Welcome to My Presentation

Comparison of Profitability
Between Islamic Bank and
Conventional Bank
Prepared By Supervised by

MD. RAKEEB ASHRAF TANZIA RAHMAN

ID # 2-15010218 Lecturer
Major in Finance Notre Dame University
Bangladesh
 This presentation will include

1. Executive 2. 4.Methodolo
3. Objectives
Summary Introduction gy

6.Findings &
5. Analysis Recommendati 7. Conclusion
on
 Executive Summary

 This study focuses on the profitability comparisons between Al-Arafah Islami

Bank Limited (AIBL) and Dutch Bangla Bank Limited (DBBL). AIBL is
representing as an Islamic bank and DBBL is representing as a Conventional
bank. AIBL is an Islamic Bank based on Islamic principles and DBBL is a
Conventional bank based on Man-Made Laws. The study evaluates the bank
performance of AIBL and DBBL in terms of profitability.
 Introduction

 AIBL performs as trader, agent or partners in business but not the lending

institutions. Interest is completely prohibited in Islamic banking. It is a

relationship of profit and loss sharing.

 DBBL is profit-oriented conventional bank and its purpose is to make

money through interest.

 Objectives

Major Objective

 To understand the concept of profitability and make comparisons between

Al-Arafah Islami Bank Limited and Dutch Bangla Bank Limited.

Specific Objective

 To understand how an Islamic Bank runs its business without charging

interest.
 Methodology

Research Type Data Type

 Focused on descriptive type

of research design.
Primary Data

 Emphasized on the
Secondary Data
financial and statistical
observation of two banks.
 Analysis

The study analyzed by several types of profitability ratio

Return on Assets (ROA)

Return on Equity (ROE)

Net Profit Margin

Net Interest Margin (NIM)

 Return on Assets (ROA)

1.40%

1.20%

1.00%

0.80%
AIBL
DBBL
0.60%

0.40%

0.20%

0.00%
2013 2014 2015 2016 2017
 Return on Equity (ROE)

20.00%
18.00%
16.00%
14.00%
12.00%
10.00% AIBL
DBBL
8.00%
6.00%
4.00%
2.00%
0.00%
2013 2014 2015 2016 2017
 Net Profit Margin

20.00%
18.00%
16.00%
14.00%
12.00%
10.00% AIBL
DBBL
8.00%
6.00%
4.00%
2.00%
0.00%
2013 2014 2015 2016 2017
 Net Interest Margin (NIM)

4.50%

4.00%

3.50%

3.00%

2.50%
AIBL
2.00% DBBL

1.50%

1.00%

0.50%

0.00%
2013 2014 2015 2016 2017
 SWOT Analysis

AIBL has better ROA and Net Profit Margin than DBBL
Strength Everyone has faith on Islamic bank

AIBL’s ROE and NIM are low as compared to DBBL

Weakness Lack of large branch network in rural area

Demand of Islamic bank is increasing day by day in our

Opportunity country

Other banks are also opening Islamic banking branch

Threat
AIBL binds with some strong Shariah rules
 Findings

 Islamic banks perform better in environments where investment are high.

 With efficient management, AIBL leads to greater return on assets and Net

profit margin.

 AIBL investment policy is not effective in the entire sector.

 AIBL needs to increase its Earning Per Share.

 Recommendation

 Islamic Bank should take its strength by increasing investments which are

coming from trading business.

 Improvement in cost efficiency to achieve higher profits and increasing the

chance of survival in competitive markets.

 AIBL should increase their revenue to improve its EPS ratio.

 AIBL should go with aggressive and promotional activities.

 Conclusion

 Banking industry in Bangladesh is highly competitive; every bank wants to

increase their market share by providing various services to the customers. Al-
Arafah Islami Bank Ltd (AIBL) is one of the most potential Islamic bank in
the Islamic banking sector in Bangladesh. The management of AIBL always
tries to maintain a steady growth by delivering their banking services across
the country. In order to be successful bank, management should take care of
their problem as well as it should make attractive investment scheme for the
customers.
THANK YOU
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