An Internship Report

On
“Investment Performance Analysis of Exim Bank Limited

Supervised By
S.M. Faridul Islam
Department Of Accounting
Faculty Of Business Administration
Exim Bank Agricultural University Bangladesh

Prepared By
Shariar Hossain Turjo
Reg No: BBAW2019000809
Major in Accounting
Batch 16th

Program: Bachelor Of Business Administration

Date of Submission: May 15th, 2024

i
“INTERNSHIP REPORT”

ii
Letter of Transmittal

S.M. Faridul Islam

Assistant Professor,
Department of Accounting
Exim Bank Agricultural University Bangladesh
Boro Indara Moor, Chapainawabganj.

Subject: Internship report submission.

Dear Sir,

I am very pleased to present my internship report on the "Investment Performance

Analysis of Exim Bank Limited". I am truly honored that you approved this topic for my

report. It is a time of great honor and pleasure for me to complete my internship at

country’s one of the second-generation banks ‘Exim Bank Limited” at the same time

under the supervision of yours. In order to write an effective internship report with the

help of your direction, I focused all my attention on successfully completing the

internship.

I am so grateful and I appreciate your wise counsel, direction, and directions very much. I

tried to do my best to create this report. However, if inaccuracies occur, I am at your

disposal for the praise and criticism of the report.

I therefore pray and hope you would be kind enough to accept my internship report.

Sincerely yours,

……………………………….
Shariar Hossain Turjo
BBAW2019000809
Program: BBA
Exim Bank Agricultural University Bangladesh
Date: May 15th, 2024

iii
 Declaration of Student

I, Shariar Hossain Turjo, a student at EXIM Bank Agricultural University Bangladesh.

Enrolled in the Faculty of Business Administration, declare that the internship report
titled “Investment Performance Analysis of EXIM Bank Limited” submitted by me for
only to fulfill my academic requirement and entirely my original work.

I acknowledged that all ideas, data, research findings, and content presented in the
internship report are my own, and any contributions from external sources have been
appropriately and accurately cited and referenced. I have not engaged in any form of
academic misconduct, including plagiarism, cheating, or any other dishonest practices, in
the preparation of this report. Any assistance, guidance, or resources received during te
research and writing of this internship report are duly acknowledged in the
acknowledgement section.

I understand that any violation of academic integrity or failure to comply with the
principles of honesty and authenticity may lead to disciplinary actions and “F” Grade. I
take full responsibility for the content and accuracy if the report, and I am prepared to
defend its authenticity if required.

By signing this declaration, I affirm my commitment to academic integrity and the

principles of honesty in scholarly work.

Sincerely,

……………………
Shariar Hossain Turjo
ID: BBAW2019000809
Batch: 16th
Major in Accounting
Faculty of Business Administration
EXIM Bank Agricultural University Bangladesh.

iv
 CERTIFICATE OF SUPERVISOR

This is certifying that Shariar Hossain Turjo is a student under the Faculty
of Business Administration, EXIM Bank Agricultural University
Bangladesh. He bears the registration ID no: BBAW201900809 and he
has successfully completed her internship program and prepared this
report on “Investment Performance Analysis of EXIM Bank Limited”
based upon the requirement of the program.

The information presented here seems to be authentic. He has done his

job according to his supervisor and guidance. He has tried his best to do
this successfully. I think this study will help his in the future to build up
his career. I wish his every success in life.

………………………….
S.M Faridul Islam
Assistant Professor
Department Of Accounting
Faculty of Business Administration
EXIM Bank Agricultural University Bangladesh

v
 ACKNOWLEDGMENT

I would like to express my sincere gratitude and appreciation to the following individuals and
organizations for their invaluable support and assistance throughout the completion of my
report.

My supervisor, S.M. Faridul Islam, for his guidance, mentorship and unwavering support. His
expertise and dedication significantly enriched the quality of the work.

EXIM Bank for providing me with the opportunity to undertake this research, and for granting
access to valuable resources, data and facilities.

My Family and Friends, for their encouragement, patience, and understanding during this
demanding academic endeavor. Their support was a constant source of motivation.

Md. Rakibul Hasan (Assistant Officer of EXIM Bank, Chapainawabganj Branch), for his
contributions in terms of advice, feedback or assistance in various forms.

I would also like to acknowledge the entire EXIM Bank Agricultural University Bangladesh
community for fostering an environment conducive to academic growth and research
excellence.

This report would not have been possible without the collective support and inspiration from
these individuals and institutions.

Thank you all for your invaluable contributions to this work.

………………

Shariar Hossain Turjo

ID: BBAW2019000809

Batch: 16th

6
 Executive Summary

The Export-Import Bank of Bangladesh Limited is a rapidly expanding private bank. It focuses
on delivering greater customer service at a low cost. The bank's efforts are focused on product
and service diversification. Within a very short period of time, the Export Import Bank of
Bangladesh Limited has made significant progress. In Bangladesh, the bank has been rated as a
top-tier institution. I attempted to analyze the investment process of Export Import Bank of
Bangladesh Limited in this report.

Behind the bank's success, they efficiently analyze investment risk and other risks and manage
the risks in such a way that they achieve success. In the first section of the report, I discuss the
organization's overview, mission and vision, goals and objectives, operations, and performance
of the bank at a glance, among other things. In the second section of the report, I discuss the
study's background, the review of the literature, and the report's research methodology. The
background of the study includes a statement of the problem, the rationale for the study, the
scope of the project, and the project's objective.

The third section of the report analyzes the topic as a whole about the Investment of Export Import Bank of
Bangladesh Limited, Investment Objectives of Export Import Bank of Bangladesh Limited, Investment
Categories of Export Import Bank of Bangladesh Limited, Lending Principles, Investment Investigation,
Sector Wise Investment Growth, Investment Assessment & Risk Management, Security, Documentation
Process, and Investment Monitoring Process of the bank. The fourth section of the report discusses the report's
major findings, and the fifth section of the report makes recommendations based on the report's findings,
before concluding the report with the conclusion section.

7
8
 List of Abbreviations

EXIM Bank Export Import Bank

EXIM BAL EXIM Balance

ROA Return on Asset

ROE Return On Equity

ES Equity Spread

EM Equity Multiplier

NTM Net Invest Margin

NNTM Net Non-Interest Margin

OPM Net Bank Operating Profit Margin

EPS Earnings Per Share

NPM Net Profit Margin

Table of Content

Cover Page i
9
Declaration of Student ii

Declaration Of Supervisor iii

Acknowledgement iv

Executive Summary v

List of Abbreviation vi

Table Of Contents vii

List Of Table viii

List Of Figure ix

Chapter 1 Introduction Page No

1.1 Introduction of the Study
1.2 Background of the Study
1.3 Objectives of the Study
1.4 Methodology of the study
1.5 Limitations of the Study
Chapter 2 Organizational Overview
2.1 History of the Organization
2.2 Vision, Mission & Corporate
culture
2.3 Hierarchy of the Organization
2.4 Functions of the Department
2.5 Financial Information
2.6 EXIM Bank At A glance

10
2.7 Shahriah Council of EXIM
Bank Limited
2.8 Shahriah Auditing
2.9 Banking with Shahriah
Principles
Chapter 3 Investment Performance
Analysis of EXIM Bank
Limited
3.1 What is investment?
3.2 Investment Objectives of
Exim Bank
3.2.1 In EXIM Bank Limited they
Invest in two ways
3.3 Investment of EXIM Bank
3.4 Sector Wise Investment
Concentration
3.4.1 Sector Wise Loans and
Advances
3.4.2 The trend analysis of sector
wise loans is given below
3.5 Major investment categories

3.6 Investment Method

3.7 General Lending Principles

of EXIM Bank
3.8 Investment Investigation

3.9 Investment Recovery

3.10 Investment Assessment &

Risk Management
3.11 Ratio Analysis

3.11.1 Return On Equity (ROE)

3.11.2 Return on Assets (ROA)

11
3.11.3 Net Invest Margin (NTM)

3.11.4 Net non-interest margin

(NNTM)
3.11.5 Net Bank Operating Profit
margin (OPM)
3.11.6 Earnings per share (EPS)

3.11.7 Net Profit Margin (NPM)

3.11.8 Equity Multiplier (EM)

3.11.9 Equity Spread (ES)

Chapter 4 Internship Experience

4.1 Job Responsibilities

4.2 Skills Applied

4.3 New Skills Developed

4.4 Challenges Faced

Chapter 5 Findings and Discussions

5.1 Findings

5.2 Discussions

Chapter 6 Recommendation &

Conclusion
6.1 Recommendation

6.2 Conclusion

References

Appendix

12
 Chapter 1

Introduction

13
1.1 Introduction of the Study

I had a few questions when I preferred this theme to work. Reports on internships under
the investment performance analysis of Exim Bank Limited. In today's modern and
globalized world, the business sector is highly competitive. It is more competitive with
financial institutions such as banks. Currently, regional banks play an important role in
the economic growth and development of the country. Everyone who is interested
wonders what the difference between traditional and Islamic banking is, and since
Islamic banking is proliferating in Bangladesh, it makes sense to do a little research.
Islamic banks can provide efficient banking services to countries supported by
appropriate banking laws and regulations. I am providing this study because I want to
inform the people of our country about the various procedures and laws regarding the
domestic investment sector of private banks. Even I am also interested of knowing how
such bank invest their capital to make profit of their organization.

1.2 Background of The Study

◻The prospective topic is the Investment Division and its investment banking activities.

◻Data required for interpretation is much easier to obtain in the case of other commercial
banking business issues.

◻Supervisors at work are extremely helpful when it comes to data collection and
interpretation. Very realistic problems and questions can arise from the topic-related
issues, which can be very beneficial for future career illumination.

1.3 Objectives of the Study

◻To explore Investment performance analysis of Exim bank Ltd.

14
 ◻To know the investment activities of Exim bank Ltd.

◻To explore their investment performance by ratio analysis.

◻To make some findings and recommendation.

1.3 Methodology of the Study

To perform the observe each number one and secondary records can be used. Which
are given as following.

Primary Sources
◻Export Import Bank of Bangladesh Limited, Chapainawabganj Branch Working at the
front desk on related topics

◻Personal communication with employees.

◻Meeting with senior bank executives.

Secondary Sources
The Internal Sources:

◻Bank’s Annual Report

◻Export-Import Bank of Korea Investment Division, Nara Yangon Branch and

Employment Policy

◻Various brochures, instructions and bank files;

◻Export-Import Bank Investment Sector

Database. The External Sources:
◻Various books and periodicals related to the investment banking sector.

15
◻Internet magazine

◻Various sites

1.5Limitations:

◻ Time is the first limitation of the duration of the program.

◻ A major limitation is interviewing some of the top decision makers who are less
interested in sharing strategies and have very busy schedules.
◻ Insufficient documents required by the foreign exchange department for
comprehensive research.
◻ Another limitation of this report is the bank's policy not to disclose some
data and information

16
 Chapter 2

Organizational Overview

2.1 History of the Organization

17
Export Import Bank of Bangladesh Ltd. (EXIM Bank) was established in 1999 under the leadership
of Late Mr. Shahjahan Kabir, Founder Chairman who had been cherishing a dream of floating a
commercial bank which would contribute to the socio-economic development of our country by
facilitating industrialization, woman empowerment, foreign trade, infrastructural development,
income generation for the marginal, and above all job creation. He had a long experience as a good
banker. A group of highly qualified and successful entrepreneurs joined hands with the founder
chairman to materialize his dream. Indeed, all of them had already established themselves in their
respective businesses as the most successful business personalities in the country with their
innovations, intelligence, talents, industriousness and honesty.

The nucleic personality of the group, Mr. Nazrul Islam Mazumder, who has now been leading the
Bangladesh Association of Banks (BAB), the apex forum of the commercial banks of the country,
and is honored as one of the most illuminated business tycoons in the garment business in the
country, became the honorable Chairman after the demise of the founder Chairman. Under his
leadership, BAB has emerged as an effective platform for exchanging views on problems being faced
by the banking sector of Bangladesh and for formulating common policy guidelines in addressing
such problems.

EXIM Bank starts functioning from 3rd August, 1999 with its name as Bengal Export Import Bank
Ltd. On 16th November, 1999, it was renamed as Export Import Bank of Bangladesh Ltd. with Mr.
Alamgir Kabir as the Founder Advisor and Mr. Mohammad Lakiotullah as the Founder Managing
Director respectively with their long experience in the financial sector of our country. By their
pragmatic decisions and management directives in the operational activities, this bank, in no time,
earned a secure and distinctive position in the banking industry in terms of performance, growth, and
excellence in management. Under the leadership of Mr Lakiotullah, the Bank migrated all of its
conventional banking operation into Shariah Based Islami Banking in July 2004.

In the year 2006, Mr. Kazi Masihur Rahman became the Managing Director of the bank when Mr.
Lakiotullah left the bank after completion of his successful 7 years as MD. Mr. Kazi served the bank
for next five years. Under his leadership, the bank moved to a state-of-the-art centralized IT platform
with world renowned core banking software TEMENOS T24 running on two modern data centers
along with alternate delivery services like ATMs and SMS banking.

18
 On 25th August, 2011, Mr. Md. Fariduddin Ahmed joined the bank as Managing Director. With his
long banking experience, EXIM Bank ensured full compliance in respect of capital adequacy and
asset quality. After his retirement, Mr Ahmed continued his service for EXIM Bank as Advisor from
27th July 2012.

An Islamic banking scholar Dr Mohammed Haider Ali Miah initiated a new era succeeding Mr.
Fariduddin Ahmed on 25th July, 2012 as the first ever Managing Director from the EXIM staff.
Under his far-sighted leadership, EXIM Bank not only achieved excellence in performance in almost
all arenas of its activities but also gained confidence to place itself as one of the dynamic banks
through delivering transparent and standard banking services to the customers in a compliant manner.
He had continued his successful career for long 10 years until he retired on 15 September 2022.

With the commitments of concrete-built resilience of the bank and tailor-made services for its dear
customers, a foreign trade maestro Mr. Mohammad Feroz Hossain succeeded Mr. Mohammed Haider
Ali Miah as Managing Director & CEO on 16th September, 2022. With these objectives, he has been
overhauling and fine-tuning job processing and service delivery mechanism for finer customer
experience. At the same time, he has been working on restructuring its asset and deposit composition
for ensured sustainability. In all, this forward-looking foreign trade veteran is instrumental in offering
international standard banking and service experience within national frontiers.

2.3 Vision, Mission, and Corporate Culture

Vision

The gist of our vision is "Together Towards Tomorrow". Export Import Bank of Bangladesh Limited
(Exim Bank) believes in togetherness with its customers, in its march on the road to growth and progress
with service. To achieve the desired goal, there will be constant pursuit of excellence in compliance with
the Islamic Shariah. We believe the advantages of Islamic economy can best be extended to the people
with a technology-driven modern banking system that upholds the Islamic values, and Exim Bank
envisages making itself a perfect instance of that kind. The Bank’s strategic plans and networking will
strengthen its competitive edge over others in rapidly changing competitive environment. Its personalized

19
 quality services to the customers with trend of constant improvement will be the cornerstone to achieve
our operational success.

Mission

The Bank’s mission comprises:

Extracting the full benefit of Islamic banking system for its customers.

Providing with quality financial services especially in Foreign Trade.

Maintaining and upgrading a technology-based professional banking environment

Maintenance of corporate and business ethics and transparency at all levels

Sound capital Base

Ensure sustainable growth for the honorable stakeholders

Fulfillment of corporate social commitments, and

above all, to add to the national economy

Corporate Culture

Organizational culture is considered as an essential component of business corporations as it has the

ability to bind organizational members together. The culture and values of our bank have been proved as a
source of competitive advantage for us and are acting as a key component to establish the relationship
between the bank and our employees and, in turn, between our employees and our customers. Our culture
and values also encourage customers and employees to join us and stay with us.

EXIM Bank has also been able to improve organizational performance via improving the performance of
individual contributors and also recognizes existing talents to fill up the higher vacancies within the
organization or place them in the right position, wherein the best use of their abilities can be ensured. Our
culture promotes sharing of common goal which ensures harmonious relationship in the working
environment

20
2.3 Hierarchy of EXIM Bank Limited Bangladesh

Managing Director & CEO

Deputy Managing Director

Senior Executive Vice President

Executive Vice President

Senior Vice President

Vice President

Senior Assistant Vice President

Assistant Vice President

Senior Principal Officer

Principal Officer

Executive Officer

Officer

Figure 2.3 Hierarchy of EXIM Bank Limited

21
2.4 Functions of the Department

The address of EXIM Bank is Munsur Bhaban, Holding 68, Baro Indara More, Chapai
Nawabganj 6300.Web: www.eximbankbd.com
Email: [email protected]
SWIFT: EXBKBDDH

Services Provided by EXIM Bank are-

Retail Banking
Deposits
 Current Deposit

- Al- Wadia Current Deposit

 Mudaraba Special Notice Deposit

 Savings Account

- Mudaraba Saving Deposit

 Mudaraba Cash Waqf Deposit

 Term Deposits

- Mudaraba Term Deposit

- Mudaraba Education Deposit

 Deposit Schemes

Mudaraba Monthly Savings Deposit Scheme

Mudaraba Su-Grehini Monthly Savings Scheme

Mudaraba Femina Monthly Savings Scheme
Mudaraba Senior Monthly Savings Scheme
Mudaraba Monthly Income Deposit Scheme
Mudaraba Su-Grehini Monthly Benefit Scheme

22
 Mudaraba Femina Monthly Benefit Scheme
Mudaraba Senior Monthly Benefit Scheme

Mudaraba Multiplus Saving Scheme

Mudaraba Super Saving Scheme
Mudaraba Hajj Deposit Scheme
Mudaraba Denmohor / Marriage Deposit Scheme
Mudaraba EXIM Student Saver
Mudaraba Millionaire Deposit Scheme
Mudaraba Kotipoti Saving Scheme
EXIM RUHAMA- (Three Years' Probable Double Benefit Scheme)
EXIM ZIADAH - (Five Years' Probable Triple Benefit Scheme)
EXIM KRISHI - (Mudaraba Krishi Monthly Deposit Scheme)

EXIM SHWAPNO - (Mudaraba Housing / Entrepreneurship Development

Scheme)

Corporate banking

Investments

Foreign Exchange & Trade Finance

Correspondent Banking
Import Finance
Export Finance
Agri Banking

EXIM Kishan
Remittance
Foreign Remittance

EXIM Exchange Company (UK) Ltd.

EXIM Exchange Company (Canada) Ltd.

SWIFT
International Operation

Departments of EXIM Bank, Chapainawabganj Branch

23
 Chapainawabganj Branch has the following departments:

1. General Banking

a. Accounts Opening/closing.

b. Cheque book issue/Demand Draft/pay order.

Cash deposits/collection/receipts/utility bills.

c. Bill and clearing department.

d. E-corner.

e. Remittance.

2. Investment Department

a. General Investment

b. Women Entrepreneur and SME.

3. Foreign exchange/trade department.

a. Export.

b. Import.

Account opening

As the name implies this section deals with an opening (and closing) of various sorts of
account, as per client wish and demand. Cheque books are also issued through this
department. A client can choose what type of account he/she wants to open. Some of the
most common account types are:
 Alwadia Current deposit

 Mudaraba Savings deposit

 Mudaraba Short term deposit

 Mudaraba Term deposit

 Mudaraba Savings Scheme

24
 Documents needed to open accounts vary from types of accounts, eg. Individual account
or proprietorship. Necessary documents needed to open an account are printed at the back
of respective forms.

2.5 Financial Information

Sl
Particulars 2018 2019 2020 2021 2022
.

1 Authorized Capital 2000.00 2000.00 2000.00 2000.00 2000.00

2 Paid-up Capital 1412.25 1412.25 1412.25 1447.56 1447.56

3 Statutory Reserve Fund 972.09 1070.60 1176.01 1251.95 1374.34

4 Deposits 30078.66 35581.65 39530.83 42170.60 42704.41

5 Investment (General) 30503.61 34328.74 39291.97 42820.49 45254.78

Investment ( Shares & Securities

6 2353.14 4208.96 3886.85 4132.30 3320.63
Exclu. Subsidiaries)

7 Foreign Exchange Business 36653.34 37791.07 34442.90 49787.93 53290.68

a) Import Business 18953.04 20080.15 17782.52 28009.30 25013.78

b) Export Business 17173.13 17065.26 16129.02 21197.45 27649.82

c) Remittance 527.17 645.66 531.36 581.18 627.08

8 Operating Profit 686.39 691.99 631.36 564.36 676.13

9 Investment as % of total Deposit * 93.78% * 89.55% * 91.14% * 88.02% * 95.47%

10 No. of Foreign Correspondent 394 396 386 389 392

11 Number of Employees 2964 2956 2910 3235 3351

12 Number of Branches 123 130 131 140 147

13 Return on Assets after tax 0.65% 0.61% 0.61% 0.37% 0.66%

14 Return on Equity (ROE) 8.22% 8.48% 9.33% 6.17% 11.41%

* As per regulatory adjustment.
Updated on: May 08, 2023

Figure 2.5 Financial Information Of EXIM Bank Limited

25
2.6 EXIM Bank Limited at a Glance

Type Public
Industry Banking
Incorporated Activity Started 2nd June 1999, 3rd August 1999

Headquarters Gulsan Avenue, Dhaka- 1212, Bangladesh

Founder: Late Mr. Shahjahan Kabir

Chairman: Me. Nazrul Islam Mazumder

Managing Director: Mohammad Feroz Hossain

Services Banking, Financial Services

Number Of employees 3242 (2021)

(Source: website of EXIM Bank Limited)

2.7 Shahriah Council of EXIM Bank Limited

The Bank's Board members has established a Shahriah Supervisory Board. Their
responsibility is to oversee the entire bank's transactional procedures and ensure
Shahriah compliance. This Board is made up of the following individuals, led by its
Chairman: In summary, the Shahriah supervisor's responsibilities include
responding to questions from the Bank's administration, staff members,
shareholders, depositors, and customers, following up with Shahriah auditors and
providing guidance, submitting reports and remarks to the Fatwa & Shahriah
Supervision Board and the administration, involved in the Bank's training
programs, supervising the All-Islamic magazine, and handling the duty of being the
Genera.

26
2.8 Shahriah Auditing

This is the civil supervisory aspect that shapes the main feature of the bank. Its existence
is a requirement of Shahriah Supervision procedures. One of its primary responsibilities
is to ensure Shahriah compliance in the Bank's transactional procedures in accordance
with Fat was issued in this regard, under the supervision of the Shahriah Supervisor. The
Shahriah auditor is in charge of reviewing the Bank's transactional procedures
throughout the year to ensure that staff members and divisions have followed the
restrictions, guidance, and Shahriah laws issued by the Fatwa &Shahriah Supervision
Board, forums, and banking conferences. In addition, the Fatwa & Shahriah Supervision
Board certifies all contracts that state a right for the bank or an obligation on the bank.

2.9 Banking with Shahriah Principles

Since July/2004, Export Import Bank of Bangladesh Limited has been the first bank in
Bangladesh to convert all of its conventional banking operations to Shahriah-based
banking. We provide banking services to both Muslims and non-Muslims, giving our
customers options and flexibility in their savings and investments. Our products have
been approved by our Shahriah Board, which is made up of veteran Muslim scholars
from our country who are experts in all aspects of Islamic finance. As a result of the
Bank's sole focus on Shahriah compliant investments, Noriba is committed to strict
adherence to the requirements of the Shahriah Board. With the approval of the Noriba
Shahriah Board, Noriba experts specifically design each of the Bank's investment
vehicles.

27
 Chapter 3

Investment Performance Analysis of EXIM Bank Limited

28
3.1 What is Investment?

In finance and business, investment is income or Capital gains or combinations thereof.

Investors are investors. The opposite of investing or selling an asset is selling an asset.
Investing has the tint of long-term holding, as opposed to speculation in which assets are
purchased to profit from short-term price movements. In practice, there is no clear
definition of the difference between investing and speculation. Expected return on
investment, or projected return on investment, is a measure of the attractiveness of an
expected or realized investment. In economics, investment refers to a company's capital
expenditures in an economy or economic model. In this context, investment differs from
consumer spending, government spending and net exports.

3.2 Investment Objectives of EXIM Bank

The objectives and principles of investment operations of the Banks are:

 Investment funds strictly in accordance with the principles of Islamic Sharia.

o Diversify the portfolio by investment size, sector (public and private),

economic purpose, and geographic region including securities, industrial,
commercial and agricultural.
 Professional evaluation of investment proposals, sound investment approval, close
and continuous supervision and monitoring ensure the mutual benefit of both banks
and investment clients.
o Invest taking into account the country's socio-economic needs.

o Increase potential investors through productive investment based on

participation.
o Funds a range of development programs aimed at reducing poverty,
generating income and creating jobs to accelerate sustainable socioeconomic
growth and community recovery.
29
3.2.1 In EXIM Bank Limited they Invest in two ways

◻ One of them is head office investment. Headquarters investments consists of

Bangladesh banking investments, security investments and some foreign
investments.
◻ Another one is finding with the aid of using the branches and branch investment
includes funding as loans, advances and ensures business.

Head Office Investments

Bangladesh Bank requires that all commercial banks make deposits with Bangladesh Bank,
which is 15% of the total deposit amount. Investments in the head office of the Export-
Import Bank of Korea consist of investments in government bonds, prize money, stocks,
promissory notes and other securities. In short, their government. Securities generally
generate limited returns, but are highly liquid with credit risk and negligible market risk.

Branch Investments

Branches invest in a variety of sectors, including loans and advance payments. The branch
of a bank that processes these loans and loans is called the credit department. Now let's
talk about the investment department of Exim Bank Limited. Exim Bank Limited invests
based on a profit-and-loss distribution system in accordance with the principles of Islamic
Sharia. Making a profit is not an emphasis and is not the only motive in achieving the
public good and creating employment opportunities. In addition, to diversify our
investment portfolio, we joined the investment business under a special system during the
year

30
3.3 Investments of EXIM Bank
Islamic Shariah, a leading third-generation commercial bank operated by EXIM Bank It
offers/provides a wide range of banking services, including a wide range of deposit and
investment products, currency exchange, remittance and other ancillary services
supported by the most sophisticated and modern information technology and
professional management. The bank's investment portfolio consists of a variety of
sectors, with all nationally defined sectors/businesses and industries. The bank
prioritizes/works to preserve and maintain high quality assets, and strives to retain good
customers by treating customers as true business partners through friendly customer
relationship management and financial advice. At the same time, it strives to attract new
clients with broad potential to diversify its existing portfolio and explore new potential
business areas, regulated by global trends as well as the changing business growth of the
national economy. By applying the above methods/processes, banks have had great
success in creating well-organized and structured investment portfolios and minimizing
overall portfolio risk.

The main areas of investment activity are concentrated in the following sectors/areas:

◻ Ready Made Garments

◻ Hospitals & Clinics
◻ IT Related business
◻ Agricultural and Agricultural developments items
◻ Fishing and fishing business promotion
◻ Telecommunication
◻ Transportation and communication
◻ Forestry and furniture
◻ Construction business and housing development
◻ Leather and leather goods
◻ Plastic and other synthetics
◻ Entertainment
◻ Photography
◻ Ceramic
◻ Hotel & tourism
31
 ◻ Warehouse and container services
◻ Printing and packaging
◻ Gunning and Bailing
◻ Pathological Laboratories
◻ Cold Storages
◻ Horticulture- Flower growing and marketing
◻ Food and oil processing plants
◻ Other admissible trading and intermediaries

Other admissible trading and intermediaries

3.4 Sector wise investment Concentration

It is especially important to monitor whether credit growth is contributing to the economy.

It focuses on sectors vulnerable to changes in economic activity. Concentration of
investments (measured as a percentage of total loans) in a particular sector of an economy
or activity makes banks vulnerable to adverse changes in that sector or activity.
Consequently, the quality of a financial institution's investment portfolio is closely related
to the financial health and profitability of its borrowers.

3.4.1 Sector Wise Loans and Advances

Sector 2016 2017 2018 2019 2020

Agriculture 0.82% 3.97% 2.63% 4.23% 3.99%

Industry (Leather, 23.15% 34.1% 35.91% 40.35% 46.29%

Pharma, Textile, food
etc.)

32
 The Working Capital 12.02% - - - -
Financing

Construction 0.92% - - 0.56% 0.98%

Transport& 2.3% 2.56% 2.59% 3.29% 3.15%

Communication
Trade 54.17% 50.75% 48.84% 38.2% 31.42%

Housing 4.89% 4.75% 6.19% 8.39% 9.16%

Miscellaneous 1.73% 4.00% 4.94% 4.98% 5.01%

3.4.2 The trend analysis of sector wise loans is given below

Figure 3.4.2 sector wise loans given

(Source EXIM Bank Limited Annual report pdf)

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3.5 Major Investment Categories
The various investment methods in the Export-Import Bank include:

1. Murabaha:

Murabaha is an Islamic investment system in which banks purchase real estate with free
and clear ownership. This is an interest-free loan that is considered and is a form of loan
sale permitted under Sharia law.

2. Bai-Muazzal:

Bai-Muazzal is an agreement between a buyer and a seller, in which the seller sells to
the buyer certain goods permitted by Islamic Sharia at an agreed upon fixed price to be
paid in a fixed payment over a set period of time.

3. IzaraBilBaia:

IzaraBilBaia is an investment method in which banks must invest in the purchase of

equipment, equipment for long-term asset lines, transportation, land, buildings, etc.
under contract. Bank rules and regulations.

4. Wazirat Bill Wakala:

Wazirat Bil Waqala: Wakala is an Islamic financial term for an agent contract, wakala is
a non-binding contract, and either the agent or principal may withdraw from this agent
agreement at any time upon agreement between the parties.

5. Quard:

It is a method of providing a financial loan on condition that the principal is repaid in the
future without increasing the principal.

6. Local Documentary Bill Purchased:

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Local supporting documents obtained: Payments as opposed to documents fall under this
section in lieu of selling goods to a local export-oriented industry treated as export and
denominated in local currency. This short-term liability depends on the receipt of your
account.

7. Foreign Documentary Bill Purchased:

This section includes payments made to customers through the purchase of foreign
documented bills of exchange. These short-term investments are regulated by export
documents.

3.6 Investment Method

3.6 Figure of investment method

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 Figure 3.6 Investment method

(Source: website EXIM Bank Limited Images)

3.7 General Lending principles of EXIM Bank Limited

Loans to merchants, businesses and industrial enterprises are major banking business.
Banks get most of their revenue from interest and discounts on their loans. Nevertheless,
the lending business is not without certain risks. Because it relies heavily on borrowings,
bankers cannot afford loans. Excessive loan risk. Therefore, banks follow very prudent
policies when lending money and conduct their business according to well-known
reliable lending principles to minimize risk. In credit management practice, banks
generally follow the following lending principles:

 Safety

 The Purpose

 Profitability

 Liquidity

 Dispersal/Diversification

 National interest/social benefit

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3.8 Investment Investigation

Loans are one of the most important functions of a bank. So, this is the most important. It is important for
banks to choose borrowers they can trust. To do this, banks establish mechanisms to help identify
creditworthy borrowers. This section describes some of the mechanisms that banks use for this purpose.

Form for Investment Application

An investment application will generally include the group name, foundation, nature and
place of business, year of establishment, borrower's experience with this line, information
about assets and liabilities, purpose of loan, amount required, length of loan required,
nature of collateral offered; Name of current banker with payment source, detailed loan
description and other opportunities. This is the first step to getting to know your borrower.

Personal Interview

The bank will arrange an interview with the borrower to learn more about the borrower's
specific needs, prospects for wise use of funds, solvency, and suitability of the collateral
offered. Highlights from the interview: his business, all legal Documents required for
business operation (Memorandum and Articles of Incorporation, trade and import permit),
capital related to working capital, business experience, financial reporting results of at
least 3 years, investment amount and period, loan purpose, repayment source, payment
terms, proposed Secure Documents, Available Fee Types. Interviewing a bank employee
attempts to analyze and judge the correctness of various statements and documents of
prospective borrowers and arrives at a balanced opinion about the acceptability or
inadequacy of the offer. If, after the initial interview, the commercial lender determines
that the loan request meets the basic criteria for a bank loan, the next step is to conduct an
in- depth investigation based on the customer and the documents received from the bank
itself and externally.

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3.9 Investment Recovery

The bank has a recovery department (EB) under CRM. He manages the account himself
with a permanent account. Damage (hazard class below Standard (6)).

The main features of RU:

 Define an action plan/strategy for account recovery.

 Take advantage of every opportunity for maximum recovery
 Ensure adequate and timely preparation for investment losses based on actual
and expected losses.
 Regularly check the score of 6 or less

3.10 Investment Assessment & Risk Management

◻Investment Assessment

A thorough mortgage and threat evaluation is performed previous to the granting of

loans and as a minimum yearly thereafter for all facilities. The outcomes of this
evaluation are provided in a mortgage inspiration to Head of Loan Division for approval.
The guiding concepts for a financial institution authentic at the same time as
accumulating and recording statistics are to stay uninfluenced through extraneous
concerns and secondly, he continues touch with all people who may be of assistance.

The following steps for finishing touch of Loan Risk evaluation for every facility are
observed through the financial institution alongside the guidelines/commands given in
Head Office circulars issued from time to time.

◻Risk Management

The following risk areas are addressed for risk management:

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◻ Borrower Analysis: Major shareholders, management and group of subsidiaries
are evaluated. Any issues related to insufficient depth of management, complex
ownership structures or intra-group transactions are resolved and risks are
reduced. Banks collect credit information on borrowers' past credit conditions
from CIB, and exchange credit information or opinions with other banks. CIB
reports reflect/include the names of all creditors with credit lines, limits and
outstanding balances.
◻ Industry Analysis: Key risk factors to the borrower's industry are assessed.
Determine the borrower's strengths and weaknesses by considering the
borrower's position in the industry, general issues in the industry, or any issues
related to competitive forces, and comparing it to competitors.
◻ Supplier/Buyer Analysis: Customer or supplier concentration is assessed. Any
issues relating to the borrower's position in the industry, general industry
interests, or competitive factors are considered and the borrower's strengths and
weaknesses are identified compared to competitors.
◻ Historical Financial Analysis: An analysis of the borrower's historical financial
statements for a minimum of three years is presented. If the equity is held by a
company guarantor, the guarantor's financial statements are analyzed. The
analysis concerns the quality and sustainability of income, cash flow and the
sustainability of the borrower's balance sheet. Specifically, it analyzes cash flow,
leverage, and profitability.
◻ Project Financial Performance: For term loan (one year or longer maturities)
proposals, projections of the borrower's future financial performance are
provided, along with an analytical indication of the adequacy of cash flows to
repay the debt. If the expected cash flow is not sufficient to repay the debt, the
loan is not provided.

◻ Accounts Conduct: For existing borrowers, past performance is assessed to

meet repayment obligations (trade payments, cheques, profits and principal
payments, etc.).

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 ◻ Mitigating Factors: Mitigation risk factors identified in the credit rating have
been identified. Potential risks include margin stability and/or volatility, high
leverage (leveraged/debt equity), overstock or debtor issues, rapid growth,
acquisition or expansion; new business line/product expansion, leadership
change or succession issues; customer or supplier focus; The opacity of industry
problems.

3.11 Ratio Analysis

Ratio analysis is type of financial statement that is use to access the company’s financial
health in few areas.

3.11.1 Return of Equity (ROE) of EXIM Bank Limited

RETURN ON EQUITY CAPITAL (ROE)

2016 8.72%
2017 10.09%
2018 9.63%
2019 7.96%
2020 7.44%

RETURN ONEQUITY
CAPITAL (ROE)
12.00%
10.09%
9.63%
10.00% 8.72%
7.96%
8.00% 7.44%

6.00%

4.00%

2.00%
40
0.00%
201 201 201 201 202
 Interpretation

ROE- That indicate how an institution earn profit by using their shareholders equity. The
higher ROE is better for institution. Above 5-year data we can see maximum ROE came
from 2017 and the rate is 10.09% and next 3 year the rate decrease. Behind these
decreasing statistics the reason is bank Exim could not utilize their shareholder capital
properly. If they did it properly the ROE might increase every year.

3.11.2 Return of Assets (ROA)

Return of Assets (ROA)

2016 0.65%

2017 0.73%

2018 0.72%

2019 0.55%

2020 0.49%

RETURN ON EQUITY ASSET

(ROA)
0.80% 0.73% 0.72%
0.70% 0.65%

0.60% 0.55%
0.49%
0.50%

0.40%

0.30%

0.20%

0.10%
41
0.00%
2016 2017 2018 2019 2020
Interpretation

ROA- It refers that how much an institution can make their profit by using their asset.
So maximum ROA is better for an institution. Above 5 years data here we can see in
2016, the ROA is .65%. In the next year that rate is increase & the rate is .73%. But next
3 year this rate was decreased because in the level of increasing asset rate is nor similar
with net profit.

3.11.3 Net Interest Margin (NIM)

Net Interest Margin (NIM)

2016 1.60%

2017 1.85%

2018 2.49%

2019 2.30%

2020 0.70%

NET INTERESTMARGIN
(NIM)
2.49%
2.30%

1.85%
1.60%

0.70%

2016 2017 2018 2019 2020 42

 Figure of NIM (Net Interest Margin)

Interpretation

The amount of difference between interest revenue and interest cost management that the bank has
been able to achieve through cost control over its earning assets is measured by net interest
margin. In this chart here we can see that in 2016 to 2018 the NIM ratio was increase it is a
positive sign for the bank because we know a positive net interest margin indicates that an
organization is profitable. And highest ration comes from 2018 the rate is 2.59%, but in 2019 to
2020 this ratio was decrease because of the pandemic situation, people are unable to pay their loan
interest. So, bank cannot earn their interest income that’s why this two year this ratio was fallen
down.

3.11.4 Net Non-Interest Margin

Net Non-Interest Margin (NNIM)

2016 0.76%

2017 0.42%

2018 0.08%

2019 0.25%

2020 0.72%

NET NON INTERESTMARGIN

0.90%
0.76%
0.80% 0.72%
0.70%

0.60%

0.50% 0.42%
0.40%

0.30% 0.25%
0.20%

0.10%
0.08%
0.00% 43

2016 2017 2018 2019 2020

 Figure Net Non-Interest Margin

Interpretation

The non interest margin is a measurement tool that measures the value of non-interest
revenue such as fees and service charges. The difference between non-interest income and
non-interest expenses divided by total earning assets is known as the non-interest margin.
Here we can see in the year 2016, the NNIM ratio is the highest. After next 4-year ratio
cannot beat the year 2016.The reason is the non-interest expenses and asset is gradually
increase but non-interest income cannot increase at the same time. But in 2020 the non-
interest income again increases as a result the NNIM ratio was increase in this year.

3.11.5 Net Bank Operation Profit Margin

Net Bank Operating Profit Margin (OPM)

2016 2.44%

2017 2.36%

2018 2.65%

2019 2.65%

2020 1.48%

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 NET BANKOPERATING
PROFIT MARGIN (OPM)
3.00% 2.65% 2.65%
2.44% 2.36%
2.50%

2.00%
1.48%
1.50%

1.00%

Figure 3.11.5 Net Operation Profit Margin (OPM)

Interpretation

The operating ratio is an indicator of a company's ability to make profit from its core
product while utilizing all of its assets. To calculate the operating margin, divide operating
income (earnings) by sales (revenues). Above 5-year data we can see in 2016 the value is
2.43% after next year this rate was fall down. But in 2018 to 2019 this ratio increases and
it is the highest rate in this graph. In2020 bank cannot utilize their asset to generate sales as
a result the rate was fall down.

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3.11.6 Earnings Per Share (EPS)

Earnings Per Share

2016 1.63

2017 1.88

2018 1.90

2019 1.68

2020 1.72

Earnings Per Share (EPS)

1.95

1.90 1.90
1.88
1.85

1.80
1.72
1.75
1.68
1.70 1.63

1.65

1.60 2016 2017 2018 2019 2020

Figure 3.11.6 Earnings Per Share

Interpretation

The fraction of a company's profit given to each outstanding share of common stock is called earnings per
share (EPS). The more company's earnings per share, the more profitable it is. In this graph here we can
see in 2016 to 2018 EPS was gradually increase but in 2019 per share price was huge fall but in 2020 the

46
share piece again increase. So we can say in the year 2018 is the best for the shareholder and the bank as
well.

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