Welcome to

My Presentation
 Presented by:
Name: Shofiul Haque
ID :11123101078
Intake : 28th
Program : BBA
Department of Finance

Bangladesh University Of Business & Technology

(BUBT)
 Presentation
on

“EVALUATION OF CREDIT
MANAGEMENT OF UTTARA BANK
LIMITED”
Areas Covered

 Objectives of the Report

 Methodology of the Report
 Company Overview
 Theoretical Aspects
 Credit Management of Uttara Bank
Limited
 Credit Analysis of Uttara Bank Limited
 Comparative Analysis
 Findings of the Study
 Recommendations
 Conclusion
Objectives of the Report
Broad Objective:
The broad objective of this report is to analyze the credit management of
Uttara Bank Limited.

Specific Objectives:
 To know the lending and recovery procedure of Uttara Bank Limited.
 To analyse the credit recovery performance of Uttara bank Limited.
 To analyse the geographical location wise credit disbursement of Uttara
Bank Limited.
 To evaluate the credit performance of Uttara Bank Limited within the
banking industry.
Methodology of the Report
Research Design:
The study, Credit Management of Uttara Bank Ltd. is descriptive in nature
which is mainly based on secondary data. The study focuses, Credit
Management of UBL. The secondary data are collected for the period of five
years 2011 to 2015.
Sources of Data:
To prepare this report the required information are collected
mainly from secondary sources are:
 Annual report of Uttara Bank Limited
 Annual report of Bangladesh Bank
 Different text books
 Web browsing
Instruments Used for Data Analysis:
The ratio analysis is used to analyze the financial performance of UBL. Different

types of computer software such as- Microsoft Word, Microsoft Excel etc. are used

for analyzing and reporting purpose of the study. The ratio analysis is conducted in

form of trend analysis and comparative analysis.

a) Trend analysis: Trend analysis is the analysis of firm’s performance over time

using ratios. It is really important to analyse trend in ratios as well as their

absolute levels. This analysis informs us whether a company’s financial condition

improving or deteriorating.

b) Comparative analysis: Comparative analysis is comparison of bank’s

performance with industry average.

COMPANY OVERVIEW
Name of the company Agrani Bank Limited
Chairman Mr. Azharul Islam
Managing Director Shaikh Abdul Aziz
Company Secretary Mr. Iftekhar Zaman
Registered Office 47, Shahid Bir Uttam Asfaqus Samad
Sarak, Motijheel Commercial Area,
Dhaka-1000, Bangladesh. GPO Box: 818
& 217
Authorized Capital Tk. 2500 Crore
Paid-up Capital Tk. 2072.29 Crore
Number of Employees 3780
Number of Branches 227
Fax +88-02-9562346, +88-029563662, +88-
02-9563658
Website www.uttara-bank.bd

E-mail headoffice@uttarabank-bd.com,
pa.md@uttarabank-bd.com
prd@uttarabank-bd.com,
ublmis@uttarabank-bd.com
Theoretical Aspects
Credit:
Credit is the ability to command goods or services of another in return for
promise to pay such goods or services at some specified time in the future.

Credit Management:
Credit management is the process for controlling and collecting payments
from the customer. A good credit management system will help to reduce
the amount of capital tide up with debtors and minimize exposure to bad
debts.
Principals of Sound Lending Criteria

 Principle of Liquidity
 Principle of Safety
 Principle of Profitability
 Principle of Security
 Principle of Purpose
Credit Management of Uttara Bank Ltd
Is the borrower credit worthy?
 Capacity
 Collateral
 Capital
 Conditions
 Character

Different types of Risk Associated

with credit management
 Financial Risk
 Business Risk
 Management Risk
 Security Risk
Credit Approval Process of UBL
 Acquisition/Credit Specific Customer

 Collecting and Review of Data

 Credit Review

 Collateral and Risk Analysis

 Loan Documentation

 Loan Approval
Disbursement Process of UBL
 Disbursements under loan facilities are only made when all standard charge
documents and security documentation are in order and preconditions for
disbursement are met fully.
 RM and Credit Administration officer to jointly prepare documentation check list.
 Credit Administration Division is to authorize disbursement.
 Evidence of disbursement is to be documented in the Disburse Authorization Form.
 Disbursement authority to check that pricing of the facility are within the Bank’s
declared band.
 All disbursement/ drawings are to be covered by approved credit lines.
 A clean updated CIB report must be obtained before any disbursement.
Loan Sanction and Disbursement

Fig: Procedures of UBL Loan Sanction and Disbursement.

Credit Recovery Process of UBL
1. Taking Normal Steps: The Recovery Unit will take normal steps like physical
contact with the borrowers and through letters for adjustment of all classified loans.
2. Notification: If any borrower fails to do within a specified period final notice
followed by a legal notice is served.
3. Legal Action Initiation: Even if no tangible result is achieved legal action is to be
initiated through the Bank’s Panel lawyers (taking permission from Head office)
under provisions of the existing laws of the country.
4. Proposals for Settlement: Recovery Unit at the branch level may also send
proposals for amicable settlement or rescheduling of the classified Loans and
Advances, through the Zonal Office for approval of Head Office.
Credit Analysis of Uttara Bank Ltd
Loans and Advances of UBL
Table 4: Loans and Advances of UBL from 2011 to 2015.
Year 2011 2012 2013 2014 2015

Loans and Advances 28477.41 37141.34 39451.36 48672.69 54010.29

Growth Rate 11% 13% 14% 19% 23%

Total Loans and Advances

60,000.00 54010.29 Total Loans
39451.36 48672.69
40,000.00 28,477.00 37,141.34 and
20,000.00 Advances

0.00
2011 2012 2013 2014 2015

Growth Rate of Loans and Advances

19.00% 23.00%
25.00% Growth
20.00% 13.00% 14.00% Rate of
15.00% 11.00%
10.00% Loans
5.00% and
0.00% Advance
2011 2012 2013 2014 2015 s
Investment of UBL
Table 5: Investment of UBL from 2011 to 2015.
Year 2011 2012 2013 2014 2015

Investment 22894.7 41998.2 45749.5 42787.9 45964.9

Growth Rate of 24% 40% 42% -10% 16%

Investment

Investment
60,000.00
45,749.50 45,964.90
40,000.00 41,998.20 42,787.90

20,000.00 22,894.70 Investment

0.00
2011 2012 2013 2014 2015

Growth Rate of Investment

60.00%
40.00% 42.00%
40.00%
24.00% 16.00%
20.00% Growth Rate of Investment

0.00% -10.00%
2011 2012 2013 2014 2015
-20.00%
Total deposit of UBL
Table 6: Total Deposit of UBL from 2010 to 2015.
Year 2011 2012 2013 2014 2015

Total Deposit 202115 244292 291935 341854 417844

Growth Rate of Deposit 21.52% 20.87% 19.50% 17.10% 22.23%

Total Deposit
500,000.00 341854 417844 Total
291935
202115 244292 Deposit (Tk
In Millions)
0.00
2011 2012 2013 2014 2015

Growth Rate of Deposit

30.00% 20.87% 22.23%
21.52% 19.50% 17.10%
20.00% Growth
10.00% Rate of
0.00% Deposit
2011 2012 2013 2014 2015
Investment to Deposit Ratio:
Table 7: Investment to Deposit Ratio of UBL from 2010 to 2015.

Year 2011 2012 2013 2014 2015

Investment to 89.08% 87.85% 90.17% 87.29% 85.18%

Deposit Ratio

Investment to Deposit Ratio

92.00%
90.17%
90.00% 89.08%
87.85% 87.29% Investm
88.00% ent to
85.18%
86.00% Deposit
84.00% Ratio
82.00%
2011 2012 2013 2014 2015
Sector Wise Credit Disbursement in 2015:
Table 8: Sector Wise Credit Disbursement of UBL in 2015.
Particulars Loan and Advance Tk. In Million
Agricultural and Fisheries 9% 1740.5
Large and Medium Scale Industry 3% 774.6
Working Capital 13% 3128.5
Export Credit: 10% 2813.8
Commercial Credit 40% 52103.9
Small and Cottage Industries 6% 1060.1
Others 19% 5606.2

Sector Wise Credit Disbursement in 2015

Agricultural and
9.00% Fisheries
19.00% 3.00%
13.00% Large and Medium
Scale Industry
6.00%
Working Capital
10.00%
Export Credit

Commercial Credit
40.00%
Small and Cottage
Industries
Others
Geographical Location Wise Credit Disbursement in 2015:
Table 9: Geographical Location Wise Credit Disbursement in 2015
Division Loan and Advance Tk. In Million
Dhaka Division 57% 213608.99
Chittagong Division 22% 81072.97
Sylhet Division 2% 7160.08
Rajshahi Division 8% 28304.68
Khulna Division 8% 31511.80
Barisal Division 1% 3729.20
Rangpur Division 2% 7533.00

1.00%
Geographical Location Wise Credit Disbursement in 2014

8.00% 2.00%
Dhaka Division
8.00% Chittagong Division

2.00% Sylhet Division

57.00%
Rajshahi Division

Khulna Division
22.00%
Barishal Division

Rangpur Division
Classification Wise Disbursement of Loans and Advances in 2015
Table 10: Classification Wise Disbursement of Loans and Advances in 2015.

Types of Loan Total Loan and Advance Contribution (Tk. In

Millions)

Unclassified Loan and Advance 94% 73,477.64

Classified Loan and Advance 6% 4,422.15

Classification Wise Disbursement of Loans and Advances in 2015

6.00%
Unclassified
Loan and
Advance

94.00% Classified Loan

and Advance
Percentages of Disbursed Classified Loan and Advance in 2015
Table 11: Percentages of Disbursed Classified Loan and Advance in 2015.
Types of Classified Loans and Classified Loan as a % of total Total classification loan &
Advances loans & advances advances (Tk. In Millions)

Substandard 0.50% 515.1

Doubtful 0.43% 514
Bad or Loss 4.75% 4846.6
Classified Loans 5.68% 5875.7

Amount of Disbursed Classified Loan and Advance in 2015

6000 4,846.60

4000

2000 515.1 514

0
Substandard Doubtful Bad or Loss

Percentages of Disbursed Classified Loan and Advance in 2015

Substandard
0.50%
Doubtful
0.43%
4.75%
Bad or Loss
Credits to Deposit Ratio:
Table 12: Credit to Deposit Ratio of UBL from 2011 to 2015.

Year 2011 2012 2013 2014 2015

Credit to Deposit 82% 80% 69% 69% 68%

Ratio

Credit to Deposit Ratio

100.00% 82.00% 80.00%
80.00% 69.00% 69.00% 68.00%

60.00% Credit to
Deposit
40.00%
Ratio
20.00%
0.00%
2011 2012 2013 2014 2015
Comparative Analysis of Uttara Bank Ltd
Deposit of UBL Comparing with Industry Average:
Table 14: Deposit of UBL Comparing with Industry Average.
Year 2011 2012 2013 2014 2015
Industry Average 38,58,900 41,70,647 50,06,825 58,06,965 66,13,550
UBL Deposit 202115 244292 291935 341854 417844
% of National Deposit 1.57% 1.69% 1.59% 1.68% 1.73%

Industry
8000000 6613550. Average (In
5006825 5806965
6000000 Million)
3858900 4170647
4000000 UBL Deposit (In
2000000 202115. 244,292. 291,935. 341,854. 417844. Millions)
0
2011 2012 2013 2014 2015

Deposit of UBL as a % Total Industry Average

1.80% 1.73%
1.69% 1.68%
1.70%
1.57% 1.59% Deposit of
1.60% UBL as a %
Total
1.50% Industry
1.40% Average

2011 2012 2013 2014 2015

UBL Credit Comparing with Industry Average:
Table 15: UBL Credit Comparing with Industry Average.
Year 2011 2012 2013 2014 2015

Industry Average 32,97,500 37,82,470 43,86,160 47,61,510 52,20,470

UBL Loan 28477.41 37141.34 39451.36 48672.69 54010.29

% of National Credit 1.51% 1.50% 1.25% 1.42% 1.49%

6000000
5220470.00
4761510.00
5000000 4386160.00 Industry
4000000 3782470.00 Average (In
3297500.00
Million)
3000000
2000000 UBL Loan
(In
1000000 37,141.34 39,451.36 48,672.69
49735.00 77900.00 Millions)
0
2011 2012 2013 2014 2015

Credit of UBL as a % of Industry Average

2.00% 1.51% 1.50% 1.42% 1.49%
1.50% 1.25% Credit of
1.00% UBL as a
% of
0.50%
Industry
0.00% Average
2011 2012 2013 2014 2015
Credits to Deposit Ratio of UBL Comparing with Industry Average
Table 16: Credits to Deposit Ratio of UBL Comparing with Industry Average.

Year 2011 2012 2013 2014 2015

Industry Average: Credit to 85% 91% 88% 82% 84%

Deposit
Uttara Bank Limited 82% 80% 69% 69% 68%

91.00%
100.00% 85.00% 88.00% 82.00% 84.00%
90.00%
80.00% Industr
70.00% 82.00% 80.00% y
60.00% 69.00% 69.00% 68.00%
50.00% Averag
40.00% e
30.00%
20.00% Uttara
10.00%
0.00% Bank
Limited
2011 2012 2013 2014 2015
Findings, Recommendations and
Conclusion
Findings:
 The total deposit of UBL has increased over the years. But the deposit of UBL as a
percentage of total national deposit has fluctuated over the year.

 Total credit of UBL has increased over the year. But the credit of UBL as a
percentage of total national credit has fluctuated over the year.

 The decreasing trend of Credit to Deposit Ratio of UBL indicates that it has
reduced providing loans compared to deposit over the year.

 In sector wise credit disbursement UBL provides a large portion of its credit in
commercial sector. But a small portion of credit was provided to Large and
Medium Scale Industry, Agriculture and fisheries

 Uttara Bank Limited disbursed large portion of its loan and advances in Dhaka
Division which is 57% of total loan and advances in 2015.

 In 2015 the unclassified loans and advance is 94.32% and the classified loans and
advances are 5.68% of total loans and advances of UBL.
Recommendations:
 Uttara Bank Limited should concentrate more on increasing total deposit by
providing better quality services to the customers.

 Uttara Bank Limited should concentrate more to increasing their quantity of loan.
And the borrowers should be monitoring properly to ensure the proper use of
loans to avoid the misuse of loan.

 As the Credit to Deposit ratio of UBL is in decreasing trend so UBL should try to
maintain this ratio by providing loans and advances to diversified sectors which
will in turn increase the interest income and profitability of the bank.

 UBL should increase their investment to the commercial and industrial sectors
because in these sectors bank can earn more profit than other sectors.

 We see that UBL provide more loans in Dhaka Division and less in other division.
So, they should provide more loans in different area specially SME loans and
industrial loan to entrepreneurs, which will ultimately increase the business and
profit for the bank.
Conclusion:
So far I have discussed about the different aspect of credit performance of Uttara
Bank Limited. For my report I have selected Uttara Bank Limited. Uttara Bank
plays an important role in the banking sector as well as in our economy. The
success of a bank depends largely on the efficient credit management. A
successful credit management is not only need for a bank’s own performance but
also it is needed for the smooth development of an economy. Credit is very
important for any financial institution. It helps to generate profit and gear-up an
economic. Credit is very important for any financial institution. It helps to
generate profit and gear-up economic activities of the country.
Thank You All
Any
Question
?