Internship Report

On
Performance Evaluation of Rupali Bank Ltd.
 Internship Report
On
Performance Evaluation of Rupali Bank Ltd.

Supervised By:
Rozina Akter
Assistant Professor
Department Of Business Administration
Faculty of Business and Entrepreneurship
Daffodil International University

Prepared By:
Md. Saroar Karim
ID: 171-11-5358
Program: BBA
Major: Finance
Department Of Business Administration
Faculty of Business and Entrepreneurship

Date of Submission:
 Table of Contents

LETTER OF TRANSMITTAL ..................................................................... ERROR! BOOKMARK NOT DEFINED.

LETTER OF AUTHORIZATION................................................................. ERROR! BOOKMARK NOT DEFINED.
LETTER OF APPROVAL ............................................................................ ERROR! BOOKMARK NOT DEFINED.
ACKNOWLEDGEMENT ............................................................................. ERROR! BOOKMARK NOT DEFINED.
EXECUTIVE SUMMARY ............................................................................ ERROR! BOOKMARK NOT DEFINED.
CHAPTER – 01 ................................................................................................................................................ 5
1. INTRODUCTION ................................................................................................................................................ 6
1.1. BACKGROUND OF THE STUDY ..................................................................................................................... 6
1.2. SCOPE OF THE STUDY .................................................................................................................................. 6
1.3. OBJECTIVES OF THE STUDY ........................................................................................................................ 7
1.4. METHODOLOGY OF THE STUDY .................................................................................................................. 7
1.5. LIMITATION OF THE STUDY ........................................................................................................................ 7
CHAPTER – 02 ................................................................................................................................................ 8
2.1 BACKGROUND HISTORY ............................................................................................................................................. 9
2.2 MISSION, VISION AND VALUES............................................................................................................................. 9
2.3 PRODUCT AND SERVICES ..................................................................................................................................... 9
................................................................................................................................................................................... 9
2.4 ORGANOGRAM ............................................................................................................................................... 10
2.5 CORE VALUES ................................................................................................................................................... 1
CHAPTER – 03 ................................................................................................................................................ 2
3.1 THEORY OF RATIO ........................................................................................................................................ 3
3.1.1 LIQUIDITY RATIO: .................................................................................................................................................. 3
3.1.2 ASSET ACTIVITY RATIO............................................................................................................................................ 4
3.1.3 EFFICIENCY RATIO:................................................................................................................................................. 4
3.1.4 PROFITABILITY RATIO: ............................................................................................................................................ 4
3.1.5 CREDIT RISK RATIO ................................................................................................................................................ 4
3.2 COMMON SIZE ANALYSIS ............................................................................................................................. 5
CHAPTER – 04 ................................................................................................................................................ 6
4.1 RATIO ANALYSIS OF THE BANK .................................................................. ERROR! BOOKMARK NOT DEFINED.
4.1.1 LIQUIDITY RATIO ................................................................................................ ERROR! BOOKMARK NOT DEFINED.
4.1.2 ASSET ACTIVITY RATIO ...................................................................................... ERROR! BOOKMARK NOT DEFINED.
4.1.3 EFFICIENCY RATIO .............................................................................................. ERROR! BOOKMARK NOT DEFINED.
4.1.4 PROFITABILITY RATIO ......................................................................................... ERROR! BOOKMARK NOT DEFINED.
4.1.5 CREDIT RISK RATIO ............................................................................................ ERROR! BOOKMARK NOT DEFINED.
4.1.6 OTHER RATIOS ........................................................................................................ ERROR! BOOKMARK NOT DEFINED.
CHAPTER 5 ........................................................................................................................................................ 13
5.1 MAJOR FINDINGS: ....................................................................................................................................... 14
5.2 RECOMMENDATIONS .................................................................................................................................. 15
5.3 CONCLUSION ............................................................................................................................................... 16
Chapter – 01

Introduction
1. Introduction
Rupali Bank Ltd. was formed by combining 3 (three) former commercial banks, i.e. On March 26,
1972, under the Bangladesh Banks (Nationalization) Order 1972 (P.O. No. 26 of 1972), Muslim
Commercial Bank Ltd., Australasia Bank Ltd. and Regular Bank Ltd. existed in what was then
Pakistan, with all their properties, advantages, rights, powers, authorities, freedoms, liabilities,
borrowings and responsibilities. Until December 13, 1986, Rupali Bank operated as a nationalized
commercial bank. On December 14, 1986, Rupali Bank Ltd. established itself as the nation's
largest public limited banking firm.
On December 14, 1986, Rupali Bank Ltd. established itself as the nation's largest public limited
banking firm. In 1986, the bank was denationalized and reorganized as a limited company with 51
per cent shares owned by the Government of Bangladesh. After the year 2000, however, the
government divested its shares and the privatization of the bank was completed.
A Board of Directors consisting of 10(ten) members, headed by a Chairman, is governed by Rupali
Bank Limited. The Chief Executive Officer & Managing Director, who is a well-known banker
and a respected expert, leads the bank. The bank's head office and its organizational structure are
situated at 34 Dilkusha Commercial District, Dhaka-1000, Bangladesh, the capital's main
commercial hub. With its qualified manpower and largest network of about 517 branches serving
all of Bangladesh's urban and remote rural areas, Rupali Bank Limited extends all major personal
banking facilities and services to its customers. It is linked all over the globe to its foreign
correspondents.
1.1. Background of the study
For all applicants who choose to be a B.B.A graduate, the internship program is a required
prerequisite. In the internship program, I was affiliated with the name RBL of the host company.
This research elaborated on my realistic knowledge in day-to-day banking operations, academic
experience and my internal assistance and my official supervisor under close supervision.
1.2. Scope of the study
The report provides a great deal of insight into Janata Bank Limited's financial results. I reviewed
the financial statements of Janata Bank Limited and several items from this study while I was
working on the annual reports of Janata Bank Limited. It consists of my impressions during the
internship time and on the work experiences. The financial condition and numerous elements of
the company's ratio review are integrated into this article.
1.3. Objectives of the study
The main objective of the report will be to present the financial performance analysis of Rupali
Bank Limited with fulfilling the requirement of BBA program. However, the objective behind this
study is something broader. Objectives of the report are summarized in the following manner-
1. To present an overview of Rupali Bank Limited.
2. To analyze the financial performances of Rupali Bank Limited of different years.
3. To provide recommendations based on the findings of the study.
1.4. Methodology of the study
I have learned many techniques from my study life in the testing process. So, I had the chance to
unite my practical educational skills in this study. I have obtained data from this study from several
outlets. Like the internet, the RBL website, newsletters, etc. So, all is secondary data, no primary
data is collected.
Secondary sources:
• Annual Report of Rupali Bank Limited
• Reported disclosed by Bangladesh Bank.
• Collected many data from Internet.

• RBL official website and Newsletters are major sources for collected data.
1.5. Limitation of the Study
The work is undertaken with the intention of conducting a comprehensive review of procedures
for loans & advancements that have been used by several facilities and encountered some
challenges during my study. These barriers can be defined as a limitation of the research. Those
limits are as follows:
• Limitation of time during duration of internship.
• The knowledge gathered was not sufficient for the analysis.
• Considering the population scale, the sampling size was too short.
• The survey carried out for the study could not reflect the fact that the state of mind of the
respondents and the response to the question could not be rational.
• The organization was unable to view classified information or items.
• As the internship is the first realistic encounter, everything about the bank may not be
understood.
 Chapter – 02

Bank Overview
2.1 Background History
With the merger of 3 (three) former commercial firms, Rupali Bank Ltd. (RBL) was founded. This
means banks, i.e., Muslim Commercial Bank Ltd., Standard Bank Ltd. and Australasia Bank Ltd.
Operated under the Bangladesh Banks in what was then Pakistan on 26 March 1972 Command
1972 (Nationalization) (P.O. NO. 26 of 1972), including all its money, privileges, rights,
Authorities, powers, rights, responsibilities, debts and commitments. Rupali Bank operated in the
same way as Nationalized Exchange Bank until 13 December 1986. Bank of Rupali Ltd. They
have emerged as the country's first public limited banking corporation on December 14, 1986.
2.2 Mission, Vision and Values
Vision
• To emerge as the main financial agency of the country to finance manufacturing ventures
in the private sector and other projects with a significant effect on the economic growth of
the country. Be an influential player in commercial banking by developing innovative
product outlines and offering outstanding customer support.
Our Mission
• Develop long-term relationships that help our customers achieve financial success.
• Offer rewarding opportunities and cultivate staff commitments.
• Uphold ethical values and meet its customer’s financial need in the fastest and most
appropriate way and continue innovate works in order to achieve human resource with
superior qualities, technological infrastructure and service packages.
2.3 Product and Services
2.4 Organogram
2.5 Core Values
• Social responsibility-we care for our families and give to them.
• Performance-we assess and credit successes with outcomes.
• Integrity-we respect commercial integrity and trustworthiness.
• Respect-we treasure every human.
• Innovation-we promote innovation.
• Teamwork-we partner to succeed together.
• The first letters of the initial words form "SPIRIT" and bear equal significance.
 Chapter – 03

Theoretical Background
3.1 Theory of Ratio
The most productive approach to analyze a corporation or company is ratio analysis. Via this, a
business will take the right decision to make an investment. Many financial institutions depend on
it only to make their investments in the profitable market. Through these methods, people will now
decide on their short-term & long-term funding for a day. The outcomes can be so similar to
realistic with Ratio. Only the ratio will, on the basis of rational estimation, express the comparative
effect. Nowadays, there are various kinds of percentages. To get proper analysis of their valued
equilibrium, people build different software. Basically, in the banking industry, percentages are
classified in five forms. Below, these are given: —
I. Liquidity Ratio
II. Asset Activity Ratio
III. Efficiency Ratio
IV. Profitability Ratio
V. Credit Risk Ratio

3.1.1 Liquidity Ratio:

The ratio of liquidity is the ratio by which a company can determine the capacity of the company
to meet the amount of creditor liability. To increase its profitable operations, much of the company
used to take a huge volume of credit from respected lenders. A business needs to measure the cost
of capital against the loan. Since a leveraged enterprise is more beneficial than an unlevered
business. In this situation, a company must retain a liquidity level in order to be mindful of its
obligations to creditors. There are some ratios of liquidity which are given below.
i. Cash Ratio.
ii. Cash to Assets Ratio.
iii. Cash to Deposit Ratio.
iv. Loan to Total deposit ratio.
v. Loan to total assets ratio.
3.1.2 Asset Activity Ratio
In view of cash & time, it modifies the different forms of account in the financial statement. An
organization can calculate the optimal time to make a purchase in cash or credit by this ratio. This
covers two ratios from the viewpoint of the financial industry. These are included below:
I. Fixed Assets Turnover.
II. Total Asset Turnover.
3.1.3 Efficiency Ratio:
Compared to the actual expense, this indicates the rate of return on investment. On the other hand,
when using a 100 percent commodity, it calculates the money made. The larger the ratio shows
the company's improved service. It sometimes guarantees that valued creditors are about to
purchase more common stocks. Some ratios are responsible for generating productivity in a sector,
such as: —
I. Interest Income to Expense ratio.
II. Operating Expense to asset ratio.
III. Operating Income to Asset Ratio.
IV. Operating Expense to Revenue Ratio.
3.1.4 Profitability Ratio:
The ratio calculates the willingness of the company to subtract all expenses in the form of residual
earnings. In terms of its overall operational activities, each organization needs to make the greater
profit. It will demonstrate the potential for an investment to an organization about to take a
decision. New investors for a business may opt to have an investment by the ratio. There are certain
ratios that are known as ratios of profitability. Below are those given:
I. Return on assets.
II. Return on equity.
III. Interest Spread.
IV. Net Interest Margin.
V. Operating Profit Margin.
3.1.5 Credit Risk Ratio
The ratio relates to the possibility of return of loaned money. If the respected debt sum does not
yield interest, it is more likely to default. That will be considered as a non-performing credit by
the end of the day. The equation was used in two ways.
3.2 Common Size Analysis
Popular size or vertical analysis is a way of measuring monetary figures by expressing, in an
economic announcement, each object as a percentage of the base sum over an equivalent span of
time. On the equilibrium sheet or its profits statement, a corporation may use this report. A balance
sheet summarizes the assets of the company (things it owns that have value), the obligations
suggest the sums it owes to others, and its fairness implies that the company is funded by an
investor. A benefit assertion indicates that the profits of the organization means the amount of cash
it earns from marketing its goods and services, and its prices reflect the amount of cash it pays to
gain its income.
 Chapter – 04

Performance Analysis
4.1 Ratio Analysis of the Bank
4.1.1 Current Ratio
Current Ratio
Particulars 2019 2018 2017 2016 2015
Current Ratio 0.75 0.79 0.73 1.46 0.98

Current Ratio
1.6

1.4

1.2

0.8

0.6

0.4

0.2

0
2019 2018 2017 2016 2015

Interpretation:
Current Ratio Refers to the ability to repay its current obligations by its current asset. When current
ratio increases than companies doesn’t increase profitability but increase liquidity. Here 2017 is
the best because the bank invest money another sector. Current ratio is the small than others years
so 2017 is the best.
4.1.2 Return on Assets (ROA)

Particular 2019 2018 2017 2016 2015

Return on Assets (ROA) 0.10% 0.10% 0.20% 0.20% 0.20%

Return on Assets (ROA)

0.003

0.002

0.002

0.001

0.001

0.000
2019 2018 2017 2016 2015

Interpretation:
Return on asset (ROA) refers how effectively the management are using its assets to generate
revenue. The higher return on assets is better, a high return on assets means that the business is
able to utilize its resources well in generating income.
Comparing with five years (2015-2019), 2017,2016 &2015 was better because in that three year
the ROA was 0.20% which is higher than the other years.
4.1.3 Return on Equity (ROE)
Particular 2019 2018 2017 2016 2015
Return on Equity (ROE) 3.30% 2.40% 4.50% 4.60% 5.20%

Return on Equity (ROE)

0.06

0.05

0.04

0.03

0.02

0.01

0
2019 2018 2017 2016 2015

Interpretation:
It is a profitability ratio that refers the ability of a firm to generate profits from its shareholder's
investments in the company. A high rate shows that the company is able to successfully utilize
the resources provided by its equity. Comparing with three years (2015-2019), 2016 was better
because in 2016 the ROE was 4.60% which is higher than the other years.
4.1.4Net Profit Margin
Net Profit Margin
2019 2018 2017 2016 2015
Net Profit Margin 5.00% 3.60% 4.80% 4.30% 4.20%

Net Profit Margin

0.06

0.05

0.04

0.03

0.02

0.01

0
2019 2018 2017 2016 2015

Interpretation:

Net Profit Margin measure how much net income a company makes from its total sales High rate
is better.so 2017 & 2019 is better than other years.

4.1.5 Operating Profit Margin

Operating Profit Margin
2019 2018 2017 2016 2015
Operating Profit Margin 0.175 0.278 0.427 0.545 0.671

Operating Profit Margin

0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
2019 2018 2017 2016 2015
Interpretation:

Operating Profit Margin refers that how much profit a company make after paying for variable
costs of production such as wages costs of production such as wages raw materials etc. Higher one
is better so 2015 & 2015 was good because those are higher.

4.1.6 Net Interest Margin

Net Interest Margin
2019 2018 2017 2016 2015
Net Interest Margin 0 0.006 0.011 0.016 0.021

Net Interest Margin

0.025

0.02

0.015

0.01

0.005

0
2019 2018 2017 2016 2015

Interpretation:
Net interest margin (NIM) is a measurement comparing the net interest income a financial firm
generates from credit products. a positive net interest margin suggests that an entity operates
profitably, while a negative figure implies investment inefficiency. According to bank
performance 2015 was good.
4.1.7 Loan to Deposit Ratio:

Loan to deposit ratio refers the liquidity of a bank by comparing a bank’s total loans to its total
deposit at the same time periods. In the event that the proportion is excessively high, it implies that
the bank might not have enough liquidity to cover any unexpected store prerequisites.
Year Total Loan & Advances Total Deposit Loan to Deposit Ratio
2015 140,915,255,805 253,829,634,016 55.52%
2016 173,939,298,062 279,116,013,508 62.32%
2017 205,835,173,526 319,718,789,701 64.38%
2018 247,114,202,842 389,549,479,401 63.44%
2019 305,732,273,604 414,624,250,170 73.74%

Loan to Deposit Ratio

80.00%

70.00%

60.00%

50.00%

40.00%

30.00%

20.00%

10.00%

0.00%
2015 2016 2017 2018 2019

Interpretation:
Here we see that loan to deposit of RUPALI BANK LIMITED are increasing every year. This is
because of their attractive and flexible loan packages. In 2015 the total loan to deposit ratio was
55.52%. It was increased to 62.32% in 2016. In 2017 it was 64.38% and that is increased 73.74%
in 2019. From the graph it can be seen that total loan to deposit of SEBL are increasing because
of their attractive and flexible loan packages RBL’s deposit also increasing year by year.
 Chapter 5
Findings, Recommendation and Conclusion
5.1 Major Findings:
1. Liquidity ratio indicates the firm’s ability to meet up its immediate demand in cash. Cash
ratio of the bank has been decreasing from 2015 to 2019 that means has facing cash crisis
in 2019.
2. Loan to total asset ratio of the bank in 2015 & 2017 was high that indicates the bank
has loan default risk because the higher the ratio, the lower the liquidity of the bank.
On the other hand, in 2016 it so low. But it has a little fluctuated between 2018 and
2019.
3. Loan to total deposit ratio showing that in 2015 the ratio was 0.08 which is co-putatively
too low than next four years. Al the same times, in 2018 it was 0.99 whereas in 2019 it
was 0.33. It means the bank could not able to make profit as much as it expected.
4. Return on asset showing a diminishing trend 2015 to 2019. Among the rates in 2017 it
was 0.06% which indicates that the bank has got a return of 0.06% by using its 100%
asset. Return on equity of the bank indicating a slum in 2017 and 2018. ROE in 2017
and 2018 were respectively 0.99% and 2.18%.
5. Cost to income ratio showing a negative trend from 2015 to 2019 expect 2016 and 2017.
Cost of deposit of the bank was high in 2015, 2016 and 2017 respectively 6.33%, 6.23%
and 5.57% which was bad compare to last two years.
5.2 Recommendations
1. Cash ratio of the bank has been decreasing from 2015 to 2019 that means facing cash crisis
in 2019. So, the bank should increase its cash ratio to solve liquidity crisis.
2. Loan to asset ratio of the bank in 2015 and 2017 was high that indicates the bank has
loan default risk because the higher the ratio, the lower the liquidity of the bank. In 2016
is very low but it has little fluctuated 2018 & 2019.In that case the bank should decrease
its loan amount with the balance of total asset.
3. Loan to deposit ratio showing that in 2015 the ratio was 0.08 which is comparatively
too low than next four years. At the same time, in 2018 it was 0.99 whereas in 2019
it was 0.33. So, the bank should increase its loan amount as well as deposit to increase
its profit.
4. Return on asset showing a slow positive trend of return from 2015 to 2019. So, the
bank should pace up its productivity. Return on equity showing a low return. So, the
should be careful about it to increase ROA and ROE.
5. Cost to income ratio showing a negative trend from 2015 to 2019 except 2016 and 2017.
Cost of deposit of the bank was high in 2015, 2016 and 2017 respectively 6.33%, 6.23%
and 5.57% which was bad compare to last two years. So, the bank should positive to
make their expense.
5.3 Conclusion
It has a number of routine roles as a commercial bank, such as various commercial banks. Without
those, the financial institution makes a wonderful contribution to preserving the community of
local financial problems worldwide in experienced banking. The clearing housing function on
behalf of the Bangladesh bank is an amazing responsibility that is carried out with the assistance
of the financial institution. The bank is well placed in the market and can balance shareholder
expectations with its core strengths and, as a result, increase its wealth through moral banking and
great pricing in the future. So, the justification for earnings technology such as a private sector
bank is no longer Rupali Bank Limited's remaining intent, but to provide a better product for the
country's economic improvement. In lieu of making an effort to do better in certain variables. From
time to time, Rupali Bank Limited has faced several monetary problems. Some of the issues were
mild terrible loans, credit and advance shortage, adequate deposits, finger money scarcity due to
vault restriction, etc. These challenges are triggered by economic slowdown, interest rate volatility,
rising stock markets, and money market inflation. The helping hand of government is crucial for
this, and it is expected that government will extend its hand to implement the suggestions for the
welfare of Bangladeshi citizens.