Summer Internship Report: by Jamila Rezayee

Summer Internship Report
By Jamila Rezayee
Symbiosis Centre for Management and Human Resource Development
[Constituent of symbiosis International (Deemed University)]
(Established under Section3 of the UGC Act 1956,bynotificationNo.F.9-12/2001– U.3 of the Government
of India)
A Comparative Analysis of Public and Private Sector Banks in Afghanistan.
(2016-2018)
By
Jamila Rezayee
MBA Finance
PRN: 18020341247
Under the Guidance of

Prof Sunit Joshi, Faculty of Finance
In (Partial) Fulfillment
of the requirements for the degree of
Master of Business Administration
June 2019
(2016-2018)
1
(2016-2018)
Acknowledgement
First of all, thanks to the all faculty members and administration of Symbiosis Center for
Management and Human Resource Development (SCMHRD), who providing such chance and a
learning situation to use the theoretical knowledge in practical field in internship course. I
sincerely express gratitude to my project Mentor, Professor Sunit Joshi for his continues
guidance, motivation and constructive criticism. I express lots of thank to Viracould staff who
helped during the period of my internship.
Finally, I would like to thank the respondents for taking out time to be an integral part of this
project and express my appreciation to my family member specially my husband for being silent
supporters of my endeavors.
Sincerely
Jamila Rezayee
2
(2016-2018)
Table of Contents
Abstract .......................................................................................................................................... 6
Industry profile ............................................................................................................................. 7
Research Methodology ................................................................................................................. 8
Objective: ................................................................................................................................... 8
Secondary Research: ................................................................................................................. 8
Method: ...................................................................................................................................... 8
Statistical Technique:................................................................................................................ 8
Sample of Study: ....................................................................................................................... 8
Result and Analyses ...................................................................................................................... 9
Table 1. CAMEL: Aspect and Ratios.......................................................................................... 9
Data Analysis ............................................................................................................................... 10
Capital Adequacy Ratio ............................................................................................................. 10
Table 2. Capital adequacy of banks (Total Equity to Total Asset) ........................................... 11
Figure 1. Average Capital Adequacy of Banks. Total equity to Total Assets .......................... 12
Asset Quality Analysis ................................................................................................................ 13
Table 3. Asset Quality of Banks (Interest Income to Loan & Advance by CAR) .................... 13
3
(2016-2018)
Figure 2. Asset Quality of Banks (Interest Income to Loan & Advance by CAR) ................... 14
Management Soundness Analysis .............................................................................................. 15
Earning Quality Analysis ........................................................................................................... 15
Return on Asset Analysis ........................................................................................................ 15
Table 4 Earning Quality: Return on Asset Ratio (Net Profit after Tax to Total Asset) ............ 16
Figure 3. Earning Quality: Return on Asset Ratio .................................................................... 17
Net Interest Margin ................................................................................................................. 18
Table 5. Earning Quality: Average Net Interest Margin (Net Interest Income to Total Asset) 18
Figure 4. Earning Quality: Net Interest Margin ........................................................................ 19
Return on Investment: ............................................................................................................ 20
Table 6. Earning quality: Av. Return on Investment (Net profit/ Total Equity) ....................... 20
Figure 5. Show Return on Investment ....................................................................................... 21
Finally, positive point goes to public bank sector......................................................................... 21
Liquidity Analysis ....................................................................................................................... 21
Total Customer Deposit to Total Asset: ................................................................................ 22
Table 7. Liquidity Analysis: Total Deposit to Total Asset ....................................................... 22
Figure 6. Indicates Total Deposit from Customer to Total Asset of Banks. ............................. 23
Discussion..................................................................................................................................... 24
Conclusion ................................................................................................................................... 25
4
(2016-2018)
Recommendation......................................................................................................................... 25
Learning during internship........................................................................................................ 26
Limitations: ................................................................................................................................. 27
References .................................................................................................................................... 28
5
(2016-2018)
Abstract
The performance of banking sector is crucial in determining of a country’s economic growth.
Bank is major player in financial sector and economic as a whole. Banks are creator of credit and
mobilizers of savings, which fuel investments and help economy running. If banks don’t perform
well, then the whole economy will face challenges that might have great negative outcome.
This paper is prepared to analyze performance of public banks and private banks in Afghanistan
for the period of 2016-2018. In this paper financial performance of 10 banks was measured,
using the financial audited report.
CAMEL ranking approach is used to examine profitability, liquidity and asset quality of banking
sector. Study found out that Public Sector Banks performed well than private sector banks in
period of 2016-2018. From 6 ratios studied, public sector banks have done well on 4 ratios out of
6, and private sector banks have done well on 2 ratios out of 6.
6
(2016-2018)
Industry profile
Banking system in an economy acts as back-bone and channeling the fund from surplus unit to
deficit unit. Banks have a massive role and importance in economic growth. Commercial banks
in Afghanistan, like other countries are financial entities which activate under law and regulation
of Afghanistan banking. The first commercial bank in Afghanistan was established in 1931,
named Bank –e- Millie Afghan. Central bank of Afghanistan as Da Afghanistan Bank was
established in 1939, and control activity of public and private banks, in addition make banking
policy and regulation. Banking system in Afghanistan changed and reformed several times.
During communist government banking system of Afghanistan accepted Soviet model of
banking, after collapse of communist government and forming Islamic Emarat of Afghanistan
(Taliban Regime), banking system was also disrupted. After establishment of new government
banking system started a new life.
Now, there are 14 active commercial banks in Afghanistan that 3 are public, 8 are private and 3
are foreign commercial banks. Despite corruption in financial sector and lack access of civilian
to banking service, these banks are great contributors to economic development.
In these study, I am going to evaluate the performance of private and public commercial banks in
last three years in Afghanistan.
7
(2016-2018)
Research Methodology
Objective:
The objective of this paper is to analyze financial performance of public and private sector banks
on the base of CAMEL Rating Approach, to help in making investment decisions for public and
private sectors and execution of financial policies by Authorities.
Secondary Research:
This paper is descriptive and analytical study based on secondary data, and data is collected from
audited financial statements of the respected banks from their official websites.
Method:
The method used in this paper is CAMEL Ranking Approach, to analyze financial performance
of different banks, from both state and private banks in Afghanistan. CAMEL approach as a
quantitative technique is popular approach for assessing financial performance of banks among
researchers. And is the latest tool nowadays. CAMEL test is consist of Capital Adequacy, Asset
Quality, Management soundness, Earning Ability and Liquidity.
Statistical Technique:
For numerical data Microsoft Excel was used, charts has been made to show the result
graphically.
Sample of Study:
10 banks are considered as sample for this study that 7 out of 10 is private and rest 3 is public
banks.
8
(2016-2018)
Result and Analyses
CAMEL approach as quantitative financial tool has been used in this paper, to evaluate financial
performance of banks in Afghanistan based on the following aspect and ratios:
Table 1. CAMEL: Aspect and Ratios
Aspect Ratios
Capital Adequacy Equity Capital to Total Asset= Equity Capital/ Total Asset
Asset Quality Interest Income to Loan and Advance * CAR= Interest Income/ Loan &
Advance* CAR
Management Gross Non Performing Asset to Loan – provision= Gross Non

soundness Performing Asset/ Loan –Provision
Return on Asset (ROA)= Net Profit After tax/ Total Asset
Earning
Net Interest Margin= Net Interest Income /Total Asset
Return on Investment= Net Profit/ Total Equity
Liquidity Customer Deposit to Total Asset= Total Deposits/ Total Asset
In this paper average financial ratios are calculated for period of 2016- 2018, to help us compare
financial performance of banks with each other. To compare the average performance of private
9
(2016-2018)
sector banks with public sector banks, mean of each ratio for both public and private banks are
calculated.
Figures and data used in this paper have been gathered from secondary data source, such is
audited financial statements, banks official websites and other secondary sources, which are
published annually and from reliable websites, such as Da Afghanistan Bank, each private and
state bank in Afghanistan.
Data Analysis
Data analysis has been done based on CAMEL Approach. All related ratios have been calculated
for both public and private sector banks except Management Soundness, that unfortunately Gross
Non Performing Assets were not available in Balance Sheets. We have examine 7 private banks
out of 8, and 3 public banks. Arian Bank as a private bank was not considered in this study due
to lack of data related to financial statement to period considered. Maiwand Bank financial
statement for FY 2018 was not accessible. For this bank I studied only two years, FY 2016 and
FY 2017.
Capital Adequacy Ratio
Capital Adequacy Ratio helps the banks to realize capability during risk. Capital Adequacy
protect interest of depositors of a bank. Here Capital Adequacy is calculated by dividing Equity
to Total Assets. And average percentage of public sector banks and average percentage of private
sector banks are compared, to find out which sector is better far in term of CAR.
10
(2016-2018)
Table 2. Capital adequacy of banks (Total Equity to Total Asset)
No Types Banks 2016 2017 2018 Av. Value %

1 Bank -e -Millie Afghan 22.73 19.89 17.33 19.98
Public Bank
2 New Kabul Bank 3.51 5.39 6.83 5.24

3 Pashtany Bank 10.15 9.05 10.37 9.86
Av. CAR for Public
Banks 11.69
4 AIB 6.7 6.31 5 6
5 Azizi Bank 17.15 15.57 14.73 15.82
6 Afghan United Bank 10.15 9.91 10.04 10.15
7 Bakhter Bank 8.55 7.88 7.32 7.92
Private Banks
First Micro Finance

8
Bank 16.66 15.86 16.18 16.23
9 Ghazanfer Bank 14.98 15.98 13.25 14.74
10 Maiwand Bank 4.16 4.85 NA 4.51
Av. CAR for Private
Banks 10.77
11
(2016-2018)
Figure 1. Average Capital Adequacy of Banks. Total Equity to Total Assets
Fluctuations of Capital Adequacy for Banks. 2016-2018

25
20
15
10
0
AIB
Azizi Bank
Bakhter Bank
Ghazanfer bank
Maiwand Bank
Pashtany Bank
Afghan United Bank

New Kabul Bank
Bank -e -Millie Afghan
First Micro Finance Bank
Public Bank Private banks

2016 2017 2018 Avarege
12
(2016-2018)
Table 2 and figure 1 show that on average public sector banks are performing better than private
sector banks. Based on CAR. Bank –e- Millie Afghan is best performer among both public and
private banks. Among private sector banks, First Micro Finance Bank has highest CAR ratio.
Here, Public Sector Banks got a positive point.
Asset Quality Analysis
This ratio helps the bank to identify the risk on the exposure of the debtor.
Table 3. Asset Quality of Banks (Interest Income to Loan & Advance by CAR)
Av. Value
No
Types Bank 2016 2017 2018 %
Public Bank
2 New Kabul Bank N/A N/A N/A 0

3 Pashtany Bank N/A N/A N/A 0
Av. Ratio for Public
Banks 2.23
4 AIB 1.93 2.14 2.23 2.10
5 Azizi Bank 3.28 1.89 2.14 2.44
Private banks
7 Bakhter Bank 0.8 2.48 0.93 1.40

8 First Micro Finance Bank 4.23 4.36 4.9 4.50
9 Ghazanfer bank 2.76 2.66 2.00 2.47
10 Maiwand Bank 0.62 0.57 NA 0.60
Av. Ratio for Private
Banks 2.13
13
(2016-2018)
Figure 2. Asset Quality of Banks (Interest Income to Loan & Advance by CAR)
Asset Quality Fluctuations

9
Ghazanfer bank
AIB
Azizi Bank
Bakhter Bank
Maiwand Bank
Pashtany Bank
Afghan United Bank

New Kabul Bank
Public Bank Private banks

2016 2017 2018 Avarege
14
(2016-2018)
Table 3 and figure 2, Asset Quality Ratio for each bank. It is clear that private banks are
performing much better than public sector. Based on Asset Quality Ratio Private Sector Banks
get a positive point.
Management Soundness Analysis
Gross Non Performing Asset to Loan – provision= Gross Non Performing Asset/ Loan –
Provision.
As mentioned, I was unable to find out Gross Non Performing Assets in Balance Sheets of
Banks. So I can’t analyze Management soundness.
Earning Quality Analysis
This parameter measures financial performance of an organization. And explain profitability and
productivity of a bank. Earning of a bank is indicator of its profitability. There are certain ratios
which are used to examine Earning Quality of a bank. These ratios are: Return on Asset or ROA
(Net Profit after Tax to Total Asset), Net Interest Margin (Net Interest Income to Total Asset)
and Return on Investment (Net Profit/ Total Equity).
Return on Asset Analysis
Return on Asset is a financial Ratio that shows profit of a company with relation to its Total
Asset. Higher the percentage of ROA, higher is the earning quality and higher management
quality. And shows better financial performance.
15
(2016-2018)
Table 4 Earning Quality: Return on Asset Ratio (Net Profit after Tax to Total Asset)
Av. Value
No
Types Bank 2016 2017 2018 %
Public Banks
2 New Kabul Bank 0.21 1.57 1.09 0.96

3 Pashtany Bank 4.03 0.13 1.08 1.75
Av. ROA Ratio for Public
Banks 2.16
4 AIB 0.89 0.59 0.67 0.72
5 Azizi Bank 0.07 0.46 0.41 0.31
6
Private Banks
Afghan United Bank 0.28 0.53 -0.49 0.11

7 Bakhter Bank -0.48 0.46 0.39 0.12
9 Ghazanfer bank 1.36 2.79 1.07 1.74
10 Maiwand Bank -2.88 -1.13 NA -2.01
Av. ROA Ratio for Private
Banks 0.29
16
(2016-2018)
Figure 3. Earning Quality: Return on Asset Ratio
Fluctuation of ROA
10
0
AIB
Azizi Bank
Bakhter Bank
Ghazanfer bank
Maiwand Bank
Pashtany Bank
Afghan United Bank

New Kabul Bank
-2 First Micro Finance Bank
-4
Public Banks Private Banks

2016 2017 2018 Avarege
Table 4 and figure 3 shows that based on ROA Public sector Banks are performing better.
Among private sector banks Ghazanfer Bank is performing well and Maiwand Bank is the
bottom of the rank. In public sector banks again Bank-e- Millie Afghan is doing well. Here,
again a positive point goes to Public Sector banks.
17
(2016-2018)
Net Interest Margin
Net Interest Margin Ratio measure earning quality of a bank. To Calculate Net Interest Margin
Net Interest Income divides by Total Asset.
Table 5. Earning Quality: Average Net Interest Margin (Net Interest Income to Total Asset)
Av. Value
No
Types Bank 2016 2017 2018 %
Public Banks
2 New Kabul Bank 0.44 1.52 0.21 0.72

3 Pashtany Bank 1.97 1.27 0.32 1.19
Av. Ration for Public
Bank 1.42
4 AIB 1.84 1.87 1.8 1.84
5 Azizi Bank 4.25 2.55 2.65 3.15
Private Banks
7 Bakhter Bank 0.67 1.47 0.62 0.92

First Micro Finance
8
Bank 11.2 11.38 11.32 11.30
9 Ghazanfer bank 4.56 4.21 3.75 4.17
10 Maiwand Bank 3.7 2.96 NA 3.33
Av. Ration for Private
Bank 4.18
18
(2016-2018)
Figure 4. Earning Quality: Net Interest Margin
Fluctuation of NIM
12
10
0
AIB
Azizi Bank
Bakhter Bank
Ghazanfer bank
Maiwand Bank
Pashtany Bank
Afghan United Bank

New Kabul Bank

2016 2017 2018 Avarege
Table 5 and figure 4 indicates that private banking sectors perform well than Public banking
sector in term of Net Interest Margin. In Private sector First Micro Finance is the top of ranking.
And private sector banks gets positive point.
19
(2016-2018)
Return on Investment:
This ratio indicates the gain or lose generated by an investment related to money which is
invested.
Table 6. Earning quality: Average Return on Investment (Net profit/ Total Equity)
Av. Value
No
Types Bank 2016 2017 2018 %
Public Banks
2 New Kabul Bank 5.89 29.12 16.03 17.01

3 Pashtany Bank 39.68 1.44 10.38 17.17
Av. ROI for Public
Banks 17.26
4
AIB 13.31 9.31 13.34 11.99
5 Azizi Bank 0.38 2.94 2.81 2.04
6 Afghan United Bank 2.73 5.32 -4.68 1.12
Private Banks
7 Bakhter Bank -5.56 5.8 5.28 1.84

8 First Micro Finance
Bank 6.3 11.61 1.56 6.49
9 Ghazanfer bank 9.09 17.46 8.08 11.54
10 Maiwand Bank -69.18 -23.24 NA -46.21
Av. ROI for Private
Banks -1.60
20
(2016-2018)
Figure 5. Show Return on Investment
Return on Investment fluctuation

60
40
20
Maiwand Bank
AIB
Azizi Bank
Bakhter Bank
Ghazanfer bank
Pashtany Bank
Bank -e -Millie
Afghan United Bank
First Micro Finance

New Kabul Bank
-20
Afghan
Bank
-40
-60
-80
2016 2017 2018 Avarege
Table 6 and figure 5 show average return on Investment for 10 Private and Public banks in
Afghanistan. The result indicates that public banks are performing very well in term of ROI. In
private sector banks, AIB Bank is better than others. And Maiwand Banks is the worst. Finally,
positive point goes to public bank sector.
Liquidity Analysis
This ratio examine the ability of a bank to pay its current liability. Cash and investment is the
most liquid assets of a bank. Liquidity of banks are evaluated through customer deposit to total
asset Ratio.
21
(2016-2018)
Total Customer Deposit to Total Asset:
Another Ratio to help us understand liquidity positions of Banks is Total Customer Deposit to
Total Asset.
Table 7. Liquidity Analysis: Total Deposit to Total Asset
Av. Value
No
Type Bank 2016 2017 2018 %
Public Banks
2 New Kabul Bank 89.2 92.1 89.9 90.40

3 Pashtany Bank 85.29 87.95 88.57 87.27
Av. Ratio for Public
Banks 84.80
4 AIB 92.94 92.33 93.95 93.07
5 Azizi Bank 82.19 83.42 84.74 83.45
6
Afghan United Bank 87.74 87.51 86.65 87.30
Private Banks
7 Bakhter Bank 54.03 83.59 64.02 67.21

9 Ghazanfer bank 83.7 82.96 86.49 84.38
10 Maiwand Bank 95.16 90.85 NA 93.01
Av. Ratio for Private
Banks 81.22
22
(2016-2018)
Figure 6. Indicates Total Deposit from Customer to Total Asset of Banks.
Deposit from Customer to Total Asset Fluctuation

100
90
80
70
60
50
40
30
20
10
0
AIB
Azizi Bank
Bakhter Bank
Ghazanfer bank
Maiwand Bank
Pashtany Bank
Afghan United Bank

New Kabul Bank

2016 2017 2018 Avarege
According to table 7 and figure 6, public Bank is performing well in term of Total Customer
Deposit to Total Asset. Among public banking sector New Kabul Bank and among Private
Banking Sector Afghanistan International Bank (AIB) and Maiwnd Bank are doing well. And
public sector bank receives a positive point.
23
(2016-2018)
Discussion
Banks work in dynamic environment, which are affected by different uncontrollable factors, like
inflation, central banks regulations, economic conditions and many more factors. It is not easy to
measure financial performance of banks in presence of above factors.
This paper has examined the performance of overall 10 banks, 7 private banks and 3 public
banks. For period of last three years, 2016-2018. Banks showed different level of profitability,
liquidity, asset quality and different level of return and risk. The government sector banks
showed highest level of Capital Adequacy Ratio, Return on Asset Ratio, Return on Investment
Ratio, and Liquidity Analysis. On the other hand, private banks showed highest level of Asset
Quality and Net Interest Margin.
Among all public sector banks, Bank –e – Millie Afghan’s activity is convenient. And in private
sector banks, Azizi Bank and Afghanistan International Bank (AIB) is continuously performing
well. First Micro finance also has a considerable activity and is improving continuously.
As a result performance of public sector banks were very well compare to private sector banks in
considered period.
24
(2016-2018)
Conclusion
To enrich the economy of a country, financial sector need to be developed. And in financial
sector, banking system have to be the first priority. Improving financial sector helps to decrease
the risk of failure of an economy.
This study has been conducted to analyze performance of banking both state and private banks in
Afghanistan. Analyzing financial performance of public and private banks help us to understand
which one is performing better and then find solution for low performers.
Based on CAMEL approach it is found that on average public sector banks are performing better
than private sector banks. Based on 6 ratios, which is analyzed in this study, public sector banks
got 4 positive points out of 6, and private sector banks got 2 positive point out of 6. Public sector
banks performed well on Capital Adequacy Ratio, Return on Asset, Return on Investment and
Liquidity Analysis. And private sector banks acted well on Asset Quality and Net Interest
Margin.
Recommendation
1. Study indicated that Asset Quality Ratio, Earning Ability and Liquidity are the key ratios
in financial sectors, so managers are advices to pay attention to mentioned ratios to
improve profitability.
2. Those banks which are identified as weak banks, Da Afghanistan Bank as Central Bank
of Afghanistan need to give attention to controlling them.
3. The weak performer banks need to work harder, to secure their financial healthiness.
25
(2016-2018)
4. Private sector banks should try more, to improve their qualifications and ratios. Besides
their hard working, Da Afghanistan bank also should facilitate environment for them.
Learning during internship
In 2 months period I learnt a lot.
 Learnt about Viracloud Company and over all process: I learnt company background,
start up, what they demand from employee and culture of their work.
 New skills and how to apply them: I learnt how to learn fast, and how to put my
theoretical knowledge in to practice.
 Independence; I learnt to be independent, and do my responsibility as good as possible,
and ask help from colleague, if I face any problem
 Learnt cross functional and team works: staff from IT, Finance Marketing were
constantly working together. I learnt how to work in a team.
 Time management: there are lots of tasks in any organization, so I learnt to manage the
time and do the tasks given to me, in case of work loading I learnt how to priorities them.
 Communication: I learnt how to communicate with staff, customers and shareholders
written and orally.
 Taking constructive criticism; Human is not perfect, everyone does a mistake, so I learnt
how to accept constructive criticism and how to behave with the one who criticize me.
26
(2016-2018)
Limitations:
 Lack of time: because internship period was only 2 months, I could not communicate
with all customers and stock holders.
 One another limitation is fact that it does not include all banks. Arian Bank due to lack of
data is excluded from private sector banks.
 Lack of data: some crucial information was not available, financial statement of Maiwand
bank for FY 2018 is not involved. One important ratio- Management Soundness, is not
calculated due to absence of Gross Non Performing Assets from Balance Sheets.
27
(2016-2018)
References
1. Afghan United Bank, Financial Statements, https://www.afghanunitedbank.com/about-
us/financialstatements/. Accessed on January 2019.
2. Afghanistan International Bank, AIB Annual Report, https://www.aib.af/. Accessed on
January 2019
3. Azizi Bank, Financials, https://www.azizibank.af/. Accessed on January 2019.
4. Bank-e-Millie Afghan, Financial Statement, http://www.bma.com.af/about-bma?id=4.
Accessed on January 2019.
5. https://pashtanybank.com.af/
6. http://ibafg.com/home
7. First Micro Finance Bank, Financials, http://fmfb.com.af/. Accessed on January 2019.
8. Ghazanfar Bank, Financials, https://www.ghazanfarbank.com/#. Accessed on January
2019.
9. Maiwand Bank, Financials, http://www.maiwandbank.com/EN/index.php#. Accessed
on Janaury 2019.
10. New Kabul Bank, Annual statements, http://newkabulbank.af/annual-statement.php.
Accessed on January 2019.
28

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Summer Internship Report

A Comparative Analysis of Public and Private Sector Banks in Afghanistan.

Under the Guidance of

helped during the period of my internship.

Industry profile ............................................................................................................................. 7

Research Methodology ................................................................................................................. 8

Secondary Research: ................................................................................................................. 8

Sample of Study: ....................................................................................................................... 8

Result and Analyses ...................................................................................................................... 9

Table 1. CAMEL: Aspect and Ratios.......................................................................................... 9

Data Analysis ............................................................................................................................... 10

Capital Adequacy Ratio ............................................................................................................. 10

Table 2. Capital adequacy of banks (Total Equity to Total Asset) ........................................... 11

Asset Quality Analysis ................................................................................................................ 13

Management Soundness Analysis .............................................................................................. 15

Earning Quality Analysis ........................................................................................................... 15

Return on Asset Analysis ........................................................................................................ 15

Figure 3. Earning Quality: Return on Asset Ratio .................................................................... 17

Net Interest Margin ................................................................................................................. 18

Figure 4. Earning Quality: Net Interest Margin ........................................................................ 19

Return on Investment: ............................................................................................................ 20

Figure 5. Show Return on Investment ....................................................................................... 21

Finally, positive point goes to public bank sector......................................................................... 21

Liquidity Analysis ....................................................................................................................... 21

Total Customer Deposit to Total Asset: ................................................................................ 22

Table 7. Liquidity Analysis: Total Deposit to Total Asset ....................................................... 22

Learning during internship........................................................................................................ 26

The performance of banking sector is crucial in determining of a country’s economic growth.

using the financial audited report.

6, and private sector banks have done well on 2 ratios out of 6.

During communist government banking system of Afghanistan accepted Soviet model of

banking system started a new life.

to banking service, these banks are great contributors to economic development.

last three years in Afghanistan.

private sectors and execution of financial policies by Authorities.

Quality, Management soundness, Earning Ability and Liquidity.

Result and Analyses

performance of banks in Afghanistan based on the following aspect and ratios:

Table 1. CAMEL: Aspect and Ratios

Management Gross Non Performing Asset to Loan – provision= Gross Non

Return on Asset (ROA)= Net Profit After tax/ Total Asset

Return on Investment= Net Profit/ Total Equity

Liquidity Customer Deposit to Total Asset= Total Deposits/ Total Asset

state bank in Afghanistan.

Capital Adequacy Ratio

Table 2. Capital adequacy of banks (Total Equity to Total Asset)

No Types Banks 2016 2017 2018 Av. Value %

2 New Kabul Bank 3.51 5.39 6.83 5.24

First Micro Finance

Figure 1. Average Capital Adequacy of Banks. Total Equity to Total Assets

Fluctuations of Capital Adequacy for Banks. 2016-2018

Afghan United Bank

First Micro Finance Bank

Public Bank Private banks

Here, Public Sector Banks got a positive point.

Asset Quality Analysis

2 New Kabul Bank N/A N/A N/A 0

7 Bakhter Bank 0.8 2.48 0.93 1.40

Asset Quality Fluctuations

Afghan United Bank

First Micro Finance Bank

Public Bank Private banks