A Report on
“Financial Performance of
Bangladeshi two
commercial banks: BASIC
Bank Limited and BRAC
Bank PLC”
Introduction
This report focuses on a comparative analysis of two key players: BASIC
Bank Limited, a state-owned commercial bank, and BRAC Bank PLC, a
private commercial bank.
BASIC Bank, with its focus on supporting small industries, faces
challenges like government regulations and operational limitations.
BRAC Bank, known for its innovative retail banking and technology-
driven approach, has expanded financial inclusion but may face
challenges in balancing market-oriented operations with its social mission.
Introduction
This analysis will evaluate their financial performance using key ratios
over three years (2021-2023) to identify strengths, weaknesses, and areas
for improvement."
Objective
To analyze and compare the financial performance of BASIC Bank and
BRAC Bank.
To examine key financial indicators including profitability, liquidity,
capital adequacy, credit risk, efficiency, and debt management.
Return on Assets
Return on asset ratio
1.50%
1.00%
0.50%
0.00%
2023 2022 2021
-0.50%
-1.00%
-1.50%
-2.00%
-2.50%
-3.00%
BASIC Bank BRAC Bank
Return on Assets
BASIC Bank Limited’s negative ROA over three years highlights
inefficiencies and high credit risk.
BRAC Bank PLC’s positive ROA reflects effective asset utilization
and strong management.
In 2022 Trends BASIC Bank reduced losses slightly, while BRAC
Bank maintained steady profitability.
In 2023 Outcome BASIC Bank’s performance worsened, while
BRAC Bank demonstrated resilience and stability.
Return on Equity
Return on Equity
800.00%
700.00%
600.00%
500.00%
400.00%
300.00%
200.00%
100.00%
0.00%
2023 2022 2021
BASIC Bank BRAC Bank
Return on Equity
BASIC Bank’s exceptionally high and volatile ROE highlights
financial instability and equity fluctuations.
BRAC Bank’s consistent ROE reflects steady profitability and
effective equity utilization.
In 2022, BASIC Bank’s ROE dropped to 61.77%, while BRAC
Bank improved to 12.50%.
By 2023, BASIC Bank’s ROE rose to 67.77%, contrasting with
BRAC Bank’s stable 11.45%.
Loan to Deposit Ratio
Loan-to-Deposit Ratio
110.00%
105.00%
100.00%
95.00%
90.00%
85.00%
80.00%
2023 2022 2021
BASIC Bank BRAC Bank
Loan to Deposit Ratio
BASIC Bank maintained a conservative LDR, decreasing from
95.68% in 2021 to 89.51% in 2023.
BRAC Bank pursued an aggressive lending strategy with LDRs
consistently above 100%, peaking at 106.82% in 2022.
BASIC Bank’s lower LDR reflects a focus on liquidity and reduced
lending risk.
BRAC Bank’s higher LDR highlights a profit-driven approach,
balancing growth and liquidity risks.
Non-Performing Loan
Non-Performing Loan Ratio
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2023 2022 2021
BASIC Bank BRAC Bank
Non-Performing Loan
BASIC Bank’s NPL ratio remained alarmingly high, rising from
59.80% in 2021 to 63.35% in 2023.
BRAC Bank’s NPL ratio showed improvement, decreasing steadily
from 3.90% in 2021 to 3.38% in 2023.
BASIC Bank’s high NPL levels indicate significant credit risk and
financial instability.
BRAC Bank’s low and declining NPL ratios reflect strong credit risk
management and asset quality.
Time Interest Earned
Time Interest Earned Ratio
1.2
0.8
0.6
0.4
0.2
0
2023 2022 2021
BASIC Bank BRAC Bank
Summary of the Findings
BRAC Bank maintained steady profitability ratios, while BASIC Bank
showed inefficiency with negative ROA and volatile ROE.
BRAC Bank’s higher LDR reflects growth-focused lending, while BASIC
Bank adopted a conservative loan policy.
BASIC Bank’s negative D/E ratio signals high financial risk, while BRAC
Bank’s positive D/E shows effective debt management.
BASIC Bank’s high NPL ratio indicates significant credit risk, while
BRAC Bank’s declining NPL highlights strong credit risk management.
Continued
BASIC Bank’s high CIR reflects inefficiency, whereas BRAC Bank
showed better operational control despite challenges.
BASIC Bank faced severe financial stress with a low TIE ratio, while
BRAC Bank managed interest expenses comparatively better.
BRAC Bank’s declining P/E ratio reflects reduced investor confidence in
future earnings growth.
Conclusion
BASIC Bank shows low financial stability, with high NPL, negative D/E
ratio, and poor operating efficiency.
BRAC Bank demonstrates stronger financial health with better
profitability, controlled liabilities, and low credit risk.
BASIC Bank requires improved credit risk management, cost control, and
structural reforms for stability.
BRAC Bank’s efficient management ensures a strong position but
highlights areas for further efficiency gains.
Conclusion
Improving liquidity and operational margins can enhance the financial
health and investor appeal of both banks.
THANKS!
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