Professional Documents
Culture Documents
Started banking operations on 17 May 1993 with an authorized capital of Tk 750 million
divided into 7.5 million ordinary shares of Tk 100 each and paid up capital of Tk 195
million. The paid up capital was enhanced to Tk 390 million in 2000. NCCBL is the
restructured form of the first investment company in the country, the National Credit
Limited (NCL), which started business with a paid up capital of Tk 50 million and
survived 8 years before its normal operations were suspended.
=> Mission:
Mobilize financial resources within home and abroad to contribute to Agricultures,
Industry & Socio-economic development of the country and to pay a catalytic role
in the formation of capital market.
=>Vision:
To become the Bank of choice in serving the Nation as a progressive and Socially
Responsible financial institution by bringing credit & commerce together for profit
and sustainable growth.
=>Objectives:
● Customer driven focusing
● Total commitment of quality of services.
● Ensure quality human resources inside of the organization.
● Socio economic change through integration of credit and commerce
Financial Ratio Analysis of the NCC Bank Ltd.
Financial ratio analysis is the calculation and comparison of ratios which are derived
from the information in a bank's financial statements. The level and historical trends of
these ratios can be used to make inferences about a bank's financial condition, its
operations and attractiveness as an investment.
For this assignment I select NCC Bank to calculate and compare between 2008 and 2009
financial year performance.
NIAT
1. Return on Equity = ---------------------------- * 100
Total Equity Capital
1719.50
For 2009 ROE = ------------ *100 = 28.49%
6034.44
882.27
For 2008 ROE = ------------ *100 = 21.75%
4055.29
Interpretation: Usually ratios over 20% are considered attractive. If a company can
return its shareholders twenty paisa or more for every taka invested, investors can be
reassured that the company is returning wealth to its shareholders. Here, In 2009 & 2008
both ROE more then 20.
In 2009 the ROE is 7 paisa greater then the 2008. That mean the bank is doing well. They
earn more in 2009 in contrast their equity capital.
NIAT
2. Return on Asset = ---------------------------- * 100
Total Asset
1719.50
For 2009 = ------------ *100 = 2.60%
65937.49
882.27
For 2008 = ------------ *100 = 1.53%
57365.52
Interpretation: The ROA figure gives investors an idea of how effectively the bank is
converting the money it has to invest into net income. The higher the ROA number, the
better, because the company is earning more money on less investment.
From here we can say that the NCC Bank has more ROA in 2009 then the 2008. So, the
bank is earning more money by investing less money in 2009.
1527.02
For 2009 = ------------ *100 = 2.31%
65937.49
1349.74
For 2008 = ------------ *100 = 2.35%
57365.52
Interpretation: Net Interest Margin (NIM) is a measure of the difference between the
interest income generated by banks and the amount of interest paid out to their lenders
(for example, deposits), relative to the amount of their assets.
Here we saw that, in 2008 the NIM is higher then the 2009. So, Bank’s NIM is going
lower because of high competition in the market and the fluctuation of interest rate.
Non Interest Revenue – Non Interest Expense
4. Net Non-Interest Margin = --------------------------------------------------------------- * 100
Total Asset
1610.67
For 2009 = ------------ *100 = 2.44%
65937.49
1013.74
For 2008 = ------------ *100 = 1.76%
57365.52
Interpretation: In case of NNIM the NCC Bank is performing well rather then the
previous year. Because bank provide different types of service to their clients. For this
their non interest margin is increasing day by day.
3137.69
For 2009 = ------------ *100 = 4.75%
65937.49
2363.48
For 2008 = ------------ *100 = 4.12%
57365.52
Interpretation: Net Bank Operating Margin is the combination of both interest & non-
interest income. It is shows the total operating income against the total asset. Here in
2009 the NCC Bank’s NBOM is increasing slightly then the 2008. the reason is their non-
interest income is much more higher then the year 2008 but the interest income is slightly
less in year 2009 then the previous year.
NIAT
6. Earning Per Share = ------------------------------------------------
Common Equity Share Outstanding
1719.50
For 2009 = ------------ = 75.26
22.84
882.27
For 2008 = ------------ = 38.61
22.84
Here, the share is remaining same for the both year but the EPS is going to double in
2009 then the 2008. That mean the bank’s profit is increased dramatically and the price of
the share will be more attractive in 2009.
# Risk Ratios:
Classified Loan
1. Credit Risk = ---------------------------- * 100
Total Loans & Lease
1420.56
For 2009 = ------------ = 2.81%
50387.68
1902.58
For 2008 = ------------ = 4.10%
46332.68
Interpretation: The credit risk ratio is the portion of default or classified loan of the total
loans & lease. The higher the portion the default loan is also higher. From the analysis we
can say that in 2009 the credit risk 2.81% that mean in 100 tk. 2.81 tk. Is the default loan.
In case of NCC Bank the credit risk ratio is much more lower then the 2009 from the
2008 financial year. That mean they minimize their classified loan in the recent year.
Net Loans (Cash + Gov. Security)
2. Liquidity Security = ------------------------------------------ * 100
Total Asset
12837.43
For 2009 = ------------ *100 = 19.46%
65937.49
9034.82
For 2008 = ------------ *100 = 15.74%
57365.52
Interpretation: The liquidity security is the measure of the portion of loans among total
assets which have more liquidity. Such as, cash & Government security.
In case of NCC Bank, in 2009 they have 19.46% liquidity security and 15.74% in 2008.
That means they can easy liquid their 20% asset in anytime. In comparison of 2008 &
2009 they have more liquidity security in 2009 FY.
# Earning Efficiency:
6487.76 4960.74
For 2009 = ------------ - -------------- = 0.0179
60059.21 55037.44
5449.72 4099.98
For 2008 = ------------ - -------------- = 0.0191
52859.50 48818.41
In 2009 the NCC Bank faced lots of competition to grave the market share. For this they
need to gave more interest to the depositor and took less interest from the borrowers.
# Analyzing Profitability:
Interpretation: Net profit margin ratio measures the relationship between the net profit
and the level of total operating revenue. This used to establish whether the bank has been
efficient in controlling its expenses. By comparing two consecutive year we saw that
NCC Bank has the more control over its expense in 2009 then the 2008 FY.
Asset Utilization ratio offers managers a measure of how well the bank is utilizing its
assets in order to generate sales revenue. An increasing AU would be an indication that
the firm is using its assets more productively. Here the AU is increased in 2009 then the
2008. Such change may be an indication of increased managerial effectiveness.
Total Assets
2. Return On Equity = ROA * -------------------------- *100
Total Equity Capital
Interpretation: EM ratio shows a bank's total assets per tk. of stockholders' equity. A
higher equity multiplier indicates higher financial leverage, which means the bank is
relying more on debt to finance its assets. In case of NCC Bank they are less rely on debt
in 2009 then the previous year.
Total Operating Expense
# Operating Efficiency = -------------------------------- * 100
Total Operating Revenue
1234.59
For 2009 = ------------ *100 = 28.23%
4372.28
954.169
For 2008 = ------------ *100 = 28.76%
3317.65
3137.69
For 2009 = ------------ = 2.097
1496
2363.48
For 2008 = ------------ = 1.688
1400
So finally we can say that the NCC Bank Ltd. Is doing great job in the banking sector
and they are doing well gradually.
Assignment on
Financial Ratio Analysis of NCC Bank Ltd.