Financial performance analysis of Shahjalal Islam Bank limited

Abstract

This internship report emphasizes the Financial Performance Analysis of Shahjalal Islam Bank limited. There are four chapters in this report which cover specific areas related to the analysis. This report's main objective is to identify Shahjalal Islami Bank Limited's financial position and analyze the financial performance to identify the strengths and weaknesses and finally provide recommendations to overcome the limitations. The whole analysis part was carried out using secondary data collected from online sources, relevant articles, and previous annual reports. Secondly, the next chapter discusses the overview of Shahajalal Islami Bank and its mission and vision. This bank has started its journey initially as a public limited company, and they have expanded now to every corner of the country by founding 72 branches. They have introduced special schemes tailored to their customers' specific needs like Mudaraba monthly income scheme, Mudaraba double/triple benefit scheme, Mudaraba monthly deposit scheme, Mudaraba Housing deposit scheme, Mudaraba education deposit scheme etc. Their marketing strategy facilitated the organization to secure sustainable business growth by offering quality services to its clients. In addition to that, they have also been able to fulfill their yearly profit goals, which has taken them one step towards becoming an industry leader. Besides growth, they strictly follow financial laws and banking protocols to show professionalism. Efficient top management and special customer need-oriented schemes have enabled this organization to achieve a competitive advantage over other banks. On the contrary, this bank always depends on centralized decisions from head office and lacks technical workforce and logistics. These can be considered as the major weaknesses of this company. Third chapter discusses financial performance analysis of the bank. Moreover, it has used financial statement analysis, different ratio analysis techniques on gathered data. There are several ratio analysis methods like current ratio, net working capital, debt ratio, equity over time, return on asset etc. which compares line-item data from company's financial statements to gain insights about profitability, liquidity, operational efficiency. It demonstrates the company's performance by identifying it's financial position and comparing it to other existing companies of the same and different sectors. The final chapter of this report focuses on financial analysis findings and provides recommendations to address the shortcomings of these findings. Some of the major conclusions are decreasing tendency of current ratio, and debt ratio demonstrates an upward curve when plotted against time intervals for the last few years. Besides shortcomings, some of the findings indicate the organization's satisfactory performance, like the debt ratio has improved compared to previous records. Some recommendations are discussed in this section to address the current issues regarding financial performance. Some of the author's suggestions are improving the bank's ability to produce more cash to fulfill short-term obligations and making appropriate use of deposit funds to improve the investment to Deposit ratio.