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Internship Report 0n
Mr. Md. Ridwan Reza Senior Lecturer Dept. of Business Administration Leading University, Sylhet.
Dear Sir, I have completed the Internship Report required to be submitted as a precondition for the completion of B.B.A. Program. The title of my report is Performance Analysis Of Southeast Bank Limited
The Internship Report is based on my 3 months attachment in Southeast Bank Limited. In this report I provide information about the performances analysis of SEBL in an integrated approach based on the information collected during the internship period.
It will be kind of you if you accept my report on the aforesaid topic. I hope you will be pleased with the report. I have given all my sincere effort in preparation of this report and will appreciate if you suggest anything about this report for any kind of rectification needed.
Sincerely yours,
.. Safinaz Amin Anni ID No: 0901010028 Dept. of Business Administration Leading University, Sylhet.
LETTER OF CERTIFICATE
I am enormously pleased to declare that Safinaz Amin Anni, a students from the Department of Business Administration, 21th Batch, Leading University, Sylhet, has been completed her Internship in Southeast Bank Limited, Laldighir Paar Branch. She has completed her internship report on the topic Performance Analysis Of Southeast Bank Limited. She has provided good effort for collection of both primary and secondary data. I have supervised her throughout the preparation of the paper.
I also certify that the paper is an original one and has not been submitted elsewhere previously for publication in any form.
.. Mr. Md. Ridwan Reza Senior Lecturer Department of Business Administration Leading University, Sylhet-3100
This is to assert that Safinaz Amin Anni, ID No: 0901010028, a student of BBA Program, Leading University, Sylhet, has consummated good & proper a 03 (three) month long Internship Program at our branch from 1 October,2012 to 31 December, 2012. She was assigned the topic Performance Analysis Of Southeast Bank Limited to Study on Southeast Bank Limited.
To my best Knowledge, it is clear crystal that he abode by the dos & donts of the bank. Her conduct towards the branch, Executives and Officers, Staffs and Customers was very satisfactory.
Acknowledgement
First & foremost of all, I would like to convey my heartiest gratitude and total devotion to almighty Allah for blessing me with the ability, strength, patience as well as keeping me active in performing my internship tasks successfully.
A special debt is due to Mr. Md. Ridwan Reza, Senior Lecturer, Department of Business Administration, Leading University, who has been my academic supervisor. He was kind enough to allocate his valuable time to provide me with his humble guidance, motivating thoughts, ample & applicable directions for the successful preparation of this report.
I would especially like to convey my gratitude to my internship supervisor, Suranjit Bhushan Das Roy, Principal Officer, to guide me throughout my stay as an intern at SEBL Bank. Without his motivation, guidance & suggestions, this report would have remained incomplete.
Special note of mention will be awarded to all respected officers within the Southeast Bank Limited, Laldighirpaar Branch, Sylhet, who were not only helpful, but also supportive & co-operative towards a learner like me to understand the tasks & operations within the Southeast Bank Limited (SEBL).
And last but not least, I would finish off with extension of appreciation to my family & friends-namely my parents, whose moral support worked as the main driving force contributing to my successful completion of Internship & Internship Report and also worthy of mention are my friends for motivating me with their tips & suggestions on preparing my internship report.
Executive Summary
Commercial banks as the most important functionary of the financial system play a dynamic role in the economic development of a nation through mobilization of savings and allocation of credit to productive sectors. The World of business has become increasingly complex and time driven. In the world of competition banks are trying to meet the demand of their clients, and seek to satisfy customer through their service. So in the competitive market they should try to find out present & future problems and try to discover how those problems can be solved. An attempt has been made in this paper to examine and evaluate the overall performance of SEBL.
In this report first I have tried most to provide overall information about SEBL, like mission & Vision of SEBL, its objectives & product/ services provided by SEBL. At the next I gave information about some particular functional performance of SEBL like their capital & reserves, shareholders equity, amount of deposits, loan & advances, assets portfolio and so on. After that I have tried most to provide information about the analytical data of financial statement of SEBL.
And finally I have highlights some important findings and tried to provide several suggestion regarding this problems.
Table of Contents
Serial Items Page No.
Chapter One
Introduction 1.01 1.02 1.03 1.04 1.05 Background Origin of the report Objectives Methodology Limitations of the report 2 2 3 4 5
Chapter Two
Overview of Southeast Bank Limited 2.01 2.02 2.03 2.04 2.05 2.06 2.07 2.08 2.09 Establishment OF Southeast Bank Limited Company Profile Vision Mission Business Objectives of Southeast Bank Commitments to the client Board of Directors Branches of SEBL Products and Services 7 8 9 9 9 9 10 11 11
Chapter Three
Functional Performance Analysis of Southeast Bank Limited. 3.01 3.02 3.03 3.04 Capital & Reserves Shareholders Equity Capital Market Scenario in 2011 SEBL Shares & its Owners I. Number of Shareholders II. Positive Earning Per Share (EPS) 13 13 14 14 14 15
III. Satisfactory Net Asset Value (NAV) IV. Authorized Capital & Paid-Up Capita V. Declaration of Dividend VI. Characteristics of Shares of SEBL 3.05 3.06 3.07 3.08 3.09 3.10 3.11 3.12 Deposits Loan & Advances Guarantee Business SME Finance Corporate Finance Environment & Green Banking Women Entrepreneurship Development
15 16 17 17 18 19 20 20 20 21 21
International Trade Operations by the Southeast Bank Limited in 22 2011 1.Import Trade 2. Export Trade 22 23 25 26
3.13 3.14
Chapter Four
Financial Statement Analysis of Southeast Bank Limited. 4.01 4.02 4.03 4.04 Financial statement Analysis Three years at a glance of SEBL Ratio analysis of SEBL SWOT Analysis 28 28 29 35
Chapter Five
Findings 5.01 Findings 37
Chapter Six
Conclusion & Recommendations 6.01 6.02 Conclusion Recommendations References Appendix
40 41 42
Chapter One
Introduction
Introduction
1.03 Objectives (i) Main Objective: (ii) Specific Objectives: 1.04 Methodology 1.05 Limitations of the report
1.01 Background
The prosperity of a country depends upon its economic activities and banking sector plays a vital role here. So banking as a profession has achieved huge popularity all over the world. The same concern immensely appeals me as well. By the grace of Almighty Allah I have been assigned to prepare an internship paper on Performance Evaluation of Southeast Bank Limited - a very promising second generation bank of Bangladesh. I went through various functions and activities of the bank with an analytical point of view during the last few months and witnessed the dynamicity of their style. This inspired and helped me a lot to furnish my internship report with a great deal of enthusiasm.
I believe that I have tried all the way to follow the previous studies retaining my originality in writing the report. Any analytical criticism and creative suggestion on this concern will receive my heartiest welcome.
During the internship program, I was under the supervision and guidance of Mr. Md. Ridwan Reza, Senior Lecturer, Department of Business Administration, Leading University, Sylhet, Bangladesh.
1.03 Objectives
The General objective of the study is to provide an overview of learning of the intern during the internship program and fulfill the internship requirement. Beside the general objective, the report can be categorized into main objective and specific objectives. The objectives behind this report are mentioned below: (i) Main Objective: The main objective of this study is to prepare an internship paper (which is a partial requirement of the under graduation program) on the specified topic working within an organization implementing the knowledge that have been gathered over the past few years at Leading University, Sylhet, Bangladesh. (ii) Specific Objectives: The specific objectives of this report are as follows: To analyze the functional area wise performance of Southeast Bank Limited. To gather knowledge about financial performance of the bank. Finding out the causes and several solutions of both analyses.
1.04 Methodology
This report is a descriptive one, which was administered by collecting primary and secondary data. The report tried to evaluate the performance of Southeast Bank Limited. Before going in to the deep study, conceptual structure visualized under which the whole study was conducted. 1.3.1 Sources of Data
This study covered two types of data, which are: Primary data Secondary data (i) Primary Data: Major sources of primary information were interviews with members of the staff of SEBL. (ii) Secondary Data: Going through different documents and papers developed by the Bank personnel and by others are the sources of secondary data. 1.3.2 Collection Procedure of Data Managers and officers of SEBL Bank from different divisions were the main sources of secondary data. Interview with the clients of SEBL Bank helped me a lot to understand their attitude towards SEBL Bank.
1.3.3 Analysis of Data Collected data are analyzed to draw the conclusion. All the data have shown in tabular form and graphical form.
Some desired information could not be collected due to confidentiality of bank. Due to lack of practical experience, some errors might be occurred during the study. Therefore maximum efforts have given to avoid mistakes.
Chapter Two
Overview of Southeast Bank Limited
2.03 Vision 2.04 Mission 2.05 Business Objectives of Southeast Bank 2.06 Commitments to the client 2.07 Board of Directors 2.08 Branches of SEBL 2.09 Products and Services
A team of efficient professionals manages the Bank. They create and generate an environment of trust and discipline that encourages everybody in the Bank to work together for achieving the objectives of the Bank. Southeast Bank has become a synonym of quality banking services and products. It has a diverse array of products and services tailored carefully to cater to the needs of all segments of customers. Our operational strategies are structured to address the special and often complex needs of the customers.
In the growth graph, the Bank has generated profit of Tk.1912.19 million after provision and income tax in the year 2011. The curve keeps soaring upward everyday making it one of the leading and most successful banking institutions in Bangladesh with a total asset base of Tk.158,07.59 million as on December 31, 2011.
Line of Business: Authorized Capital: Paid Up Capital: Year of Initial Public Officer: Stock Exchange Listing: Phone: Fax: SWIFT: E-mail : Website:
April 10, 2000 (DSE) & April 24, 2000 (CSE) 9571115, 7160866, 7173793, 9555766 & 9550081 9550086, 9550093 &9563102 SEBDBDDHXXX info@southeastbank.com.bd http://www.southeastbank.com.bd/owa
2.03 Vision
To be a premier banking institution in Bangladesh and contribute significantly to the national economy.
2.04 Mission
High quality financial services with state of the art technology Fast customer service Sustainable growth strategy Follow ethical standards in business Steady return on shareholders equity Innovative banking at a competitive price Attract and retain quality human resource Commitment to Corporate Social Responsibility
Provide service with high degree of professionalism and use of modern technology. Create long-term relationship based on mutual trust. Respond to customer needs with speed and accuracy. Share their values and beliefs. Grow as our customers grow. Provide products and service at competitive pricing. Ensure safety and security of customers valuables in trust with them.
SME Banking Dual Currency VISA Credit Card Remittance Business Western Union SWIFT Services Locker Services SMS Banking ATM Service
Chapter Three
Functional Performance Analysis of Southeast Bank Limited.
3.01 Capital & Reserves 3.02 Shareholders Equity 3.03 Capital Market Scenario in 2011 3.04 SEBL Shares & its Owners 3.05 Deposits 3.06 Loan & Advances
3.07 Guarantee Business 3.08 SME Finance 3.09 Corporate Finance 3.10 Environment & Green Banking 3.11 Women Entrepreneurship Development 3.12 International Trade Operations by the Southeast Bank Limited in 2011 3.13 Assets Portfolio 3.14 Information Technology
2000 1500 2011 1000 500 0 2011 2010 2009 2010 2009
In the year, 25 new companies offered part of their shares to the public as Initial Public Offering (IPOs). The total value of offered shares amounted to Tk. 18,791.53 million. All the 25 new companies were listed & their shares were traded in DSE in 2011. The total numbers of listed companies were 232 as at 31st December, 2011.
I. Number of Shareholders A large number of shareholders repose their trust in our Banks Securities. The number of Banks registered shareholders rose to 68,039 on December 2011 from 66,989 of the
previous year showing an increasing of 1.7%. The trend of increase in the number of shareholders of the Bank for the last three years in shown below:
growth rate. Year 2011 2010 2009 Shareholders 68,039 66,898 22,152 Growth Rate 1.71% 202.00% 76.70%
II. Positive Earning Per Share (EPS) The total Paid-Up Shares of the Bank stood at 831,700,840 at the end of the year 2011. Since, they listed with two bourses of the country, the number of issued shares increased by 2,672.33%.They are generating substantial amount of profit through operational excellence for the last six years & allocated good rate of dividend against each outstanding share of the company. Their EPS which is a prime indicator of the Banks profitability is shown below for the last three years:
Year
Earning Per Share of Tk. 10 Tk. 2.33 Tk. 3.77 Tk. 3.24
III. Satisfactory Net Asset Value (NAV) SEBLs Net Asset Value Per share is always positive reflecting higher asset compared to liabilities. For their better NAV, a large number of investors subscribed to their shares. The Net Asset Value of the Bank since 2009 is given below:
Net Asset Value Year (NAV) per share of TK. 10 2011 2010 2009 Tk. 23.30 Tk. 24.73 Tk. 33.10
IV. Authorized Capital & Paid-Up Capita Their Authorized Capital & Issued Share Capital has considerably increased over the years. At present, their Authorized Capital is 10,000.00 million & Paid-Up Capital is Tk. 8317.01 million. The Banks year wise Authorized Capital & Paid-Up Capital since 2009 are shown below: Authorized Capital Year (Taka in million) Paid-Up Capital (Taka in million) 2011 2010 2009 10,000.00 10,000.00 10,000.00 8,317.01 6,930.84 3,422.63
10,000.00 8317.01
10,000.00 6930.84
10,000.00
2011
2010
2009
Figure 4: Authorized Capital & Paid-Up Capital of 3 years. V. Declaration of Dividend In the preceding years, their Board of Directors declared dividends out of profits to the companys shareholders at good rates. The rates of Cash Dividend & Stock Dividend Declared by the Bank since 2009 are shown below: Year 2011 2010 2009 Cash Dividend 15% 10% Stock Dividend 5% 20% 35% Total 20% 30% 35%
Now I would like to highlight some nature of shares of Southeast Bank Ltd. Large number of Shareholders. Good & satisfactory rate of dividend. Positive Earning Per Share (EPS). Good Net Asset Value per share (NAV) Continuous stay for a long time in DSE & CSE in top 20 Index. Traded in both the bourses of the country as an A category share.
3.05 Deposits
The Bank mobilized total deposits of Tk. 127,178.22 million as of December, 2011 as compared to Tk 107,253.19 million in 2010. Competitive interest rates, attractive deposit products, deposit mobilization efforts of the bank employees & confidence reposed by the customers in the Bank contributed to the notable growth in deposits. The Bank introduced a number of attractive deposit schemes to cater to the requirement of savers. This improved not only the quantum of deposits but also brought about qualitative changes in deposits structure. The deposit mix of the Bank as on December 31, 2011 was as follows:
Particulars Current & Other Deposits Saving Bank/ Mudaraba saving bank deposits Short Notice Deposits/ Mudaraba short notice deposits Fixed Deposits or Term Deposits Fund Under different deposit Schemes Bill payable Accounts Total
9,212.61
7.24%
Depos it Mix
1.20% 7.32% 3.10% 5.23% 7.24% C urrent & O ther D epos its S av ing B ank/ Mudaraba s av ing bank depos its S hort Notice D epos its/ Mudaraba short notice deposits F ixed D eposits or T erm D epos its F und Under different deposit S chemes B ill payable A ccounts 75.91%
Liquidity constraint in the first half of the year restricted growth of loans & advances & in the second half due to development of governments borrowing instruments & depreciation of Taka against foreign currencies lending activity was affected. Both capital & money market remained unstable throughout the year. Notwithstanding the situation, Loans & Advances portfolio of the Bank stood at Tk. 107,288.56 million as on 31December 2011 compared to Tk. 93,981.20 million as on 31 December 2010 registering a growth of 14.16%.
benchmark service levels & strong customer orientation, Southeast Bank delivers optimal client services & focuses on the needs of the customers covering a broad range of strategic products & financial advisory services.
1. Import Trade
Southeast Bank Limited has another successful year in Import Trade. This year total Import Business handled by the bank is Tk. 99,509.01 million (eqv. USD1,215.75 million). Deposit global & domestic economic slowdown Southeast Bank has been able to ensure its slice of total International Trade Business of Bangladesh. In 2011, beyond the traditional items some non-traditional items like Ocean going vessel & passenger Aircraft have enriched Southeast banks Import basket.
Year
Table8: Import Figure of the bank for the last three years
Export Business which is the lifeline of the economy has been significantly contributing to our national economy in terms of foreign currency inflow and employment generation, Southeast Bank Limited since inception has been trying to facilitate export trade through offering well-tailored services to the exporters starting from financing backward-linkage industry to forward-linkage industry. Since 2009 the world economy has suffered huge meltdown & is still going through volatile condition which has adversely affected our economy. Despite all odds Southeast Bank Limited has been able to ensure a steady growth in Export business. This has been possible due to integrated efforts of all concerned from the management at head office and at the branches. Besides traditional items like Readymade Garments, Jute & Jute-made goods, Ceramics, Frozen Fish Southeast Bank Limited has made sufficient headway in exploring export of some new items as ship building. Despite the global meltdown, 2011 was another excellent year for Southeast Bank Limited in handling Export Business experiencing 31% growth.
Year
Export
Volume
in Export
Volume
in
eqvt. US Dollars (in eqvt. Tk (in Million) Million) 2011 2010 2009 928.31 822.02 674.53 75,982.06 58,158.06 46,724.47
58,158.06
Total:
158,078.59
The bank has developed its own ATM network in a limited scale. It also shares the network of DBBL and OMNIBUS. Internet Banking services has already been developed by which clients are getting account information and statements.
The Bank has gone live with BEFTN (Bangladesh Electronic Fund Transfer Network) since February 28, 2011. BEFTN is a faster, safer and a more efficient means of interbank fund transfer. After introducing BEFTN, the Bank has got the capability to offer a wide range of electronic products that helps to improve payment services for its customers. Moreover, BEFTN dramatically lowered the operational cost, reduced risk and increased the efficiency of the overall payment process. The Bank has since been using the BEFTN Channel for disbursement of inward Foreign Remittance and receiving payments against SEBL Visa Credit Card.
The year 2011 was a constructive year for technological growth of the Bank & the Bank has realized its technology with business objectives and brought about changes for greater customer convenience and satisfaction.
Chapter Four:
Financial Statement Analysis of Southeast Bank Limited.
4.02 Three years at a glance of SEBL 4.03 Ratio analysis of SEBL 4.04 SWOT Analysis
From the above table we see that the trend of paid up capital is upward. This upward trend indicates that investors are buying more and more shares at high price.
Investment is also showing an upward trend. This indicates that borrowers of SEBL Bank are taking more loans and the bank is also extending its range of loans. As the export business handled by SEBL Bank is increasing, but import business in 2011 slightly goes down. The growth of operating profit is fairly good than year 2009. From the above table it is very much clear that operating profit of SEBL has been increased at a good rate in 2010. This indicates that the operating efficiency of the bank is increasing at a rapid pace and the bank is able to reduce its operating cost. But in 2011 it fall a bit. Their net profit after tax and provision has been decrease in 2011. But fixed assets increased in a good rate.
Comments: The above figure represents the Return on Assets (ROA) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in highest profitable position. In 2011 the Bank was in lowest profitable position.
2. Return on Equity (ROE): Return on Equity is a measure of the rate of return flowing to shareholders.
20.00% 15.00% 10.00% 5.00%
This ratio tells us the earning power on shareholders book value investment. The ROE of SEBL Bank was high in 2009and 2010 and it reflects the banks acceptance of strong investment opportunity and effective expense management. But in 2011 it fall down, its a negative side for this bank.
3. Profit coverage Ratio: Coverage ratios are designed to relate the financial charges of a firm to its ability to service, or cover, them.
0.7 0.6 0.5 0.4 0.3 0.2 0.1 0 2011 2010 2009
Comment: The profit coverage ratio of SEBL Bank is very low. This low ratio is a danger signal that the bank is using excessive debt and greater the likelihood that the bank could not cover its profit payment without difficulty.
4. Equity Multiplier (EM): This ratio shows a company's total assets per taka of stockholders' equity.
10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2011 2010 2009
Comments: A lower calculated number indicates lower financial leverage and vice versa. We can see that a lower percentage in 2010 and higher in 2009. Generally, a lower equitymultiplier is desired because it means a company is using less debt to fund its assets. 5. Stockholders' Equity Ratio: Relative financial strength and long-run liquidity are approximated with this calculation.
14.00% 12.00% 10.00% 8.00% 6.00% 4.00% 2.00% 0.00% 2011 2010 2009
Comment: A low ratio points to trouble, while a high ratio suggests you will have less difficulty meeting fixed interest charges and maturing debt obligations. SEBL still now a good position on it.
6. Loans to Deposits (LTD): The loan to deposit ratio can be used by investors and internally by the company to determine the financial institutions short term viability.
86.00% 85.00% 84.00% 83.00% 82.00% 81.00% 80.00% 79.00% 78.00% 77.00% 2011 2010 2009
Figure15: LTD
Comments: If the ratio is too high, it means that banks might not have enough liquidity to cover any unforeseen fund requirements; if the ratio is too low, banks may not be earning as much as they could be. In the figure we can see that the bank still now standing on a good position.
7. Return on Deposits (ROD): This ratio shows that, what is the proportion of Net income in against of total deposit.
3.00% 2.50% 2.00% 1.50% 1.00% 0.50% 0.00% 2011 2010 2009
Table 18: R
Comments: The above figure represents the Return on Deposit (ROD) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in most profitable position. In 2011 the Bank was in lowest profitable position.
Figure17: OER
Comments: The above figure represents the Operating expenses to revenue (OER) Ratio of SOUTHEAST Bank Limited & we see that in the year 2010 was in most efficient position. In 2009 & 2011 the Bank was in lowest efficiency position.
9. Loan Ratio (LR): The loan ratio represents that what proportion of loan and advance is provided against of total assets.
70.50% 70.00% 69.50% 69.00% 68.50% 68.00% 67.50% 67.00% 2011 2010 2009
Figure 18: LR
Comments: The above figure represents the Loan Ratio (LR) Ratio of Southeast Bank Limited & we see that in the year 2010 Southeast Bank was in most loan position. In 2011 the Bank was decrease loan position. 10. Earning Per Share (EPS): EPS is the ratio between net profit after tax to number of shares outstanding at the end of the year as shown in balance sheet and its relevant notes to accounts.
Limited & we see that in the year 2010 Southeast Bank was in most earning position. In 2011 the Bank was decrease earning position. SEBL have positive EPS but it is not good enough rather than other bank
Strengths:
Efficient management. Better employee relations. Better location of the branch. Better financial standing. Interesting consumer schemes. Quick delivery of foreign exchange. On line Banking ATM facility Simultaneously Islamic Banking
Opportunities:
Market leadership. Growth of the banking sector. Different consumer service scheme of the SEBL. Make the goodwill. Perform more quickly services. Go beyond the national boundaries. SMS banking.
Weakness:
Conservative loan facility. Profit rate is less than others. Poor EPS. Lack of sufficient own ATM booths.
Threats:
Political instability. Intense competition. Government rules and regulation. Economical variation. Policy of competitive banks.
Chapter Five:
Findings & Conclusion
5.01 Findings
While working at Southeast Bank, Laldighir Paar Branch, I have attained to the newer kind of experience. After collecting and analyzing of data I have got some findings. These findings are completely from my personal point of view. Those are given below:
Southeast Bank Limited has already established a favorable reputation in the banking industry of the country. It is one of the leading private sector commercial banks in Bangladesh. The bank has already shown a tremendous growth the profits and deposits sectors. The bank successfully stepped in to the 17th year of operations having enjoyed the complete confidence of the depositors and achieving significant growth in the entire areas of banking operations. The bank follows the online banking system to provide the customer better services. The consistent and increasing growth trend of the above mentioned performance indicators has increased depositors' confidence as well as good will/reputation of the bank to a great extent and these have contributed to increase the shareholders value. The number of Banks registered shareholders rose to 68,039 on December 2011 from 66,989 of the previous year showing an increasing of 1.7%. SEBLs Net Asset Value Per share is always positive reflecting higher asset compared to liabilities. Loans & Advances portfolio of the Bank stood at Tk. 107,288.56 million as on 31December 2011 compared to Tk. 93,981.20 million as on 31 December 2010 registering a growth of 14.16%. 2011 was an excellent year for Southeast Bank Limited in handling Export Business experiencing 31% growth. Bank proactively diversified its portfolio in assorted sectors, industries & regions to avert high concentration in any specific area. Export oriented garments, textile,
spinning, food & food processing, ship breaking & ship building, ceramics, pharmaceuticals, sugar, chemicals, electrical & electrical & electronics are the industries that took a larger pie of the investment bucket. SME accounted for 13.42% and retail 0.17% of the total loans & advances portfolio. To facilitate SME financing awareness, bank also participated in a good number of fairs & supported a business plan competition arranged by SME foundation. The Banks Human resources Development strategy is to build up quality manpower with conceptual/managerial Knowledge, skills through
designing/arranging of continuous in-house and outside training programs. The company philosophy to workout best solutions for customers and clients as a business and customer friendly Bank. South East bank has an interactive corporate culture the working environment is very friendly, interactive and informal. And there are no hidden barriers or boundaries while communication between die superior and the subordinate. This corporate culture provides as a great motivation factor to the employees. The number of branches of SEBL is also increasing. This increasing number of bank branch indicates that SEBLs geographical coverage is increasing and the bank is expanding its operation.It indicates that asset efficiency of the bank is increasing and assets are utilized in efficient way. To successfully operate SME business, the bank is formulating an SME- specific strategy & implementation plan which will reflect an understanding of the banks goals & aspirations, target market segments, value proposition & competitive advantage, build internal capabilities required to implement, and manage the SME business. An important part of this strategy is to create a bank definition of the SME sector based on the target market segments. In 2011 Bank introduced a new SME definition based on financial limit and also adopted Bangladesh Banks definition based on number of employees & fixed asset. In 2011 Bank introduced SME dedicated desk in each of their branches to ensure dedicated service to SMEs. Other findings regarding financial performances is given in the financial performance analysis chapter as a comment.
5.02 Conclusion
Southeast Bank Limited had some difficulties in the past, but in the last few years, it experienced growth in their operations. The company observes growth in its entire sector. Investment is increasing rapidly and it is getting a good response from the clients in different investment scheme. The Bank was also able to increase its investments significantly, which in turn led to significant investment income for the bank.
Turning on to the financial ratios, it can be observed that most of the ratio indicators are showing a satisfactory performance of the Southeast bank, especially in 2010. The performance of the bank at 2009 & 2010 was indeed good, but in 2011, some had a negative growth rate. This may be due to some reasons which have been described in the earlier sections.
We have seen earlier that SEBL have some positive sides like great customer loyalty, positive EPS during last 3 year, increasing number of shareholders, providing new attractive products & services and so on.
Southeast Bank Limited is making huge contribution to the national economy by investing on different sector. Nevertheless, this Bank is still performing below satisfactory level in some financial aspect. So if Southeast Bank Limited properly takes care of the above mentioned discussed issues, it might help them to improve their financial performance and contribute more to the national economy.
Chapter Six
Recommendations
6.01 Recommendations
Through this study I myself gained some practical knowledge about banking general activities and other related matter. I want to put some suggestion here which I think if followed would definitely help Southeast Bank Ltd.
1) To attract more clients Southeast Bank Ltd. should sought new marketing strategy, which will help to increase market share in the competitive market. 2) Introduction of various incentives to increase remittance. 3) SEBL should have their own ATM booth, which is necessary for giving prompt service to clients. 4) Adding some promotional offers to large balance bearing clients. 5) Bank should grant investment portfolio to new entrepreneurs /new businessmen new companies etc. with trouble-free conditions. 6) They need to promote SEBL massively, which will help them to gain more valuable clients. 7) Effective training is very much essential for the foreign exchange officials & customer relationship officers than others. 8) Computerized Banking system and latest communication devices are the most important elements for the coming year. Online banking is there but still now customer can not do transaction or get access without going to the bank physically. So, they need to modernize on this.
Southeast Bank with its strong corporate image and organization strength can successfully utilize the presented based on the findings.
References
I studied the documents of SJIBL and visited the following websites for gaining necessary information and data that helped me to prepare the report.
Documents:
1. Booklet of Southeast Bank Limited. 2. Supporting documents related to performance measurement.
Websites:
1. www.southeastbank.com.bd/ 2. www.investopedia.com/ 3. www.scribd.com/doc/37981573/Financial-Ratio-Analysis 4. www.sbp.org.pk/departments/stats/FSA-2007-11.pdf 5. www.va-interactive.com/inbusiness/editorial/finance/ibt/ratio_analysis.html 6. www.ledgers.com/guides/Financial%20Ratios.pdf 7. wms-soros.mngt.waikato.ac.nz/NR/Personal/Ed%20Vos/.../chap7p.pd 8. www.rmahq.org/.../Statement%20Studies/2011_12_FRB_Definition
Appendixes
Formulas used in Ratio Analysis 1. Return on Assets = Net income/Total Assets 2. Return on Equity= Net Income/ Share Holders Equity 3. Return on Deposits = Net Income/ Total Deposits 4. Equity Multiplier = Total Assets/ Total Equity 5. Earning Per Share= Earning After Tax/ Number of Share Eligible 6. Operating expenses to revenue= Operating Income/ Operating Expense 7. Loans to Deposits= Total Loan and Advance/ Total Deposits 8. Stockholders' Equity Ratio= Shareholders equity/ Total Assets 9. Loan Ratio= Total Loan And Advance/ Total Assets 10. Profit coverage ratio=Earning Before Tax/ Profit Paid on Deposits, Borrowings