Performance Evaluation

Of

HSBC Bank

Ahsanullah University of Science and Technology

ASSIGNMENTASSIGNMENT

ONON

PERFORMANCE EVALUATION OF HSBC BANKPERFORMANCE EVALUATION OF HSBC BANK

Prepared For:

MS. Naznin Sultana Chaity Lecturer, School of BusinessAhsanullah University of Science & Technology

Prepared By:

DREAM MEARCHENTS

Tahia Nawar ID# 09.01.02.103Ayesha Parven ID# 09.01.02.105Mahmuda Zaman ID# 09.01.02.115Sharmin Rahman ID# 09.01.02.123Afrina Islam ID# 09.01.02.135Mehnaz ID# 08.02.02.103

Course Title: Money & Banking Course No: BBA 315 Date of Submission: 12 July 2011

Letter of Transmittal

July 12, 2011

MS. Nusrat Jahan Chaity,Lecturer,School of Business,Ahsanullah University of Science & Technology.

Subject: Letter of Transmittal.

Respected Madam,

We would like to thank you for giving us an assignment of preparing a realistic paper work for our Money & Banking Course, Course No. BBA-315. Without your help and advice it was impossible for us to prepare these answers. Your help and advice has made our work much easier. While preparing this assignment we got to know various new aspects of performance evaluation, ratio analysis, banking sector, their works & internal & external performances etc. which have increased our analyzing skills. It is a matter of great pleasure that our assignment is a result of team work and we are really grateful to you for giving a chance to form our group & charging up our team spirit.

We will be indebted to you if you have a look on our assignment and consider our faults and let us know the way to make it better and more effective.

We hope this report will merit your approval.

Respectfully yours,

Tahia Nawar Deya - 09.01.02.103Ayesha Parven - 09.01.02.105Mahmuda Zaman - 09.01.02.115Sharmin Rahman - 09.01.02.123Afrina Islam - 09.01.02.135Mehnaz Muna - 08.02.02.103

Acknowledgement

This report is an output of the study on ‘Performance Evaluation of HSBC Bank” instructed by Ms. Naznin Sultana Chaity, Lecturer of Ahsanullah University of Science & Technology (AUST).

At the very beginning we thank Almighty Allah for the successful completion of this report.

We owe a lot to many people during the writing of this report.

Our deepest thanks and gratefulness goes to our respected madam Ms. Naznin Sultana for guiding and helping us to do the assignment. She has taken a lot of pain to go through the report and correct it as and when needed.

We like to express our thanks to the Dean of School of Business, AUST for his kind help.

We also extend our thanks to all our well wishers.

Table of Contents

Properties Page No.Letter of Transmittal

Acknowledgement

Part I- Introduction

Origin of the Report

Objective of the Report

Flow of Methodology

Limitations

Part II- Literature Review

Part III- Company Profile

History of HSBC in Bangladesh

Operations of HSBC in Bangladesh

Mission, Vision & Value of HSBC

Part IV- Findings & Analysis

Liquidity Analysis

Profitability Analysis

Operating Efficiency

Asset Quality

Market Position

Part V- Recommendation & Conclusion

Recommendations

Conclusion

Appendix

Executive Summery

HSBC Bank is one of the leading banks in the world’s banking sector. For the performance evaluation of this world’s local bank, we have used the ratio analysis process in this report. This is the most fruitful way to evaluate a bank’s performance. For this reason we have discussed the definition of performance evaluation and ratio analysis in literature review, the second part of the report. We have used liquidity ratio, profitability ratio, efficiency ratio, asset quality ratio and market. Within these ratios cash position indicator, security position indicator, deposit composition ratio and temporary investment ratio in liquidity ratio; return on equity, return on asset, net interest margin ratio, net profit margin ratio, equity multiplier ratio in profitability ratio; operating efficiency ratio in efficiency ratio; provision for loan loss in asset quality ratio are discussed here. We discuss the company’s profile in part three. In part four we analyze the ratios from the data collected of 2005-2010 from the annual report of the bank and interpret them according to their results. In part five there are some recommendations for the management of the bank to make more profit and then the conclusion. Without these we have also discussed the origin of the report, objective of the report, methodology and the limitation in part one.

PART I

INTRODUCTION

Origin of The Report:

The report is a result of the course Money and Banking, course no. BBA-315, designed for the students of 3rd Year 1st Semester. The report is prepared on Performance Evaluation of HSBC bank. Preparation of the report helped a lot to achieve analyzing skills and practical knowledge about the proper ways of making evaluation of a bank.

The task was assigned by the Course Instructor Ms. Naznin Sultana Chaity. Under her able guidance and supervision, the report is completed and submitted hereby.

Objective of the Report:

The objective is to find out the performance evaluation of the bank as a whole and suggest steps to improve the condition. The financial ratios were used as the main tool for evaluating the performance. The financial ratios concerning liquidity, efficiency, profitability and market position are useful in evaluating the financial performance and management quality of the bank. The ratio findings help to identify the current position and future growth of the bank. After the main objective of determining the performance evaluation of the bank, there are some recommendations for the management of the bank.

Flow of Methodology:

The methodology of this report consisted of developing an analysis based on the ratio calculation of HSBC Bank.

Data Collection:The ratios were calculated by using the data collected from the annual report of 2005-2010 of the particular bank.

Data Analysis:Analysis was done according the relevant topic.

Interpretation and Recommendation:Interpretation and recommendation are given according to the result of the ratios, which is better for the bank.

Others:We also have taken the help of text book, newspapers and website of the particular bank and follow the class lecture.

Limitations:

The report accuracy is minimized due to some limitations. The unavoidable limitations are as follows:

Accuracy of Analysis: The quality of information in this study is limited as the basis of data is taken from a delicate source. All of the data had to be taken from the secondary sources i.e, Annual Reports and the website.

Shortage of Data:The notes of 2005 annual report were not found. So the Temporary Investment Ratio of the bank could not be done.

Part II

Literature Review

Performance Evaluation:

This is the way to evaluate the bank’s performance by calculating the financial ratios.

Financial Ratio:

Financial ratios are constructed by forming ratios of accounting data contained in the bank’s Reports of income (i.e., profit and loss statement) and condition (i.e. balance sheet).

Ratio Analysis:

Ratio Analysis is the starting point for developing the information desired by a financial analyst.

Now the ratios used in this report are described following:

Liquidity Ratios:

1. Cash Position Indicator:The ratio indicates a bank’s ability to handle immediate cash needs. The higher the ratio the better the liquid position of the bank. It is calculated as follows-

Cash Position Indicator = cash∧due ¿other bank ¿Total Asset

2. Securities Position Indicator:Government securities are the second most liquid assets after cash. This ratio compares the most marketable securities an institution can hold with the overall size of its asset portfolio; the greater the proportion of govt. securities, the more liquid the bank. It is calculated as-

Security Position Indicator = Government Securities

Total Assets

3. Deposit Composition Ratio:The ratio measures how stable a funding base each institution possesses. A decline in this ratio suggests greater deposit stability and a lesser need for liquidity. It is calculated as-

Deposit Composition Ratio = DemandDepositTimeDeposit

4. Temporary Investment Ratio:Temporary investment ratio describes a bank’s total liquid position. The increase of the ratio indicates better liquid position of the bank. It is calculated as-

Temporary Investment Ratio = Investment ≥1 yr+Due¿ other banks ¿Total Asset

Profitability Ratio:

1. Return on Equity:Return on equity measures a bank’s profitability by revealing how much profit a bank generates with the shareholders investment. The equation of ROE is-

ROE = Net Income

Total Shareholder ' sEquity

It measures the ratio potential investors may look at when deciding whether or not to invest in the company. In general, the higher the percentage is the better.

2. Return on Asset:ROA measures the efficiency with which the company is managing its investment in assets utilizing them to generate profit. It measures the amount of profit earned relative to the firm’s level of investment in total assets. The higher the percentage is better, because that means the company is doing a good job using its assets to generate sales. The equation for ROA is-

ROA = Net IncomeTotal Assets

3. Net Interest Margin:Net Interest Margin (NIM) is a measurement of the difference between the interest income generated by banks or other financial institutions and the amount of interest paid out to their lenders. It examines how successful a firm’s investment decisions are compared to its debt situations. A negative value denotes that the firm did not make an optimal decision, because interest expenses were greater than the anount of returns generated by investments. The equation for NIM is-

NIM = Total Interest Income−Total interest expense

Average earning Asset

4. Net Profit Margin: It tells investors the percentage of money a company actually earns per dollar of sales. This number is an indication of how effective a company is at cost control. The higher the net profit margin is, the more effective the company is at converting revenue into actual profit. The net profit margin is a good way of comparing companies in the same industry. The equation is-

NPM = Net Income

OperatingRevenue

5. Asset Utilization Ratio:It measures the rate at which a business is able to turn assets into sales, and hence cash. The higher the ration, the more effectively assets are used to generate revenue. The equation is-

Asset Utilization Ratio = OperatingRevenue

Total Asset

6. Equity Multiplier Ratio:The ratio shows a company’s total assets per dollar of stockholder’s equity. A higher equity multiplier indicates higher financial leverage, which means the company is relying more on debt to finance its assets. The equation is-

Equity Multiplier Ratio = TotalassetTotal Equity

Efficiency Ratios:

1. Operating Efficiency Ratio:The efficiency ratio gives us a measure of how effectively a bank is operating. It is the cost required to generate each dollar of revenue. The equation is-

Operating Efficiency Ratio = TotalOperating IncomeTotalOperating Expense

Asset Quality:

1. Provision for loan losses: Each bank provides an estimate of future loan losses as an expense on its income statement. This expense maybe related to the volume of loan. The equation is-

Provision for loan losses = Provision fo r loan∧advances

Total loan alease

When the ratio increases it denotes the company is not efficient in its loan collection which means the asset is not good.

Market Position:

1. Earnings Per share:Earning per share is the statistic that is often quoted when profitability is discussed. The reason for its popularity is that it is relatively easy to understand and easy to relate to stock prices. The equation is-

EPS = net Income

Number of totalou tstanding shareThe number of shares outstanding can change from year to year, a firm with no change in income could have hired EPS if the number of shares declined. Many firms buy their own stock for treasury stock, employee stock option plans (ESOP), and other purposes. One effect of such purchase is to increase EPS.

2. Price Earnings Ratio:The price earnings (P/E) ratio summarizes the outlook for the future of the bank, the amount of its earnings and dividends, the timing of earnings and dividends and the risk of those earning and dividends. A bank that is expected to show rapid growth in earnings

will have a higher price earnings ratio than one with little expected earnings growth. The equation is-

P/E = Market per share

EPS

Part III

Company Profile

Organization’s name:

The Hongkong and Shanghai Banking Corporation (HSBC).

History of HSBC in Bangladesh:

The Hongkong and Shanghai Banking Corporation (HSBC), Bangladesh branches commenced its banking operations in Bangladesh on 3 December 1996 after obtaining its banking license from Bangladesh Bank on 17 April 1996. The Hongkong and Shanghai Banking Corporation Limited is incorporated in Hongkong and its ultimate holding company HSBC Holdings plc is incorporated in England.

The bank primarily focuses on urban areas have branches in most areas of the capital city of Dhaka, it also has branches in the cities of Chittagong and Sylhet. The bank also has a good number of ATM booths in the cities present; it also has booths in most five star hotels.

HSBC Bangladesh is rated ‘AAA’ in the Long-term and ST-1 rating in the Short-term, which are the highest level of ratings for any bank or financial institution in Bangladesh.

HSBC Bangladesh offers a comprehensive range of financial services such as commercial banking, consumer banking, payments and cash management, trade services, treasury, and custody and clearing. The bank also offers offshore banking in the Export Processing Zones, this is only limited to investors in the EPZs. A special service called NRB Services is also available for Non Resident Bangladeshis, this service allows consumers to maintain accounts in US Dollars, Pound Sterling and Euros. People using this service can freely remit money from Bangladesh to any part of the world and can access their money from any HSBC booth around the world.

HSBC Bangladesh has a help center which operates on a daily basics. It is one of the very few banks in the country to offer day night banking.

HSBC's global Islamic banking system called Amanah is available in Bangladesh. There is a special branch dedicated just for this service. Under this service customers can also avail debit and credit cards.

General Background:

Opened first Bangladesh branch in December 1996 Network of 13 offices, 39 ATMs, 9 Customer Service Centres, an offshore banking unit,

and offices in 7 EPZs. 1051 employees as of December 2010

HSBC’s Operation in Bangladesh:

Personal Banking Commercial Banking Corporate & Institutional Banking HSBC Net Trade & Supply Chains Payments & Cash Management Custody & Clearing Investment Banking & Markets Treasury & Capital Markets Amanah

Mission, Vision & Value:

Mission of HSBC:Having regard to ethical values; to meet its customers financial needs in the fastest and most appropriate way, to continue innovative works in order to achieve: human resource with superior qualities, technological infrastructure and service packages.

Vision of HSBC:Bringing together people that make a difference.

Value of HSBC: To exceed customer expectations in service quality.

To be a pioneer in the implementation of technologies those create distinction for its customers, employees and shareholders.

To keep its reliability at the utmost level with the contribution of its strong capital structure and liquid assets.

To make a positive contribution to the community

To respect meritocracy during hiring processes, improving knowledge and skills of its employees, creating the mostly preferred work environment.

PART IV

Findings & Analysis

Ratio Analysis:

Liquidity Ratio:

1. Cash Position indicator = Cash+Due ¿other Bank ¿Total Asset

= Cash+Balance withOther Bank+Money at call∧short notices

Total Asset

Item 2010 2009 2008 2007 2006 2005

Cash 9615.24 7978.22 6548.82 5888.1 4843 4633.02

Balance with other Bank

1400.62 1332.64 965.69 1403.85 1201.84 972.34

Money at Call & Short Notices

3035 1685 905 850 400 140

Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92 31209.8

Cash Position Indicator

0.172322 0.158555 0.130366 0.146614 0.154397 0.184088

% 17.23221 15.85553 13.03658 14.66139 15.43973 18.40883

Interpretation:

From the graph we can see cash position was maximum in 2005. Then it falls gradually upto 2008. This indicates that the bank is shrinking its asset as cash rather they are investing them. From 2009 the cash position was again increasing. In 2010 it is 17.23% i.e the bank has the sufficient liquidity position than the previous year. This means they have enough cash in their hand for liquidate but in the long run it may causes problem. Because this cash are not creating any interest or other income.

Year0

0.020.040.060.08

0.10.120.140.160.18

0.2

Cash Position Indicator

2010 2009 2008 2007 2006 2005

2. Security Position Indicator = Government Securities

Total Asset

Item 2010 2009 2008 2007 2006 2005Govt. Securities 6773.06 18384.09 10335.76 2453.65 3226.69 2401.06Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92 31209.8Securities Position Indicator

0.083066 0.26509 0.160037 0.044183 0.077301 0.076933

% 8.306594 26.50902 16.00366 4.418341 7.730095 7.693289

05

1015202530

Security Position Indicator

201020092008200720062005

Year

%

Interpretation:From the above information we can see, Government Securities in 2007 falls than 2005 and 2006. Again in 2008 and 2009 it increases much. That means the company is investing maximum in government securities. They can liquidate these securities any time easily. After that in 2010 again it decreases. This means the company is investing more in risky areas. This may cause problem if they need immediate liquidity

.

3. Deposit Composition Ratio = DemandDepositTimeDeposit

= Current Account∧Other AccountsSavings Deposits+TermDeposits

Item 2010 2009 2008 2007 2006 2005

Current Accounts 22666.88 13721.1 7843.65 14954.52 7000.88 5329.2

Savings Deposits 12922.17 11304.13 8605.86 8023 7718..23 6248.43

Term Deposits 27414.1 29848.8 34163.11

21019.97 17838.97 12621.05

Demand Composition Ratio

0.561948 0.333417 0.183396 0.51491 0.273929 0.282424

% 56.19478 33.34173 18.33958 51.49101 27.39298 28.24243

Year0

10

20

30

40

50

60

Deposit Composition Ratio

2010 2009 2008 2007 2006 2005

Interpretation:The Deposit Composition Ratio of HSBC Bank decreases in 2006 than 2005. That means the bank is collecting more deposits. Again it increases in 2007 and falls in 2008 and then gradually increases in 2009 and 2010. This means the fund

collection process of the bank fluctuates randomly. In 2010 the Bank has less stability in deposit than 2009. That gives them a less interest income which is important in giving loan.

4. Temporary Investment Ratio =

Investment ≤1Yr+Due ¿other Bank ¿Total Asset

= Investment ≤1Yr+Money at call∧short notices

Total Asset

Items 2010 2009 2008 2007 2006Investment ≥1Yr 4615.27 17306.7 9958.66 2086.51 3325.71

Money at Call & short notices

3035 1685 905 850 400

Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92

Temporary Investment Ratio

0.093824 0.273852 0.168211 0.052878 0.089256

% 9.382419 27.38516 16.82105 5.287837 8.925584

0

5

10

15

20

25

30

Temporary Investment Ratio

20102009200820072006

Year

%

Interpretation:The above information shows that the Temporary Investment Ratio decreases in 2007 than 2006. Again it increases in 2008 and 2009 respectively. This means

the liquidity position of the bank is increasing. In 2010 again it decreases. This represents that the liquidity position of the overall bank was maximum in 2009. And in 2010 the liquidity position of the bank falls than 2009.

Profitability Ratio:

1. Return on Equity = Net Income

Total Shareholder s ' Equity

Item 2010 2009 2008 2007 2006 2005Net Income 2614.35 2520.69 1937.36 1703.53 1216.79 861.23

Total Shareholders’ Equity

8824.68 9365.04 7921.75 6732.79 5025.8 4077.12

ROE 0.296254 0.26916 0.244562 0.25302 0.242109 0.211235

% 29.62544 26.91596 24.45621 25.30199 24.21087 21.12349

0

5

10

15

20

25

30

ROE Ratio

201020092008200720062005

Year

%

Interpretation:The above information shows a increasing and a stability of ROE Ratio. This means the company has a strong capacity to return the money of the investors. The company has maximum ROE Ratio in 2010. This may attract the investors to invest in the company.

2. Return on Asset = Net IncomeTotal Asset

Items 2010 2009 2008 2007 2006 2005Net Income 2614.35 2520.69 1937.36 1703.53 1216.79 861.23

Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92 31209.8

ROA 0.032063 0.036347 0.029998 0.030676 0.02915 0.027595

% 3.206283 3.63472 2.999765 3.067583 2.915031 2.759486

00.5

11.5

22.5

33.5

4

ROA Ratio

201020092008200720062005

Year

%

Interpretation:The ROA Ratio of HSBC increases in 2006 and 2007 respectively than 2005. That represents the bank is utilizing its assets in making profit. Again it falls in 2008 and increase rapidly in 2009. Again in 2010 it falls a little bit. This means the company gains its highest profit using assets in 2009 and in 2010 the amount of using asset reduces some extent.

3. Net Interest Margin Ratio = Total Interest Income−Total Interest Expense

Average Earning Asset

Average Earning Asset = (Total Asset−Cash )of Year1+(Total Asset−Cash )of Year2

2

Items 2010 2009 2008 2007 2006 2005Total Interest Income 4589.77 4593.95 4931.28 3988.7 3052.09 2401.37

Total Interest Expense 1877.68 2214.26 2219.62 1811.46 1398.18 1012.94

Average Earning AssetNet Interest Margin 0.040693 0.039858 0.050365 0.050315 0.052112

% 4.069298 3.985846 5.036511 5.031515 5.21116

0

1

2

3

4

5

6

Net Interest Margin Ratio

20102009200820072006

Year

%

Interpretation:The above information shows positive result of the ratio. Which represents that the bank is successful in it’s investment decisions compared to debt situations. In 2006 the bank gets maximum from interest income. Gradually the ratio falls that indicating the bank is spending greater in loan purpose than collecting deposits. In 2010 the ratio increases than 2009. That means the bank is trying to get income from interest earnings.

4. Net Profit Margin Ratio = Net Income

OperatingRevenue

Items 2010 2009 2008 2007 2006 2005Net Income 2614.35 2520.69 1937.36 1703.53 1216.79 861.23

Operating Revenue 6643.86 5585.39 5250.63 4194.4 3273.41 2451.53

Net profit Margin 0.393499 0.451301 0.368977 0.406144 0.371719 0.351303

% 39.34987 45.13006 36.89767 40.61439 37.17194 35.13031

05

101520253035404550

Net Profit Margin Ratio

201020092008200720062005

Year

%

Interpretation:Net Profit Margin of the company was highest in 2009. That means the company was then got highest profit from revenue. In 2010 the amount decreases some extent. But the overall ratio represents a steady form. That represents the company’s efficiency in cost controlling. They are efficient in converting the revenue in to profit. This can attract the investors.

5. Asset Utilization Ratio = OperatingRevenue

Total Asset

Items 2010 2009 2008 2007 2006 2005Operating Revenue 6643.86 5585.39 5250.63 4194.4 3273.41 2451.53

Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92 31209.8

Asset Utilization 0.081481 0.080539 0.0813 0.075529 0.07842 0.07855

% 8.148141 8.053877 8.129959 7.552947 7.842021 7.855001

7.27.37.47.57.67.77.87.9

88.18.2

Asset Utilization Ratio

201020092008200720062005

Year

%

Interpretation:Asset Utilization Ratio was highest in 2010 and overall has a steady growth. That represents that the company is using its assets effectively to generate revenue. This means the bank can easily convert its assets in to sales when they in need of liquid money or cash.

6. Equity Multiplier = Total AssetTotal Equity

Items 2010 2009 2008 2007 2006 2005Total Asset 81538.35 69350.33 64583.72 55533.29 41741.92 31209.8

Total Equity 8824.68 9365.04 7921.75 6732.79 5025.8 4077.12

Equity Multiplier

9.239808 7.405236 8.152709 8.248184 8.305527 7.654864

0123456789

10

Equity Multiplier Ratio

201020092008200720062005

Year

Ratio

Interpretation:The Equity Multiplier Ratio of HSBC Bank increases most in 2010. This means the bank is relying more on debt. The percentage of equity in total asset is increasing.

Efficiency Ratio:

1. Operating Efficiency Ratio = TotalOperating IncomeTotalOperating Expense

Items 2010 2009 2008 2007 2006 2005Operating Income 6643.86 5585.39 5250.63 4194.4 3273.41 2451.53

Operating Expense 1455.56 1274.68 1144.83 867.86 701.62 649.52

Operating Efficiency 4.56447 4.381798 4.586384 4.833038 4.665503 3.774372

00.5

11.5

22.5

33.5

44.5

5

Operating Efficiency Ratio

201020092008200720062005

Year

Ratio

Interpretation:The Operating Efficiency ratio was lower in 2005 but it increases gradually from 2006. In 2010 the ratio is again higher than 2009. This means the bank is expending more in operating. If they decrease the expense in operating they can do more profit. They have to cut cost in the salaries, technology, buildings, supplies and administrative sectors.

Asset Quality:

1. Provision For Loan Loss = Provision for Loan∧Advance

Total Loan∧lease

= Specific Provision forClassified Loan∧Advances+General Provision for Unclassified Loan∧Advances

Total Loan∧Lease

Items 2010 2009 2008 2007 2006 2005Specific Provision for Classified Loan & Advance

216.4 48.2 228.86 213 47.58 68.49

General Provision for Unclassified Loan & Advances

510.82 120.54 279.2 213.04 253.76 110.55

Total Loan & Lease 45532.06 30126.37 31908.44 32367.56 24572.66 19990.47

Provision for Loan & Loss 0.015972 0.005601 0.015922 0.013163 0.012263 0.008956

% 1.59716 0.560107 1.592243 1.316256 1.226322 0.895627

00.20.40.60.8

11.21.41.6

Provision For Loan Loss

201020092008200720062005

Year

%

Interpretation:The ratio is lowest in 2009. This means bank was strictly control their loan collection in those days. But in 2010 the ratio increases a large portion suddenly. This indicates the loan collection of that year was very low. This indicates the asset quality is decreasing of the bank.

Market Position Ratio:As HSBC is a multinational company, there are no shares of this bank in our country. So we are not able to make Earning Per Share and Price Earnings Ratio under Market Position Ratio.

PART V

RECOMANDATION&CONCLUSION

Recommendation:

After the analysis of HSBC Bank’s performance there are some recommendations for the management of the bank to follow for a better profit.

At first the bank should invest more in government securities. This will make them sufficient in liquid asset. It can also help when the bank will need immediate cash.

The bank should concentrate more in deposit collection. By these they will be able to give loans easily.

They have to utilize more their assets for making profit.

Their amount of debt is very high. They have to cut it short. Their operating expense is higher. They have to reduce it to make more profit. Their loan collection system is poor. They have to strictly handle it otherwise the bank

would be suffered in the long run.

Conclusion:

After completing the performance evaluation of HSBC Bank by ratio analysis, we can say the position of HSBC Bank is strong. But they have to take the above measures so that they would not face any risk in the future.

Appendix:

References-

Commercial Banking (3rd Edition) by Benton E. Gup and James W. Koleri Annual Report of 2005-2010 of HSBC Bank Class Lecture Website- www.hsbc.com/bd.