Welcome To

The Presentation

PRESENTATION

ON

“Financial Analysis

of

United Commercial Bank

Limited”

Presenting By

Sparkling Starts

NAME ID

Zahid Hasan 121321010162

Rizwan Mahbub Khan 121321010051

INTRODUCTION

Scope of the Study

United Commercial Bank Limited is one of the traditional

banks of Bangladesh. The scope of the study covers the

organizational overview and objectives, and Financial

analysis of the bank. However, the presentation of the five

years at a glance, products and services, total asset

position, total liability & shareholder equity and also

different analysis & comparison are showed to evaluate

the performance of the bank.

Objectives of the Study

Specific Objectives:

To analyze the capacity of United Commercial bank limited to meet

up the short term financial obligation.

To examine debt position of United Commercial bank limited.

To evaluate the profitability and Marketability position of UCBL’s.

To analyze the profitability of UCBL’s within the banking industry.

General Objective:

The prime objective of the financial Performance of United Commercial

bank limited.

Methodology of the Study

Sources of data:

The study had been conducted based on mainly secondary data. Annual

report of UCBL was the major secondary sources in this regard. The data

had been collected for the period of five years from 2010 to 2014. Data of

industry average are collected from annual report of Bangladesh Bank.

The data also collected from website and annual report 2014 of UCBL’s.

Methodology of the Study

Instruments Used for data Analysis

Trend Analysis: Trend analysis is the analysis of firm’s performance over

time using ratios. It is really important to analyze trends in ratios as well

as their absolute levels. This analysis informs us whether a company’s

financial condition improving or deteriorating.

Comparative analysis: Comparative analysis is comparison of banks

performance with the industry average. The study compares the

profitability of the bank with industry average.

Limitation of the Study

To prepare this, we have faced some limitations, which are mentioned

in the follows:

Time Limitation

Lack of experience

Limitation of scope

Inadequate Data

Overview

of United Commercial Bank Ltd.

United Commercial Bank Limited (UCBL) is a First-generation

private commercial bank established in Bangladesh in the year

1983 under the Companies act. Since inception, it has committed

to provide high quality financial services to the people of this

country to accelerate economic development of the nation. As

such, it has been working for stimulating trade and commerce,

accelerating the pace of industrialization, boosting export, creating

employment opportunity, alleviating poverty, raising standard of

the living of the people etc. and thereby contributing to the

sustainable development of the country.

At present the bank has 148 branches in both rural and urban areas

of the country.

History

Vision:

To be the bank of first choice through maximizing value for our clients, shareholders &

employees and contributing to the national economy with social commitments.

Mission:

To offer financial solutions that create, manage and increase our clients’ wealth while

improving the quality of life in the communities we serve.

Corporate Slogan of UCB: “United We Achieve”

Core Values:

We put our customers first

We emphasize on professional ethics

We maintain quality at all levels

We believe in being a responsible corporate citizen

We say what we believe in

We foster participative management

FINANCIAL ANALYSIS

Current ratio

Source: Annual Report of UCBL (2010-2014)

1.05

1.1

1.17

1.21

1.13

0.95

1

1.05

1.1

1.15

1.2

1.25

2010 2011 2012 2013 2014

Current Ratio

Current Ratio

Figure: Current Ratio

Graphical Presentation:

Years 2010 2011 2012 2013 2014

Current

Ratio(%)

1.05 1.10 1.17 1.21 1.13

Debt ratio

Year 2010 2011 2012 2013 2014

Debt ratio(%) 94% 91% 91% 91% 92%

Source: Annual Report of UCBL (2010-2014)

Graphical Presentation:

94%

91% 91% 91%

92%

90%

90%

91%

91%

92%

92%

93%

93%

94%

94%

95%

2010 2011 2012 2013 2014

Debt Ratio

Figure: Debt Ratio

Net Profit Margin

Year 2010 2011 2012 2013 2014

Net profit Margin 28% 32% 16% 25% 24%

Source: Annual Report of UCBL (2010-2014)

28.00%

32.00%

16.00%

25.00% 24.00%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2010 2011 2012 2013 2014

Axis

Tit

le

Net Profit Margin

Net Profit Margin

Graphical presentation:

Figure: Net Profit Margin

Return on Assets

Year 2010 2011 2012 2013 2014

ROA 1.98% 1.97% .84% 1.41% 1.49%

Source: Annual Report of UCBL (2009-2013)

Graphical Presentation:

1.98% 1.97%

0.84%

1.41%1.49%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

2010 2011 2012 2013 2014

ROA( In Percentage)

ROA( In Percentage)

Figure: ROA

Year 2010 2011 2012 2013 2014

ROE 32.28% 24.77% 9.29% 15.85% 17.07%

Return on Equity

Source: Annual Report of UCBL (2010-2014)

Graphical Presentation:

32.28%

24.77%

9.29%

15.85%17.07%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2010 2011 2012 2013 2014

ROE (In Percentage)

ROE(In Percentage)

Figure: Return on Equity

Year 2010 2011 2012 2013 2014

EPS( Taka per share) 7.50 4.05 1.90 3.66 4.39

Earnings Per share (EPS)

Source: Annual report of UCBL (2010-2014)Graphical Presentation:

Figure: Earning per share

7.5

4.05

1.9

3.664.39

0

2

4

6

8

2010 2011 2012 2013 2014

EPS(Per share)

EPS(Per share)

COMPARATIVE ANALYSIS OF UCBL

WITH INDUSTRY AVERAGE

Year UCBL Industry Average

2011 1.97% 1.5%

2012 0.84% .60%

2013 1.41% .90%

2014 1.49% .60%

Return on Assets

Source: Annual report of UCBL, and Bangladesh bank

Graphical Presentation:

Figure: Return on Assets

1.97%

0.84%

1.41% 1.49%1.50%

0.60%0.90%

0.60%

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

2011 2012 2013 2014

Return On Assets

UCBL Industry Average

Year UCBL Industry Average

2011 24.77% 17.00%

2012 9.29% 8.20%

2013 15.85% 11.00%

2014 17.07% 8.40%

Source: Annual report of UCBL, and Bangladesh bank

Return on Equity

Graphical Presentation:

24.77%

9.29%

15.85% 17.07%17.00%

8.20%11.00%

8.40%

0.00%

10.00%

20.00%

30.00%

2011 2012 2013 2014

Return On Equity

UCBL Industry Average

Figure: Return on equity

MAJOR FINDINGS

The current ratio of UCBL’s was upward trend from 2011 to 2013. But it was

decreased to 1.13 in 2014. UCBL maintains Tk. 1.13 current assets against Tk. 1

current liabilities.

Cost to income ratio of UCBL’s was stable position in previous three years. And also

it is standing in a batter position compare to the last 5 years industry average.

We know higher the net profit margin is batter for the firm. UCBL’s NPM was

increasing from 2012 to 2014. In 2014, NPM increased to 24%.

The ROA and ROE of UCBL was fluctuating. However, both of them are

comparatively higher than industry average. So, we can state it as a positive sign of

UCBL to earn profitability.

RECOMMENDATIONS

United Commercial Bank Ltd. is an established privatized bank in our country. This bank is doing

well over years. Based on my three months of internship program, ours recommendations towards the

UCBL’s operations are:

Current ratio of United Commercial Bank Limited is enough to recover its current liabilities. So,

UCBL should keep up this ratio because excess liabilities may affect profitability of the bank.

UCBL’s information system should be developed to deal with its local and international clients

properly.

UCBL should introduce new short term DPS like other banks to increase its deposits.

As cost to income ratio is decreased in 2014, bank should always reduce the operating cost like as

software cost, security cost, and manpower cost etc. to decrease the cost.

UCBL’s should to provide E-banking system to the customer, increase number of ATM Booths &

number of Agri. branches to increase its profitability.

CONCLUSION

Private commercial banks are playing a vital role in the development of our economy.

Government and Bangladesh Bank also play a crucial role in banking sector by regulating

the overall banking systems and setting rules and regulation in the activities of commercial

banks. In recent years of banking sector, UCBL has shown better performance comparing

with other first generation banking.

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