An Assignment On

Performance of Banks with Special Reference to Bangladesh

Prepared For

Professor Dr. Shah Md. Ahsan Habib

Course Instructor

Financial Institutions & Markets (FIN 504/EMBA 564/MBM 524)

Department of Business Administration

East West University

Section-1

Session: Spring 2012

Prepared By

Md. Mesbah Uddin

ID: 2010-3-95-078

East West University, Bangladesh

April 17, 2012

Chapter One: Introduction

1.1 Background

Banking system plays a very important role in the economic life of the nation. The health of

the economy is closely related to the soundness of its banking system. In a developing

country like Bangladesh the banking system as a whole play a vital role in the progress of

economic development. A bank as a matter of fact is just like a heart in the economic

structure and the capital provided by it is like blood in it. As long as blood is in circulation

the organs will remain sound and healthy. If the blood is not supplied to any organ then that

part would become useless. So if the finance is not provided to agriculture sector or industrial

sector, it will be destroyed. Loan facility provided by banks works as an incentive to the

producer to increase the production. [1]

Banking is now an essential part of our economic system. Modern trade and commerce would

almost be impossible without the availability of suitable banking services. First of all,

banking promotes savings. All manner of people, from the ordinary laborers and workers to

the rich land owners and businessmen, can keep their money safely in banks and saving

centers. Secondly, banking promotes investments. Banks easily invest the money they get in

industry, agriculture and trade. They either invest it directly or advance loans to other

investors. Thirdly, it is most through banks that foreign trade is carried on. Whether we

export or import, it is through banks that money is transferred from one country to another.

The financial system of Bangladesh consists of Bangladesh Bank (BB) as the central bank, 4

state-owned commercial banks (SCBs), 4 government-owned specialized banks (SBs), 30

domestic private commercial banks (PCBs), 9 foreign commercial banks (FCBs) and 29 non-

bank financial institutions (NBFIs). The financial system also embraces Investment

Corporation of Bangladesh (ICB), House Building Finance Corporation (HBFC), Securities

and Exchange Commission (SEC) as the regulator of the capital markets, 2 stock exchanges,

insurance companies, micro-credit organizations and cooperative banks. The banking sector

is the dominant sector in the financial system of Bangladesh. The regulatory and supervisory

arrangements for these entities are well defined, with strong legal underpinnings. [2]

According to a Bangladesh Bank report, nominal GDP increased more than threefold from

TK. 2535.5 billion to TK. 7875.0 billion, within last one decade (2000-2001 to 2010-2011).

In 2010-2011 per capita income was USD 818 which was USD 374 in 2000-2001. Foreign

exchange reserve increased to USD 10.91 billion from USD 1.30 billion. Export income has

increased to USD 22.92 billion from USD 6.47 billion. Import payment has increased to USD

33.66 billion in 2010-2011 from USD 9.33 billion in 2000-2001. During the last FY wage

earners remittances was USD 11.65 billion which was only 2.50 billion in 2000-2001. All

these rapid growth in the economy has created demand for new banks. Since bank licenses

were last issued in 2000-01, the Bangladesh economy has grown manifold, with consequent

increase in financial service needs; in April, 2012 the Board of Directors of Bangladesh Bank

approved licensing of nine new commercial banks (three with NRB and six with indigenous

sponsors).

Evaluation of banks financial performance is important for all parties like depositors, bank

manager, stockholders, creditors, regulators and educationalist. In a competitive market

financial bank performance provides signals to depositor investors whether to invest or

withdraw fund from the bank. Similarly, it flashes direction to bank manager whether to

improve its deposit service or loan service or both to improve its finance. Stockholders and

creditors use the performance to evaluate the attractiveness of the bank as an investment by

examining its ability to meets its current and expected future financial obligation. Regulator

is also interested to know its regulation purpose. Educationalist can use this article for further

research.

1.2 Objectives

Hence the objectives of this assignment are-

i. to discuss the theoretical aspects of Bank Performance and

ii. to discuss the bank performance evaluation practices in Bangladesh

Chapter Two: Theoretical Aspects of Banks’ Performance

Pandey (2004) stated that the easiest way to evaluate the performance of a firm is to compare

its present ratio with the past ratio. It gives an indicator of the direction of change and reflects

whether the firm’s financial performance has improved, deteriorated or re mained constant

over time. [3]

Al-Shammari and Salimi (1998) stated that profitability ratio especially Return on Equity

(ROE) signals the earning capability of the organization. They also suggest that higher return

on Equity (ROE) ratio is appreciable and it is the primary indicator of banks profitability and

functional efficiency. [4]

Bhatt and Ghosh (1992) stated that the profitability of commercial banks depends on several

factors some of them are endogenous and some exogenous. The endogenous factors represent

control of expenditure, expansion of banking business, timely recovery of loan and

productivity. The exogenous factors consist of direct investments, such as SLR (Statutory

Liquidity Ratio), CRR (Cash Reserve Ratio) and direct credit program such as region wise,

population wise guidelines on lending to priority sector. The regulated and restricted regime

in the operation of banking system of investment, credit allocation, branch expansion, interest

rate determination and internal management corded the productivity and profitability. [5]

Khan (2009) stated that bank is evaluated based on profit and loss as the same way for other

business. If the shareholders of the bank get more profit then the bank is identified as

successful. Banks can attain success if relevant risks are effectively controlled. [6]

Van Horne & Wachowicz (2005) stated that to evaluate a firm’s financial condition and

performance the financial analyst need to perform “checkups” on various aspects of a firm’s

financial health. A tool frequently used these checkup is a financial ratio. [7]

Jahangir et al. (2007) argued that the traditional measure of profitability through

stakeholder’s equity is quite different in banking industry from any other sector of business,

where loan-to-deposit ratio works as a very good indicator of banks’ profitability as it depict

the status of assets-liability management of banks. [8]

Performance and financial conditions of the scheduled banks are evaluated through CAMELS

rating system, which involves analysis and evaluation of the six crucial dimensions of

banking operations. The six indicators used in the rating system are:

(i) Capital Adequacy: Capital Adequacy focuses on the total position of banks'

capital and protection of depositors and other creditors from the potential shocks

of losses that a bank might incur. It helps absorbing all possible financial risks like

credit risk and other core risks, market risk, operational risk, residual risk, credit

concentration risk, interest rate risk, liquidity risk, reputation risk, settlement risk,

strategic risk, environmental & climate change risk etc. [2]

(ii) Asset Quality: Asset quality is related to the left-hand side of the bank balance

sheet. Bank managers are concerned with the quality of their loans since that

provides earnings for the bank. Government bonds and T-bills are considered as

good quality loans whereas junk bonds, corporate credits to low credit score firms

etc. are bad quality loans. A bad quality loan has a higher probability of becoming

a non-performing loan with no return. [9]

(iii) Management Efficiency (including implementation status of Core Risk

Management Guidelines),

(iv) Earnings,

(v) Liquidity: Liquidity is the ability to meet obligations when they come due

without incurring unacceptable losses. Managing liquidity is a daily process

requiring bankers to monitor and project cash flows to ensure adequate liquidity is

maintained. Maintaining a balance between short-term assets and short-term

liabilities is critical. [10]

(vi) Sensitivity to market risk.

Chapter Three: Bangladesh Aspects of Banks’

Performance

Banking sector in Bangladesh demonstrated a moderate level of resilience in FY11,

attributable to improvement in key financial indicators of the banking industry.[11] With a

view to maintaining soundness, solvency, efficiency and stability in the financial system,

Bangladesh Bank (BB) initiated a number of policy measures including greater emphasis on

risk managements in the banks, periodic review of stability of the banks and the banking

industry through stress testing, strengthening financial inclusion of under-served/un-served

productive economic sectors and population segments, encouraging enhanced CSR activities

and Green Banking initiatives (Chart 3.1 & 3.2). CSR activities of banks deepened and

broadened substantially in 2010, with 46 out of 47 banks reporting direct expenditure on this

count against only 24 in 2009. Direct CSR expenditure of the banks in 2010 totaled Tk.

2329.8 million as against TK. 553.8 million in 2009, which is four fold larger than in

2009.[12]

Chart 3.1: Structure of the Banking System in Bangladesh (2010)

Bank Type Total Assets

(Billion Taka)

% of Industry

Assets

Deposits

(Billion Taka)

% of Deposits

SCBs 1384.3 28.5 1044.9 28.1

SBs 295.4 6.1 183.4 4.9

PCBs 2854.6 58.8 2266.5 60.9

FCBs 320.8 6.6 227.1 6.1

Industry 4855.1 100 3721.9 100

Source: Bangladesh Bank

Chart 3.2: Distribution of Bank Branches in Different Regions

(up to February 2011) Type of Banks No. of Banks No. of Bank Branches As % of the Total

Branches

Urban Rural Total Urban Rural Total

SCBs 4 1243 2161 3404 36.52 63.48 100

SBs 4 157 1225 1382 11.36 88.64 100

PCBs 30 1805 1011 2816 64.10 35.90 100

FCBs 9 62 0 62 100 - 100

Industry 47 3267 4397 7664 42.63 57.37 100 Source: Bangladesh Bank

3.1 Performance and Rating of Banks

In Bangladesh, Performance and financial conditions of the scheduled banks are evaluated

through CAMELS rating system, which involves analysis and evaluation of the six crucial

dimensions of banking operations. The six indicators used in the rating system are (1) capital

adequacy, (2) asset quality, (3) management efficiency (including implementation status of

Core Risk Management Guidelines), (4) earnings, (5) liquidity, and (6) sensitivity to market

risk.

3.1.1 Capital Adequacy

Capital Adequacy focuses on the total position of banks' capital and protection of depositors

and other creditors from the potential shocks of losses that a bank might incur. Under Basel-

II, banks in Bangladesh are instructed to maintain minimum capital requirement (MCR) at

10.0 percent of the risk weighted assets (RWA) or Taka 4.0 billion as capital, whichever is

higher, with effect from July-September 2011 quarter. It may be mentioned that in the fourth

quarter of 2010 banks were required to maintain MCR at 9.0 percent of RWA or Taka 2.0

billion, whichever was higher.

Chart 3.3 shows that as on 31 December 2010 the SCBs, SBs, PCBs and FCBs maintained

CAR of 8.9, -7.3, 10.1 and 15.6 percent respectively. 2 SCBs, 2 SBs and 4 PCBs could not

maintain minimum required CAR. The CAR of the banking industry was 9.3 percent at end

2010 as against 11.6 percent at end 2009. All foreign banks maintained minimum required

capital.

2005 2006 2007 2008 2009 2010

SCBs -0.40% 1.10% 7.90% 6.90% 9% 8.90%

SBs -7.50% -6.70% -5.50% -5.30% 0.40% -7.30%

PCBs 9.10% 9.80% 10.60% 11.40% 12.10% 10.10%

FCBs 26% 22.70% 22.70% 24% 28.10% 15.60%

Industry 5.60% 6.70% 9.60% 10.10% 11.60% 9.30%

-10.00%

-5.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

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Chart 3.3: Capital to Risk Weighted Assets Ratio by Type of Banks [11]

3.1.2 Asset Quality

The asset composition of all commercial banks shows the concentration of loans and

advances (64.3%). The high concentration of loans and advances indicates vulnerability of

assets to credit risk, especially because of having significant portion of non-performing

assets. A huge nonperforming loan portfolio has been the major predicament of banks

particularly of the SCBs and SBs. However, investment of banks in bills, bonds, shares etc.

also demonstrates somewhat concentration (Chart 3.4).

Chart 3.4: Aggregate industry assets (Dec, 2010) [11]

The most important indicator intended to identify problems with asset quality in the loan

portfolio is the ratio of gross nonperforming loans (NPLs) to total loans and net NPLs to net

total loans. In 2010, FCBs have the lowest and SBs have the highest ratio of gross NPLs to

total loans. SCBs had gross NPLs to total loans ratio of 15.7 % whereas in case of PCBs,

FCBs and SBs, the ratios were 3.2, 3.0 and 24.2 percent respectively at end December 2010

(Chart 3.5 & 3.6). The ratio of NPL to total loans of all the banks shows an encouraging trend

since its decline from the peak (34.9 percent) in 2000, although the aggregate ratio was still

as high as 7.3 percent in December 2010. The reason is being high NPL of the SCBs and the

SBs.

The SCBs and SBs continue to experience high level of NPLs mainly due to substantial loans

provided by them on considerations other than commercial and under directed credit

programmes during the 70s and 80s. Poor appraisal and inadequate follow-up and supervision

of the loans disbursed by the SCBs and SBs in the past eventually resulted in massive

booking of poor quality assets remained significant in the portfolio of these banks.

Loans & Advances, 64.3

%

Govt. bills & bond, 10.1% Deposit with

BB, 6.2%

Cash in Tills, 1.1%

Other Assets, 18.3%

Other, 19.4%

Furthermore, these banks were reluctant to write-off the historically accumulated bad loans

because of poor quality of underlying collaterals.

Recovery of NPLs, however, witnessed some signs of improvement mainly because of the

steps taken with regard to internal restructuring of these banks to strengthen their loan

recovery mechanism and recovery drive and write-off measures initiated in recent years. The

total amount of written-off bad debts from June 2006 to June 2011 in different bank

categories is given in Chart 3.7.

2005 2006 2007 2008 2009 2010

SCBs 21.4% 22.9% 29.9% 25.4% 21.4% 15.7%

SBs 34.9% 33.7% 28.6% 25.5% 25.9% 24.2%

PCBs 5.6% 5.5% 5.0% 4.4% 3.9% 3.2%

FCBs 1.3% 80.0% 1.4% 1.9% 2.3% 3.0%

Industry 13.6% 13.2% 13.2% 10.8% 9.2% 7.3%

0.0%10.0%20.0%30.0%40.0%50.0%60.0%70.0%80.0%90.0%

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Chart 3.5: NPLs To Total Loans Ratio by Type of Banks [11]

2005 2006 2007 2008 2009 2010

SCBs 13.2% 14.5% 12.9% 5.9% 1.9% 1.9%

SBs 22.6% 23.6% 19.0% 17.0% 18.3% 10.0%

PCBs 1.8% 1.8% 1.4% 0.90% 0.4% 0.0%

FCBs -2.2% -2.6% -1.9% -2.0% -2.3% -1.7%

Industry 7.2% 7.1% 5.1% 2.8% 1.7% 1.3%

-5.0%0.0%5.0%

10.0%15.0%20.0%25.0%

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Chart 3.6: Ratio of net NPLs to net Total Loans by Type of Banks [11]

3.1.3 Management Efficiency

Sound management is the most important pre-requisite for the strength and growth of any

financial institution. The total expenditure to total income, operating expenses to total

expenses, earnings and operating expenses per employee, and interest rate spread are

generally used to gauge management soundness. In particular, a high and increasing

expenditure to income ratio indicates the operating inefficiency that could be due to flaws in

management.

As evident from Chart 3.8, in 2010, expenditure- income (EI) ratio of the SBs was the highest

among the shown bank clusters due to huge operating loss incurred by BKB and RAKUB.

The EI ratio of the SCBs was 80.7 which could mainly attributable to high administrative and

overhead expenses and suspension of income against NPLs. EI ratio of PCBs was also

substantially high due to deduction of loan loss provision, other assets and corporate tax from

current income.

0

100

200B

illio

n T

aka

30-Jun-05 30-Jun-06 30-Jun-07 30-Jun-08 30-Jun-09 30-Jun-10

SCBs 29.7 35.7 42.8 48.4 64.5 70.5

SBs 27.6 28.6 30.4 31 31.8 31.8

PCBs 32.9 40.7 45.5 49.4 54.7 69.6

FCBs 1.1 1.5 1.6 1.7 2 2.1

Industry 91.3 106.5 120.3 130.5 153 174

Chart 3.7: Writing-off Bad Debts in Different Bank Categories [11]

2004 2005 2006 2007 2008 2009 2010

SCBs 102.3% 101.9% 100.0% 100.0% 89.6% 75.6% 80.7%

SBs 104.0% 103.9% 103.5% 107.7% 103.7% 112.1% 87.8%

PCBs 87.1% 89.3% 90.2% 88.8% 88.4% 72.6% 67.6%

FCBs 76.3% 70.8% 71.1% 72.9% 75.8% 59.0% 64.7%

Industry 90.9% 92.1% 91.4% 90.4% 87.9% 72.6% 70.9%

0.0%20.0%40.0%60.0%80.0%

100.0%120.0%

Pe

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Chart 3.8: Expenditure-Income Ratio by Type of Banks [11]

3.1.4 Earnings and Profitability

Strong earnings and profitability profile of a bank reflect its ability to support present and

future operations. More specifically, this determines the capacity to absorb losses by building

an adequate capital base, finance its expansion and pay adequate dividends to its

shareholders. Although there are various measures of earning and profitability, the best and

widely used indicator is return on assets (ROA), which is supplemented by return on equity

(ROE) and net interest margin (NIM).

Analysis of these indicators reveals that the ROA of the SCBs was less than industry average

considering huge provision shortfall and that of the SBs even worse (Chart 3.9). PCBs' ROA

shows consistently strong position during last five years. FCBs' ROA has been consistently

strong during the last couple of years.

2005 2006 2007 2008 2009 2010

SCBs -0.1% 0.0% 0.0% 0.7% 1.0% 1.1%

SBs -0.1% -0.2% -0.3% -0.6% 0.4% 0.2%

PCBs 1.1% 1.1% 1.3% 1.4% 1.6% 2.1%

FCBs 3.1% 2.2% 3.1% 2.9% 3.2% 2.9%

Industry 0.6% 0.8% 0.9% 1.2% 1.4% 1.8%

-1.0%-0.5%0.0%0.5%1.0%1.5%2.0%2.5%3.0%3.5%

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Chart 3.9: Return on Assets (ROA) [11]

2005 2006 2007 2008 2009 2010

SCBs -6.9% 0.0% 0.0% 22.5% 26.2% 18.4%

SBs -2.0% -2.0% -3.4% -6.9% -171.7% -3.2%

PCBs 18.1% 15.2% 16.7% 16.4% 21.0% 20.9%

FCBs 18.4% 21.5% 20.4% 17.8% 22.4% 17.0%

Industry 12.4% 14.1% 13.8% 15.6% 21.7% 21.0%

-200.0%

-150.0%

-100.0%

-50.0%

0.0%

50.0%

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Chart 3.10: Return on Equity (ROE) [11]

SCBs' ROE was -6.9 percent in 2005 and rose to 26.2 percent in 2009, but dropped down to

18.4 percent in 2010 as owners' equity had increased comparatively at higher rate than after

tax profit. In case of SBs, the ROE was still negative in 2010. The ROE of PCBs was robust

for last five years (Chart 3.10). The ROE of FCBs was 22.4 percent in 2009, but decreased to

17.0 percent as two FCBs incurred net loss in 2010.

Aggregate net interest income (NII) of the industry has consistently increased from Taka 16.6

billion in 2003 to Taka 121.9 billion in 2010 (Chart 3.11). However, the NII of the SCBs was

a negative amount of Taka 0.3 billion in 2003 and had become positive (Taka 7.7 billion) in

2005. The positive trend continued till 2010. In 2010, the NII of SCBs was Taka 19.8 billion.

The SBs had a positive trend since 2002 and it was Taka 6.2 billion in 2010.

Since 2005, SCBs have been able to increase their net interest income (NII) by reducing their

cost of fund. The NII of the PCBs has been incredibly high over the period from 2003

through 2010. Overall industry NII shows a consistently upward trend. The trend of NII

indicates that the interest spread of PCBs and FCBs is higher than that of SCBs and SBs.

3.1.5 Liquidity

Commercial banks' demand and time liabilities are at present subject to a statutory liquidity

requirement (SLR) of 19.0 percent inclusive of average 6.0 percent (at least 5.5 percent in

any day) cash reserve ratio (CRR) on bi-weekly basis. The CRR is to be kept with the BB and

the remainder as qualifying secured assets under the SLR, either in cash or in Government

securities. SLR for the banks operating under the Islamic Shariah is 11.5 percent. The

specialized banks (except Basic Bank Ltd.) are exempted from maintaining the SLR.

2005 2006 2007 2008 2009 2010

SCBs 7.7 9 7.4 7.9 12.1 19.8

SBs 1 1.7 1.4 1.9 1.9 6.2

PCBs 21 25.4 36.1 48.5 56.7 82.8

FCBs 5.6 8.2 9.9 12.6 10.7 13

Industry 35.3 44.3 54.8 70.9 81.5 121.9

020406080

100120140

Bill

ion

Tak

a

Chart 3.11: Net Interest Income by Type of Banks [11]

Liquidity indicators measured as percentage of demand and time liabilities (excluding inter-

bank items) of the banks indicate that although all the banks had excess liquidity but the

amount was lower than the previous two years. Chart 3.12 & 3.13 show that the FCBs are

having the highest liquidity ratios followed by the SCBs. This situation of lower surplus of

liquidity made the money market volatile.

2005 2006 2007 2008 2009 2010

SCBs 20% 20.10% 24.90% 32.90% 25.10% 27.20%

SBs 11.20% 11.90% 14.20% 13.70% 9.60% 21.30%

PCBs 21% 21.40% 22.20% 20.70% 18.20% 21.50%

FCBs 41.50% 34.40% 29.20% 31.30% 31.80% 32.10%

Industry 21.70% 21.50% 23.20% 24.80% 20.60% 23%

0%5%

10%15%20%25%30%35%40%45%

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Chart 3.12: Liquidity Ratio by Type of Banks (Liquid Asset) [11]

2005 2006 2007 2008 2009 2010

SCBs 2% 2.10% 6.90% 14.90% 17.60% 8.20%

SBs 6.20% 3.80% 5.60% 4.90% 7.10% 2.30%

PCBs 5.10% 5.60% 6.40% 4.70% 5.30% 4.60%

FCBs 23.60% 16.40% 11.20% 13.30% 21.80% 13.20%

Industry 5.30% 5.10% 6.90% 8.40% 9% 6%

0%

5%

10%

15%

20%

25%

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Chart 3.13: Liquidity Ratio by Type of Banks (Excess Liquidity) [11]

Chapter Four: Conclusion

Evaluation of banks’ financial performance is important for all parties like depositors, bank

manager, stockholders, creditors, regulators and academic researchers. From the presented

data, it is evident that banks are performing very well in Bangladesh, due in part by the rapid

economic growth and strict regulatory supervision of Bangladesh Bank. Over the years,

performance of the banking sector has improved significantly as has Bangladesh Banks’

supervision capacity and tools. Net NPL ratios have declined by more than two thirds since

2004. Return on assets has tripled since 2005 (from 0.6% in 2005 to 1.8% in 2010 for all

banks). Return on equity has sharply increased from 12.4% in 2005 to 21% in 2010. Private

and foreign banks are better in terms of capital adequacy (10.1% & 15.6% respectively),

qualities of assets (NPLs of PCBs was 3.2% & FCBs was 3% in 2010), expenditure- income

ratio (67.6% & 64.7% respectively) etc than SCBs and SBs.

The economy of Bangladesh has grown and the banking system has become more

competitive, but still 45% of the population remains unbanked. Although private and foreign

banks are better in terms of performance, they offer only limited access to people. On the

contrary, there is much more access of mass people to the state-owned commercial banks and

specialized banks because of wider distribution of their branch network (Chart 3.2). As of

February 2011, while there was no branch of the foreign banks in the rural areas, only 35.9%

of the total branches of the local private banks were located in rural areas. On the other hand,

63.48% and 88.64% of the total branches of state-owned commercial banks and specialized

banks are located in the rural areas respectively.

Efficient capital infusion by the existing banks will augment the banking system’s capacity to

meet the credit needs of the expanding corporate sector in this fast growing economy and

opening of new branches in rural areas will increase rural presence of banks and widen

financial inclusion. And thus we can ensure the access of the mass population to the banking

services and include them in the financial system.

Chapter Five: References

[1] Chowdhury, T. A. & Ahmed, K. (2009), “Performance Evaluation of Selected

Commercial Banks in Bangladesh”, International Journal of Business and

Management, 4 (4), 86-97.

[2] Financial Stability Report (2010), Department of Off-site Supervision, Bangladesh

Bank

[3] Pandey I. M. (2004), “Financial statement analysis”, Financial Management, (9th

edition). New Delhi, India:Vikas, pp. 517-558.

[4] Al- Shammari, M. & Salimi, M. (1998), “Modeling the operating efficiency of banks: A

parametric methodology”, Journal of Logistic Information Management, 11, 27-41.

[5] Bhatt, P. R. & Ghosh, R. (1992), “Profitability of Commercial banks in India”, Indian

Journal of Economics,14-27.

[6] Khan, A. R. (2009), “Sources and uses of funds, performance evaluation and bank

failure”, Bank Management: A fund Emphasis, (2nd edition), Dhaka: Decent Book

House, pp. 51-68.

[7] Van Horne J. C. & Wachowicz Jr. J. M. (2005), “Financial statement analysis”,

Fundamentals of Financial Management, (11th edition). India, Pearson, pp. 125-168.

[8] Jahangir, N., Shill, S. & Haque, M. A. J. (2007), “Examination of Profitability in the

Context of Bangladesh Banking Industry”, ABAC Journal, 27( 2), 36-46.

[9] Asset quality. [cited April 17, 2012]; Available from:

http://en.wikipedia.org/wiki/Asset_quality

[10] Liquidity. [Cited April 17, 2012]; Available from: http://en.wikipedia.org/wiki/

Liquidity

[11] Annual Report (2010-2011), Bangladesh Bank

[12] Review of CSR initiatives in banks (2010), Department of Off-Site Supervision,

Bangladesh Bank