Financila Statement Analysis of 3 Local Banks in Bangladesh
Intracompany Analysis: This basis compares an item or financial relationship within a company in the current year with the same item or relationship in one or more prior years. To do so, the tool Horizontal analysis has been used here. The variables which have been selected for Horizontal Analysis are as follows: * Loans & Advances * Deposits * Interest Income * Fee Income/Commission * Provision * EPS * Net Income
Beneath the analysis along with the findings are shown:
Prime Bank Ltd: In case of Prime Bank we see they showed a consistent performance regarding their asset expansion year by year (Figure 1) whereas in case of their liabilities we
see in 2009 they had a massive increase and others years a mixed growth is seen (Figure2). Then if we turn towards their revenue we see they had a consistent growth in both interest income and commission income. However, in 2011, they had a massive growth in interest income. The reason may be the extended interest spread that they were enjoying in that year. Then in case of Provision we see during 2011 they had a sharp increase in provisioning(Figure 5) which may be attribute to stringent regulatory policy regarding provisioning and deteriorating asset quality due to aggressive banking. At the same time the stock market breakdown may also be attribute behind their deterioration of asset quality as most of the banks had large amount of exposures directly or indirectly related with stock market. Finally this increasing trend of provisioning has been reflected through the EPS in the same year (Figure 6)
United Commercial Bank Ltd: As a 1st Generation bank UCB had shown fluctuating performance throughout the years. Here we see in case of Asset expansion their present growth is in declining phase (Figure 8). Then regarding deposit. They had a consistent growth in interest income (Figure 10) but it was reflected in their EPS (Figure 11). Please note that although EPS growth in 2010
Beneath the analysis along with the findings are shown:
Prime Bank Ltd: In case of Prime Bank we see they showed a consistent performance regarding their asset expansion year by year (Figure 1) whereas in case of their liabilities we
see in 2009 they had a massive increase and others years a mixed growth is seen (Figure2). Then if we turn towards their revenue we see they had a consistent growth in both interest income and commission income. However, in 2011, they had a massive growth in interest income. The reason may be the extended interest spread that they were enjoying in that year. Then in case of Provision we see during 2011 they had a sharp increase in provisioning(Figure 5) which may be attribute to stringent regulatory policy regarding provisioning and deteriorating asset quality due to aggressive banking. At the same time the stock market breakdown may also be attribute behind their deterioration of asset quality as most of the banks had large amount of exposures directly or indirectly related with stock market. Finally this increasing trend of provisioning has been reflected through the EPS in the same year (Figure 6)
United Commercial Bank Ltd: As a 1st Generation bank UCB had shown fluctuating performance throughout the years. Here we see in case of Asset expansion their present growth is in declining phase (Figure 8). Then regarding deposit. They had a consistent growth in interest income (Figure 10) but it was reflected in their EPS (Figure 11). Please note that although EPS growth in 2010