Ratio analysis ADVANCE TO DEPOSIT RATIO

Formula: Advance/ deposit:vg/

Year %

2007 62.67

2008 63.77

2009 57.90

2010 58.52

2011 49.46

interpretation: Since the computed value of advance to deposit Ratio is showing an increasing trend in FY 2008 then it tends to decrease in FY 2009 and show slight increase in year 2010 but decrease gradually in FY 2011, the over all trend is fluctuating. The factors of this computation are due to increase in total deposits. It is therefore suggested that the bank should review the policies regarding deposits and advances. However, the bank improve its ratio by maintain more advances.

return on equity Formula: Net Income/Stockholder Equity

Year %

2007 20.72

2008 9.19

2009 5.22

2010 4.90

2011 15.33

interpretation: Since the computed value of ROE Ratio is showing a increasing trend in FY 2007. Then it tends to decrease in FY 2008 and showing gradually decreases in FY 2009-10and ibcrease in 2011. The over all trend is decreasing. It is therefore suggested that the bank should maintain its expenses related to deposits and improve its income status by offering more advances to clients.

capital adequacy ratio

Year %

2007 9.48

2008 9.85

2009 12.46

2010 10.53

2011 11.60

interpretation:

Since the computed value of capital adequacy Ratio is showing slightly rend in FY 200708. Then it tends to increase in FY 2009 and showing gradually increases in FY 2010 and increase in 2011. The over all trend is fluctuating. gross spread ratio Formula: Net markup Income/gross markup income

Year %

2007 35.54

2008 33.82

2009 30.67

2010 36.44

2011 42.01

interpretation: Since the computed value of gross spread Ratio is showing a increasing trend in FY 2007. And showing gradually decreases up to the FY 2009 anb slightly increase in 2010-11. The over all trend is increasing. It is therefore suggested that the bank should reduce its interest expenses paid on deposits and increase interest income that is earn on advances.

profit before tax ratio Formula: PBT/Gross markup income:

Year %

2007 17.59

2008 5.80

2009 2.80

2010 3.65

2011 12.27

interpretation: Since the computed value of profit before tax Ratio is showing a increasing trend in FY 2007. It tends to increase in FY 2007 but showing gradually decreases up to the FY 2010 and increase in 2010-11. The over all trend is decreasing. It is therefore suggested that the bank should reduce its tax and other expenses and maintain its operating activities in order to increase its net income. income to expense ratio Formula: Income/Expense:

Year Times

2007 3.84

2008 3.59

2009 3.70

2010 3.31

2011 3.49

interpretation:

Since the computed value of income to expense Ratio is showing a decreasing trend in FY 2008. It tends to decrease up to the FY 2009 but decrease in 2010 showing slightly increases in FY and 2011. The over all trends remain same. It is therefore suggested that the bank should improve its interest income by giving more advances and reducing its interest expense on deposits by opening more currents accounts. basic earning per share Formula: Earning available to common share holder/Total no. of shares

Year Rs.

2007 3.92

2008 1.41

2009 0.71

2010 0.72

2011 2.60

INTERPRETATION Since the computed value of EPS is showing a increasing trend in FY 2007. It tends to increase in FY 2007 but gradually decreases up to FY 2009 and 2010 bt increase in 22011. The over all trends decreasing.

Equity to Assets Ratio Formula: Stockholder Equity/Avg. Total Asset

Year %

2007 4.04

2008 4.55

2009 4.31

2010 5.36

2011 3.27

interpretation: Since the computed value of equity to assets Ratio is showing a increasing trend in FY 2007. It tends to decrease in FY 2008 but showing increases in the FY 2009 but again decrease in FY 2010. The over all trend is fluctuating. It is therefore suggested that the bank should maintain its reserve position and net profit by increasing interest income on advances.

EQUITY TO TOTAL DEPOSIT RATIO Formula: Stockholder equity/Total deposits Year % 2007 4.41 2008 5.04 2009 4.86 2010 6.09 2011 3.81

interpretation: Since the computed value of equity to deposit Ratio is showing an increasing trend up to FY 2008. It tends to decrease in FY 2009 but showing slightly increases in the FY 2010 and decrease in 2011. The over all trend is increasing. It is therefore suggested that the bank should decrease its interest expenses on deposit by opening more currents account than saving accounts.

LAIBILITY TO ASSET RATIO Formula: Total liability/Total assets Year % 2007 95.07 2008 95.12 2009 94.31 2010 94.57 2011 94.49

interpretation:

Since the computed value of liability to assets Ratio is showing a increasing trend up to FY 2008. It tends to decrease in FY 2009 also showing slightly decreases in the FY 2009-10. The over all trend is decreasing. It is therefore suggested that the bank should decrease its interest expenses on deposit by opening more currents account than saving accounts.

DEPOSIT TO LIABILITY RATIO

Formula: Total deposits/Total liabilities Year % 2007 87.37 2008 90.60 2009 88.51 2010 90.96 2011 90.69

interpretation: Since the computed value of deposit to liability Ratio is showing a decreasing trend up to FY 2007. It tends to increase in FY 2008 but again decreases in the FY 2009. And increase in 2010 and decrease in 2010. It is therefore suggested that the bank should decrease its interest expenses on deposit by opening more currents account than saving accounts and giving more advances and maintain more reserve accounts.