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Independent University, Bangladesh(IUB)

INTERNSHIP REPORT (AUTUMN, 2018)
RATIO ANALYSIS ON BANKING ACTIVITY OF BANK ASIA
Submitted to
Mohammad Fahad Noor
Lecturer, Department of Finance,
School of Business
Submitted by
MD. Irfan Chowdhury
ID: 1430131
Independent University, Bangladesh
Date of submission: 25-03-2018

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LETTER OF TRANSMITTAL

6th September, 2016
Mohammad Fahad Noor
Lecturer, Department of Finance
Business school, Independent University Bangladesh (IUB)
Bashundhara R/A, Dhaka-1229
Subject: Submission of Internship Report.

Dear Sir,
With due respect, I would like to inform you that, I am a student of Business School at IUB. It is
an absolute pleasure for me to submit the internship report titled ‘Ratio analysis on banking
activities of Bank Asia’ which has done as a part of the requirement of the course BBA499A.
Your guideline has been followed in every aspect of preparing this report. I have really enjoyed
working on this report and I have tried my lvel best to make an effective report.
Within the title limit I have made this report as comprehensive as possible. But there may be some
mistakes due to various limitations. So I beg your kind consideration in this regard. I hope that my
work would meet the level of your expectation. Any query on this report is appreciated.

Sincerely yours,
——————————-
MD. Irfan Chowdhury
ID-1430131
Business School,
Independent University, Bangladesh

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ACKNOWLEDGEMENT

First of all I would like to express my gratitude to omnipotent and almighty Allah, whose invisible
guidance helped me to complete this report. Although, time was very limited for getting the
sufficient knowledge about all of banking service, but the short experience that I gathered
information as an internee, in Bank Asia on Import, Export and L/C Department in my life.
I take the opportunity to express my deep sense of gratitude of my reverend supervisor,
Mohammad Fahad Noor (Lecturer, Business School, Independent University, Bangladesh) for
his invaluable suggestions and guidance during the study period that has greatly inspired me in
preparing this report successfully.
I would like to thank Mr. Md. Ekramul Hossain, SVP & Head of CTSU, Corporate Office giving
me the permission to do the internship at Import Department of Bank Asia. I also like to thank to
my second Sir Md. Nazrul Islam Khan CDCS, AVP & Deputy Head of Corporate office giving
me the guidance throughout the internship period and giving me the knowledge about his
department as much as possible.
Finally, my heartiest thank to all my colleagues and seniors of Bank Asia – Corporate Office, 117
Kazi Nazrul Islam Avenue, Eskaton Garden (Poribagh), Dhaka-1217 for their cordial support to
prepare this difficult study with important information and data. Without them it would not
possible for me to complete this difficult task. I got all necessary guidelines, cooperation and
advice from them to complete this complicated task.

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TABLE OF CONTENS

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EXECUTIVE SUMMARY

Now a days Banking sector is dominating financial sector of Bangladesh. Bangladesh bank is the
central Bank and chief regulatory authority in the banking sector. Banking is one of the major
sector, it can contribute to economic growth and development. Today many illegal monetary
activities are done through banking system. Since banking industry is competitive therefore the
bank who can provide best service to get more customer and higher profit. So customer satisfaction
is the most potential issue in today’s competitive environment.
Bank Asia is fully licensed commercial bank. It is a highly professional and dedicated team with
long experience in banking. The report is prepared on the partial requirement of Bachelor degree
of Independent University, Bangladesh (IUB). I have prepared the report based on ‘Ratio analysis
on banking activities of Bank Asia’. I have discussed the details of Bank Asia such as vision,
mission, objectives, products and services, CSR activities, function of the department and their
details and my internship experience and outcomes. I have also done the analysis of industry and
find the main competitor and compare the financial ratio. Then I figured out some problems based
on those particular problems. So I recommend few points which I think will be helpful for Bank
Asia to overcome those problem. Lastly I attached my financial analysis data and industry analysis
data on appendix part.

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INTRODUCTION

The role of banks in economic development is to remove the deficiency of capital by stimulating
savings and investment. A sound banking system mobilizes the small and scattered savings of the
community and makes them available for investment in productive enterprises. In any plan of
economic development, capital occupies a position of strategic importance. Bank accepts deposits
and make loan and derive a profit from the difference in the interest rate paid and charge to
borrower and depositor respectively. The process performed by banks of taking in fund from a
depositor and then lending them out to a borrower is known as financial intimidations.

The modern central bank is an institution responsible not only for the maintenance of economic
stability; it also performs a variety of developmental and promotional functions of a countries
economy. Bangladesh pursues a liberal market economy. Bangladesh Bank is the Central Bank of
Bangladesh and the chief regulatory authority in the sector, which is responsible for promoting
healthy growth and development of the banking system. So, without any doubt we can say that
from very first emergence and inception of modern civilization, bank plays a pivotal role in case
of overall financial and socioeconomic development of any modern country.

Commercial banks in Bangladesh economy are to face an increasing competition for their business
in coming days, like any other emerging market economies. Their business is no longer remaining
easy as they earlier. The real change in the banking business has started to come with the
government’s decision to allow the business in the private sector in the middle of the Eighty’s.
This report is an effort to reflect a clear idea about the strategies, activities, performance and ratio
analysis of Bank Asia. Bank is an important and the most appropriate institution for the necessity
of the use of money and the protection of the money. As a student of IUB, Business School having
major in Finance. Financial institutions are the most appropriate field to gather the experience and
knowledge about this sector. So I think that Bank is the most prominent place for intern.

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COMPANY PROFILE

Few successful entrepreneurs was established Bank Asia in the recognized society. The
management of the Bank consists of a team led by senior bankers with decades of experience in
national and international markets. The senior management team is ably supported by a group of
professionals many of whom have exposure in the international market.

It set milestone by acquiring the business operations of the Bank of Nova Scotia in Dhaka, first in
the banking history of Bangladesh. It again repeated the performance by acquiring the Bangladesh
operations of Muslim Commercial Bank Ltd. (MCB), a Pakistani bank.

In the year 2003 the Bank again came to the limelight with oversubscription of the Initial Public
Offering of the shares of the Bank, which was a record (55 times) in capital market’s history and
its shares commands respectable premium.

The asset and liability growth has been remarkable. Bank Asia has been actively participating in
the local money market as well as foreign currency market without exposing the Bank to
vulnerable positions. The Bank’s investment in Treasury Bills and other securities went up
noticeably opening up opportunities for enhancing income in the context of a regime of gradual
interest rate decline.

Bank Asia Limited started its service with a vision to serve people with modern and innovative
banking products and services at affordable charge. Being parallel to the cutting edge technology
the Bank is offering online banking with added delivery channels like ATM, Tele-banking, SMS
and Net Banking. And as part of the bank’s commitment to provide all modern and value added
banking service in keeping with the very best standard in a globalize world.

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Vision, Mission & Core Values

Bank Asia is a third generation public limited commercial bank. It received the Certificate of Incorporation
on September 28, 1999 and came to operation on November 27, 1999. Now after 12 faithful years of
dedicated and reliable services, Bank Asia has created an envious position for itself among the leading
banks of the country with an Asset base of TK. 289 billion, Deposit of TK 207 Billion and 127+ outlets all
over the country. But most importantly, the Bank has an unsurpassed legacy attached with its image.

VISION

Bank Asia’s vision is to have a poverty free Bangladesh in course of a generation in the new millennium,
reflecting the national dream. Their vision is to build a society where human dignity and human rights
receive the highest consideration along with reduction of poverty.

MISSION

? To assist in bringing high quality service to customers and to participate in the growth and
expansion of national economy.

? To set high standards of integrity and bring total satisfaction to clients, shareholders and
employees.

? To become the most sought after bank in the country, rendering technology driven innovative
services by dedicated team of professionals.

CORE VALUES

? ? Place customer interest and satisfaction as first priority and provide customized banking
products and services.
?
? ? Value addition to the stakeholders through attaining excellence in banking operations.
?
? ? Maintain high ethical standard and transparency in dealings.
?
? ? Be a compliant institution through adhering to all regulatory requirements.
?
? ? Contribute significantly for the betterment of the society.
?
? ? Ensure higher degree of motivation and dignified working environment for human capital and
respect optimal work-life balance.

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?
? ? Committed to protect the environment and go green.

SALIENT FEATURES OF BANK ASIA

? Only Bangladeshi Bank to acquire (Purchase) operations of 02 (two) foreign banks namely:

? Bank of Nova Scotia of Canada

? Muslim Commercial Bank of Pakistan

? Majority stakeholder of ERA INFOTECH (A joint Venture IT Company)

? Centralized Trade Services Operation (Facilitates Export/ Import and Inward and Outward
Remittance foreign-AD Branches)

? Central Clearing Fully Automated

? Credit Rating (valid up to June 2019)

? Long Term: AA2

? Short Term: ST2

? No. of Shareholders (up to December 2017): 10,681

CORPORATE DEPARTMENT:

? Operations, Credit ; IT:
The primary motivation behind the operation division is to keep up and guarantee
free stream the general organizational exercises. HR; Company Secretary: In the creating keeping
cash field headway and specialization will be the best approach to keeping up centered edge. A
clear system to select the best capacity is viably settled through the Human Resource Division.
The human resource office goes on different get ready and change programs all through in an effort
towards determined progression of the HR Interactions of the bank. Both inside and external
coaches conduct in-house planning programs and these tasks are tenaciously updated to reflect the
latest progression in the dealing with a record furthermore information advancement territory.

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Prior to the end of 2005 forms the work quality extended to 397 from 331 toward the end of the
prior year.
? Marketing
The Marketing Department is in charge of the coordination of all promoting
exercises of the Bank; guarantees promoting exercises are in consistence with state and
government controls; creates different advertising ideas, targets, materials, commercials,
programs, public statements, and other uncommon occasions endorsed by senior administration
and the Top managerial staff. The division gives direction and directions execution endeavors
concerning the establishment of new or existing items and administrations. The Office is likewise
in charge of being the essential contact of advertising and media contacts, publicizing, and certain
business advancement exercises that advance the soul, reasoning, commitment, and general course
of the Bank
? International Division
International Division creates and benefit far reaching individual budgetary
connections inside Global target market through an expert deals exertion and distinguish qualified
potential foreign customers. The office start contacts survey need; introduce a variety of items and
administrations, and close deals. This office is in charge of the administration and aggregate
overhauling of the global customer relationship, and for the development and gainfulness of the
biggest, most mind boggling and beneficial connections in the unit.

? Credit
The Credit Division is in charge of social event and investigating credit data on
present and potential borrowers; decides the suitability of giving acknowledgment for broadened
sorts of advances Obligations additionally incorporate helping advance officers in composing
advance solicitations; advancing business for the Bank by keeping up great client relations and
alluding clients to fitting staff for new administrations.
? Audit ; Internal Control
The Audit and Inner Control Department is liable of creating, executing and
imparting Treasury Bank Review’s vision, mission, objectives and systems. To guarantee that basic
business and administrative procedures are set up and working, this office creates and keeps up a
powerful association with business accomplice administration, helps business accomplices adjust

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their business system with proper danger administration controls and urges specialty unit
administration to self-evaluate its business surroundings and create activity arranges around
“holes” that could affect sound danger administration or accomplishment in meeting marketable
strategies. The division additionally guarantees that staff comprehends and is fittingly adjusted to
the organization’s targets/values, and stay side by side to strategies utilized by Review and the
specialty units they survey. Different obligations incorporate guaranteeing that satisfactory assets
and preparing are given to staff, adequate to guarantee full consistence with every single
administrative necessity.
? Financial Control Department
This division is in charge of the greater part of the Bank’s financial working results,
for example, cost bookkeeping, spending plans, administrative office and government reports
guaranteeing the shield of Bank resources. The Money related Control Office likewise advises
senior administration on monetary control and benefit; gets ready, exhibits and translates
budgetary reports to senior administration; sticks to duty laws and administrative consistence to
appropriately mirror the budgetary position of the Bank.
? Information & Communication Department
The Data and Correspondence Division is in charge of the Bank’s electronic and
money administration based items and tasks, including the advancement, arrangement and upkeep
of Bank’s Website; helps record and business improvement officers in the offers of related items
and administrations. The division likewise performs direct supervisory obligations of office staff;
organizes staff for scope in every single related range of the office; guarantees different office
exercises or activities run easily and effectively.

PRODUCT & SERVICE OFFERING OF BANK ASIA LIMITED:
Bank Asia is another participant in the Private Banking segment of Bangladesh. It is resolved to
give adaptable administrations to its clients for their most extreme advantage and higher
fulfillment. Step by step Bank Asia builds its item list for the significant clients which are
mentioned forth a few offerings and plans been stated underneath,
? Savings account
? Foreign Currency account
? DPS- Deposit Pension Scheme

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? Current account
? MB+
? FDR
? STD- short term deposit
? DB+
? TRPLE Benefit PLUS
Since initial set up, its product rundown is solid and incorporates generally includes. At whatever
point, the bank dispatches an item, it looks profoundly in its specialized issue and acknowledgment
to the overall population.
? Savings Account
This is an interest bearing account and only individual person can open this sort of accounts. Loan
cost may vary from bank to bank. At present, Bank Asia is putting forth 6% interest on its SB
accounts. This might be considered as minimal effort store for bank. Interest is charged to the
record on quarterly premise. Components of Savings Account are, o Interest bearing record o
Provide sensible interest. Rate is presently 7 % o Customer can Store any sum and no. of store is
not confined o No. of withdrawal is limited o Deposit underneath tk15000.00 charges tk100.00 on
half yearly premise o Better for the little salary bunch
? Current Account
It is well known as Present Account. Any individual, organization, firm, may open this sort of
record in its own name. This is non-interest bearing account. So it is a cost free stores for bank,
Then again, clients appreciate the privilege to wiredraw cash the same number of times as they
wish. Features of Current Account: 1) Noninterest bearing Account 2) Running Account 3) No. of
withdrawal or store is not confined 4) Worked any number of times excluding a working day 5)
For the most part keep running by various business association
? Short Term Deposit (STD) Account
This is opened and worked for fleeting and for particular reason. It is additionally an interest
bearing account and where rate of interest is for the most part underneath the reserve funds rate.
Regularly, intrigue is paid on day by day item premise. People, Firms, Organizations, and
Affiliations may open this account. Current Loan cost of Bank Asia for this store is 5%.
? Fixed Deposit Receipt (FDR) Account

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People, Firms, Organizations, and Affiliations may open this record. The store is taken for a
particular altered timeframe, for example, 1 months, 2 months, 3 months, 6months, 1-year and so
forth. Loan fee relies on upon sum and period and reaches from 8% to 10.70%. If there should be
an occurrence of untimely encashment for the most part no premium is honored. In uncommon
thought interest at sparing rate or STD rate might be permitted. It is considered as high cost store
for banks.
Components of Fixed Deposit Receipt (FDR) Account are,
? Provide high intrigue
? Premature encashment gives just investment funds rate
? It is renewable before the date of development

No. Tenor Interest Rate

1 1 month 10.00%

2 2 months 11.00%

3 3 months 13.50%

4 6 months 13.00%

5 12 months 13.00%

6 1 year (1 Crore & above) 13.50%

7 Above 1 Year 12.50%

Figure 03: Rate of interest on FDR account

? Deposit Pension Scheme Plus (DPS+):

The details of this package is stated below,
Monthly After After After After After
Deposit
3 years 5 years 7 years 10 years 12 years

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500/- 21,500/- 41,000/- 65,500/- 1,15,000/- 1,60,000/-

1,000/- 43,000/- 82,000/- 1,31,000/- 2,30,000/- 3,20,000/-

2,000/- 86,000/- 1,64,000/- 2,62,000/- 4,60,000/- 6,40,000/-

3,000/- 1,29,000/- 2,46,000/- 3,93,000/- 6,90,000/- 9,60,000/-

4,000/- 1,72,000/- 3,28,000/- 5,24,000/- 9,20,000/- 12,80,000/-

5,000/- 2,15,000/- 4,10,000/- 6,55,000/- 11,50,000/- 16,00,000/-

8,000/- 3,44,000/- 6,56,000/- 10,48,000/- 18,40,000/- 25,60,000/-

10,000/- 4,30,000/- 8,20,000/- 13,10,000/- 23,00,000/- 32,00,000/-

Figure 04: The detail of the Package of (DPS+)

? Installment will be naturally kept from your Investment account.
? Loan office will be accessible up to 90% of the saved sum.

? Double Benefit Plus (DB+)
DB+ is a 6 years term store plan. Store the cash in this record and it gets double the amount of
cash in 6 years.
Elements of this item are:
? Only individuals can open this record.
? Money stored in this record will be multiplied in 6 (six) years.
? Deposit sum will be least Tk. 1, 00,000/ – or it’s various, and most extreme store will be
Tk. 25, 00,000/ – under single name and Tk. 40, 00,000/ – under joint name.

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? Loan office will be accessible up to 90% of the kept sum. The main data regarding this
scheme are,
Tenure Initial Deposit Value at Maturity

6 years Tk. 1,00,000/- Tk. 2,00,000/-

Figure 05: Amount of deposition and maturity value of (DB+)

? Triple Benefit Plus (Triple+)
Features of this product are,
? Only individuals can open this record.
? Money kept in this record will be Tripled in 9 (nine) years 6 (six) months.
? Deposit sum will be Tk. 1,00,000/ – or it’s numerous, and most extreme will be Tk.
25,00,000/ – under single name and Tk. 40,00,000/ – under joint name.
? Loan office will be accessible up to 90% of the kept sum.

Tenure Initial Deposit Value at Maturity

91/2 years Tk. 1,00,000/- Tk. 3,00,000/-

Figure 06: Amount of deposition and maturity value of Triple Benefit plus

? Monthly Benefit Plus (MB+)
Elements of this item are:
? Only individuals can open this record.
? The people must have an investment account with the bank in which the month to
month advantage will be credited consequently.
? Deposit sum will be least Tk. 1, 00,000/ – or it’s various, and greatest store will be Tk.
25, 00,000/ – under single name and Tk. 40, 00,000/ – under joint name.

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? Depositor will get month to month advantage of Tk. 975/ – or it’s various for store
measure of Tk. 1, 00,000/ – or it’s different for a long time term store.
? Depositor will get month to month advantage of Tk. 1,000/ – or it’s different for store
measure of Tk. 1, 00,000/ – or it’s different for a long time term store.
? Loan office is accessible against the saved sum.

Deposit amount Monthly Benefit
(In Taka) (In Taka)

1,00,000/- 3 years 5 years

975/- 1,000/-

Figure 07: Deposit amount and monthly benefit from (MB+)

? Non Resident Foreign Currency Deposit (NFCD) Account:
This account is opened by the Non Occupants. For the most part NRB’s or outside subject can open
this kind of records. What’s more, this record is opened and administered by the outside settlement
related guidelines and directions. Here the store is held in remote money in designated coin for say
FC dollar a/c or FC Euro A/c and so on.
? Resident Foreign Currency Deposit (RFCD) Account:
This account is opened by the inhabitants who require keeping outside coin in it’s own particular
record to pay some particular future consumption continues upon legitimate authorization from
the legislature on sum and reason.