Team name: MoneyMug

Course Code: FIN464

Sec:04
Submitted To:
Mokhdym MorShed (MdM)
Submitted by:
Name Student ID

MD.Shahriar Hossain 1721548030

MD.Sarwar Hossen 1722311630

MD.Tarikuzaman Rony 1711402030

Contents
1 EXECUTIVE SUMMARY .................................................................................................... 3
2 Introduction ......................................................................................................................... 3
3 Methodology ....................................................................................................................... 3
4 Overview of Southeast Bank ............................................................................................... 4
5 LIMITATIONS ..................................................................................................................... 4
6 Findings and Analysis ......................................................................................................... 4
6.1 Profitability Ratio .......................................................................................................... 4
6.2 Liquidity Ratio .............................................................................................................. 6
6.3 Efficiency Ratio ............................................................................................................ 6
6.4 Market Ratio ................................................................................................................ 7
6.5 Financial Risk Ratio ..................................................................................................... 8
6.6 Risk Exposure.............................................................................................................. 8
6.7 Investor's viewpoint ...................................................................................................... 9
6.8 Capital Adequacy ......................................................................................................... 9
6.9 CAMELS Rating ........................................................................................................... 9
7 Conclusions .......................................................................................................................11
1 EXECUTIVE SUMMARY
The sole aim of this project was to find the critical financial ratios and risk factors associated
with Southeast bank and compare their financial results for the years 2017, 2018, 2019, and
2020. We allotted to evaluate southeast bank. The ratios used in this report have been
categorized into eight groups: Liquidity, Financial Leverage, Efficiency, Profitability, Market
Position, Investor's Viewpoint, Risk Exposure, Capital Adequacy, CAMELS Rating. Each group
of ratios provided unique insights into the differences in financial controlling practices between
the two banks in a country, and our analysis revealed that one bank has a better financial
management practice than the other. Initially, all of the essential financial materials from the
four-year annual reports were gathered in our excel file. The ratios were then created in
individual excel sheets in the order specified. As a result, all of the appropriate fields were
measured, displaying the relevant volatility and progress for the bank.

2 Introduction
Following independence, Bangladesh's banking industry began with six nationalized commercial
banks, three state-owned specialty banks, and nine foreign banks. With the entry of private
banks in the 1980s, the banking sector experienced considerable growth. Bangladesh's banking
industry has grown significantly in recent years, contributing significantly to the country's
economy. Even though there is much debate about the current banking system, no one can
deny that it is the lifeblood of Bangladesh's economy.

Bangladesh has a long tradition of banking. Despite the fact that all Bangladeshi banks were
founded after the liberation war in 1971, the banking foundation was established during the
British time. Following the country's independence, a new banking system was developed in
order to reform the economy. However, banking legislation and regulations have evolved over
time to keep up with the modern world.

In this project we will do a time series analysis of Southeast bank over a period starting from
2017 to 2020. Performance analysis will be based on the Liquidity, Financial Leverage,
Efficiency, Profitability, Market Position, Investor’s Viewpoint, Risk Exposure, Capital Adequacy,
CAMELS Rating. The analysis will indicate whether the performance of the bank has been
improving or deteriorating over the last 4 years and we will also reveal the reasons for that as
well.

3 Methodology
The main objective of this analysis is to do a time series analysis from 2017-2020 over
southeast bank limited and find out their performance over the years. Moreover, to find out there
over years performance, we took some secondary data on their website and calculated some of
the ratios like Liquidity ratio, financial leverage, efficiency ratio, profitability ratio, market position.
Investors' viewpoint, risk exposure, Capital Adequacy, and camels rating compare the ratios
over the years.
4 Overview of Southeast Bank
Southeast Bank Limited established in 1995 with the dream and vision of being the country's
largest banking institution and contributing significantly to the country's economic development.
The Bank was founded by leading business figures and eminent industrialists worldwide, each
with a stake in a different economic sector. Mr. Alamgir Kabir, FCA, a certified Chartered
Accountant, is the current Chairman of the Bank.

A dedicated group of professionals manages Southeast Bank. They foster a culture of

confidence and discipline that inspires and motivates everyone in the Bank to collaborate to
achieve the Bank's goals. The Bank's culture of maintaining a pleasant work atmosphere has
also enabled employees to compare themselves to manage expectations better. Their identity is
defined by a dedication to quality and service excellence.

Southeast Bank is proud of its efforts to increase the number of women in the banking sector to
achieve gender equality.

5 LIMITATIONS
We tried to do the project as clean as possible. We worked as a team to complete the project,
and we tried to give all detailed information. The main limitation of the project is the time. It is
not possible to express all information or describe it thoroughly in this short time. Another
limitation is that banks do not provide us all kinds of data, so it is impossible to discuss it without
detailed data.

Finally, because we were working with sample data and did not have access to a lot of the
bank's details, we could not make the intuitive judgments and analyses we had hoped for before
beginning the project.

6 Findings and Analysis

6.1 Profitability Ratio
Profitability ratio
2017 2018 2019 2020
Return on Equity (ROE) 0.0434 0.0875 0.0829 0.0709
Return on Assets (ROA) 0.0033 0.0064 0.0060 0.0045
Net interest margin 0.0118 0.0136 0.0100 0.0052
Net non-interest margin 0.0003 -0.0015 0.0004 0.0014
Net operating margin 0.0121 0.0121 0.0104 0.0066
Earnings Per Share (EPS) 1.0605 2.3289 2.1202 1.7629
Dividend Per Share (DPS) 1.7391 0.0000 0.0000 0.7317
Dividend yield ratio 0.0783 0.0000 0.0000 0.0585
Net profit margin ratio 0.0413 0.0733 0.0696 0.0628

RETURN ON EQUITY (ROE): From the graph and data, we can see that Southeast bank's
highest ROE was 0.0875 in 2018, and the lowest was 0.0434 in 2017. After an increase, the
graph is downward sloping. Over all it is in good form.

RETURN ON ASSETS (ROA): From the graph and data, we can see that Southeast bank's
highest ROA was 0.0064 in 2018, and the lowest was 0.0033 in 2017. After an increase, the
graph is downward sloping.

Net Interest Margin: From the graph and data, we can see that Southeast bank's highest Net
Interest Margin was 0.0136 in 2018, and the lowest was 0.0052 in 2020. After an increase, the
graph is downward sloping which is not good.

Net Non-Interest Margin: From the graph and data, we can see Southeast bank's highest Net
Non-Interest Margin was 0.0014 in 2020, and the lowest was -0.0015 in 2020. After a decrease,
the graph is upward sloping which is good.

Net Operating Margin: From the graph and data, we can see that Southeast bank's highest
Net Operating Margin was 0.0121 in 2017,2018, and the lowest was 0.0066 in 2020. After an
increase, the graph is downward sloping which is not good.

Earnings Per Share: From the graph and data, we can see that Southeast bank's highest
Earnings Per Share was 2.3289 in 2018, and the lowest was 1.0605 in 2017. After an increase,
the graph is downward sloping which is not good for this year but over all it is in good shape.

Dividend Per Share: From the graph and data, we can see that Southeast bank's highest
Dividend Per Share was 1.7391 in 2017, and the lowest was 0.00in 2018. After a decrease, the
graph is upward sloping which is good.

Dividend Yield Ratio: From the graph and data, we can see that Southeast bank's highest
Dividend Per Share was 0.0783 in 2017, and the lowest was 0.00in 2018. After a decrease, the
graph is upward sloping which is good.

Net Profit Margin: From the graph and data, we can see that Southeast bank's highest
Dividend Per Share was 0.0733 in 2018, and the lowest was 0.0413 in 2018. After an increase,
the graph is downward sloping which is not good, but it is quite stable so we consider it is in
good shape.
6.2 Liquidity Ratio
Liquidity ratio
2017 2018 2019 2020

Cash position indicator 0.0849 0.0910 0.0821 0.0606

Liquid securities indicator 0.1780 0.1650 0.1763 0.2025

Capacity ratio 0.6841 0.6959 0.6984 0.6888

Hot money ratio 0.0000 0.4387 3.3100 4.1261

Loan Commitment Ratio 0.4180 0.3818 0.2915 0.2983

Cash position indicator: After analyzing the data and graph, we can say that the highest Cash
position indicator was 0.0910 in 2018, and the lowest is 0.0606 in 2020. The graph was upward
sloping, but it is decreasing yearly, which is a bad indicator. It also means that the bank will
require more liquidity in the future.

Liquid securities indicator: After analyzing the data and graph, we can say that the highest
Liquid securities indicator was 0.2025 in 2020, and the lowest is 0.1650 in 2018. The graph was
downward sloping, but it is increasing yearly, which is a good indicator. It also means that the
bank's liquidity is increasing.

Capacity Ratio: After analyzing the data and graph, we can say that the Capacity Ratio was
0.6984 in 2019, and the lowest is 0.6841 in 2020. The graph was upward sloping, but it
decreased yearly, which is a good indicator.

Loan commitment Ratio: After analyzing the data and graph, we can say that the Capacity
Ratio was 0.4180 in 2017, and the lowest is 0.2915 in 2020. The graph is downward sloping,
and this means the liquidity requirement is going down.

6.3 Efficiency Ratio

Efficiency ratio
2017 2018 2019 2020
Asset’s utilization ratio 0.0798 0.0879 0.0858 0.0717
Tax management efficiency ratio 0.2729 0.5315 0.5760 0.6860
Expense control efficiency ratio 0.1515 0.1379 0.1208 0.0916
Net profit margin ratio 0.0413 0.0733 0.0696 0.0628
Asset Management Efficiency 0.0798 0.0879 0.0858 0.0717
Operating Efficiency Ratio 0.8485 0.8621 0.8792 0.9084
Employee Productivity Ratio 1,515,642 1,652,044 1,516,950 1,068,635

Asset Utilization Ratio: After analyzing the calculation and the graph, we can see that the
highest ratio was 0.0879 in 2018, and the lowest ratio was 0.0717 in 2020. After the increase,
the graph is downward sloping. Their efficiency is increasing throughout the year, but in the last
year, it drops, that's why the ratio is lower in the last year.

Tax Management Efficiency Ratio: After analyzing the calculation and the graph, we can see
that the highest ratio was 0.6860 in 2020, and the lowest ratio was 0.2729 in 2017. The graph is
upward sloping, so we can say that they are efficient in managing the tax.

Expense Control Efficiency Ratio: After analyzing the calculation and the graph, we can see
that the highest ratio was 0.1515 in 2017, and the lowest ratio was 0.0916 in 2020. The graph is
downward sloping that means the expense is going up, and they are not efficiently managing it.

Net profit margin Ratio: After analyzing the calculation and the graph, we can see that the
highest ratio was 0.0733 in 2018, and the lowest ratio was 0.0413 in 2017. It is pretty stable in
the last three years. The reason is that they are efficient in managing the tax, but they are not
efficiently managing the expense.

Asset management efficiency: After analyzing the calculation and the graph, we can see that
the highest ratio was 0.0879 in 2018, and the lowest ratio was 0.0717 in 2020. It is the same as
Asset Utilization Ratio.

Operating efficiency ratio: After analyzing the calculation and the graph, we can see that the
highest ratio was 0.9084 in 2020, and the lowest ratio was 0.8485 in 2018. It is also same as
Expense Control Efficiency Ratio.

Employee productivity ratio: After analyzing the calculation and the graph, we can see that
the highest ratio was 1652044 in 2018, and the lowest ratio was 1068635 in 2020. After the
increase, the graph is downward sloping. It means the productivity drop in the last year.

6.4 Market Ratio

Market ratio (Market Position)
2017 2018 2019 2020
Price earnings ratio (PE) 20.933 6.699 6.320 7.091
Market book ratio 0.909 0.586 0.524 0.502
Price-earnings ratio: After analyzing the calculation and the graph, we can see that the highest
ratio was 20.933 in 2017, and the lowest ratio was 6.320 in 2019. The graph is downward
sloping. The growth potential and investor confidence of the bank decrease in the last three
years. Which is bad for the bank.

Market book Ratio: After analyzing the calculation and the graph, we can see that the highest
ratio was 0.909 in 2017, and the lowest ratio was 0.502 in 2020. The graph is downward
sloping. It means that in the market the share is half the price of the book value. It is very bad.

6.5 Financial Risk Ratio

Financial risk ratio
2017 2018 2019 2020
Debt ratio (leverage ratio) 0.92 0.93 0.93 0.94
Funds Management Efficiency (equity multiplier) 13.16 13.59 13.89 15.72
Times interest earned ratio (interest coverage ratio) 0.31 0.25 0.20 0.15

Debt Ratio (leverage ratio): After analyzing the calculation and the graph, we can see that the
highest ratio was 0.94 in 2020, and the lowest ratio was 0.92 in 2017. The graph is quite stable
but slightly upward sloping. It seems like the bank financed 90% by debt it also means that the
risk of leverage is high.

Equity multiplier Ratio: After analyzing the calculation and the graph, we can see that the
highest ratio was 15.7228 in 2020, and the lowest ratio was 13.1555 in 2017. The graph is
upward sloping. It also means that the bank has used 13-15 times more debt than equity.

Interest coverage Ratio: After analyzing the calculation and the graph, we can see that the
highest ratio was 0.3063 in 2017, and the lowest ratio was 0.1542 in 2020. The graph is upward
sloping. It means that the ability to pay their interest is going down. The ratio is way less than
one, which means that the Financial leverage risk ratio is way more than high.

6.6 Risk Exposure

Risk Exposure
2017 2018 2019 2020
Credit Risk 0.217 0.196 0.160 0.147
Liquidity Risk 0.233 0.225 0.230 0.240

Credit Risk: After analyzing the calculation and the graph, we can see that the highest ratio
was 0.217 in 2017, and the lowest ratio was 0.147 in 2020. The graph is downward sloping. It
means the possibility of paying back the loan is also decreasing.
Liquidity Risk: After analyzing the calculation and the graph, we can see that the highest ratio
was 0.240 in 2020, and the lowest ratio was 0.225 in 2018. The graph is quite stable throughout
the year. It means the Liquidity is also stable.

6.7 Investor's viewpoint

An investment view is an ideal approach to guarantee them to settle on the best choices for
their family or business. A few financial backers may search for "value," which they decide by
looking at an organization's price-earnings ratio (P/E) contrasted with the business standard,
while others may look for a solid, dividend-yielding stock.

From the graph and data, we can see that Southeast bank's highest Dividend Per Share was
0.0783 in 2017, and the lowest was 0.00in 2018. After a decrease, the graph is upward sloping.
Furthermore, their price-earnings ratio is also decreasing over the year. This scenario occurs
because southeast bank's market price per share decreases over the year, but their earnings
per share are comparatively stable over the year. This information helps the investors whether
they should invest in the southeast bank or not.

Obviously, as individuals age or experience other material changes throughout everyday life,
their investment view often changes.

6.8 Capital Adequacy

Capital Adequacy
2017 2018 2019 2020
Capital Adequacy 10.87% 12.47% 11.61% 14.52%

The Basel Agreement sets the minimum capital adequacy 8%. If we look at Southeast bank's
capital adequacy rate, we will be found out that they are maintaining over 10% capital adequacy
over the year. It means that according to Basel Agreement, they have adequate capital.

6.9 CAMELS Rating

Profitability ratio
Rating Weight Weighted Rating
Capital Adequacy 3.0 1.0 3.0
Asset Quality 2.5 2.0 5.0
Management 2.5 1.5 3.75
Earnings 1.0 2.0 2.0
Liquidity 1.0 1.0 1.0
Sensitivity 3.0 1.0 3.0
Total Score 13.0 8.5 17.8
Converted to CAMELS rating (Dividing by 6) 2.17 2.09

According to this rating, it is 2.09, which is satisfactory. We also agree with the rating. We find
some inefficiency, but overall, the bank has managed to maintain good performance. From
capital adequacy to liquidity, it has done good enough.
7 Conclusions
In conclusion, we can say that the performance of the bank pretty satisfactory. Though they lose
the growth potential and investor confidence in recent years, they can move it around in the
future because they have good Capital Adequacy and efficient management.