1.

1 Origin of the Report:

The internship program is an integral part after completion of 4 years of Bachelor of

Business Administration (BBA) program from Dhaka City College under the
curriculum of National University, Bangladesh. As a student of BBA program in
National University, Bangladesh everyone has to submit a report after completion of
internship program. It is a two months program. I have been assigned to Investment
Corporation of Bangladesh to complete the internship program. During my internship
period I joined ICB at Motijheel Head Office. I have prepared this report on the basis
of my practical working experience in ICB. The title of the report is “‘Performance
Evaluation of Investment Corporation of Bangladesh (ICB)”. The report has been
completed under the supervision of my academic supervisor Mr. Sohel Ahmed,
Associate Professor, Department of Business Administration, Dhaka City College.

1.2 Objective of the Report:

The objective of the internship program is to familiarize students with real business
situation, to compare with the business theories and at last stage make a report on assign
task. Primary objectives of this report is to fulfill the requirements of BBA program
containing the completion of internship program and preparation of internship report
accordingly.

Secondary objectives of this report are:

• To know the activities of the Investment Corporation of Bangladesh.

• To know how ICB play an important role in the capital market
• To know the actions of the ICB through direct observation is one of the report's
key goals.
• To learn about ICB's subsidiaries and their performance, to learn about ICB's
performance through various financial ratios, to understand how ICB manages
mutual funds, and to learn about merchant banking.

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1.3 Methodology of the Report:

This report is descriptive in nature. Both qualitative and quantitative approach have
been followed. To accomplish the study and to prepare the report, data have been
collected from both primary and secondary sources which include-

Primary sources:

• Face to face conversation with the officers

• Practical desk work
• Briefing Session
• Practical experience acquires by working in different desks in during internship
session

Secondary sources:

• Annual Report of ICB

• ICB Website
• ICB Ordinance
• Monthly review of DSE & CSE
• Materials & documents of ICB
• Daily Newspapers, journals and books

Data processing and analysis:

Collected information has been processed and complied with the aid of MS word, MS
Excel and others related computer software. Necessary tables, graphs, charts have been
prepared on the basis of collected data and various statistical techniques have been
applied on the basis of classification of information. Different types of analysis (like:
Time Series, Ratio, Horizontal, Vertical and Cross sectional) has been done for
interpreting the result, findings and observations. Finally, some recommendation and
conclusion in according to the findings and observations have been included.

2
1.4 Scope of the Report:

This report covers the roles and activities of the ICB in the economic development of
Bangladesh. In addition to this, an overview of ICB, the product and services offered
by ICB, the performance of ICB and performance of ICB’s subsidiary companies also
covered in this report. Besides working practically with ICB, I have to work with its
subsidiary companies’ activities.

1.5 Limitations of the Report:

Although the internal environment of ICB was much better and the employees were so
much co-operative but like all other field, there were some limitations which I have to
face at the time of my internship and preparing the report. I have worked all the
departments of ICB one after another. But ICB is a large corporation and therefore 2
months internship program is too short to know the activities of ICB and prepare
comprehensive report on Role of the ICB in Development of Capital Market in
Bangladesh. Some other limitations, I have faced are as follow:

• The time limit is insufficient to cover all of the report's components.

• The ICB staff were able to give us a little time when speaking with us because
they were so busy with their tasks.
• ICB doesn’t have own building so ICB has to maintain its department in
different buildings
• Unavailability of relevant papers and documents
• Insufficiency of necessary information
• Internship program pattern was theoretical, so I could not gather practical
knowledge of everyday activities.

3
2.1 Historical Background of ICB:

Investment Corporation of Bangladesh (ICB) is an investment bank that collects funds

from numerous sources and invests these funds in various sectors. It transfers funds
from the surplus to the deficit economic unit. It accepts term deposits and offers a
margin loan as a banking financial institution. As a development financial institution,
it provides term loans to finance the equity gap and provides operating capital. As a
market maker, it issues unit certificates, underwrites securities, and manages securities
issuance. It also creates and administers mutual funds. The Investment Corporation of
Bangladesh was established on October 1, 1976, in accordance with the Investment
Corporation of Bangladesh Ordinance (No. Xl of 1976), to promote and broaden
investment, develop the capital market, stock trading, portfolio management, and run
open-ended and closed ended mutual funds. The establishment of ICB is a crucial step
in a series of steps undertaken by the government in recent years to accelerate the pace
of industrialization. The resurrected ICB has met a long-felt need for institutional
assistance in closing the equity gap faced by industrial enterprises, without which the
private sector's industrialization process would have stalled.

The ICB Act of 2000 increased the scope of ICB's operations by allowing for the
creation and management of subsidiary firms. The capital market should offer a wide
variety and a sufficient number of securities to satisfy the interests of investors of all
stripes. Support from institutions and institutions is required for such capital market
activities. The only entity performing the job of generating demand for securities and,
on the other hand, assuring the supply of securities in the capital markets of Bangladesh
is ICB, the national investment house. The Investment Corporation of Bangladesh Act,
2014 governs how the corporation is now run.

2.2 ICB at a Glance:

Investment Corporation of Bangladesh (ICB) is the only Government owned

investment banking financial institution. ICB was established on October 1, 1976 under
“The Investment Corporation of Bangladesh Ordinance, 1976” (No. XL of 1976) to
encourage and broaden the base of investments, develop the capital market and
mobilize savings. The establishment of ICB is a major step in a series of measures

4
undertaken by the government to accelerate the pace of industrialization and to develop
a well-organized and vibrant capital market. ICB caters to the need of institutional
support to meet equity gap of the industrial enterprise. In view of the national policy of
accelerating the rate of savings and investment to foster self-reliant economy, ICB
assumes an indispensable and pivotal role. Through the enactment of the Investment
Corporation of Bangladesh (Amendment) Act, 2000 (XXIV of 2000), space of ICB's
activities through the formation and operation of subsidiary companies has been
expanded

Investment Corporation of Bangladesh

Date of incorporation October 1, 1976.

Nature: Investment Banking Company

Related Law: Investment Corporation of Bangladesh Ordinance 1976 (No.
XL 1976
Type Statutory corporation Public
Headquarters BDBL Bhaban, 8, Rajuk Avenue, Dhaka, Bangladesh

Services Investment Banking

Wealth Banking
Portfolio Management
Status: Corporation (Listed on the Stock Exchange).

Subsidiaries: ICB Asset Management Company Ltd. (AMCL)

ICB Capital Management Company Ltd. (CML)
ICB Security Trading Company Ltd. (STCL)
Website Icb.gov.bd

Table 2.1: ICB at a glance

5
2.3 Main Objectives of ICB:

• To encourage and broaden the base of investments.

• To develop the capital market.
• To mobilize savings.
• To promote and establish subsidiary for business development.
• To provide for matters ancillary there

2.4 The functions of ICB:

• Direct purchase of shares and debentures including placement and equity

participation
• Participating in and financing of joint-venture companies
• Providing lease finance singly and through syndication
• Managing existing investment account
• Managing Mutual funds and Unit funds
• Managing Portfolios of existing shares
• Conducting computer training programmers
• Providing advance against ICB Unit and Mutual Fund certificate
• To act as Trustee and Custodian
• Providing Bank Guarantee
• Providing Consumer Credit
• Operating on the stock exchanges
• Providing investment counseling to issuers and investors
• Participating in and financing of joint venture project
• Dealing in other matters related to capital market operation
• Introducing new business products suiting market demand
• To supervise and control the activities of the subsidiary companies

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2.5 Business Policy of ICB:

The Corporation has adopted a realistic business policy framework within which its
operation is conducted.

• To act on commercial consideration with due regard to the interest of industry,

commerce, depositors, investors and to the public in general,
• To provide financial assistance to projects subject to their economic and
commercial viability,
• To arrange consortium of financial institutions including Merchant Banks to
provide equity support to projects,
• To develop and encourage entrepreneurs,
• To diversify investments,
• To induce small and medium savers for investment in securities,
• To create employment opportunities,
• To encourage investment in Agro-based and IT sectors.

2.6 Vision of ICB:

Continue to be the leading, responsible and environment friendly financial institution

operating in such a way that fellow competitors and the society watch, acknowledge,
admire and emulate ICB as a successful and model organization in the industry.

2.7 Mission of ICB:

ICB's primary purpose is to develop the corporation into a responsible institution, a

financial architect, an innovative solution supplier, and a performance leader. Another
objective of the corporation is to be a responsible institution established by law and to
work in accordance with the requirements of the ICB's legislation in order to promote
the rapid expansion of Bangladesh's economy.

Another important purpose of the corporation is to become a financial architect and

seek to develop a benchmark of values, attitudes, conduct, and commitments with
sincere efforts in achieving optimum earnings and growth for our shareholders through

7
effective resource utilization. Furthermore, one of the most significant tasks of the ICB
is to be an innovative solution provider, with a focus on developing entire solutions to
encourage the mobilization of all domestic and NRB funds into potential investments.

2.8 Strategic Objectives of ICB:

Priority Strategy:

• Focus on the fulfillment of the country's priorities and objectives and delivery
of a beneficial outcome in the public interest through sustainable development.
• Contribute within the area of professional competence to the sustainable
economic growth of the country, develop the capital market, mobilize savings,
encourage and broaden the base of investments and provide for matters ancillary
thereto.

Financial Strategy:

• Maximize the present value of the stakeholders' wealth in an innovative and

improved manner in terms of accountability, propriety, regularity and value for
money.
• Retain a trade-off between opportunities and responsibilities so as to stay ahead
of competition and provide superior returns on equity by virtue of sustainable
growth.
• Focus on core competence in financial services.

Business Strategy:

• Strive for new business model commensurate with the Government's economic
policy relating to capital market development
• Encourage and motivate the EEF/ESF Project owners to make EEF/ESF Project
a successful venture by generating profit and buy-back the shares on time
• Diverse revenue streams through introducing multiple products.

Customer Strategy:

• Provide available system at their finger-tips to take appropriate investment

decisions.

8
 • Provide real-time data and ledger balances of the stocks and funds position
enabling customers to know their latest positions
• Allow customers access to sophisticated information systems.

ICT Strategy:

• Efficiently deploy advance technology and create a wide, multi-modal network

to serve customers at one stop.

HR Strategy:

• Ensure conducive working environment for employees.

• Attract exceptionally talented, well-educated, highly adaptive and efficient
people.

Risk Strategy:

• Insulate the corporation as far as possible from the risks associated with the
business by creating an environment that help mitigating the risk.

2.9 Core Values of ICB:

The core values which ICB follows while it is operating are very specific and customer
friendly. According to setting up the best service and facing new challenges there are
some core values been set by the ICB are given below:

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2.10 Organizational Structure of ICB:

Figure: 2.2 Organizational Structure of ICB

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2.11 Sources of Capital of ICB:

Every organization collects funds from several sources. It may be internal sources or
externals. In case of Investment Corporation of Bangladesh, it’s main sources of capital
is Paid-up Capital, Reserves, Retained profit. However, the corporation is authorized to
borrow fund from Government and other agencies including International Agencies
both in local and foreign currencies.

2.12 Branches of ICB:

1. Chittagong Branch
2. Rajshahi Branch
3. Khulna Branch
4. Barisal Branch
5. Sylhet Branch
6. Bogura Branch
7. Local Office

2.13 Subsidiaries of ICB:

ICB has three subsidiary firms that conduct business alongside their main company.
These three ICB subsidiaries are listed below: ICB has three subsidiary firms that
conduct business alongside their main company. These three ICB subsidiaries are listed
below:

a. ICB Capital Management Ltd. (ICML):

ICB Capital Management Ltd. is a fully owned subsidiary of Investment Corporation

of Bangladesh. The company obtained license from the Securities and Exchange
Commission to act as Issue Manager, Underwriter and Portfolio Manager and to carry
out other merchant banking operations under the Securities and Exchange Commission
(Merchant Banker and Portfolio Manager) Regulations, 1996. The company was
incorporated under the Companies Act, 1994 on 5 December 2000 and obtained
registration from the Securities & Exchange Commission on 16 October 2001. The
company started its' operation from 01 July, 2002 upon issuance of gazette notification
by the government. The Company has a separate Board of Directors comprising 3

11
members from the private sector having good academic qualification, expertise and
experience in the field of business, finance and investment. The Managing Director of
ICB is the Chairman of the Board. The company has excellent working environment
being equipped with logistics and computer facilities.

b. ICB Asset Management Company Limited (IAMCL):

On July 1, 2002, it began operations to carry out an ICB restructuring project funded
by the ICB and the Asian Development Bank (ADB). The company began with
managing mutual funds and is now a fast expanding Asset Management Company in
Bangladesh. Until June 30, 2022, the business will manage 13 closed-end mutual funds
and 13 open-end mutual funds. As of 30 June 2022, there were 106,247 investors in
IAMCL managed mutual funds.

c. ICB Securities Trading Company Ltd. (ISTCL):

ICB Securities Trading Company Limited began providing brokerage services on

December 5, 2000, shortly after the establishment of the Automated Trading System in
Bangladesh. The government of Bangladesh and the Asian Development Bank also
initiated it for restructuring objectives (ADB). After receiving a license from the
Bangladesh Securities and Exchange Commission, the ISTCL began stock brokerage
operations with Dhaka Stock Exchange Limited on August 13, 2002, and with
Chittagong Stock Exchange Limited on February 7, 2004. (BSEC). Since July 1, 2002,
I have worked as a merchant banker in our country, and it is presently rapidly
expanding. ICML has conducted feasibility analyses on a total of 1190 projects up to
30 June 2022, of which 1020 are agro-based projects and the remaining 170 are ICT-
based initiatives.

2.14 Products & Services of ICB:

Private Equity, Placement of Shares: As part of the business diversification and

encouraging rapid industrialization of the country, the scheme for private equity
participation & placement of shares etc. has been introduced since inception of the
Corporation. ICB invests in different companies through equity participation either
singly or under consortium arrangements with different banks and financial institutions.

12
Margin Loan Accounts: The existing Investment Account holders can avail of margin
loan facilities to purchase securities from both primary and secondary markets as per
BSEC margin rules. Margin loan is provided for purchasing securities with sound
fundamentals and good prospects to reduce the risk of investment as well as to protect
the interest of the investors.

ICB Unit Fund: ICB Unit Fund is the first-ever open-end mutual fund of the country.
The scheme was launched in April 1981, through which the small and medium savers
get opportunity to invest their savings in a balanced and relatively low-risk portfolio.
ICB has so far declared attractive dividends on units every year. During FY 2021-22
this fund declared dividend @ Tk. 42.00 per unit. Investors of Unit Fund enjoy tax
benefits, amount being applicable as per law.

Advance against ICB Unit Fund, IAMCL Unit Fund Certificates etc.: Advance
against ICB Unit/Mutual Fund certificate scheme was introduced in 1998 for the ICB
Unit holders to meet their emergency fund requirements. Presently, ICB provides
advance against the certificates of ICB Unit Fund, Bangladesh Fund, ICB AMCL
Pension holders Unit Fund, ICB AMCL Unit Fund, and ICB AMCL Shotoborsho Unit
Fund etc. One can borrow maximum 80 percent of initial surrender value by depositing
his/her unit certificates under lien arrangement from any of the ICB offices and
authorized banks.

ICB Mutual Funds: ICB has so far floated eight closed-end mutual funds. The First
ICB Mutual Fund was floated on 25 April 1980, while the Eighth ICB Mutual Fund
was floated on 23 July 1996. Investors show overwhelming interest in all the ICB
Mutual Funds. New mutual funds are now being floated through "ICB Asset
Management Company Ltd."- a subsidiary of ICB after corporate restructuring.

Trustee & Custodian Service: ICB acts as trustee and custodian to the mutual funds,
bonds and debentures.

Portfolio Management: Being the largest institutional investor, ICB contributes

significantly to the development of the country’s capital market through active portfolio
management which is one of the important functions of ICB. There are altogether five
portfolios which are being managed by ICB- four are ICB’s own portfolio and the rest
one is ICB Unit Fund. To strengthen the role of ICB for stabilizing the capital market,

13
increased investment has been made in the secondary market in line with the market
demand.

Stock Market Operations: ICB plays an unparalleled role in both the primary and
secondary market which ultimately makes the capital market vibrant. Merchant banking
operations such as portfolio management, fund management, etc. are being provided
uniquely

i) Investment in Preference Shares: Diversified instruments are the strength of ICB’s

investment strategy. Investment in preference shares signifies this position

ii) Debenture Financing ICB: provides debenture finance in potential industries.

iii) Advance against equity: ICB provides Advance against equity in different
projects.

iv) Lease Financing: ICB provides lease finance mainly for procurement of capital
machinery, equipment and transport to the prospective companies. The period of lease,
rentals, charges and other terms & conditions are determined on the basis of assets and
assistance provided as per requirement of the lessee.

v) Investment in Bond: ICB invests in various types of bonds like subordinated and
zero- coupon bonds to diversify its portfolio

Merger & Acquisition: Companies willing to expand their business through mergers
or acquisitions or to divest projects that no longer fit into present scale of operation
contact the ICB. Corporation provides professional advisory services in respect of
shaping up the cost and financial structures to ensure best possible operational results.

Issuing Bank Guarantee: ICB has introduced the Bank Guarantee scheme in 2002-
03. ICB provides (i) Bid bond guarantee for enabling the business people to participate
in any tender or bidding; (ii) Performance bond guarantee for helping the business
community to continue their business smoothly by fulfilling their obligations promised
by them to their clients; (iii) Customs guarantee for solving different disagreements
between the customs authority and the business classes at the initial stage. The limit of
guarantee is issued against at least 20.00 per cent cash and 80.00 per cent easily en-
cashable securities or against 100.00 per cent cash margin.

14
Corporate Financial Advice: ICB and its subsidiary company ICB Capital
management Limited provide professional & financial advices on corporate
restructuring & reengineering to companies of Govt. enterprise those who are intently
to offload shares in the Capital market.

Agent for Divestment of Govt. Shares: ICB is actively associated with the divestment
process of Government shares through the Stock Market. ICB has been entrusted with
the responsibility to offloading Government owned shares of different listed Companies
by selling through stock market.

2.15 SWOT Analysis of ICB:

Strengths:

• ICB Unit Fund more popular for investors, because every year authority
declared handsome dividend for unit holders
• Higher job satisfaction exists among the employer and employee
• Not engaged in unfair business practice. As a result, investors are investing
money in the ICB Unit more safely
• Good co-operation among the officers and executives in the ICB Unit Fund
Department.
• Risk less investment because ICB Unit Fund authority every year declared
handsome dividend

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 • ICB Unit Fund investment processes comparatively easy another institution
Chittagong Stock Exchange

Weaknesses:

• Loan facilities are not sufficient for investors.

• Most of officers are not business graduate and not highly qualified.
• There is information gap between head office Unit Fund Department and
Chittagong Branch office
• Absence of sufficient computer facilities
• Reluctant to Advertisement campaign

Opportunities:

• As the corporate tax is reduced more investor will come to set up new ventures
• Loan facilities can be increased
• ICB can be more reliable towards the public investors
• Capital market can be developed via government

Threats:

• Market competition are increasing day by day as many private companies are
now in the market
• Practicing of corruption in the stock market
• There are many people who have less knowledge about stock market.

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3.1 Debt Ratio:

The debt ratio, also known as the debt-to-asset ratio, calculates the percentage of a
company's total assets that are financed by debt by dividing the total liabilities by the
total assets. Estimated the Investment Corporation of Bangladesh's debt ratio for the
previous 12 years (ICB).

Debt Ratio

14.00 %
12.00 %
10.00 %
8.00 %
6.00 %
4.00 %
2.00 %
0.00 %
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt Ratio 0.05% 7.03% 12.61% 10.89% 7.49% 3.98% 5.17% 3.20% 6.79% 0.60% 4.44% 6.61%

Figure 3.3: Debt Ratio of ICB

The debt ratio of ICB has expanded at a compound annual growth rate of 49.71 percent
during the last 12 years. This is due to incurring a significant amount of long-term debt
from 2011-12 to 2022 in comparison to 2010-11. The debt ratio peaked at 12.61 percent
in 2012-13, increasing the company's financial risk through fixed-interest payments.

3.2 Debt to Equity Ratio:

Analyses the Investment Corporation of Bangladesh's debt-to-equity ratio for the

previous 12 years ICB.

Debt-Equity Ratio

60.00 %
50.00 %
40.00 %
30.00 %
20.00 %
10.00 %
0.00 %
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt-Equity(%) 0.10 16.65 38.32 33.68 19.14 14.18 18.39 14.38 49.76 2.75 20.13 28.44

Figure 3.4: Debt to Equity Ratio of ICB

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The debt-to-equity ratio of ICB has expanded at a compound annual growth rate of
59.50 percent during the last 12 years. This is due to the assumption of long-term debt
from 2011-12 to 2021-22 in comparison to 2010-11. Furthermore, the debt-to-equity
ratio was the highest in the fiscal year 2018-19, at 49.76 percent. In summary, the trends
of debt to equity ratio reveal that ICB's overall debt to equity ratio during the last 12
years was not too high, reflecting the company's low financial risk.

3.3 Interest Coverage Ratio:

The interest coverage ratio compares the operating cash flows generated by a
corporation to its interest payments. The operating profit or EBIT (Earnings before
interest and taxes) is divided by the interest payments to arrive at this ratio. Let us now
look at the Investment Corporation of Bangladesh's Interest Coverage Ratio during the
last 12 years of ICB.

Interest Coverage Ratio

4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Interest Coverage Ratio 4.00 1.64 1.03 0.99 1.13 0.84 1.24 0.89 0.18 0.16 0.61 0.80

Figure 3.5: Interest Coverage of ICB

ICB's Interest Coverage ratio has deteriorated over the previous 12 years with a
compound annual growth rate of -12.57 percent, indicating that the company's interest
payments are not being met by its operational profit on a daily basis. A ratio greater
than one suggests that the company can produce sufficient operating cash flows to cover
its interest payments. We can observe that the company can generate enough operating
cash flows to make its interest payment except for the fiscal years 2013-14, 2015-16,
and 2017-22, which indicate that ICB is unable to generate enough operating cash flows
to meet its interest payment during these years.

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3.4 Debt Service Coverage Ratio:

Over the preceding 12 years, ICB's Interest Coverage ratio has deteriorated with a
compound annual growth rate of -12.57 percent, showing that the company's interest
payments are not being covered by its operational earnings on a daily basis. A ratio
larger than one indicates that the company's operating cash flows are sufficient to meet
its interest payments. Except for the fiscal years 2013-14, 2015-16, and 2017-22, which
suggest that ICB is unable to create enough operational cash flows to meet its interest
payment, we can see that the corporation can generate enough operating cash flows to
meet its interest payment.

Debt Service Coverage Ratio

4.50
4.00
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0.00
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Debt Service Coverage Ratio 3.96 1.65 1.04 1.00 0.81 0.54 1.26 0.61 0.19 0.17 0.63 0.82

Figure: 3.6 Debt Service Coverage Ratio

Over the preceding 12 years, ICB's Interest Coverage ratio has deteriorated with a
compound annual growth rate of -12.57 percent, showing that the company's interest
payments are not being covered by its operational earnings on a daily basis. A ratio
larger than one indicates that the company's operating cash flows are sufficient to meet
its interest payments. Except for the fiscal years 2013-14, 2015-16, and 2017-22, which
suggest that ICB is unable to create enough operational cash flows to meet its interest
payment, we can see that the corporation can generate enough operating cash flows to
meet its interest payment.

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3.5 Return on Assets (ROA):

Return on assets is computed by dividing net income by the total assets of the
organization, and it measures how efficiently a company uses its assets. A high ratio
suggests that the corporation can create earnings efficiently using its assets. We
calculated the Investment Corporation of Bangladesh's Return on Assets (ROA) during
the previous 12 years of ICB.

Figure: 3.7 Return on Assets (ROA)

Return on assets is computed by dividing net income by the total assets of the
organization, and it measures how efficiently a company uses its assets. A high ratio
suggests that the corporation can create earnings efficiently using its assets. We
calculated the Investment Corporation of Bangladesh's Return on Assets (ROA) during
the previous 12 years of ICB.

3.6 Return on Equity (ROE):

This ratio compares the amount of net income allocated to shareholders to the amount
of investment made by shareholders in the firm. It is computed by dividing a company's
net income by its shareholders' equity. Let us now look at the Investment Corporation
of Bangladesh's Return on Equity (ROE) during the last 12 years of ICB.

20
 Figure: 3.8 Return on Equity (ROE)

We can see that ICB's Return on Equity (ROE) has dropped over the previous 12 years,
with a compound annual growth rate of -12.92 percent, indicating that ICB's ability to
generate earnings utilizing its equity capital is deteriorating year by year. Except for
2015-17 and 2019-22, the ROA of ICB is dropping. In 2021-22, the ROA was 3.23
percent or 0.0323, indicating that ICB generates TK 0.0323 in net income for every TK
1 of the company's equity capital.

3.7 Operating Profit Margin:

This ratio shows how much profit a corporation makes after deducting all of its
operating expenses. It is computed by dividing an investment firm's operating profit by
its net revenue. Now, let us look at the Investment Corporation of Bangladesh's
Operating Profit Margin for the last 12 years of ICB.

Figure: 3.9 Operating Profit Margin

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With a compound annual growth rate of -4.98 percent over the past 12 years, we can
see that ICB's operating profit margin has fallen. The ICB's operating profit margin for
the fiscal year 2021–2022 was 46.06 percent, or 0.46062, meaning that the business
made TK. 0.4662 in profit before interest and taxes for each taka of net revenue.

3.8 Pretax Profit Margin:

The pretax Profit Margin ratio indicates how much profit a corporation makes after
deducting all operating and interest costs. It is calculated by dividing a company's net
income by its profit before taxes. Let us now look at the Investment Corporation of
Bangladesh's Pretax Profit Margin during last 12 year in ICB.

Figure: 3.10 Pretax Profit Margin

With a compound annual growth rate of -12.1 percent in this instance, we can see that
ICB's pretax profit margin has dropped over the past 12 years. The ICB's pretax profit
margin for the fiscal year 2021–2022 was 17.87 percent, or 0.1787, meaning that the
business made TK 0.1787 before taxes for every taka of net revenue.

3.9 Net Profit Margin:

The profit margin ratio reveals the amount of profit a business makes after covering all
of its operational, interest, and tax costs. It is computed by dividing the investment

22
company's net profit by its net revenue. Let's now talk about the Net Profit Margin for
the past 12 years of the Investment Corporation of Bangladesh (ICB).

Net Profit Margin

80.00 %
70.00 %
60.00 %
50.00 %
40.00 %
30.00 %
20.00 %
10.00 %
0.00 %
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Net Profit Margin 68.78 50.87 42.75 39.07 44.96 35.76 32.78 27.21 5.09 4.17 7.27 10.24
(%)

Figure: 3.11 Net Profit Margin

With a compound annual growth rate of -14.7 percent in this instance, we can see that
ICB's net profit margin has fallen over the past 12 years. The ICB's net profit margin
for the fiscal year 2021–2022 was 10.24 percent, or 0. 1024, meaning that the business
earned TK 0. 1024 in net income for every taka in net sales.

3.10 Current Ratio:

A liquidity ratio known as the current ratio gauges a company's capacity to cover its
current liabilities with its current assets. If the ratio is greater than 1, it means that there
is no liquidity risk for the company. Let's now review the Current Ratio for the previous
12 years of the Investment Corporation of Bangladesh (ICB).

Current Ratio
6.00
5.00
4.00
3.00
2.00
1.00
0.00 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Current Ratio 5.23 2.80 1.12 0.95 1.25 2.63 2.67 3.56 1.42 0.94 1.87 0.91

Figure: 3.12 Current Ratio

23
The current ratio for ICB has fallen over the past 12 years with a compound annual
growth rate of -13.57 percent, as can be seen in the chart. The ICB's current ratio in the
years 2013–14 and 2019– 20 was 0.95 and 0.94, respectively, which shows that the
company was unable to cover its short-term liability with its current assets. Recently,
the corporation has been keeping more current assets on hand than is necessary to
satisfy its short-term liabilities.

3.11 Book Value Per Share:

The per-share value that is based on a firm's equity capital is referred to as the book
value per share of a company. Let's now talk about the Book Value Per Share during
the past 12 years of the Investment Corporation of Bangladesh (ICB).

Book Value Per Share

80.00
70.00
60.00
50.00
40.00
30.00
20.00
10.00
0.00
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Book Value Per Share 66.83 57.02 50.32 41.22 69.2 59.51 74.39 57.56 56.5 54.53 55.44 56.27

Figure: 3.13 Book Value Per Share

With a compound annual growth rate of -1.42 percent, we can see that ICB's book value
per share has fallen over the past 12 years. Due to ICB's rising equity capital, its BV
per share started to drop precipitously in the years 2013–2014. Over the past 12 years,
the corporation's BV per share has been on the decline.

24
3.12 Earnings Per Share (EPS):

Earnings Per Share (EPS) is the measure of how much of a company's profits are
distributed to its common stockholders. It is derived by dividing the Net Income
accessible to Common Stockholders by the weighted average of Outstanding Shares.
Check out the EPS over the previous 12 years of the Investment Corporation of
Bangladesh (ICB).

EPS

250.00

200.00

150.00

100.00

50.00

0.00
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022

EPS 204.01 109.65 77.95 85.47 6.94 5.24 6.95 6.27 0.78 0.70 1.43 1.79

Figure: 3.14 Earnings Per Share (EPS)

With a compound annual growth rate of -32.61 percent over the past 12 years, we can
see that ICB's EPS has fallen. Due to ICB's rising equity capital, its EPS started to drop
precipitously in the 2014–15 fiscal year. Since the corporation's EPS has been on the
decline for the past 12 years, ICB's ability to earn money per share is also declining.

25
3.13 Dividend:

The dividend trends over the previous 12 years of the Investment Corporation of
Bangladesh (ICB).

Figure: 3.15 Dividend of ICB

We can see that during the past 12 years, ICB's dividend has decreased at a compound
annual growth rate of -12.55 percent. Over the past 12 years, ICB's payout pattern has
fluctuated. In the fiscal years 2010–11 and 2011–12, the company announced a
dividend that was 50% cash and bonus dividend combined.

3.14 Role of ICB in the Capital Market:

Every state-owned Corporation has its objectives, mandates, core functions and
strategies that are time tested, reliable and stable. ICB emerged as a state-owned
Corporation to transform the economy of Bangladesh and develop a new industrial
capacity with the mandates to encourage and broaden the base of investment, develop
the capital market, mobilize savings and provide matters ancillary thereto. From its very
inception, ICB remains engaged with identifying the internal and external factors that
are favorable for achieving its objectives. This enables the organization to grow and
gain strength. ICB has experienced a successful year at a decent pace recovering from
the adverse effect of the pandemic situation of COVID-19, the war between Russia-
Ukraine and numerous domestic and international turmoil.

26
Mandate-1: To Encourage and Broaden the Base of Investment:

i. Creation of Supply of Securities in the Primary Market in the Initial Period: In

order to encourage first-generation private enterprise and investment in the early
seventies and eighties, ICB was virtually the one and only institution to provide
investment-driven institutional support through bridge financing, debenture financing,
share take-up, advance against equity, pre-IPO placement, purchase of bonds and
preference shares and other means to meet equity gap of companies. In the process, the
companies repaid the bridge loan through IPO and bonds through instalments over a
period of 5/10 years. Thus, ICB contributed to increase the supply of securities in the
primary market of the capital market since its inception. One issue needs to be clear to
the concerned stakeholders that ICB does not provide long-term loans directly to any
project. Instead, ICB continues to enrich the supply side of the capital market by
providing institutional support to various non-listed public companies, investing in
convertible securities of various companies and floating profitable mutual funds to
motivate inexperienced small investors to invest in the capital market. ICB invests in
the shares of public limited companies with the targeted goal to bring those companies
to the public through IPO and thus increasing the number of listed securities in the
capital market under the mandate of broadening the base of investment.

Overview of Contribution and Success:

1. The position of Recovery: The significant results of the financial assistance

disbursed in favor of 238 companies in the early 80’s are as follows:

SL No. Particulars Disbursed Amount Recovered Amount

01 Bridge Financing 94.23 199.82
02 Debenture Financing 4.72 22.61

Table: 3.12 The Position of Recovery

27
2. Listing in the Securities Market:

Listed
in
SL No. Particulars Mentionable Companies
Capital
Market
01 Equity finance Apex Food Limited, Ambee Pharmaceuticals
80
against 238 Limited, Aftab Automobiles Limited, Beximco
companies in Pharmaceuticals Limited, GQ Ballpen Limited,
the early 80’s Libra Infusions Limited, Monno Ceramics
Limited, Monno Jute Stafflers Limited, Prime
Textile Mills Limited, Pharma Aids Limited
are mentionable. The remaining 150 companies
have settled the accounts by paying the
principal with interest.
02 Investment in British American Tobacco Limited, Bata Shoe
26
pre-IPO Limited, Berger Paints Limited, ACI Limited,
placement ACI Formulations Limited, ACME
shares laboratories Limited, Aramit Limited, Marico
Limited, Lindebd Limited (formerly
Bangladesh Oxygen Limited), Beacon
Pharmaceuticals Limited, Silva
Pharmaceuticals Limited, BBS Cables Limited,
Bangladesh Submarine Cables Limited, Power
Grid Company Limited, Padma Oil Limited,
Meghna Oil Company Limited, Jamuna Oil
Company Limited, DESCO Limited.

Table: 3.13 Listing in the Securities Market

3. Special Contribution to the Socio-Economic Development of the Country: ICB

has made significant contributions to the country’s infrastructure, power, textiles,
housing and service sectors by investing in a number of reputed companies. Among
them Mayor Md. Hanif Flyover (Gulistan-Jatrabari Flyover), GBB Power Limited,

28
Rajlanka Power Limited, Energies Power Corporation, Universal Medical College
Hospital, JMI Hospital Limited, Sea Pearl Hotel and Resort Limited (Royal Tulip), Best
Holdings Limited, (The La Meridian), Rakeen Development Limited, Regent Spinning
Mills Limited, Orion Power Rupsha Limited, Bashundhara Oil & Gas Company
Limited, Bashundhara Dredging Limited, Dhaka West Power Limited, etc. are
mentionable.

4. The Role of ICB in the Development of the Bond Market: ICB also undertook
activities to develop the Bond market over the past decade. ICB served as the Trustee
and Issue Manager of the largest Islamic bond “IBBL Mudaraba Perpetual Bond” of
Tk. 300.00 crore issued in 2007 in Bangladesh. In recent times, ICB has invested in
subordinated bonds issued by various commercial banks to help them fulfilling the
regulatory capital requirement. For example, investment in The Premier Bank Sub-
Ordinated Bonds, Standard Bank Sub-Ordinated Bonds, Sonali Bank Sub-Ordinated
Bonds, Janata Bank SubOrdinated Bonds, and Agrani Bank Sub-Ordinated Bonds etc.
On the other hand, ICB raised Tk. 1,590.00 crore through issuing Tk. 2,000.00 crore
non-convertible floating rate subordinated bond in FY 2018-19 and invested the
proceeds in the capital market. Recently ICB became the trustee to the Tk. 3,000 crore
Beximco Green-Sukuk al-Istisna’a. Beximco Green-Sukuk Al Istisna’a is the First-ever
Corporate Assetbacked Green Sukuk issued. The bond was approved for listing on 22
December 2021 and started trading on 13 January 2022. Issuance of “ICB 1st Mudaraba
Sukuk” of Tk. 1,000.00 crore to raise long-term fund is also at the final stage now.

ii. Creation of Demand for Securities in the Initial Period: ICB is the pioneer
organization for initiating mutual funds, unit funds, building efficient portfolios for
retail investors and providing margin loans and other financial solutions in Bangladesh.
Therefore, ICB contributed to the creation of demand for securities in the capital
market. ICB has 45 years of extensive experience in Investment Banking,
Underwriting, Issue Management, Stock Market Operations, Investors’ schemes and
Investment Counseling. This has equipped ICB with a deep knowledge of markets,
sentiments that drive them, fundamentals that underlie them and the techniques to deal
with them. Thus, ICB’s contribution by creating demand for securities and the
development of the capital market since its inception has been remarkable.

29
iii. A Trade-off between Money and Capital Market: ICB collects Term Deposits
from the surplus sectors and mobilizes those by making finances and investing in
various financial markets. A small portion of the TDR is invested as FDR in various
banks and NBFIs to maintain adequate liquidity. ICB has earned a significant amount
through FDR since the introduction of the scheme in FY 1997-98 which has helped the
Corporation to reduce the gap between interest income and expenditure. An efficient
Fund Management Committee manages the funds through an effective tradeoff between
Money and Capital Market in light of interest rate movements. Furthermore, those
banks or non-bank financial institutions are licensed from Bangladesh Bank and are
listed on the Stock Exchanges as well. ICB has sufficient capital investment in them as
part of the ownership. ICB has been keeping FDRs with them so that these funds can
be reinvested in the capital market through them and the participation of institutional
investors in the capital market can be significantly increased under the mandate of
broadening the base of investment.

iv. Investment in Mutual Funds to Support Other Institutional Investors and the
Mutual Fund Industry: Institutional investors bring long-term commitment and a
greater focus on fundamentals and hence, stability in the market. An estimate suggests
that the ratio of institutional-to-retail investors is still low in Bangladesh. About 80
percent to 82 percent of transactions in the capital market of Bangladesh are conducted
by individual investors while 15 percent to 20 percent are conducted by institutional
investors and 3 percent by foreign investors. Institutional investors hold around 36.5
percent of the market capitalization. Individual investors and mutual funds hold 48.5
percent and 1.09 percent of the market capitalization, respectively. We do have
institutional investors but the proprietary investment of private institutions is not
significant. BSEC has approved 53 Asset Management companies to increase the
participation of institutional investors and increase the number of mutual funds and
those companies have introduced 34 closed-end and 82 open-end mutual funds in the
market. ICB has made some investments in the initial stage to help the mutual fund
industry and diversify its portfolio as well. If ICB had not invested a portion of its
investable funds, many of those subscriptions would have been cancelled. ICB
undertook these responsibilities under its mandate of broadening the base of
investment.

30
Mandate-2: To Develop the Capital Market:

From the very inception of its establishment, ICB has made every effort to develop and
stabilize the capital market through its active participation in both supply of and demand
for securities for the capital market. It has introduced new products and services,
targeted growth areas and aligned its business strategies with implementation and
achievements. ICB was committed to identifying internal and external factors that are
necessary for achieving its objectives of developing the capital market.

Overview of Contribution and Success:

1. Keeping Supply and Demand Side Activities in the Capital Market: ICB is the
pioneer organization for building efficient portfolios and providing other financial
solutions. As a leading institutional investor, ICB is mostly involved in the trading of
securities through stock exchanges and it has built up 06 (six) strong and diversified
portfolios (including ICB Unit Fund) over the years. The Corporation systematically
buys shares during the bearish period to increase the demand and thus supports the
prices and sells shares in the bullish period to increase the supply so that the prices do
not move abnormally. Too often, the purchases take place at relatively higher prices
and the sales at relatively lower prices. Expert teams manage these portfolios diligently
so that it is balanced and adequately hedged to absorb any share market debacle.

2. Role in the Recovery of the Capital Market after the Upheaval of 1996 and 2010:
During 46 years of operation, ICB has come forward as a responsible and trustworthy
public sector institution that focuses on the fulfilment of the country’s priorities and
objectives and delivery of a beneficial outcome in the public interest. There have been
a lot of talks recently about the declining investment capacity of ICB in this context the
following issues seem to be taken into consideration by the stakeholders. Possibly you
all are aware that ICB’s stock brokerage, mutual fund operations and merchant banking
activities were discontinued under the “Capital Market Development Program
(CMDP)” signed between the Asian Development Bank and the Government of
Bangladesh. As a result, ICB lost its ability to provide market support by mobilizing
savings directly from general investors since 2002. As an alternative measure, ICB has
had to raise funds consistently through the collection of institutional deposits or TDRs
at high-interest rates to continue support to the capital market year after year, the bulk
of which was invested in the capital market. Meanwhile, after the upheaval of 2010, the

31
Capital Market of Bangladesh passed a prolonged bearish trend in the last 10 (ten)
years. During this bearish trend, ICB, the only state-owned investment bank, with its
tireless efforts, has been able to stimulate the market by investing funds raised in
various ways, formulating incentive schemes for small investors and launching various
instruments in the Capital Market. Launch of Tk. 5,000.00 crore specialized open-end
mutual fund “Bangladesh Fund”, approval of waiver facilities under a special scheme
declared by the Government for the protection of interest of small investors in the
capital market, management of Taka 900.00 crore fund established by the Government
for capital market stability and rehabilitation of small investors were some of them. We
strongly believe that these and other steps taken as and when necessary has had a
positive impact in terms of making the stock traders and the investors in the capital
market gradually more confident and giving some momentum.

3. Investing in Capital Market from CMSF Fund: The Capital Market Stabilization
Fund (CMSF) came into operation during FY 2021-22. CMSF was created under
Bangladesh Securities and Exchange Commission (Capital Market Stabilization Fund)
Rules, 2021 (CMSF Rule 2021) by the Bangladesh Securities and Exchange
Commission (BSEC) in exercise of the powers conferred by section 33(1) of the
Securities and Exchange Ordinance, 1969. CMSF acts as a perpetual custodian of
undistributed cash and stock dividend, non-refunded public subscription money and
unallotted rights shares from the issuer of listed securities. Cash and stocks in the fund
will be returned on due claim by the shareholders or investors at any time in the
indefinite perpetuity. The resources from CMSF will be utilized to stabilize the capital
market ensuring liquidity to the market by buying and selling listed securities, making
investments in other securities, providing loans to market intermediaries, lending and
borrowing listed securities and settlement of investors’ claims. The fund is run by a
Board of Governors (BOG) constituted of eleven (11) members. Former Principal
Secretary Mr. Md Nojibur Rahman became the first Chairman. The BSEC has picked
up the idea of injecting the CMSF funds into the capital market to make the latter
buoyant. In pursuance of that aim, the CMSF has provided Tk. 225.00 crore to ICB
during FY 2021-22. So far ICB has invested the total amount it received from CMSF
to support the ailing stock market.

32
Mandate-3: To Mobilize Savings:

i. Introduction of Investors’ Scheme: Under the mandate of mobilizing savings, ICB

launched the Investors’ Scheme for the general investors in 1977. To convert public
savings into collective investment, ICB started providing margin loans using the
customer’s securities in their account as collateral. Considering the investment in the
capital market as an alternative source of income, new investors with marginal savings
used to supply new capital to the market through this scheme. Mainly retired
employees, housewives, government and private officials/employees and a significant
number of expatriate Bangladeshis invested in this scheme, most of whom were small
and medium savers and investors. Following the commencement of business activities
of ICB Capital Management Ltd. on 1 July 2002, ICB stopped opening new accounts
under the Investors’ Scheme. But the scheme is still very popular with the first-
generation investors of ICB as they have benefited greatly from the scheme. To reduce
losses and encourage investors in the interest of the capital market, ICB has provided a
maximum of 100 percent interest rebate facility for investors’ scheme account holders.

ii. Introduction of Mutual Fund Industry in Bangladesh: ICB is the pioneer in

floating closed-end and open-end mutual funds in Bangladesh. On April 25, 1980, the
country’s first mutual fund “First ICB Mutual Fund” was launched. From then until
1996, ICB launched 8 closed-end mutual funds with a total capital of Tk. 17.75 crore.
ICB Unit Fund scheme was launched on 10 April 1981, through which the small and
medium savers got the opportunity to invest their savings in a balanced and relatively
low-risk portfolio. ICB is the only institution, which has been able to pay 1000 percent
dividend in the mutual fund industry in the history of Bangladesh. ICB has converted
the entire 8 (eight) mutual funds from closed-end to open-end with a Net Asset Value
of Tk. 389.97 crore based on the corresponding record dates and handed over to the
management of IAMCL, one of its subsidiaries. It is a matter of pride that ICB has paid
a total of Tk. 246.83 crore as dividend against those 8 (eight) closed-end mutual funds
before conversion. So, the benefit against the entire 8 (eight) mutual funds up to the
period of their conversion stood at Tk. 636.80 crore, which is quite worthy of the
expectation of investors of the country. Capital Market Stabilization Fund (CMSF) and
ICB Asset Management Company Ltd. (IAMCL) jointly floated a closed-end mutual
fund of Tk. 100 crore namely “ICB AMCL CMSF Golden Jubilee Mutual Fund” during
FY 2021-22. The IAMCL is acting as the Asset Manager and the Bangladesh General

33
Insurance Company Ltd. (BGIC) as trustee whereas BRAC Bank Ltd. is acting as
custodian of the fund. Present Scenario of Mutual funds in Bangladesh is shown in the
table.

Mutual Funds Close-Ended Open-Ended Tk. in crore

Mutual Funds in Bangladesh 36 80 16,220.00
ICB and its Subsidiaries 9 16 8,760.00
Other Asset Managers 27 64 7,460.00

Table: 3.14 Mutual Funds in Bangladesh

Mandate-4: To Provide Matters Ancillary Thereto:

i. Acting as a Trustee: ICB acts as a trustee of various mutual funds, bonds, debentures
and securities. ICB was registered as a trustee on 20 August 2002. ICB has been
discharging responsibilities as Trustee to the following funds:

SL No. Particulars Nos Tk. in crore

01 Closed-End Mutual Funds 20 2,969.05
02 Open-End Mutual Funds 45 1,459.58
03 Bonds 03 900.00
04 Beximco Green Sukuk Al Istisna’a 01 3,000.00
Total 69 8,328.63

Table: 3.15 Acting as a Trustee

ii. Acting as a Custodian: ICB acts as a Custodian of various mutual funds, bonds,
debentures and securities. ICB was registered as a custodian on 20 August 2002. ICB
has been discharging responsibilities as Custodian to the following funds:

SL No. Particulars Nos Tk. In crore

01 Closed-End Mutual Funds 21 3,408.70
02 Closed-End Mutual Funds 37 7,047.09
Total 58 10,455.79

Table: 3.16 Acting as a Custodian

34
iii. Act as a Selling Agent of Shares under Direct Listing: Dhaka Electric Supply
Company Limited (DESCO) is the first company, which was listed directly with DSE
& CSE under Direct Listing Regulations, 2006. DESCO started to offload its share
under direct listing from 18 June 2006. Till 30 June 2021, 09 (nine) companies
offloaded their shares under direct listing, in which ICB Securities Trading Company
Limited acted as the proud and successful selling agent.

iv. Act as a Selling Agent for Offloading Government Shares: The government has
decided to offload its holding securities of various companies in the secondary market.
Till 30 June, 2022, the Government offloaded a portion of securities of a number of
companies out of its total holdings through ICB Securities Trading Company Limited
at prevailing market price in the both stock exchanges.

v. Advance Scheme against Unit Fund and Mutual Fund Certificate: Under this
scheme, new capital is invested in the market through extending short-term loans
against ICB Unit Funds / Mutual Funds, ICB AMCL Unit Funds and Bangladesh Fund
Certificates. In FY 2021-22, an advance of Tk. 27.84 crore was provided under this
scheme which was Tk. 17.88 crore in FY 2020-21. As of 30 June 2022, the amount of
cumulative loan disbursement was Tk. 229.77 crore. The net balance of the advance
paid on that date stood at Tk. 51.71 crore. Tk. 206.75 crore has been recovered till 30
June 2022.

vi. Development of Alternative Trading Board/ OTC Market through Active

Participation: Bangladesh Securities and Exchange Commission abolished the over-
the-counter market (OTC) and transferred 41 companies to newly established small
capital platform and alternative trading board (ATB) of the country’s stock exchanges
through the enactment of Bangladesh Securities and Exchange Commission
(Alternative Trading System) Rules, 2019 dated 16 September 2021. Moreover, 29
companies had been delisted from the capital market as per the BSEC’s exit plan
directive dated 28 December 2020. ICB has been playing a leading role in bringing 75
companies listed in the OTC market back to the main market. Many of the private sector
companies were facing multiple problems arising out of the financial crisis,
management synchronizing problems and such others types resulting the companies
ceasing production, keeping the projects/industries closed. ICB stepped forward with a
motive to bring the prospective companies to start production by way of arranging the

35
required fund, and mitigating the management problems through appropriate steps. In
the process, ICB has been actively considering whether it is possible to resume the
production activities of the companies where the net asset value is satisfactory after
properly reviewing the financial condition through refinancing under its existing
mandates and policies. The resumption of production activities of Wata Chemicals
Limited through refinancing by ICB may be considered as an example case in this
regard.

vii. Contribution to Turnover in Stock Markets: The total turnover of the bourses
increased by Tk 64,288.38 crore from Tk. 2,66,388.40 crore in FY 2020-21 to Tk.
3,30,676.78 crore in FY 2021-22, registering an increase of 24.13 percent. During FY
2021-22, the contribution of ICB and its subsidiary companies to the total turnover was
9.93 percent, which was 7.81 percent in the previous year. However, the total trade
volume of ICB’s own portfolio, ICB unit fund portfolio and portfolio of subsidiary
companies in both the stock exchanges stood at Tk. 32,825.40 crore which was 57.86
percent higher than the previous year. The Table-22 shows the comparative position of
transactions made by ICB and its subsidiary companies on DSE and CSE during FY
2021-22 and FY 2020-21:

Dhaka Stock Exchange Ltd. Chittagong Stock Exchange

(DSE) Ltd. (CSE)

Particulars
Change

Change
2021-22 2020-21 2021-22 2020-21
(%)

(%)

Total 3,18,607.02 2 2,54,697.05 25.09 12,069.76 11,691.35 3.24

Turnover
Transactions 32,126.99 19,666.32 63.36 698.52 1,128.24 (38.09)

of ICB and
Subsidiaries
Percentage 10.08 7.72 30.59 5.79 9.65 (40.00)

(%) of total
turnover

Table: 3.17 Transaction of ICB & its Subsidiaries on the Bourses (DSE & CSE)

36
3.15 Subsidiary Companies of ICB:

ICB has 3 subsidiary companies that perform their business activities along with their
parent company. These 3 subsidiary companies of ICB are given below:

1. ICB Capital Management Limited

2. ICB Asset Management Limited
3. ICB Securities Trading Company Limited

1. ICB Capital Management Limited: As a part of the restructuring program of ICB

under Capital Market Development Program (CMDP) initiated by the Government of
Bangladesh and the Asian Development Bank (ADB), ICB Capital Management Ltd.
has been established as a subsidiary of ICB to carry out merchant banking activities
including issue management, underwriting and portfolio management. The Company
was incorporated under the Companies Act, 1994 on 5 December 2000 and registration
from the Securities and Exchange Commission was obtained on 16 October 2001. The
Company started its operation from 01 July 2002 upon issuance of gazette notification
by the Government.

ICML provided advisory & issue management services to 10 (ten) companies involving
total issue size of Tk.1065.26 crore and underwriting commitment of Tk.25.20 crore to
04 (four) companies for IPO, RPO and Rights Issue during the FY 2021-22. Under
investors’ scheme, 26,052 net accounts were operated with a new deposit of Tk.89.55
crore and investment of Tk.1,020.23 crore during the year under review. An amount of
Tk.93.98 crore was invested in both primary and secondary markets in ICML’s own
portfolio. ICML offered rebate facilities to the affected investors under in two phases
during the period under review. In both the phases a total no. of 4,905 accountholders
took the facility against 9,986 no. of short-listed applications where an amount of
interest of Tk. 290.01 crore was waived. According to the financial statements of the
financial year 2021-22, the amount of net profit after tax of ICML stood at Tk. 13.71
crore, the amount of net profit after tax in the same period of the previous financial year
was Tk. 7.53 crore, that is, the net profit of the current financial year has increased by
82.16% compared to the same period of the previous financial year.

37
Financial and operational highlights of last 5 fiscal year are abended below:

Particulars 2021-22 2020-21 2019-20 2018-19 2017-18

Financial performance
01. Total Income 96.29 88.87 39.65 72.03 109.67
02. Net Income 13.71 7.53 (4.52) 4.70 4.28
03.Shareholder’s equity 446.08 437.28 433.15 371.00 371.00
04. Total Assets 898.20 1172.29 1014.96 951.99 951.99
Operational Performance
Issue Management
01. No. of Issue 10 06 08 08 13
02. Issue Size 1065.26 791.00 235.00 1401.10 501.67
Underwriting
03. No. of Issue 04 04 05 05 05
04. U. commitment 25.20 26.90 22.80 57.82 48.32
Trustee & Custodian
05. No. of Issue 04 06 03 04 03
06. issue Size 1325.00 130.00 80.00 730.00 2900.00
Investor’s Scheme
07. No. of Account Open 470 901 287 360 288
08. Deposits Received 89.55 72.15 81.03 53.44 69.66
09.Margin Loan Disbursed 690.61 796.62 329.58 495.63 596.23
10.Recovey Margin Loan 939.94 939.40 385.38 549.68 709.44
Own Portfolio
11.Total Investment 122.43 93.98 65.59 88.16 134.53
12.Profit on Sale MS 28.66 33.56 4.28 13.31 39.27

Table 3.18 Financial Performance of ICML

2. ICB Asset Management Company Limited (IAMCL): It began its operations on

July 1, 2002, to carry out an ICB reform initiative that was instigated by the ICB and
the Asian Development Bank (ADB). The company started off managing mutual funds,
and it is currently operating as a quickly growing asset management company in
Bangladesh. 13 closed-end mutual funds and 13 open-end mutual funds are being

38
managed by the company as of 30 June 2021. As of June 30, 2021, there were 106,247
investors in all of the mutual funds that the IAMCL manages. Let's look at the financial
performance of IAMCL's results during the previous two years:

Change from
Particulars 2021-22 2020-21
previous year
Statement of Comprehensive Income
Operating income 1,075.00 817.51 31.50%
Non-Operating income - - -
Total income 1,075.00 817.51 31.50%
Operating expenses 132.57 118.89 11.50%
Non-Operating expenses - - -
Total Expenses 132.57 118.89 11.50%
Provision 340.09 300.00 13.36%
Net operating profit 602.35 398.62 51.11%
Net profit after taxation 532.10 351.74 50.99%
Statement of Financial Position
Total asset 5,693.75 5,067.72 12.35%
Total equity 4,771.5 4,559.16 4.66%
Share Information
Basic EPS 134.88 89.33 50.99%
Restated EPS 134.88 89.33 50.99%
Diluted EPS 134.88 89.33 50.99%
Rate of Dividend 85% 60% 41.67%
Dividend Amount 334.69 236.25 -
Other Data
Return on Equity 11.38% 7.81% 45.72%
Total Asset under Management 48,050.34 44,466.76 8.06%
Total no of Employee 76 76 0.00%
Net operating profit per employee 6.99 4.63 50.99%

Table 3.19: Financial Performance of IAMCL

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3. ICB Securities Trading Company Limited (ISTCL): On December 5, 2000, ICB
Securities Trading Company Limited launched its brokerage services operation in
Bangladesh, shortly after the country's implementation of the Automated Trading
System. For the objective of restructuring, it was also started by the Bangladeshi
government and the Asian Development Bank (ADB). The ISTCL commenced the
stock brokerage business with the Dhaka Stock Exchange Limited on August 13, 2002,
and the Chittagong Stock Exchange Limited on February 7, 2004, following the receipt
of a license from the Bangladesh Securities and Exchange Commission (BSEC). The
following lists the company's stock brokerage activities throughout the previous two
fiscal years:

Particulars 2017-18 2018-19 2019-20 2020-21 2021-22

Operational Activities
No. of Institutional Clients 261 254 265 270 282
No. of Individual Clients 17330 16834 16771 16112 16294
Transaction of ISTCL DSE 19637.90 14618.71 10293.81 8080.04 19666.3
Transaction of ISTCL CSE 1390.56 860.12 906.53 1584.41 1128.28
ISTCL at DSE & CSE 21028.46 15478.83 11200.34 9664.45 20794.6
Total Turnover of DSE 10.88 9.19 7.05 10.35 7.72
Total Turnover of CSE 11.78 7.83 10.69 29.85 9.65

Table 3.20: Stock Brokerage Functions of ISTCL for the FY 2020-21

3.16 Mutual Funds Management of ICB:

A Mutual Fund makes a certain number of certificates accessible for general public
purchase. Each Mutual Fund maintains the same level of capital and the same number
of certificates. The ICB Mutual Funds are independent of one another. A mutual fund
is traded on the stock exchanges after it is recorded. In stock market citations and
articles, mutual fund authentications are available. Following an initial public offering,
the price of mutual fund declarations is decided on the stock exchanges through the
dissemination of free market activity. For the Investment Corporation of Bangladesh,
mutual funds primarily come in two varieties. Here are some of them:

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Closed-end Mutual Fund: A Close-end Mutual Fund has a fixed time frame, typically
between 5 and 15 years. Only during a specific time period is membership in the reserve
open. These mutual fund types are continuously listed in the stock market for liquidity.
The fact that close-end mutual funds operate more and more like stocks, whose market
value is determined by free market activity for the offering, is an important contrast.

Open-end Mutual Fund: As the year went on, anyone may join an open-end mutual
fund. The primary feature of this mutual fund is that these don't have a set maturity
period. Speculators can profitably buy and sell units at costs proportional to Net Asset
Value (NAV) Liquidity is the main component of open-end plans.

Table: 3.21 Performance of Mutual funds of FY 2021-22 & FY 2020-21

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4.1 Findings:

Investment Corporation of Bangladesh (ICB) employs knowledgeable and qualified

financial professionals to run its business operations on behalf of its clients and other
corporate stakeholders. By offering investors services with the aim of expanding the
base of investment in Bangladesh, this company gained the trust of its clients.
Additionally, ICB is one of Bangladesh's top financial organizations and is doing
exceptionally well in our financial sector. Even if the corporation is doing well in our
nation's financial sector, several aspects of its commercial operations need
improvement. While working with ICB during my internship, I discovered the
following conclusions of ICB from my perspective. The results are as follows:

Due to the company's weak marketing and communication efforts, many Bangladeshis
are unaware of the programmers, goods, and services it offers. By approving money for
entrepreneurs' ideas, ICB consistently aims to encourage business owners to invest in a
range of creative projects. This organization falls short of the other private financial
institutions when it comes to designing the ICB service. The company's capital
adequacy ratio is consistently greater than the required rate, which is a positive sign for
the business.

Additionally, the company's numerous profitability ratios, solvency ratios, liquidity

ratios, coverage ratios, and efficiency ratios are all pretty adequate, which is a positive
sign for the management skills of the business. Overall, the company's information
technology (IT) management is unsatisfactory. This institution, which is a financial
institution, has weak information management and file-keeping practices. Although
various departments are responsible for various firm duties, these various departments
are interdependent on one another. It, in my opinion, makes the company's bureaucratic
issues easier to handle. I discovered that there is a disagreement between the
management and the workers' welfare association on the promotion issue and other
advantages during my internship programmed at ICB.

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4.2 Recommendations:

While pursuing my internship at ICB, I have observed the company's numerous actions.
From my perspective, I offer some suggestions for the development and enhancement
of the business's operations in order to better serve its customers. The following
suggestions are provided:

The ICB must communicate with investors through a variety of methods in order to
inspire small and medium investors. ICB unquestionably has an excellent
infrastructure. However, in order to compete with other financial institutions, ICB must
upgrade its infrastructure and provide additional facilities for its staff and clients in
order to offer better services. The personnel of the company that attract potential
investors should receive reward packages from ICB. Investors in Unit Certificates
should find it simple to secure a bank loan.

Investors desire to put their savings into a variety of securities on the capital market.
However, it was discovered that some investors do not receive their dividends properly,
so the business must pay dividends appropriately. Additionally, ICB's dividend yield is
declining year over year, which discourages some of its equity investors. The business
should boost its dividend distribution percentage to equity investors to compel them.
The management of ICB is tasked with ensuring that management staffs and employees
are more effective and specialized so that ICB's success, which is dependent on
competent and skilled management and staff, can develop.

To provide better and higher-quality services to the company's stakeholders, the

business needs also set up a robust IT and internet system. It appears that ICB is
experiencing a bureaucratic issue that is causing duties to be completed by the company
more slowly. The senior management should therefore take the appropriate actions to
address the corporation's bureaucratic issue in order to provide a smooth working
environment for the organization, which will improve staff productivity and efficiency.
It is important to resolve the disagreement between management and the employees'
welfare association. Because this tension makes it harder for the employees to focus
and work enthusiastically, the company is protected from losing both human capital
and working hours.

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4.3 Conclusion:

As an investment bank that conducts its operations with a view to expanding the base
of investment in Bangladesh, ICB is a distinctive name in our capital market. By
directing investors' tiny resources toward the capital market, ICB is promoting
industrial progress in our nation. Additionally, ICB plays a vital role in fostering
investor confidence in Bangladesh's capital market. The capital market supports a
country's economy by fostering long-term commercial and governmental institution
growth and prosperity. Bangladesh's capital market is crucial to the growth of a robust
and sustainable economy as a growing nation. Additionally, it links various social
groups together so they can trade to meet their requirements. Additionally, the
management of the ICB's mutual funds and portfolio are important activities that are
carried out by the organization and have a substantial impact on our economy. The
mutual fund section is notably inventive, adventurous, and active. Because the majority
of small investors are the mutual fund's most important clients, ICB should continue to
operate and administer the mutual fund. Additionally, the combined performance of
ICB and its 3 subsidiary enterprises is admirable. However, it is concerning to note that
the company's profitability is declining yearly. Despite the company's success in the
financial sector of our nation, there are still certain shortcomings in how the corporation
conducts its business. The company should overcome these shortcomings to broaden
the base of investment of the country, encourage savings as well as helps to the
development of the overall economy of our country. The recommendations that are
given to the report will help the company to improve and enhance its efficiency and
quality that facilitates the corporation to satisfy its different stakeholders. And this will
contribute to the rapid development and stability of our capital market as well as our
economy.

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 Bibliography

Books:

Azam, M. (2013), “Foreign direct investment, financial deepening and economic

growth in Azerbaijan and Kazakhstan: a comparative empirical study”, The Empirical
Economic Letters, Vol. 2 No. 6

Pandey, I. M. (1998), Financial Management

Chattopadhyay, B. and Sarkar, N. (2013). Foreign investment and economic

development in Asia. 4th ed. Bombay: Orient Longman, pp.122-128.

Reports:

ICB Annual Report 2021-22

ICB Annual Report 2020-21

ICB Annual Report 2019-20

ICB Annual Report 2018-19

ICB Annual Report 2017-18

Websites:

www.icb.org.bd

www.dsebd.org

www.icb.gov.bd

http://www.investopedia.com/university/ratios/

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