year 2017 Mercantile bank operating margin ratio is higher than other which was
0.03.

Comparative Analysis -. The higher the operating margin, the more profitable a bank is.
Among these two banks Mercantile has the highest operating margin ratio. The increasing
non- interest expense is responsible for lowering the operating ratio for others banks.
06. Net Profit Margin: It indicates how much the operating revenue contributing to net
income. Higher the ratio is good. This ratio is going up and down subject to how efficiently
bank managing their operating expense

0.24913812056208
npm

0.24230512180906
0.21753333966468

0.21680487121947
Dhaka Bank Mercantile Bank

3
0.17441090866400

3
0.17274600027706

0.16600579219668
0.16557344782203
2

0.14796867812538
0.12749361369484
9

5
8

9
3

2015 2016 2017 2018 2019

Dhaka Bank: It has a 0.217 net profit margin in year of 2015.After that in 2016, 2017, 2018
and 2019 it was decreased which is 0.17, 0.16, 0.13 and 0.1.

Mercantile Bank: In 2015 Mercantile Bank has the lowest net profit margin than other years
but after 2015 net profit margin more stable than other year. In 2019 is the lowest net profit
margin recorded and it was 0.166.

Comparative Analysis: The changes of net profit margin indicates how efficiently bank is
managing their operating expenses. From the above graph we can clearly see that Mercantile
bank has a very high net profit margin which means their operating revenue is contributing to
net income.