Chapter-1Introduction and Overview of

SIBL

Welcome to my

presentation

Individual Performence given

by Versatile Boy Maruf

1.1 Introduction Social Islami Bank Limited(SIBL) was incorporated on 5th July,

1995 as a result of dedicated effort of a group of established Bangladeshi entrepreneurs and internationally important personalities. The bank started commercial operation on 22nd November, 1995 with a clear manifesto to demonstrate the operational meaning of particularly economy, banking and financial activities as an integrated part of Islamic code of life. Targeting poverty, SIBL is indeed a concept of 21st Century participatory several sector banking modes. The formal corporate sector, this Bank would, among others, offer the most up-to date banking services through opening of various types of deposit and investment accounts, financing trade, providing letters of guarantee, opening letters of credit, collection of bills effecting domestic and international transfer, leasing of equipment and consumer durables, hire purchase and installment sale for capital goods, investment in low-cost housing and management of real estates, participatory investment in various industrial, agricultural , transport, educational and health projects and so on. In the Non-formal non-corporate sector, it would, among others, involve in cash Waqf Certificate and development and management of WAQF and MOSQUE properties, and Trust funds.

1.2 Management Hierarchy: Chairman

Managing Director

Deputy Managing

Director

Executive President

Senior Vice

President

Vice President

Senior Assistant Vice

President

Assistant Vice

President

First Assistant Vice

President

Senior Executive

Officer

Executive Officer

Senior Officer

Officer

Junior Officer

Assistant Officer

Chapter-2Mission, Vision, Moto

2.1 Mission of 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

2.2 Vision of SIBL: Working together for a caring society. In its journey

towards continuous excellence SIBL is striving to become the Country‟s leading Islamic Bank offering one-step service of an wide range of value added products and services meeting the needs of the customers; conducting the business ethically in accordance with the laws of Shari‟ah while optimizing best utilization of the most modern state-of-the-art technological solutions through creation of a pro-active organizational culture based on sound team spirit, fairness, mutual understanding and pragmatic leadership always remaining open to new ideas and adaptable to the best practices in the market ensuring recognition and quality banking experience to the customers and deliver best value to all the stakeholders as well.

2.3 Moto/Slogan of SIBL With the new journey SIBL has started its

new slogan to add a new dimension in their service. The slogan is the indicator o its continuous improvement to create the excellent service condition for the clients.

4.1 Liquidity Ratio 4.1.1 Current Ratio The current ratio is one of the most commonly

financial ratios measures the bank’s ability to meet its short term obligations. The higher the current ratio, the better the liquidity position of the bank.

Current Ratio= Current Asset/ Current Liabilities

Year 2011 2012 2013 2014 2015

Current Asset 3852.84 9468.71 5700.06 6327.16 3275.1 5

Current

Liabilities

79569.56 104,676.17 115,309.14 141,412.32 167,053.52

Current

Ratio

0.48 0.90 0.49 0.45 0.19

Graphical Presentation:

Interpretation: We know that the current ratio measures a firm’s liquidity by measuring the portion of its current asset relative to its current liabilities and the higher the ratio, the higher the liquidity of the firm. This graph shows that a fluctuating trend in SIBL’s liquidity position from 2011 to 2015. The current ratio has initially increased but later on current ratio has decreased from 0.90 in 2012 to 0.19 in 2015.

2011 2012 2013 2014 20150

0.10.20.30.40.50.60.70.80.9

1

0.48

0.9

0.49 0.45

0.19

Current Ratio

4.2 Activity Ratios

4.2.1 Total Asset Turnover Total asset turnover indicates the efficiency with which the firm is

able to use all its assets to generate sales. The formula is as follows:

Total Asset Turnover= Total Income / Total Asset (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Total Income 4,955.62 5,549.45 5,560.46 6,798.43 8,291.92

Total Asset 84406.18 115165.95 126616.56 1537374.67 180112.11

Total Asset

Turnover

0.059 0.048 0.044 0.004 0.046

Graphical Presentation :

Interpretation: The graph shows that, the total assets turnover of SIBL is fluctuating trend from 2011 to 2015. From 2011 the total assets turnover is decrease to 2014 later on in 2015 total assets turnover shifted from 0.004 to 0.046.

2011 2012 2013 2014 20150

0.01

0.02

0.03

0.04

0.05

0.06

0.070.059000000000

0001

0.0480.044

0.00400000000000001

0.046

Total Asset Turnover

4.2.2 Credit to Deposit Ratio Credit to deposit ratio is an important ratio specially for

Banks. It is the proportion of loan-assets created by banks from deposits received. The higher the ratio the higher the loan-assets created from deposits. Formula is as follows:

Credit to deposit ratio= Total Loan & Advance / Total Deposit (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Total Credit

(Gross)

3852.84 9468.71 5700.06 6327.16 3275.15

Total Deposit 66852.55 93594.29 102104.48 124535.01 149773.62

Credit to

deposit ratio

5.85 10.1% 5.6% 5.1% 2.2%

Graphical Presentation:

Interpretation: From the graph we can see that credit to deposit ratio was in decreasing trend for last couple of years, which is not a good indicator of bank performance. The ratio was increased from 5.80% in 2011 to 10.1% but decreasing 2.20% in 2015.

2011 2012 2013 2014 20150.00%

2.00%

4.00%

6.00%

8.00%

10.00%

12.00%

5.80%

10.10%

5.60%5.10%

2.20%

Credit to deposit ratio

4.3 Debt Ratios

4.3.1 Debt Ratio Debt ratio is a ratio that indicates the proportion of a

company's debt to its total assets. It shows how much the company relies on debt to finance assets

Debt ratio = Total Liabilities / Total Assets (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Total Liabilities 79569.56 104,676.17 115,309.14 141,412.32 167,053.52

Total Assets 84406.18 115165.95 126616.56 1537374.67 180112.11

Debt ratio 94.3% 90.9% 91.1% 92.0% 92.7%

Graphical Presentation:

  Interpretation: Every origination should give more

emphasize on equity capital than debt capital. Here, we can see that the SIBL debt ratio is decreasing from 2011 to 2015. In 2011 debt ratio was 94.30% and it decreased to 92.70%.

2011 2012 2013 2014 201589.00%

90.00%

91.00%

92.00%

93.00%

94.00%

95.00%94.30%

90.90% 91.10%

92.20%92.70%

Debt Ratio

4.3.2 Debt to Equity Ratio The debt-to-equity ratio (debt/equity ratio, D/E) is a financial

ratio indicating the relative proportion of entity's equity and debt used to finance an entity's assets. This ratio is also known as financial leverage.

Debt-to-equity ratio =Total Liabilities / Shareholder’s Equity (Tk. in Millions)

Year 2011 2012 2013 2014 2015Total Liabilities

79569.56 104,676.17 115,309.14 141,412.32 167,053.52

Shareholder’s Equity

9412.21 10181.97 11083.43 12143.38 129503.22

Debt-to-equity ratio

8.45% 10.28% 10.40% 11.64% 11.29%

Graphical Presentation:

Interpretation: The graph shows that SIBL’s debt to equity ratio is increasing year by year. The ratio was lowest in the year 2011 and it increased to its highest position in the year of 2014. This indicates more creditor financing is used than investor financing.

2011 2012 2013 2014 20150

2

4

6

8

10

12

14

8.45

10.28 10.411.64 11.29

Debt-to-equity Ratio

4.4 Profitability Ratios

4.4.1 Cost to Income Ratio Cost to income ratio is the ratio between operating

expenses and operating income. It is a measure of how costs are changing compared to income. It is one of the main key Bank. Formula of cost to oncome ratio:

Cost to Income Ratio= Total Operating Expenses/ Total Operating Income (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Total Operating

Expenses

1377.45 943.90 1228.50 11,753.80 12,455.80

Total Operating

Income

4146.025 1305.68 1520.95 15,718.08 17,305.68

Cost to Income

Ratio

33% 72% 81% 75% 72%

Graphical Presentation:

Interpretation: The graph shows that SIBL’s cost to income ratio is fluctuating year by year. The ratio was lowest in the year 2011 in 33% and it increased to its highest position in the year of 2013 in81%. It decreased from 81% in 2013 to 72% in 2015.

2011 2012 2013 2014 20150%

10%

20%

30%

40%

50%

60%

70%

80%

90%

33%

72%

81%75% 72%

Cost to Income Ratio

4.4.2 Operating Profit Margin The Operating profit margin represents what are often called

the pure profits earned on each sales dollar. A high operating profit margin is preferred. The operating profit margin is calculated as follows:

Operating Profit Margin= Operating Profit / Revenue (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Operating

Profit

2768.58 361.78 292.45 3964.28 4849.88

Revenue 2768.80 3617.82 2924.55 3964.27 4849.82

Operating

Profit Margin

0.99 0.10 0.10 1.00 1.00

Graphical Presentation:

Interpretation: The graph shows that the operating profit margin has increased over the year. The total asset turnover has increased from 0.1 in 2013 to 1.0 in 2015. The SIBL total operating profit margin is increasing day by day and which is good sing.

2011 2012 2013 2014 20150

0.2

0.4

0.6

0.8

1

1.2

0.99

0.1 0.1

1 1

Operating Profit Margin

4.4.3 Net profit Margin The net profit margin measures the percentage of operating

profit remaining after all expenses, including taxes, have deducted. The higher the firm’s net profit margin is better. The net profit margin is a commonly cited measure of the bank’s success with respect to operating profit. The net profit margin ratio is calculated as:

Net Profit Margin= Net profit after taxes / Operating Income (Tk. in Millions)Year 2011 2012 2013 2014 2015

Operating

Income

4,955.62 5,549.45 5,560.46 6,798.43 8,291.92

Net profit

after taxes

1083.42 1441.13 1220.20 1903.72 2072.59

Net Profit

Margin

22% 26% 22% 28% 25%

Graphical Presentation:

Interpretation: Net profit margin shows how good a company is at converting revenue at profit. In this figure, Net profit margin is fluctuating from 2011 to 2015. But in 2014 net profit margin dramatically increased to 28 % and it indicates a good sign for the bank.

2011 2012 2013 2014 20150%

5%

10%

15%

20%

25%

30%

22%

26%

22%

28%25%

Net Profit Margin

4.4.4 Return on Asset (ROA) This measures how efficiently profits are being generated

from the assets employed in the business when compared with the ratios of firms in a similar business. A low ratio in comparison with industry averages indicates an inefficient use of business assets. The Return on Assets Ratio is calculated as follows:

Return on Assets =Net Profit Before Tax / Total Assets (Tk. in Millions)Year 2011 2012 2013 2014 2015

Net Profit

Before Tax

1901.28 2747.89 2024.66 3307.52 3479.17

Total Assets 84406.18 115165.95 126616.56 153737.48 180112.11

Return on

Assets

2.25% 2.38% 1.60% 2.15% 1.93%

Graphical Presentation:

Interpretation: The graph shows a downward trend in return on asset of SIBL except 2012. In this figure it has been seen that SIBL’s return on asset was increasing from 2.25 in 2011 to 2.38 in 2012 but after that it was decreased which is bad sign for the bank. So, management should work hard to increase return on terms of assets.

2011 2012 2013 2014 20150.00%

0.50%

1.00%

1.50%

2.00%

2.50%2.25%

2.38%

1.60%

2.15%1.93%

Return on Assets

4.4.5 Return on Equity (ROE) The return on equity is the amount of net income

returned as a percentage of shareholder’s equity. Moreover, the return on equity estimates the profitability of a corporation by revealing the amount of profit generated by a company with the money invested by the shareholders. Also, the return on equity ratio is expressed as a percentage and is computed as:

Return on Equity (ROE)= Net Income / Shareholder's Equity (Tk. in Millions)Year 2011 2012 2013 2014 2015

Net Income 3,465.95 3,783.58 3,945.72 4,977.03 6,290.88

Shareholder's

Equity

9412.21 10181.97 11083.43 12143.38 12950.322

Return on

Equity (ROE)

37% 37% 36% 41% 49%

Graphical Presentation:

Interpretation: The graph shows an upward trend in return on equity of SIBL except the last year. This indicates that It was increasing from 37% in 2011 to 49% in 2015. This is positive sign for the bank.

2011 2012 2013 2014 20150%

10%

20%

30%

40%

50%

60%

37% 37% 36%41%

49%

Return on Equity (ROE)

4.4.6 Earnings per share (EPS) The firm’s Earning per share (EPS) are generally of interest

to present or prospective stockholders and management. The Earning per share represent the number of dollars earned on behalf of each outstanding share of common stock. The earning per share is calculated as follows:

Earnings Per Share= Earnings available for stockholder / No. of shares of common stock outstanding (Tk. in Millions)

Year 2011 2012 2013 2014 2015

Earnings

available for

stockholder

9412.21 10181.97 11083.43 12143.38 12950.322

No. of shares of

common stock

outstanding

639.39 639.39 703.14 703.14 703.14

Earnings Per

Share

14.72% 15.92% 15.76% 17.27% 18.41%

Graphical Presentation:

Interpretation: The earning per share represent the number of taka earned on behalf of each outstanding share of common stock. The graph shows that the firm’s earning per share has increased over year from 14.72 on 2011 to 18.41 in 2015 which is positive sing for a firm.

2011 2012 2013 2014 201502468

101214161820

14.7215.92 15.76

17.2718.41

Earning Per Share (EPS)

4.5 Market Ratios 4.5.1 Price/Earnings ratio (PE ratio) The price or earning (P/E) ratio is commonly used to assess

the owner’s appraisal of share value. The P/E represents the amount investors are willing to pay for each dollar of the firm’s earning. It’s calculated:

Price/Earnings Ratio= Market price per share / Earning per share

(Tk. in Millions)Year 2011 2012 2013 2014 2015

Market price

per share

18.20 19.40 13.30 13.60 14.40

Earnings per

share

1.81 2.25 1.74 2.71 2.95

Price/Earnins

Ratio

10.06% 8.62% 7.64% 5.02% 4.88%

Graphical Presentation:

Interpretation: The price earnings ratio represents investors’ confidence firm’s performance has reduced over the years. The graph shows that the firm’s price earnings ratio has decreased over year which is negative sing for a firm.

2011 2012 2013 2014 20150

2

4

6

8

10

12

10.06

8.627.64

5.02 4.88

Price/Earning Ratio (PE Ratio)

Chapter-5Comparative Analysis of

SIBL

5.1 Cost to Income Ratio The operating cost to income ratio is a key financial

measure, particularly important in valuing banks. It shows the bank’s costs in relation to its income. It is calculated by:

Operating cost to income ratio= Total operating Cost / Total Operating Income

Year 2011 2012 2013 2014 2015Industry Average

68.6% 74.0% 73.20% 67.95% 64.30%

Social Islami Bank Limited

33.21% 72.26% 80.79% 74.77% 71.97%

Graphical Presentation:

Interpretation: The graph shows that, the cost to income ratio of the SIBL is lower than industry average over the year. However, the cost of income of the industry average has decreased over the years. From 2011 to 2015, cost to income ratio decreased from 68.60% to 64.30%. We know, the lower cost to income ratio is the more efficient the firm is running, So, Bank should decrease the cost.

2011 2012 2013 2014 20150.00%

20.00%40.00%60.00%80.00%

100.00%120.00%140.00%160.00%180.00%

69% 74% 73% 68% 64%

33.21%

72.26% 80.79%74.77% 71.97%

Cost to Income Ratio

Industry Average Social Islami Bank Ltd

5.2 Return on Assets (ROA) The return on asset (ROA), which is often called the

company’s return on total assets, measures the overall effectiveness of management in generating profits with its available assets. The higher the ratio is better. The return on assets ratio formula is calculated by:

Return on Assets = Profit After Tax / Average total assets

Year 2011 2012 2013 2014 2015Industry Average

1.5% 0.60% 0.88% 0.64% 0.94%

Social Islami Bank Limited

1.28% 1.25% 0.96% 1.24% 1.15%

Graphical Presentation:

Interpretation: The graph shows that, the ROA of SIBL is higher than industry average in every year.

2011 2012 2013 2014 20150.00%

0.50%

1.00%

1.50%

2.00%

2.50%

3.00%

1.50%

0.60%0.88%

0.64%0.94%

1.28%

1.25% 0.96% 1.24%1.15%

Return on Assets (ROA)

Industry Average Social Islami Bank Ltd.

5.3 Return on Equity (ROE) The return on equity measures the return earned on the

owner’s (both preferred and common stockholder’s) investment. Generally, the higher the return is better for the owner’s. the return on equity ratio formula is calculated by:

Return on Equity= Net profit after tax / Average shareholder’s equity

Year 2011 2012 2013 2014 2015Industry Average

17.0% 8.2% 8.09% 10.80% 12.3%

Social Islami Bank Limited

11.51% 14.15% 11.01% 15.68% 16.01%

Graphical Presentation:

Interpretation: The graph shows that, the ROE of SIBL is higher than industry average in every year.

2011 2012 2013 2014 20150%

5%

10%

15%

20%

25%

30%

17.00%

8.20% 8.09%10.80%

12.30%

11.51%

14.15%11.01%

15.68%16.01%

Return on Equity (ROE)

Industry Average Social Islami Bank Ltd.

Chapter-6Recommendation

And Conclusion

6.1 Recommendations

It is not unexpected to have problems in any organization. There must be problems to operate an organization. But there must be remedies to follow. The following commendations can be suggested to solve the above-mentioned problems:

Decentralized decision making is really essential for going forward. In the credit department, strict supervision is necessary to avoid loan defaulters. Bank officials should do regular visit to the projects. Attendance system needs to update which will help the transparency and time keeping to them.

Performance of IT division should be improved which is badly in need them for. An uninterrupted network system has to be ensured It. will save the officials from much hassle and will save time. Reviewing market conditions and taking precautionary measures towards facing abnormal market situation and weakness of investments of the Bank.

SIBL may also indulge in Tele Marketing. This will smooth the progress of them to expand their sales. SIBL should appoint customer service officers in all branches. They solve customers’ problem, answer inquiry of customer’s.

Campaigning is important to build up a strong image reputation among the potential customers, such as ad in the newspaper & magazine, billboard, publicity message. SIBL can pursue promotion campaign with its customers particularly the corporate clients to build up a strong report.

6.2 Conclusion The evaluation process of performance of IBBL and SIBL in my

report, highlighted different ranks for using CAMEL ratios. About capital adequacy ratio IBBL was at the top position, whereas SIBL got lowest rank. Poor performance of SIBL in debt-equity, advances to assets is the probable reason of this. IBBL obtained the top rank while SIBL held the lowest rank in asset quality ratios. Poor performance of SIBL in net NPAs to net advances, total investments to total assets and net NPAs to total assets ratios is the reason of getting last. First place is taken by SIBL and lowest rank taken by IBBL in management efficiency. This is likely to be the poor performance of IBBL in total advances to total deposits, profit per employee and business per employee ratios. Competence of SIBL got the top rank in the while IBBL was at the lowest position in earning quality.

References

http://www.siblbd.com/   http://www.siblbd.com/home/branches   http://www.siblbd.com/home/annual_reports   http://www.bangladesh-bank.org/   http://www.bangladesh-bank.org/econdata/index.php   http://www.sjiblbd.com/   http://www.assignmentpoint.com/business/finance/a-report-on-social-islami-bank-imited- part-

1.html

  http://www.studymode.com/subjects/internship-report-on-social-islami- bank-limited-of- bangl

adesh-page1.html

  Internship report for financial analysis on UBL, BUBT   http://knowledge.wharton.upenn.edu/article/a-brief-history-of-modern-banking/  

Thank You