Internship Report

On
“Analysis of General Banking activities and Financial
Performance of Social Islami Bank PLC”

By
Anisul Islam Rohit
Reg: 20102004

An internship report submitted in partial fulfilment of the

requirements for the degree of Bachelor of Business
Administration

Department of Business Administration

University of Asia Pacific (UAP)

Date: 25th June 2025

 APPROVAL PAGE

The internship report of Anisul Islam Rohit (20102004) has been approved by the following:

……………………………………………….

Supervisor

…………………………………………………

Examiner

…………………………………………………..

Convener, Internship Committee

………………………………………………….

Head of the Department

ii
 DECLARATION

I do hereby declare that this report is the result of my own research, except were otherwise

stated. I also declare that it has not been previously or concurrently submitted as a whole for

any other degrees at University of Asia Pacific (UAP) or at any other institution.

Anisul Islam Rohit

Registration: 20102004

Date............................ Signature.........................................

iii
 Acknowledgment

First, I would like to pay my humble gratitude to Almighty Allah, and my family for giving me

the support to complete the internship report within the given time. It is a pleasure to have been

assigned under the guidance and supervision of Professor Dr. Nazma Begum, Department of

Business Administration, University of Asia Pacific, because of whom the report was made

possible. I cordially appreciate her valuable support in the preparation of the respective

internship report in a well-organized manner. Moreover, I would like to recognize Ms. Jafrin

Khandker Madam, Manager of Social Islami Bank, Mohammadpur branch, for giving me the

internship opportunity to gain credibility and Tasmia Mahmud Lia, Junior Officer, Social Islami

Bank of the same branch for hands-on knowledge and in-depth experience from his team during

my internship tenure. I will always cherish the unconditional mentoring support and opinions she

provided in supplementing information requested during the preparation phase of the internship

report. The successful completion of this work would not have been possible without the support,

encouragement and assistance of many individuals who contributed immensely to conduct,

compilation and the quality of work. Last but not the least, I am thankful to my family and

friends for their suggestions, assistance and help with doing this report

iv
 Executive Summary
This report is prepared as the requirement of the completion of BBA degree at the University of

Asia Pacific (UAP). It evaluates the overall performance of Social Islami Bank Ltd. (SIBL),

focusing on its financial position with various financial ratios and proposing strategies for future

improvement. It is based on a combination of primary and secondary data sources, providing a

comprehensive and practical analysis.

The report begins with an overview of the banking sector in Bangladesh, differentiating between

scheduled and non-scheduled banks, and presents a detailed profile of SIBL. It outlines SIBL’s

general banking operations, including account management, clearing services, green banking

initiatives, and Islamic banking practices. Internship experiences at SIBL are also highlighted,

covering day-to-day responsibilities such as assisting officers, managing checkbook requisitions,

handling pay orders and debit cards, and maintaining records of inward and outward

transactions. A SWOT analysis identifies key strengths such as diversification and a strong

merchant banking system, as well as weaknesses including limited advertising and promotional

efforts

The financial performance of SIBL is evaluated using short-term and long-term solvency,

efficiency, profitability, and market position ratios. The analysis reveals a weakness in short-

term solvency, while indicating strong performance in other key areas. Improvements have been

observed in the management of Non-Performing Loans, areas such as the Cash Ratio, Investment

to Deposit Ratio, Equity Multiplier, Return on Equity (ROE), Market-to-Book (M/B) ratio, and

Net Investment Margin (NIM) remain in need of attention.

v
 The report concludes by recommending that SIBL focus on increasing deposit mobilization,

enhancing net income, expanding its range of services, and adopting innovative marketing

strategies. Although the bank has shown strong performance in certain areas, it also showed

weakness in some. Thus, it is recommended that continuous innovation and strategic

diversification are crucial to maintaining a competitive edge in the evolving banking industry.

vi
 Table of Contents

APPROVAL PAGE----------------------------------------------------------------------------------ii
DECLARATION-------------------------------------------------------------------------------------iii
Acknowledgment-------------------------------------------------------------------------------------iv
Executive Summary----------------------------------------------------------------------------------v
Chapter 1---------------------------------------------------------------------------------------------1
1.1 Background------------------------------------------------------------------------------------1
1.2 Origin of the Report--------------------------------------------------------------------------1
1.3 Objectives of the Report----------------------------------------------------------------------2
1.3.1 Broad Objective----------------------------------------------------------------------------2
1.3.2 Specific Objectives------------------------------------------------------------------------2
1.4 Methodology of the Report-------------------------------------------------------------------2
1.4.1 Primary Data Sources----------------------------------------------------------------------2
1.4.2 Secondary Sources of Data----------------------------------------------------------------2
1.5 Scope of the report-----------------------------------------------------------------------------3
1.6 Limitations of the Report---------------------------------------------------------------------3
1.7 Structure of the Report-----------------------------------------------------------------------3
Chapter 2 Industry and Organization Overview------------------------------------------------4
2.1 Overview of the banking industry-----------------------------------------------------------4
2.2 Overview of the Social Islami Bank PLC---------------------------------------------------5
2.2.1 Historical Background of SIBL-----------------------------------------------------------5
2.2.2 Board of Director--------------------------------------------------------------------------6
2.2.3 Organogram of SIBL----------------------------------------------------------------------6
2.2.4 The Vision, Mission and Core values of SIBL PLC-------------------------------------7
2.2.5 General Banking Section----------------------------------------------------------7
2.3 “SWOT” analysis of Social Islami Bank PLC----------------------------------------------9

vii
Chapter 3 Internship Duties & Responsibility--------------------------------------------------12
3.1 Duties & Responsibilities-------------------------------------------------------------------12
3.2 Key Responsibilities-------------------------------------------------------------------------12
3.3 My Work Activities During the Entire 12 weeks-----------------------------------------13
Chapter 4 Quantitative Analysis of the Performance of Social Islami Bank PLC---------14
4.1 Short Term Solvency------------------------------------------------------------------------14
4.2 Long Term Solvency------------------------------------------------------------------------17
4.3 Efficiency-------------------------------------------------------------------------------------19
4.4 Profitability----------------------------------------------------------------------------------21
4.5 Market Prospect:------------------------------------------------------------------------23
Chapter 5 Recommendations & Conclusion----------------------------------------------------27
5.1 Recommendations---------------------------------------------------------------------------27
5.2 Conclusion------------------------------------------------------------------------------------28
References & Bibliography-----------------------------------------------------------------------29
Appendix-----------------------------------------------------------------------------------------30
Appendix-1---------------------------------------------------------------------------------------30
Appendix-2---------------------------------------------------------------------------------------31
Appendix-3---------------------------------------------------------------------------------------32
Appendix-4---------------------------------------------------------------------------------------33
Appendix-5---------------------------------------------------------------------------------------34
Appendix-6---------------------------------------------------------------------------------------35
Appendix-7---------------------------------------------------------------------------------------36
Appendix- 8--------------------------------------------------------------------------------------37
Appendix- 9--------------------------------------------------------------------------------------38

viii
 List of Tables

Table Number Name of Table Page Number

1 Board of Directors 6

2 Daily Work Activities 13

List of Figures

Figure Number Name of Figure Page Number

5.1 Current Ratio 15

5.2 Cash Ratio 16

5.3 Invest to Deposit Ratio 17

5.4 Equity Multiplier Ratio 19

5.5 Non-performing loan Ratio 20

5.6 Net Investment Margin Ratio 21

5.7 Return on Equity Ratio 23

5.8 Price to Equity Ratio 24

5.9 Market to Book Ratio 25

ix
 Chapter 1
Introduction
1.1 Background
In today’s rapidly evolving and highly competitive business landscape, academic knowledge

alone is no longer sufficient to equip students for real-world professional challenges. Practical

exposure through internships has become a vital component, allowing students to apply

theoretical learning, develop essential skills, and gain a clearer understanding of organizational

operations. As part of the Bachelor of Business Administration (BBA) curriculum, the internship

program is designed to provide students with hands-on experience, bridging the gap between

classroom theories and workplace practices. To fulfill this academic requirement, I had the

opportunity to complete my internship at Social Islami Bank Ltd. (SIBL), a distinguished

Shariah-compliant commercial bank in Bangladesh. This report captures the entire span of my

internship experience at Social Islami Bank Ltd., including an analysis of its financial

performance through key ratios, an assessment of its strengths and weaknesses through a SWOT

framework, and a set of recommendations for future improvements. It combines practical

observations with theoretical analysis, aiming to provide a comprehensive understanding of both

the operational and strategic dimensions of banking within a Shariah-based institution.

1.2 Origin of the Report

The primary focus of the internship program was to immerse students in real-world business

environments, enabling them to bridge the gap between theoretical frameworks and actual

corporate practices.

1
1.3 Objectives of the Report
1.3.1 Broad Objective
 The board objective of this report is to analyze the performance of Social Islami Bank

PLC and to describe its general banking activities.

1.3.2 Specific Objectives

 To depict the various general banking activities that the bank conducts.

 To assess the financial performance of the bank by using financial ratios.

 To recommend policies which will help the bank to perform better.

1.4 Methodology of the Report

In the preparation of this report, a combination of primary and secondary data was used.

Relevant information was collected through the review of various official circulars, notices, and

published reports.

1.4.1 Primary Data Sources

 Daily exposer to banking activities during the internship period.

 Frequent dialogue exchange with officers, clients and staff.

 Relevant files, cases and reports provided by the officers concerned.

 Hands on contribution to the work force and experience gathered from the internship.

1.4.2 Secondary Sources of Data

 Annual Report of Social Islami Bank LTD (2019 – 2023)

 Website of Social Islami Bank PLC

 Circulars of SIBL

2
1.5 Scope of the report
1. Developing an in-depth understanding of the general banking operations at Social Islami

Bank Ltd. (SIBL).

2. Acquiring insights into the management of various types of accounts at SIBL.

3. Understanding the financial performance and analysis of Social Islami Bank.

1.6 Limitations of the Report

This report is not immune from limitations. Some noteworthy limitations are:

 Time Constraints: Limited time was one of the major challenges that restricted the

ability to cover all aspects relevant to the report.

 Insufficient Secondary Data: The primary secondary source of information was the

bank’s annual report, which alone was inadequate to fully complete the report and offer a

comprehensive understanding of the institution.

 Restricted Scope: During data collection, the organization-maintained confidentiality

protocols and was reluctant to disclose certain information, which narrowed the overall

scope of the report

1.7 Structure of the Report

This report is organized into five chapters. Chapter one provides an overview of the internship

program, outlining its objectives, methodology and significance. Chapter two presents a detailed

overview of the banking sector with a special focus on Standard Bank PLC, incorporating a

SWOT analysis and a description of general banking activities. Chapter three discusses the

specific duties and responsibilities undertaken during the internship, along with reflections on the

overall learning experience. Chapter four analyzes the financial performance of the bank through

3
various ratios. Finally, chapter five offers recommendations and conclusions based on the

findings of the report.

Chapter 2
Industry and Organization Overview

2.1 Overview of the banking industry

The banking industry in Bangladesh is critical to the country's economic development, acting as

the foundation for financial intermediation and resource mobilization. Since its inception after

the country's independence in 1971, the banking sector has experienced substantial expansion

and reform, expanding its services to include retail, corporate, rural, and Islamic banking. It

makes a significant contribution to economic growth, job creation, investment promotion, and

stability of the monetary system. Currently, Bangladesh's banking sector is primarily governed

by the Bangladesh Bank, the central bank, under the Bank Company Act of 1991 (amended).

Bangladesh's banking system will have 61 scheduled banks and many non-scheduled banks by

2024. Scheduled banks are authorized to operate under Bangladesh Bank laws and monitoring,

whilst non-scheduled banks are founded for specific purposes and function with special licenses.

Types of banks in Bangladesh:

There are several types of Banks actively contributing to the nation’s economic cycle. There are

State-owned commercial banks (SOCBs) that are owned and operated by the government.

Their principal goal is to benefit the public by encouraging financial inclusion. Examples include

Sonali Bank Ltd., Janata Bank Ltd., and Agrani Bank Ltd. There are Private Commercial

Banks (PCBCs) that are privately held and seek to maximize profits while providing a diverse

4
variety of financial services. Private banks are further categorized by two segments.

Conventional private commercial banks (for example, Prime Bank Ltd. and BRAC Bank Ltd.)

and Islamic Shariah-based private banks (such as Islami Bank Bangladesh Ltd. and Social Islami

Bank Ltd.)

There banks that have branches or subsidiaries of internationally known foreign banks operating

in Bangladesh are known as Foreign Commercial Banks (FCBs), including Standard Chartered

Bank and HSBC Bangladesh. Banks that target certain sectors like agriculture and manufacturing

to drive growth are Specialized Banks. Examples are Bangladesh Krishi Bank (agricultural) and

Bangladesh Development Bank Ltd. Lastly; there are financial institutions that are not fully

regulated by Bangladesh Bank but are licensed for certain purposes they are non-Schedule

Banks.

2.2 Overview of the Social Islami Bank PLC

2.2.1 Historical Background of SIBL

Social Islami Bank Limited (SIBL), founded on November 22, 1995, is a second-generation

Islamic bank in Bangladesh. Initially named "Social Investment Bank Limited," it aims to

promote a participatory banking system based on Shariah principles, focusing on welfare-

oriented financial services. The bank's initial purpose was to use an Islamic financial system to

significantly reduce poverty, create jobs, and promote entrepreneurship among impoverished

groups of society. In 2009, the bank rebranded as Social Islami Bank Limited to enhance its

commercial operations while upholding Islamic banking standards. It has since expanded its

5
offerings in retail, SME, corporate banking, and remittances, adopting new technologies like

mobile and online banking, all while prioritizing Shariah compliance. Today, Social Islami Bank

Limited is regarded as one of Bangladesh's top Shariah-compliant private commercial banks,

with a statewide presence via a vast network of branches, sub-branches, and agent banking

outlets. The bank continues devoted to its founding vision of delivering ethical and inclusive

financial services to foster a just, caring, and welfare-oriented society.

2.2.2 Board of Director

Name Designation
Prof. Dr. M. Sadiqul Islam, PhD, FCMA Independent Director and Chairman

Mrs. Maksuda Begum Vice Chairman

Major (Retd.) Dr. Md. Rezaul Haque Director

Mr. Md. Morshed Alam Khondoker Independent Director

Mr. Md. Anwar Hossain, FCA Independent Director

Mr. Shafiuzzaman Managing Director

Mr. Abu Rushd Iftekharul Haque SEVP

Mr. Md. Nazmus Saadat Deputy Managing Director

Table 1: Board of Directors

6
2.2.3 Organogram of SIBL

Figure 2.3 Organogram of SIBL

2.2.4 The Vision, Mission and Core values of SIBL PLC

The Vision of SIBL:

“Working together for a caring society"

SIBL aims to create a caring and inclusive society by providing ethical, Shariah-compliant

financial services that benefit social welfare and economic development

The Mission of SIBL:

Establishing a Three-Sector Banking Model that includes formal, non-formal, and voluntary

sectors. Transforming into a service-oriented, technology-driven, profit-generating organization.

Providing prompt, accurate, and satisfying client service. Implementing a balanced and

sustainable growth strategy.

7
2.2.5 General Banking Section
SIBL's General Banking Division oversees a wide range of fundamental banking services that

are critical to everyday operations and client service. These operations are meant to provide a

variety of financial services while adhering to Islamic Shariah rules.

Types of Accounts:

SIBL introduced Al-Wasiyah Bil Waqf (Cash) Account

SIBL launched the Al-Wasiyah Bil Waqf (Cash) Account for the first time in the country. This is

also an everlasting endowment, like the monetary waqf. This deposit product may be an

excellent instrument for both worldly and spiritual goals. This account can be opened by any

solvent individual aged 40 or older. This account may be started by depositing Tk. 1.00 (One)

Lac or more. The waqif (account holder) can use the entire or partial profit to supplement his

income during his lifetime, and the profit can be used for social, religious, or educational reasons

after his death. For unavoidable or emergency situations, the waqif may cash the entire sum or a

portion of it. Waqif may make one-third of his assets as waqf, but if he wishes to make more

than one-third, he must obtain written agreement from his descendants.

SIBL Education Savings Scheme

Double Investment Facility on Your Deposit SIBL has brought this deposit product to relieve the

worry of guardians who dream of their children’s higher education but are anxious about

educational expenses. Such account has maturity of 05 years, 10 years, 15 years and 20 years.

Monthly minimum deposit Tk.1000.00 and any amount multiple of Tk.1,000.00 (such as

Tk.1,000.00, Tk.2,000.00, Tk. 5,000.00 and Maximum Tk.1,00,000.00). Scheme holders can

avail themselves of a double investment facility of deposited amount or equal amount accrued at

8
the end of tenure or Tk.15.00 Lac, whichever is minimum. Investment facility can be available

after 24 installments in 02 years.

SIBL Suborno Rekha- Special Savings Scheme for Women

Women can ensure an economically sound life by availing this scheme which shall pay a lump

sum amount with attractive profit or as monthly pension scheme as per their requirement. The

scheme is run in compliance with Mudaraba policy of Islami Shariah. Depositing a small amount

monthly the women can withdraw the total deposit at a time including attractive profit or as

periodical/monthly pension after maturity. (3,5,10 years). The scheme holders shall be insured

against any risk of accident and shall be entitled to an insurance facility from Tk.50,000 to

Tk.1,00,000

Kafela Mudaraba Hajj Scheme

The scheme holders can save through monthly installment for a period of one to ten years as per

their desired hajj time. The beneficiaries shall be providing the stipulated amount based on

nominal monthly installment after a certain period with a view to performing Hajj. Each

Mudaraba Hajj account shall be opened in the name of a single person.

2.3 “SWOT” analysis of Social Islami Bank PLC

SWOT analysis may provide significant insights into the company's operating capabilities,

market positioning, and development prospects.

Strengths

 Strong Shariah Compliance:

SIBL adheres to Islamic banking principles, attracting loyal customers who want Shariah-

compliant financial services.

9
  Diverse Product Portfolio:

The bank provides a diverse portfolio of services, including general banking, SME

finance, corporate banking, agent banking, green banking, and digital banking.

 Nationwide Network:

SIBL's nationwide network includes branches, sub-branches, and agent banking outlets,

ensuring a significant presence in both urban and rural locations.

 Social Responsibility Initiatives:

SIBL's social responsibility initiatives, including financial inclusion, school banking, and

microfinance, enhance its brand image and build community trust.

Weaknesses

 Limited International Presence:

SIBL's limited worldwide presence limits its potential to recruit overseas clients and

remittances.

 Dependence on Traditional Banking Channels:

Despite digital efforts, many organizations still rely on traditional financial channels,

which can hamper efficiency.

 Relatively High NPL (Non-Performing Loan) Ratio:

SIBL, like many Bangladeshi banks, struggles to manage non-performing loans, thereby

impacting profitability and asset quality due to its high NPL ratio.

 Brand Visibility and Promotion:

SIBL's minimal marketing and brand promotion efforts may hinder new client acquisition

when compared to top-tier private banks.

Opportunities

10
  Growing Demand for Islamic Banking:

The growing demand for Shariah-compliant financial products presents an opportunity

for SIBL to dramatically increase its customer base.

 Expansion into Rural Banking:

SIBL may expand into rural banking by offering agent banking and mobile financial

services to underserved communities, increasing financial inclusion and deposit

mobilization.

 Partnerships with FinTech Firms:

Collaboration with FinTech firms improves service delivery, customer experience, and

operational effectiveness.

 Development of Green and Sustainable Finance Products:

SIBL can capitalize on the growing global and national focus on sustainable finance by

developing innovative green banking solutions.

Threats

 Intense Competition:

Bangladesh's banking business is highly competitive, with conventional and Islamic

banks offering identical goods and aggressive pricing techniques.

 Economic Instability and Inflation:

Economic instability and inflation, including currency volatility and global financial

uncertainty, can impact banking sector stability and loan growth.

 Regulatory Changes:

Regulatory changes in banking, such as tougher capital requirements or investment rate

limitations, can affect profitability.

11
  Technological Disruptions and Cybersecurity Risks:

Banks' dependence on digital platforms increases their vulnerability to cyberattacks, data

breaches, and operational interruptions.

Strengths Weaknesses
 Attracts loyal Islamic finance customers.  Weak international presence affects remittance
 Offers SME, corporate, green & digital banking.  Over-reliance on conventional banking reduces efficiency.
 Urban & rural presence across the country.  Asset quality affected by above-average loan defaults.
 Promotes inclusion through microfinance & school  Minimal marketing limits new customer acquisition.
banking.

Opportunities Threats

 Boost deposits via agent & mobile banking in remote  Conventional & Islamic banks compete with similar
areas. offerings.
 Enhance efficiency & customer service through tech  Inflation and volatility threaten loan growth & stability.
partnerships.  Digital reliance exposes the bank to cyber threats &
 Innovate with sustainable and eco-friendly financial disruptions.
products.

Chapter 3
Internship Duties & Responsibility
3.1 Duties & Responsibilities

During my internship at Social Islami Bank PLC, Mohammadpur Branch, I had the valuable

opportunity to engage directly in a variety of practical banking activities. My primary role was to

assist officers and executives in the execution of their daily responsibilities. This involved tasks

such as client interaction, document verification, processing account opening forms, handling

cheque clearing procedures, preparing and/or sorting daily vouchers, and maintaining customer

records. I was also involved in the issuance of pay orders, inward and outward mail handling,

12
assisting in cash receipt and payment transactions, and supporting the compliance team in

maintaining proper documentation as per regulatory requirements.

The working environment at the Mohammadpur Branch was very professional, supportive,

conducive to learning and welcoming for new commers. The officers and staff, especially my

supervisor, were exceptionally cooperative, offering guidance and feedback throughout my

tenure. This experience significantly enhanced my understanding of general banking operations

and prepared me for future professional challenges in the banking sector.

3.2 Key Responsibilities

The core responsibilities that were part of my daily commute were:

 Assisting officers with their regular responsibilities. (EX: Sorting daily vouchers)

 Maintain the pay order register.

 Dealing with consumers in person and via phone.

3.3 My Work Activities During the Entire 12 weeks

I have done a three-month internship at SIBL and during this time frame. The following table

will summarize the different activities on a weekly basis.

Week Activities

1st week Introduce every kind of file location, seals, paper documents. Introducing

2nd week opening forms, KYC, pay order, inward & outward book, documents required to

open an account.

3rd week Opening accounts, checking if forms have missing documents and credentials,

4th week Label and report them to my supervisor, Notify the client via telephone and

13
 email.

5th week Check book requisition, check book entry & support clients filling out check &

6th week deposit books.

7th week Check received, check return procedure.

8th week RTGS, Creation and sorting of vouchers.

9th week Pay order scheduling, pay order creation, posting and releasing.

10th week Helping employers with client's loan documents listing and providing customer

support via telecom.

11th week CIS entry, providing support to the cash counter, Verification of Online

12th week documents submission, supporting clients with E-Banking facilities.

Table 3.3: Regular Working Activities

Chapter 4
Quantitative Analysis of the Performance of Social
Islami Bank PLC

4.1 Short Term Solvency

 Current ratio:

The current ratio measures a company's liquidity. When the current ratio equals 1, it

indicates that assets can cover liabilities. When the ratio is larger than one, it indicates

that the company has enough assets to cover liabilities. If the ratio is less than one, it

14
 indicates potential liquidity concerns

Formula: Current Ratio = Current Asset/Current Liabilities

Particulars 2019 2020 2021 2022 2023

Current 42,097,164,021 44,075,111,604 42,725,210,201 39,492,281,683 50,465,186,406

Asset

Current 287,936,655,109 322,383,510,566 341,661,064,252 340,950,314,928 357,388,847,131

Liabilities

Current 0.1462 0.1367 0.1250 0.1158 0.1412

Ratio

(Amounts in BDT)

Current Ratio
0.16 0.1462
0.1367 0.1412
0.14
0.125
0.12 0.1158

0.1

0.08

0.06

0.04

0.02

0
2019 2020 2021 2022 2023

(Source: Social Islami Bank PLC Annual Report)

Figure 5.1: Current Ratio

Findings: The current ratio is a liquidity ratio that measures a company’s ability to pay short-

term obligations. The ideal current ratio is regarded as 1.0. The current ratio for SIBL shows

0.1462 to 0.1412 times from 2019 to 2021 where the ratio suggest that the organization cannot

15
cover the current liabilities. The highest current ratio of 0.1462 times in 2019 indicates better

liquidity. The lower current ratio in 2022 indicates difficulties in fulfilling immediate financial

obligations

 Cash Ratio:

A ratio greater than one shows that there is more than enough cash on hand to cover the

liabilities. However, an abnormally high level may indicate that monies that could have been

invested are not being used.

Formula:

Cash Ratio = (Cash + Cash Equivalent)/Current Liabilities.

Cash Ratio=(A+B)/C

16
Particulars 2019 2020 2021 2022 2023

A+B 31,898,442,122 33,373,482,438 23,491,241,717 26,922,335,857 34,158,244,894

C 287,936,655,10 322,383,510,566 341,661,064,252 340,950,314,928 357,388,847,131

Cash 0.1107 0.1035 0.0687 0.0789 0.0955

Ratio

Cash Ratio
0.12
0.1107
0.1 0.1035
0.0955
0.08 0.0789
0.0687
0.06

0.04

0.02

0
2019 2020 2021 2022 2023

(Amounts in BDT)

(Source: Social Islami Bank PLC)

(Figure 5.2: Cash Ratio)

Findings: SIBL's liquidity situation was quite robust in 2019 and 2020, with cash ratios

exceeding 10%, suggesting that the bank retained more than 10% of its current liabilities in

immediate liquid form. In 2021, there was a notable fall to 6.87%, indicating a likely tightening

of liquidity. This might be the result of increasing lending or investment operations, or a shift in

asset allocation away from liquid reserves. 2022 witnessed a minor increase to 7.89%, indicating

efforts to restore short-term liquidity while perhaps balancing profitability objectives. By 2023,

the ratio had risen to 9.55%, demonstrating continuous progress in liquidity management, but

still lower than the levels seen in 2019 and 2020.

17
4.2 Long Term Solvency
 Investment to Deposit Ratio:

The Investment to Deposit Ratio (IDR) is a financial indicator that determines how much of a

bank's deposits are allocated to various investment vehicles, such as government securities,

Islamic bonds (Sukuk), or other Shariah-compliant investment products.

Detail 2019 2020 2021 2022 2023

Investment 264,268,589,649 300,617,943,566 312,773,820,529 342,944,157,503 360,816,978,271

Deposit
287,936,655,109 322,383,510,566 341,661,064,252 340,950,314,928 357,388,847,131

LDR 91.78% 93.24% 91.54% 100.58% 100.95%

Investment to Deposit Ratio = (Total Investments/Total Deposits)

Investment to Deposit Ratio

102.00% 100.58% 100.95%
100.00%
98.00%
96.00%
94.00% 93.24%
91.78% 91.54%
92.00%
90.00%
88.00%
86.00%
2019 2020 2021 2022 2023

(Source: Social Islami Bank Annual Report)

(Figure 5.3: Investment to Deposit Ratio)

Findings: From 2019 to 2021, SIBL maintained a reasonably consistent IDR of 91% to 93%,

showing a balanced investing strategy. The bank was effectively allocating a major amount of its

deposit base to income-generating investments while maintaining a reasonable buffer for

18
 liquidity needs. In 2022, the IDR surpassed 100% for the first time, hitting 100.58%, and it grew

further to 100.95% in 2023. This means that the bank's total investments were somewhat more

than its total deposits, implying that it may have used extra funding sources (e.g., borrowings or

retained earnings) to support its investment operations. The rising IDR over the previous two

years indicates a more aggressive investing strategy, maybe targeted at maximizing profits.

Equity Multiplier:

The Equity Multiplier (EM) is a financial leverage ratio that shows how much of a bank's total

assets are funded by its shareholders' equity. It indicates the extent to which a bank relies on debt

or other liabilities to fund its assets.

Equity Multiplier = Total Assets / Total Shareholder Equity.

Detail 2019 2020 2021 2022 2023

Asset 345,056,231,62 300,617,943,566 312,773,820, 439,968,684,936 476,051,862,17

7 529 2
Shareholder’s 17,271,330,473 18,038,387,095 19,237,423,8 20,765,081,406 22,383,442,294
Equity
35

Equity 19.97x 16.65x 16.25x 21.18x 21.26x

Multiplier

(Amounts in BDT)

19
 Equity Multiplier Ratio
25 19.97 21.18 21.26
20 16.65 16.25
15
10
5
0
2019 2020 2021 2022 2023

(Source: Social Islami Bank PLC annual report)

(Figure 5.4: Equity Multiplier Ratio)

Findings: The equity multiplier declined from 19.97x in 2019 to 16.25x in 2021. This suggests

that the bank had a little more conservative capital structure, funding its assets through equity

rather than financial leverage. However, in 2022 and 2023, the equity multiplier rose to 21.18x

and 21.26x, respectively, indicating a strategy move toward more leverage. This increase shows

that SIBL increased its dependence on liabilities (such as deposits or borrowings) to fund asset

growth and maybe improve profitability. The equity multiplier remained in a modest range, as is

common for banks, which operate with a greater level of leverage than non-financial enterprises.

While the increases in 2022 and 2023 represent a more aggressive use of financial resources, the

figures do not imply an undue risk.

4.3 Efficiency
 Non-Performing Loan Ratio (NPL)

The non-performing loan (NPL) ratio is an important indication of a bank's asset quality and

credit risk management. It calculates the proportion of loans in default or near default in relation

to the overall loan portfolio. A loan is normally categorized as non-performing when investment

and/or principal payments are more than 90 days late.

Formula: NPL = Total NPL/Total Credit

Particular 2019 2020 2021 2022 2023

20
 NPL 6.63% 6.05% 5.18% 4.08% 4.79%

Amount 17,533.30 18,201.16 16,194.08 16,476.57 17,288.59

million BDT million BDT million BDT million BDT million BDT

NPL Ratio
8.00% 6.63% 6.05%
6.00% 5.18% 4.79%
4.08%
4.00%
2.00%
0.00%
2019 2020 2021 2022 2023

Figure 5.6: NPL Ratio

Findings: SIBL's asset quality improved consistently and noticeably between 2019 and 2022,

with the NPL ratio progressively falling from 6.63% to 4.08%. This lower trend reflects the

bank's efforts to tighten credit evaluation procedures, improve loan recovery systems, and

maintain cautious lending standards. The four-year drop in NPLs is a favorable sign of better

credit risk management and increased borrower discipline. It also demonstrates that SIBL was

able to reduce loan defaults despite economic instability, especially during the COVID-19 era.

However, in 2023, the NPL ratio climbed marginally to 4.79%, up from 4.08% the year before.

While the ratio remains below previous levels, this little increase might indicate early symptoms

of stress in specific lending categories or industries. It might also indicate the expiration of

pandemic-related regulatory relaxations or changes in categorization standards.

21
4.4 Profitability
Net Investment Margin:

Particular 2019 2020 2021 2022 2023

Investment Income 27.87 27.11 24.10 21.76 25.37

Investment Expense 18.50 19.56 16.22 15.72 17.75

Total Asset 345.06 384.96 408.20 439.97 476.05

Net Investment 2.71% 1.96% 1.93% 1.36% 1.6%

Margin

Net Investment Margin (NIM) is a significant financial indicator that assesses a bank's

profitability by evaluating the difference between investment revenue produced on loans and

investments with investment costs paid on deposits and borrowings in relation to its average

earning assets. A higher NIM suggests successful asset management and profitability, whereas a

lower NIM may indicate operational issues. It is commonly used in performance analysis to

evaluate a bank's financial health and competitiveness in the industry.

NIM = Investment Income-Investment Expense/Total Asset *100

Net Investment Margin

3.00%
2.71%
2.50%
1.93%
2.00% 1.93%
1.50% 1.60%
1.00% 1.36%
0.50%
0.00%
2019 2020 2021 2022 2023

Figure 5.7: Net Investment Margin

22
Findings: In the year 2019 the NIM was 2.71%, indicating a healthy margin, implying that the

bank was effectively managing its investment revenue compared to its investment costs,

resulting in a solid return on loan operations. In 2020 and 2021, the NIM fell to 1.96% and

1.93%, respectively, indicating a modest reduction in profitability. This decrease might be

attributable to changes in investment rates, increased competition, or a possible shift in the bank's

asset-liability management. In the year 2022 the NIM fell substantially to 1.36%, a notable

decrease. This might signal that the bank is struggling to remain profitable, potentially owing to

increasing investment expenses, a reduced loan yield, or a shift toward lower-yielding assets.

Finally on 2023 the NIM increased to 1.60%, although it remained lower than in 2019. This

shows that SIBL made some changes to its asset management techniques, which resulted in a

recovery, but it has yet to fully return to its prior margin levels.

Return on Equity

ROE measures how well a bank uses the capital invested by its shareholders to generate

earnings. A greater ROE indicates that the bank is effectively leveraging its equity basis to create

profits, making it more appealing to investors. It represents profitability from the shareholders'

standpoint, contributes to determining the bank's ability to reinvest earnings for expansion or pay

dividends. Also, it acts as a baseline for assessing the performance of banks with various capital

arrangements.

Formula: ROE = EAT (Earning After Tax)/ Total Equity Capital*100

23
 Particular 2019 2020 2021 2022 2023

ROE 9.22% 8.85% 9.34% 12.22% 11.70%

ROE
14.00% 12.22% 11.70%
12.00%
10.00% 9.22% 8.85% 9.34%
8.00%
6.00%
4.00%
2.00%
0.00%
2019 2020 2021 2022 2023

(Source: Social Islami Bank PLC Annual Report)

Figure 5.8: Return on Equity

Findings: From 2019 to 2023, Social Islami Bank Limited (SIBL) demonstrated a stable and

gradually improving Return on Equity (ROE), beginning at 9.22% in 2019 and rising to 11.70%

in 2023. The consistent performance reflects the bank’s resilience and ability to generate returns

on shareholders’ equity amidst economic challenges, including the pandemic period. A notable

improvement occurred in 2022, with ROE reaching 12.22%, indicating enhanced profitability

and efficient capital utilization. This momentum was largely sustained in 2023, with only a

marginal decrease, suggesting strong financial management and earnings stability. The overall

trend illustrates SIBL’s effective strategies in revenue generation, cost control, and equity

deployment. To maintain this positive trajectory, the bank should continue focusing on

improving its profit margins, strengthening credit risk oversight, and enhancing operational

efficiency. A consistently strong ROE is crucial for reinforcing investor confidence and long-

term financial growth.

24
4.5 Market Prospect:
Price per Earnings (P/E) Ration:

The Price-to-Earnings (P/E) ratio is a popular valuation indicator that compares a company's

market price per share to its earnings per share (EPS). The P/E ratio shows how much investors

are ready to pay for a single unit of a company's profits. A greater P/E ratio may imply that the

market anticipates significant future growth or profitability, whilst a lower P/E ratio may indicate

lower expectations or possible undervaluation. When examining a bank's performance, the P/E

ratio gives information about investor mood, market confidence, and comparable value in the

banking industry. It can help analysts and investors estimate the bank's profits potential in

relation to its share price and make educated investment decisions.

Particulars 2019 2020 2021 2022 2023

Share Price 10.81 10.70 12.78 11.16 11.14

EPS 1.338 1.375 1.535 1.814 1.865

P/E Ratio 8.07 7.78 8.32 6.15 5.97

Formula: P/E Ratio: Share Price/EPS (Earning Per Share)

P/E Ratio
10
8.07 7.78 8.32
8
6.15 5.97
6
4
2
0
2019 2020 2021 2022 2023
(Source: Social Islami Bank Annual Report)

Figure 5.9: P/E ratio

25
Findings: From 2019 to 2021, SIBL's P/E ratio was very constant, fluctuating between 8.07 and

8.32. This stability implies that the market valued the bank's earnings consistently over this

period, which might be attributed to solid financial performance and investor trust. The P/E ratio

fell to 6.15 in 2022, and it fell even more to 5.97 by 2023. This decreasing trend illustrates that,

despite increases in profits per share (EPS) throughout these years, the market price of SIBL's

shares did not rise proportionally. This might indicate a more cautious investor perspective,

worries about future earnings sustainability, or broader market circumstances influencing value.

Market to Book Ratio (M/B Ratio):

The Market-to-Book (M/B) ratio is a financial valuation tool that compares a company's current

market value and book value. In banking, the M/B ratio measures how the market sees a bank's

worth in relation to its net asset value. A ratio larger than one indicates that investors expect the

bank to create future growth and profitability above its present book value. A ratio of less than 1

may signal market worries about the bank's future performance or asset quality. The Valuation

Benchmark provides for a comparison of market valuation among banks of various sizes

Particulars 2019 2020 2021 2022 2023

Market 10.81 10.70 12.78 11.16 11.14

Capitalization

Book Value 13.39 13.76 14.18 14.82 15.0

M/B Ratio 0.81 0.78 0.90 0.75 0.74

Formula: M/B Ratio = Market Capitalization /Book Value

26
 Market to Book Ratio
1 0.9
0.81 0.78
0.8 0.75 0.74

0.6
0.4
0.2
0
2019 2020 2021 2022 2023

(Source: Social Islami Bank PLC Annual Report)

Figure 5.10: M/B Ratio

Findings: SIBL's Market-to-Book ratio stayed below 1.0 from 2019 to 2023, suggesting that the

bank was regularly valued lower than its book value. This trend indicates investor hesitation or

concern about the bank's future profitability, asset quality, or overall market circumstances.

Despite a minor increase in 2021, the overall decreasing trend in the M/B ratio may imply

ongoing difficulties in boosting market confidence and perceived value.

A persistently low M/B ratio might indicate possible undervaluation, but it may also indicate

underlying concerns that require additional research. Investors and analysts should analyze these

ratios in conjunction with other financial measures and qualitative elements to acquire a

thorough view of the bank's performance and market image.

27
 Chapter 5
Recommendations & Conclusion
5.1 Recommendations

 Improve Liquidity Management: To improve liquidity management, the bank should

increase current and cash assets for more financial flexibility, especially under heavy

withdrawal pressures.

 Monitor and Control Non-performing Loans: To prevent future deterioration of asset

quality, credit risk management, tight loan monitoring, and prompt recovery operations

are necessary to monitor and control non-performing loans (NPLs), which have slightly

increased in 2023.

 Examine Capital Structure and Leverage: An increasing equity multiplier in recent years

suggests a greater reliance on financial leverage. SIBL should ensure that its capital

sufficiency remains strong and in line with regulatory standards as it pursues expansion.

 Boost Market Confidence and Valuation: To increase market trust and valuation, banks

with low Price-to-Earnings and Market-to-Book ratios could explore improving

transparency, corporate communication, and investor relations.

 Invest in Technology and Digital Banking: Investing in technology and digital banking

may enhance operational efficiency, customer experience, and service delivery, enabling

competitive positioning in the continuously digitizing banking sector.

 Improve Marketing and Brand Visibility: SIBL should invest in smart marketing

initiatives to raise awareness of Shariah-compliant services and extend its client base,

particularly in rural and SME segments.

28
5.2 Conclusion

The analysis of Social Islami Bank Limited (SIBL) over the period 2019 to 2023 reveals a mixed

but largely positive financial trajectory. The bank demonstrated strong progress in reducing its

Non-Performing Loan (NPL) ratio, reflecting improved asset quality and credit risk

management. Return on Equity (ROE) remained stable and entered the ideal range in recent

years, indicating efficient use of shareholders’ funds. However, the Net Investment Margin

(NIM) and Net Investment Income (NII) showed a declining trend, suggesting pressure on core

earnings. Liquidity indicators, such as the current and cash ratios, remained below optimal

levels, and the Investment to Deposit Ratio (IDR) exceeded 100% in the last two years,

highlighting potential liquidity concerns. Additionally, market performance indicators like the

P/E and M/B ratios suggest subdued investor confidence. To address these issues, SIBL should

focus on mobilizing low-cost deposits, optimizing its liquidity structure, enhancing marketing

efforts, and leveraging digital and green banking innovations to sustain competitiveness in a

dynamic financial landscape.

29
References & Bibliography
 Books:

1) Ross, S. A., Westerfeld, R. W., & Jordan, B. D. (2019). Fundamentals of

corporate finance (12th ed.). McGraw-Hill Education.

2) Gitman, L. J., & Zutter, C. J. (2010). Principles of managerial finance (13th ed.).

Prentice Hall.

3) Dayananda, D., Irons, R., Harrison, S., Herbohn, J., & Rowland, P. (2002).

Capital budgeting: Financial appraisal of investment projects. Cambridge

University Press.

 Website:

(1) SIBL (n.d.). SIBL. Facebook. https://www.facebook.com/socialislamibankplc

(2) SIBL. In Wikipedia. https://en.wikipedia.org/wiki/Social_Islami_Bank

 Articles:

(1) Suzuki, Y., & Uddin, S. M. S. (2016). Recent trends in Islamic banks’ lending

modes in Bangladesh: An evaluation. Journal of Islamic Accounting and Business

Research, 7(1), 28–41. https://doi.org/10.1108/JIABR-07-2013-0026

(2) Sen, S., Antara, N., & Sen, S. (2020). The determinants of opening account with

Islamic banks. Journal of Islamic Marketing, 12(9), 1709–1733.

https://doi.org/10.1108/JIMA-04-2020-0110

 Annual Report:

Bank (n.d.). Financial Statements. SIBL. https://www.siblbd.com/about/financialreports

30
 Appendix
Appendix-1

31
Appendix-2

32
Appendix-3

33
Appendix-4

34
Appendix-5

35
Appendix-6

36
Appendix-7

37
Appendix- 8

38
Appendix- 9

39