Equity analysis & loan and advances of Mutual Trust Bank Limited (MTBL)

Abstract

Now-a day‟s banking sector is modernizing and expanding its hand in different financial events every day. At the same time the banking process is becoming faster, easier and is becoming wider. There is a great supportive role of banking system in human society. It plays a vital role for the economic development of a country. The banking system of Bangladesh is backward, compared to many other nations. The local banks which are rendering services to mass people of the country are following the traditional system, which are no longer followed by bank in other development countries. It brings Bangladesh people to the touch of modern technology. Banking System of Bangladesh has gone through three phases of development – Nationalization, Privatization and lastly Financial Sector Reform. Mutual Trust Bank Ltd. (MTBL, the 3rd generation bank) has started its journey as a private commercial bank on 29 September, 1999. The Company (Bank) operates financial activities through its Head Office situated at Dhaka and 101 branches. The Company/ Bank carry out international business through a Global Network of Foreign Correspondent Banks. In this study, a fervent appeal has been made to demonstrate and analyze the equity part and Loan & Advance the subsequent outcome of Mutual Trust Bank Ltd. (MTBL), which is passing its childhood period to establish an iconic threshold in the banking arena. The title of the report is the “Internship Report Equity Analysis and Credit of Mutual Trust Bank Limited”. In the first chapter of this report the equity analysis part are stated with the financial statement of past 5 year. Using this financial figure the growth of the MTBL has been calculated and after that future five year financial statement has been forecasted. This is the first chapter of the report. Main part contains the forecasted Balance sheet of 2015 to 2019. The growth rate has been calculated on basis of calculating of past five year in a sequential face. This chapter also contains the Profit and Loss statement of Passed five 2009 to 2014 and using this financial figure future 5 year 2015 to 2019 year‟s profit and loss statement has been forecasted. After that main calculation has been started. Using this forecasted data Operating cash flow of 2015 to 2019 has been calculated. Then Change in net working capital and capital spending has been deducted from Operating cash flow with the resulted findings of Project cash flow of 2015 to 2019. Then here Net Present Value has been calculated of Project Cash Flow. This NPV figure is divided by the number of share outstanding of 31 Dec, 2014. Then the calculation ended by get the price of share to find out that share price is undervalued. Second main part contains the Loan and Advance details of Mutual trust bank. Mutual Trust Bank Ltd. offers different type of loan. The categories are divided according to the purpose of the loan. MTBL Offers mainly five types of Loan, these are MTB Personal Loan, MTB Auto Loan, MTB Home Loan, MTB Home and Equity Loan and MTB Professional Loan. These types of loan acquire different features as well as facilities. These loans are functioned according to the category. Difference in the loans category is amount, target customer, interest rate, loan process and etc. Different types of loan are as follow.