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Review of Non-Bank Financial Sector 2010

Advisor & EditorDr. Toufic Ahmad Choudhury

Report Preparation Team

Team LeaderDr. Prashanta Kumar Banerjee

MembersAbdul Jalil Choudhury

Ashraf Al MamunMd. Alamgir

Md. Mosharref HossainA.N.K. Mizan

Tahmina Rahman

Editorial AssociatesDr. Bandana Saha

Abed Ali

Bangladesh Institute of Bank ManagementPlot # 4, Main Road # 1(South), Section # 2, Mirpur, Dhaka-1216

PABX: 9003031-5, 9003051-2, Fax: 88-02-9006756Email: [email protected], Web: www.bibm.org.bd

Acknowledgement

The report on "Review of Non-Bank Financial Sector 2010" has been completed with enormous

and sustained support from many quarters.

We would like to particularly thank the honorable Director General of BIBM, Dr. Toufic Ahmad

Choudhury for his valuable advice, observations and innovative ideas to improve our work

throughout the year.

We are really appreciative and very grateful to all of our faculty colleagues for their valuable

remarks and positive suggestions which helped us in finishing the report.

Bangladesh Bank and different financial institutions extended their unstinted support in

matters of data collection. We express our gratitude for their contribution.

Our sincere appreciation goes to the Research Officer of BIBM, Ms. Papon Tabassum and

Research Assistants, Mr. Md. Faysal Alam and Mr. Mia Sakib Anam for helping us in obtaining

and processing a wide range of information.

We hope this report would serve as a valuable resource for the financial institutions and

concerned persons working in the financial sector.

Dr. Prashanta Kumar Banerjee

Abdul Jalil Choudhury

Ashraf Al Mamun

Md. Alamgir

Md. Mosharref Hossain

A.N.K. Mizan

Tahmina Rahman

Review of Non-Bank Financial Sector 2010 III

Message from the Director General

Bangladesh Institute of Bank Management (BIBM) presents, in all humility, this first issue of the

'Review of Non-Bank Financial Sector' - a new publication, which basically seeks to assess the

strengths and weaknesses of the non-bank financial institutions of Bangladesh through

comparative performance evaluation.

In the financial market of Bangladesh, both banks and non-bank financial institutions are

working in an intense competitive environment where they need to locate their market niche

so that they can craft and put into use appropriate financial and marketing strategy. We hope

all stakeholders of the financial sector particularly non-bank financial institutions would be

benefited by the analysis contained in the Non-bank Review. We, at the BIBM, envision the

Review to be our flagship publication and would welcome comments and suggestions from

potential users to improve upon our presentation.

(Dr. Toufic Ahmad Choudhury)

Director General

Review of Non-Bank Financial Sector 2010 V

Contents

Review of Non-Bank Financial Sector 2010 VII

Part-1

Part-2

Part-3

Part-4

Part-5

Part-6

References

Pages

1

3

4

4

5

11

13

15

16

18

19

22

23

25

27

28

29

29

30

32

32

35

37

38

38

39

40

41

42

45

70

Introduction

1. Introduction

2. Structure of the Report

3. Data and Methodology

Performance of NBFIs Compared to BFIs

Comparative Performance Evaluation Based on Establishment Year of NBFIs

1. Liquidity

2. Capital Management

3. Fund Utilization

4. Asset Quality

5. Earning

6. Operational Efficiency

7. Concluding Remarks

Comparative Performance Evaluation Based on Listing Status of NBFIs

1. Liquidity


3. Fund Utilization

4. Asset Quality

5. Earning



Comparative Performance Evaluation Based on Ownership Patterns of NBFIs

1. Liquidity


3. Fund Utilization

4. Asset Quality

5. Earning



Pictorial Views of All Tables

List of Tables

Table 1

Table 2

Table 3

Table 4

Table 5

Table 6

Table 7

Table 8

Table 9

Table 10

Table 11

Table 12

Table 13

Table 14

Table 15

Table 16

Pages

8

8

9

9

13

14

15

17

18

20

21

21

22

27

28

29

Part 2: Performance of Non Bank Financial Institutions

NBFIs and BFIs: Paid-up Capital & Reserve, Loan & Advance, Deposit, Borrowings

and Profit

Sector wise Allocation

Correlation Matrix of NBFIs

Correlation Matrix of BFIs

Part 3: Comparative Performance Evaluation Based on Establishment Year of NBFIs

Liquidity: Regulatory - Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR)

Liquidity: Non-regulatory - Current Ratio (CR), Liquid Asset to Total Asset (LA to TA)

Capital Management: Paid-up Capital to Required Capital (PC to RC), Total

Capital to Total Asset (TC to TA) and Debt to Equity (DE) Ratio

Funds Utilization: Total Loan & Lease to Total Deposit (TL&LS to TD), Total Loan

& Lease to Total Borrowings (TL&LS to TB) and Total Loan & Lease to Total

Deposit & Borrowings (TL&LS to TD&B)

Asset Quality: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment

to Total Asset (TI to TA) and Classified Loan & Lease to Total Asset (CL&LS to TA)

Earning: ROA 1 - Operating Profit to Total Asset (OP to TA), ROA 2 - Net

Income Before Tax to Total Asset (NIBT to TA) and ROA 3 - Net Income After Tax

to Total Asset (NIAT to TA)

Earning: Return on Equity - Net Income After Tax to Total Equity (NIAT to TE)

Earning: Interest Income to Net Operating Income (II to NOI)

Operational Efficiency: Operating Expense to Net Operating Income (OE to

NOI), Staff Expense to Net Operating Income (SE to NOI), Staff Expense to Total

Operating Income (SE to TOI)

Part 4: Comparative Performance Evaluation Based on Listing Status of NBFIs

Liquidity: Regulatory - Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR)

and Non-regulatory - Current Ratio (CR), Liquid Asset to Total Asset (LA to TA)

Capital Management: Paid-up Capital to Required Capital (PC to RC), Total

Capital to Total Asset (TC to TA) and Debt to Equity (DE) Ratio

Funds Utilization: Total Loan & Lease to Total Deposit (TL&LS to TD), Total Loan

& Lease to Total Borrowings (TL&LS to TB) and Total Loan & Lease to Total

Deposit & Borrowings (TL&LS to TD&B)

VIII Review of Non-Bank Financial Sector 2010

List of Tables

Table 17

Table 18

Table 19

Table 20

Table 21

Table 22

Table 23

Table 24

Table 25

Table 26

Table 27

Table 28

Table 29

30

30

31

31

32

37

38

39

40

40

41

41

42

Asset Quality: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment to

Total Asset (TIv to TA) and Classified Loan & Lease to Total Asset (CL&LS to TA)

Earning: ROA 1 - Operating Profit to Total Asset (OP to TA), ROA 2 - Net Income

Before Tax to Total Asset (NIBT to TA) and ROA 3 - Net Income After Tax to Total Asset

(NIAT to TA)



Operational Efficiency: Operating Expense to Net Operating Income (OE to NOI),

Staff Expense to Net Operating Income (SE to NOI), and Staff Expense to Total

Operating Expense (SE to TOE)

Part 5: Comparative Performance Evaluation Based on Ownership Patterns of NBFIs

Liquidity: Regulatory - Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and

Non-regulatory - Current Ratio (CR), Liquid Asset to Total Asset (LA to TA Ratio)

Capital Management: Paid-up Capital to Required Capital (PC to RC), Total Capital to

Total Asset (TC to TA) and Debt to Equity (DE) Ratio

Funds Utilization: Total Loan & Lease to Total Deposit (TL&LS to TD), Total Loan &

Lease to Total Borrowings (TL&LS to TB) and Total Loan & Lease to Total Deposit &

Borrowings (TL&LS to TD&B)

Asset Quality: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment to

Total Asset (TIv to TA) and Classified Loan & Lease to Total Asset (CL&LS to TA)

Earning: ROA 1 - Operating Profit to Total Asset (OP to TA), ROA 2 - Net Income

Before Tax to Total Asset (NIBT to TA) and ROA 3 - Net Income After Tax to Total Asset

(NIAT to TA)



Operational Efficiency: Operating Expense to Net Operating Income (OE to NOI),

Staff Expense to Net Operating Income (SE to NOI), Staff Expense to Total Operating

Expense (SE to TOE)

Review of Non-Bank Financial Sector 2010 IX

List of Figures

List of Appendices

Pages

Appendix I Indicators and Definitions 73

Appendix II Non-bank Financial Institutions Grouped as Per Year of Establishment 74

Appendix III Non-bank Financial Institutions Grouped as Per Listing Status with

the Secondary Market 75

Appendix IV Non-bank Financial Institutions Grouped as Per Ownership Pattern 76

Appendix V CAGR and CV of Different Parameters of NBFIs from 2007-2010

(Based on Establishment Year) 77

Appendix VI CAGR and CV of Different Parameters of NBFIs from 2007-2010

(Based on Listing in the Exchange) 78

Appendix VII CAGR and CV of Different Parameters of NBFIs from 2007-2010

(Based on Ownership Structure) 79

Figure 1-5

Figure 6-40

Figure 41-64

Figure 65-88

Pages

47-48

48-55

56-62

63-69


A Pictorial View of the Comparative Performance Evaluation Based on

Establishment Year of NBFIs

A Pictorial View of the Comparative Performance Evaluation Based on Listing

Status of NBFIs

A Pictorial View of the Comparative Performance Evaluation Based on

Ownership Patterns of NBFIs

X Review of Non-Bank Financial Sector 2010

AbbreviationBB Bangladesh Bank

BFI Bank Financial Institution

CAR Capital Adequacy Ratio

CAGR Compound Annual Growth Rate

CL&LS Classified Loan and Lease

CR Current Ratio

CRR Cash Reserve Ratio

CSE Chittagong Stock Exchange

CV Coefficient of Variation

DE Debt to Equity

DSE Dhaka Stock Exchange

ECB European Central Bank

II Interest Income

LA Liquid Asset

L/C Letters of Credit

MOF Ministry of Finance

N/A Not Available

NBFIs Non-bank Financial Institutions

NIAT Net Income Ater Tax

NIBT Net Income Before Tax

NOI Net Operating Income

OE Operating Expense

OP Operating Profit

PC Paid-up Capital

RC Required Capital

ROA Return on Asset

ROE Return on Equity

SD Standard Deviation

SE Staff Expense

SLR Statutory Liquidity Ratio

TA Total Asset

TC Total Capital

TB Total Borrowing

TL&LS Total Loan & Lease

TD Total Deposit

TD&B Total Deposit and Borrowing

TE Total Equity

TIc Total Income

TIv Total Investment

TIPS Treasury Inflation-Protected Securities

TOE Total Operating Expense

Review of Non-Bank Financial Sector 2010 XI

Part 1Introduction

1. Introduction

In the 1980s when financial sector of Bangladesh was highly regulated, interest rates were at a

high level, amount of classified loans were excessive, activities of banks were limited to a few

sectors, directed loans were common, then Non-bank Financial Institutions (NBFIs) entered

into the financial sector of Bangladesh. NBFIs were established mainly to offer long-term

financing as, by nature, Bank Financial Institutions (BFIs) usually cannot go for that.

Meanwhile, NBFIs of Bangladesh have undergone qualitative changes in terms of number of

NBFIs as well as list of activities. NBFIs, numbering 31, invested Tk. 163.5 billion in different

sectors of the economy in Bangladesh up to June 30, 2010 (Bangladesh Bank, Annual Report

2009-2010). As a result, now this segment of the financial sector constitutes an integral part of

the Bangladesh financial system. These financial institutions also earned separate identity for

their functional specialization, wide range of tailored financial products, ability to take quicker

decisions, assume more risks, etc. Although these features have facilitated NBFIs in

proliferating their services, this proliferation is not widespread; rather it is confined to the main

urban areas, namely, Dhaka, Chittagong and Khulna cities. In addition, it seems that, currently,

NBFIs are offering many similar types of services like BFIs instead of concentrating more on

their specialized financial services.

Performance evaluation of NBFIs is an old issue but a continuous exercise. NBFIs have become

increasingly complex in terms of variety and concentration of services, sources of funds,

structure of ownership. Continuous performance evaluation of NBFIs with the proper

indicators is, therefore, necessary for the stake holders to know the past and present

performance and understand the future prospect of those organizations. Regarding indicators,

European Central Bank (2010) has suggested earnings, efficiency, risk taking and leverage as

key drivers of Financial Institutions' performance. Harker and Stavros (2000) in their paper

titled 'Performance of Financial Institutions' put forward a host of indicators like earning, price

to earning ratio, the firm's stock beta ( ) and alpha ( ) and Tobin's q ratios for short and long

term performance. The Ministry of Finance (MOF) of Government of China in 2011 has

published the rules for evaluation of financial institutions' performance which is based on a

financial institution's profitability, asset quality, solvency and business growth in a financial

year (www.esnai.com). A number of studies on different areas of NBFIs have also been

conducted in Bangladesh from time to time (Choudhury 1999, Saha et al. 1999, Chowdhury

2001, and Banerjee and Ashraf 2003) .The current report on performance of NBFIs will,

therefore, offer an update on an old issue.

Review of Non-Bank Financial Sector 2010 03

2. Structure of the Report

The study is principally concerned with performance evaluation of the NBFIs with a view to

reviewing the Non Banking Financial Sector. The study proceeds with the introduction,

structure of the report, data and methodology, performance of NBFIs compared to BFIs,

performance of NBFIs under different three groups1 in terms of liquidity, capital adequacy,

fund utilization, asset quality, earnings, and finally, operational efficiency.

3. Data and Methodology

For the study, data are collected from the Financial Institution Department of Bangladesh

Bank, financial statements of NBFIs, annual report of Bangladesh Bank, Activities of Banks and

Financial Institutions of the MOF, Financial Stability Report 2010 of BB and Dhaka Stock

Exchange for the period 2007-2010. The study covers 28 NBFIs2 following the list available in

the 'Activities of Banks and Financial Institutions' published by Ministry of Finance (MoF),

Bangladesh.

To analyze the performance with a view to reviewing the Non Banking Financial Sector, these

financial organizations are grouped on the basis of (1) establishment year, (2) listing status

with DSE/CSE and (3) ownership pattern. Considering establishment year, NBFIs are grouped

under four categories, such as, those established before 1990, between 1990 and 1995,

between 1996 and 2000 and after 2000, respectively (Appendix-II). Taking into consideration

of listing status of NBFIs in the secondary market, groups are made into two categories, listed

and non-listed (Appendix-III). Finally, groups are formed as joint venture (joint venture with

foreign countries and companies) and local on the consideration of ownership pattern

(Appendix-IV).

The performance of the NBFIs has been examined by taking into account the areas like

liquidity, capital adequacy, fund utilization, asset quality, earnings and operational efficiency

(Appendix-I). A simple average of calculated ratios of related NBFIs under each group has been

used to find out the representative figure of each group. In this regard, both regulatory and

non-regulatory measures have been taken into consideration. A number of ratios have been

used. Simple mathematical and statistical tools like average, Compound Annual Growth Rate

(CAGR), Co-efficient of Variation (CV) and correlation have also been used to present more

concrete results. In addition, pictorial views of all tables are placed in a separate chapter with a

view to understanding the findings of the report more clearly.

1 Three groups are formed on the basis of (1) establishment year, (2) listing status with DSE/ CSE and (3) ownership pattern. 2 The study has taken into consideration the NBFIs which got the license from Bangladesh Bank under Financial Institutions Act

1993. However, Hajj Finance Company Limited (HFCL) dedicated mainly to save money for performing Hajj and the recently

established NBFIs, namely, Agrani SME Financing Ltd. and Bangladesh Infrastructure Finance Fund (BIFF) Ltd. have not been

considered here. Notable that prior to the enactment of the Financial Institutions Act 1993, Non-bank Financial Institutions were

allowed by the Bangladesh Bank under the authority of Bangladesh Bank order, 1972 (P.O. No. 127 of 1972). But due to want of

sufficient and effective legal provision to regulate and control them, it was found to be difficult to take legal action against them

and thereby safeguard the interests of their customers. Such situations and circumstance necessitated the enactment of the

Financial Institutions Act 1993.

04 Review of Non-Bank Financial Sector 2010

Part 2Performance of NBFIs Compared to BFIs


The total amount of capital and reserves of the NBFIs stood at Tk. 39 billion in 2010 with

Compound Annual Growth Rate (CAGR) of 23 per cent during 2007-2010 (Table-1). The

Co-efficient of Variation (CV) of capital and reserve is 39.06 per cent during the same period.

However, as compared to BFIs, the amount of capital and reserve of NBFIs is very small,

constituting only 8.02 per cent of total in 2010. Considering CAGR and CV of capital and

reserve, NBFIs are also lagging behind the BFIs. Regulatory compulsion for BFIs ensures

persistent increase of the amount of capital and reserve which is not the case for NBFIs.

The share of loans and advances of NBFIs in 2010 is only 5.3 per cent of total. The amount of

loans and advances extended by NBFIs grew at an impressive rate of 19.09 per cent with a

high variation of 31.40 per cent during the period 2007-2010. This indicates that NBFIs have a

limited role as a lender in supporting the economic development of the country when

compared to commercial banks, although the growth rate of loans and advances shows an

impressive rate. This also signifies that NBFIs still have a lot of room to grow. In contrast, the

amount of deposit collected by NBFIs accounts for Tk. 100 billion in 2010 representing

3 per cent of total deposits which is a tiny figure compared to deposits collected by BFIs.

However, growth rate of deposits is inspiring as evident from the 22.09 per cent of CAGR of

deposits for NBFIs during 2007-2010. Another important source of funds of NBFIs is borrowing,

holding 20.40 per cent of total borrowing of BFIs and NBFIs in 2010. The share of borrowing of

NBFIs looks excessively high when one considers the size of business of both units of the

financial sector although borrowing of these organizations shows a negative CAGR. This

borrowing over deposits translates into excess pressure on the money market. In the total

amount of profit of BFIs and NBFIs, the share of NBFIs is only 4.40 per cent indicating their

trivial existence. In addition, the variation in the amount of profit of NBFIs measured by

coefficient of variations is also high (52.45%).


Table 1: NBFIs and BFIs: Paid-up Capital & Reserve, Loan & Advance, Deposit, Borrowings and Profit

(Tk. in Billion)

Sources: "Activities of Bank and Financial Institutions", Ministry of Finance and Financial Stability Report

2010, Bangladesh Bank.

Note: Figures in parentheses indicate percentage of participation in total combined figures of NBFIs

and BFIs.

Looking at the sector-wise allocation of loan and lease of NBFIs (Table-2), it is observed that,

allocation of loan and lease is concentrated mainly on industrial sector with the highest share

of finance of 43.68 per cent, followed by housing sector at 17.5 per cent and merchant

banking and margin loan at 14.88 per cent in 2010. The agriculture sector received a very tiny

share of loan and lease from NBFIs, being only 1.51 per cent of the total. In contrast, BFIs'

sector-wise loan allocation seems more diversified. These organizations contributed 6.12

per cent to the agriculture sector.

Table 2: Sector-wise Allocation

Source: Bangladesh Bank

Particulars

Trade and Commerce

Industry

Agriculture

Housing

Merchant Banking & Margin Loan

Others

Grand Total

Amount of Loan &

Lease Dec. 2010

(In crore Tk.)

1060.73

7988.83

276.38

3202.30

2722.44

3043.70

18294.38

% of

Total

Dec. 2010

5.80

43.68

1.51

17.50

14.88

16.63

100.00

% of

Total

Dec. 2010

37.87

21.80

6.12

7.53

N/A

26.67

100.00

Amount of Loan

Dec. 2010

(In crore Tk.)

121681.01

70054.27

19655.20

24190.05

N/A

85698.34

321278.87

NBFIs BFIs

Year

2007

2008

2009

2010

CAGR

CV

NBFIs

17

(9.04)

20

(8.16)

24

(7.08)

39

(8.02)

23.00

39.06

BFIs

171

(90.96)

225

(91.84)

315

(92.92)

447

(91.98)

27.00

41.67

NBFIs

90

(4.90)

105

(4.60)

140

(5.30)

181

(5.30)

19.09

31.40

BFIs

1758

(95.10)

2185

(95.40)

2512

(94.70)

3248

(94.70)

16.59

25.94

NBFIs

45

(2.00)

55

(2.40)

84

(2.60)

100

(3.00)

22.09

35.83

BFIs

2212

(98.00)

2607

(97.90)

3137

(97.40)

3700

(97.00)

13.72

22.19

NBFIs

79

(100.00)

60

(100.00)

50

(29.07)

41

(20.40)

-15.00

28.35

BFIs

N/A

N/A

N/A

N/A

122

(70.93)

160

(79.60)

15.00

19.06

NBFIs

2

(2.44)

4

(2.03)

7

(5.50)

8

(4.40)

7.46

52.45

BFIs

80

(97.56)

194

(97.97)

122

(94.50)

172

(95.60)

20.09

36.02

Paid-up Capital & Reserve

Loan & Advance Deposit Borrowings Profit


The correlation matrix (Table-3) shows that correlation of profit with all variables except

borrowing is highly positive in case of NBFIs, indicating existence of a high linear relationship.

It means that, NBFIs mostly depend on balance sheet activities for generating profit. In BFIs,

this relationship is also positive; however, coefficient of correlation is not as high as NBFIs

(Table-4). It seems that, banks do not depend on only traditional banking activities like

collecting deposits and giving loans for earning their profits. Besides, banks also concentrate

more on off-balance sheet activities to enhance their profit. This could not be possible in case

of NBFIs as these organizations are not involved in providing popular off-balance sheet

services like issuing Letters of Credit (L/C), performance bond, etc. As mentioned above, one

discernible finding is that, profit of NBFIs has high negative correlation with the borrowings of

NBFIs, signifying the existence of inverse relationship between profit and borrowings (-0.98). It

indicates that borrowing, which is high (Table-1) in NBFIs does not have positive relationship

with the profit. On the other hand, BFIs have very narrow relationship between its profit and

borrowings (0.19).

Table 3: Correlation Matrix of NBFIs

Source: Authors' Calculation

Table 4: Correlation Matrix of BFIs


Variable

Profit


Loan & Advance

Deposit

Borrowings

Profit

1

0.86

0.95

0.98

-0.98

Paid-upCapital & Reserve

1

0.97

0.91

-0.85

Loan&

Advance

1

0.99

-0.93

Deposit

1

-0.94

Borrowings

1

Variable

Profit


Loan & Advance

Deposit

Borrowings

Profit

1

0.44

0.54

0.47

0.19

Paid-upCapital & Reserve

1

0.99

0.99

0.94

Loan&

Advance

1

0.99

0.91

Deposit

1

0.95

Borrowings

1


Concluding Remarks

It is observed that, NBFIs are far behind of BFIs in terms of maintaining capital and reserve,

collecting deposits, extending loan and advances and earning profit. The sector-wise

allocation of loan and lease of NBFIs is not also well diversified. In addition, NBFIs have

significant dependence on borrowing, while profit and borrowings of NBFIs show a high

negative correlation. NBFIs, therefore, need to deepen their existence in the financial sector of

Bangladesh by using their inherent opportunities to grow.

For this, NBFIs may bring variations in collecting more funds besides currently-used deposits

and other products. In this regard, NBFIs may think of issuing commercial papers for short

term funds and bonds like traditional coupon or Zero coupon bond, Sukuk Bond, TIPS, etc. for

long term funds. On the other side, for offering finance with innovation in product ranges,

these organizations need to go to more geographical areas with a view to covering more

un-banked and under-banked clients and organizations so that NBFIs can play an important

role beside BFIs in the development of the financial sector of Bangladesh like other countries.


Part 3Comparative Performance Evaluation Based

on Establishment Year of NBFIs

Comparative Performance Evaluation Based on Establishment Year of NBFIs

To review the Non-banking Financial Sector of Bangladesh, this section has shown a

comparative picture of 4 (Four) groups created on the basis of the establishment year. A total

number of 5 (Five) NBFIs are grouped under 'Before 1990', 2 (Two) are under '1991 to 1995', 15

(Fifteen) under the group of '1996 to 2000' and finally 6 (Six) are grouped under 'After 2000'.

With a view to knowing a comparative performance of these groups of NBFIs, a good number

of indicators linking the liquidity, capital management, fund utilization, asset quality, earning

and operational efficiency performance (Appendix-I) as described in the methodology have

been used.

1a. Liquidity Performance: Regulatory

All NBFIs are maintaining both Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) in

compliance with Bangladesh Bank requirements (Table-5). The NBFIs which were established

during 1996-2000 and after 2000 are maintaining these regulatory requirements more than

adequately. But CAGRs of CRRs of the NBFIs which were established before 1990 and during

1996-2000 are negative, meaning rate maintained for CRR of these groups of NBFIs is

persistently decreasing although rates are always more than the regulatory requirements.

Table 5: Liquidity Performance: Regulatory - Cash Reserve Ratio (CRR)

and Statutory Liquidity Ratio (SLR)

(%)

Source: Annual Reports, All NBFIs

CAGRs of CRRs of the NBFIs which were established after 2000 and during 1991-1995 are

positive (Table-5) indicating that besides satisfying regulatory requirements, these NBFIs are

continuously increasing their liquidity ratios. The CVs of CRRs for NBFIs established before

Year

2007

2008

2009

2010

CAGR

CV

Before

1990

N/A

2.56

2.61

2.54

-0.22

1.40

During

1991-1995

N/A

2.71

3.22

3.45

8.32

12.04

During

1996-2000

N/A

9.30

3.12

3.50

-27.81

65.27

After

2000

N/A

4.73

3.03

5.20

3.22

26.42

Before

1990

N/A

11.61

9.86

9.19

-7.51

12.25

During

1991-1995

N/A

23.69

24.92

11.34

-21.77

37.57

During

1996-2000

N/A

21.89

26.22

27.82

-62.3

48.82

After

2000

N/A

36.40

12.95

32.65

-3.56

46.08

CRR SLR


1990 is quite low whereas NBFIs established during 1996-2000 hold the higher CV. The CVs of

SLR of all except those of NBFIs established before 1990 are high (Table-5).

1b. Liquidity Performance: Non-regulatory

The Current Ratios (CRs) of all NBFIs are more than 1.00 and it indicates that the NBFIs are able

to meet their current obligations with their current assets. But the CAGRs of CRs of the NBFIs

which were established during 1991-1995 and during 1996-2000 are negative indicating these

groups of NBFIs are persistently decreasing their CRs whereas CAGRs of CRs of the NBFIs which

were established before 1990 and after 2000 are positive (Table-6) indicating these groups of

NBFIs are continuously increasing their CRs. The CVs of CRs are high only exception is for NBFIs

established before 1990. The CAGRs of LA to TA ratios of all the NBFIs are negative with

different figures of CVs.

Table 6: Liquidity Performance: Non-regulatory - Current Ratio (CR), Liquid

Asset to Total Asset (LA to TA)


CR (X) LA to TA (%)

Year

2007

2008

2009

2010

CAGR

CV

Before

1990

1.13

1.11

1.16

1.46

9.31

13.36

During

1991-1995

2.12

1.78

0.60

1.36

-10.43

44.68

During

1996-2000

1.69

1.84

0.88

1.09

-10.38

33.66

After

2000

1.31

1.22

2.02

2.47

17.15

33.87

Before

1990

3.71

0.58

0.43

0.49

-39.83

23.29

During

1991-1995

0.90

0.74

0.24

0.33

-22.42

58.17

During

1996-2000

0.50

0.39

0.38

0.37

-7.22

15.13

After

2000

0.55

0.40

0.44

0.40

-7.69

15.56


2. C

apit

al M

anag

emen

t P

erfo

rman

ce

This

par

t o

f th

e re

po

rt e

xam

ines

th

e st

ren

gth

of N

BFI

s in

term

s o

f su

ffic

ien

cy o

f cap

ital

3 by

usi

ng

ind

icat

ors

like

Pai

d-u

p C

apit

al to

Req

uir

ed

Cap

ital

(PC

to R

C),

Tota

l Cap

ital

toTo

tal A

sset

s (T

C to

TA) a

nd

Deb

t to

Eq

uit

y (D

E) R

atio

.

Tab

le 7

: Cap

ital

Man

agem

ent

Per

form

ance

: Pai

d-u

p C

apit

al t

o R

equ

ired

Cap

ital

(PC

to

RC

),To

tal C

apit

al t

oTo

tal

Ass

et (

TC t

oTA

) an

d D

ebt

to E

qu

ity

(DE)

Rat

io

Sou

rce:

Au

tho

rs' C

alcu

lati

on

3 Du

rin

g 2

007-

08 t

he

reg

ula

tory

cap

ital

req

uir

emen

t fo

r th

e N

BFI

s in

Ban

gla

des

h w

asTk

. 25

cro

re a

nd

it

sto

od

at

Tk. 5

0 cr

ore

in

200

9-10

.

Ho

wev

er, o

n J

uly

24,

201

1 C

entr

al B

ank

aske

d t

he

NB

FIs

to i

ncr

ease

th

eir

Paid

-up

cap

ital

to

Tk. 1

00 c

rore

by

30th

Ju

ne

2012

fro

m t

he

min

imu

m li

mit

of T

k. 5

0 cr

ore

.

PC

to

RC

(%)

TC t

oTA

(%)

DE

Rat

io (X

)

Year

20

07

20

08

20

09

20

10

CA

GR

CV

Bef

ore

19

90

102

113

144

170

13.6

3

23.3

7

Du

rin

g

19

91

-19

95

131

131

65 105

-5.3

3

28.6

3

Du

rin

g

19

96

-20

00

110

129

77 109

-0.2

3

20.2

9

Aft

er

20

00

104

119

62 98 -1.6

0

25.2

0

Bef

ore

19

90

32 33 25 39 4.94

18.3

7

Du

rin

g

19

91

-19

95

20 20 12 17 -4.3

0

23.9

0

Du

rin

g

19

96

-20

00

20 17 16 18 -2.5

7

9.56

Aft

er

20

00

27 25 22 22 -4.8

6

10.6

4

Bef

ore

19

90

3.97

4.22

3.88 3.2

-5.2

4

11.4

1

Du

rin

g

19

91

-19

95

7.91

8.14 9.5

5.14

-10.

23

23.8

3

Du

rin

g

19

96

-20

00

6.35

7.11

6.93

6.68

1.31 4.9

Aft

er

20

00

5.38

5.79

6.19

4.57

-4.0

1

12.6

5


Table-7 shows that the growth of PC to RC of the NBFIs established before 1990 achieved the

highest rate (13.63%) among all the groups. According to the same table, all NBFI groups

established after 1990 show negative growth rates (-5.33%, -0.23% and -1.60%) in terms of

their Capital Adequacy Ratio (CAR). However, all the NBFI groups hold almost the same CV

with the highest for NBFIs established during 1991 to 1995 (28.63%). In 2010, all except NBFIs

established after 2000 reveals a high percentage of PC over the necessary amount of capital as

per regulation. In examining the percentage of TC to TAs, it is observed that NBFIs established

before 1990 achieved positive growth (4.94%) with the CV of 18.37 per cent, whereas the other

groups show negative growth rates. NBFIs established during 1991 to 1995 represent a high

variation (23.90%) in this regard. To assess the overall debt load of the NBFIs, DE Ratio is used

and the result shows that CAGR of NBFIs established during 1996 to 2000 was only positive

(1.31%) with lowest CV (4.9%). The other three groups demonstrate the negative growth rates

indicating these groups of NBFIs have reduced debt portion in their capital structure

gradually.

3. Fund Utilization Performance

Considering the fund utilization as one of the key indicators, this part of the study attempts to

determine the performance of the NBFIs regarding their funds utilization pattern by using

three key indicators, namely, Total Loan & Lease to Total Deposit (TL&LS to TD), Total Loan &

Lease to Total Borrowing (TL&LS to TB) and Total Loan & Lease to Total Deposit & Borrowing

(TL&LS to TD&B).

Table-8 shows that the growth of TL&LS to TD of the NBFIs established before 1990 achieved

the highest rate (7.89%) among all the groups. The growth is negative (-5.02%) for the NBFIs

established during 1996 to 2000 with the CV of 13.95%. In terms of TL&LS to TB, NBFIs

established before 1990 show the highest growth (16.06%) and NBFIs established after 2000

represent the lowest growth rate (0.46%). NBFIs established during 1996 to 2000 show the

lowest degree of CV (3.79%). To assess the efficiency through the ratio of TL&LS to TD&B, it is

seen that only NBFIs established before 1990 shows positive growth rate (1.44%). The group of

NBFIs established during 1996 to 2000 indicates the lowest CV (2.47%). As a whole, it may be

concluded that NBFIs established before 1990 are more efficient in utilization of funds.


Tab

le 8

: Fu

nd

s U

tiliz

atio

n P

erfo

rman

ce:T

ota

l Lo

an &

Lea

se t

oTo

tal D

epo

sit

(TL&

LS t

oTD

),To

tal L

oan

& L

ease

to

Tota

l Bo

rro

win

gs

(TL&

LS t

oTB

) an

d T

ota

l Lo

an &

Lea

se t

oTo

tal D

epo

sit

& B

orr

ow

ing

s (T

L&LS

to

TD&

B)

Sou

rce:

Au

tho

rs' C

alcu

lati

on

TL&

LS t

oTD

(%)

TL&

LS t

oTB

(%)

TL&

LS t

oTD

&B

(X)

Year

20

07

20

08

20

09

20

10

CA

GR

CV

Bef

ore

19

90

114

188

183

154

7.89

21.4

9

Du

rin

g

19

91

-19

95

182

156

160

182

0.02

8.11

Du

rin

g

19

96

-20

00

276

258

201

224

-5.0

2

13.9

5

Aft

er

20

00

275

231

258

308

2.87

12.0

3

Bef

ore

19

90

1014

977

1402

1841

16.0

6

30.8

4

Du

rin

g

19

91

-19

95

310

261

296

366

4.22

14.1

7

Du

rin

g

19

96

-20

00

225

228

245

230

0.5

3.79

Aft

er

20

00

260

284

306

265

0.46

7.54

Bef

ore

19

90

797

769

844

844

1.44

4.52

Du

rin

g

19

91

-19

95

111

111

92 101

-2.2

7

9.04

Du

rin

g

19

96

-20

00

110

108

104

105

-1.1

3

2.47

Aft

er

20

00

165

155

125

114

-8.9

6

17.4

9


TL&LS to TA TIv to TA CL&LS to TA

Year

2007

2008

2009

2010

CAGR

CV

Befor

1990

48

65

60

54

3.04

12.66

During

1991-

1995

35

40

50

65

16.48

27.44

During

1996-

2000

43

45

59

59

8.37

17.02

After

2000

52

59

60

65

5.66

8.97

Before

1990

4

4

9

11

28.08

51.27

During

1991-

1995

6

3

7

5

-3.61

34.02

During

1996-

2000

4

5

7

7

10.50

22.86

After

2000

3

4

5

7

29.83

42.35

Before

1990

N/A

12

10

6

-21.85

34.69

During

1991-

1995

N/A

2

2

2

-5.13

8.06

During

1996-

2000

N/A

7

14

10

12.08

31.65

After

2000

N/A

6

5

6

-1.42

10.03

4. Asset Quality Performance

This part of the study judges the quality of asset of the NBFIs by using three indicators, namely,

Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment4 to Total Asset (TIv to TA) and

Classified Loan and Lease to Total Asset (CL&LS to TA). Table-9 shows that all the groups of

NBFIs represent a positive growth rate in terms of TL&LS to TA. But NBFIs established during

1991 to 1996 achieved the highest growth rate (16.48%) with high CV (27.24%) among all the

groups. In terms of TIv to TA, NBFIs established after 2000 achieved the highest rate of growth

(29.83%) and NBFIs established before 1990 attained almost the same growth rate of 28.08 per

cent with the high degree of CV (51.27%). All except the NBFIs established during 1996 to 2000

represent a negative growth rate for CL&LS to TA. Thus, NBFIs established during 1996 to 2000

show that the portion of their CL&LS has increased from 2008 to 2010. On the other hand,

other groups particularly NBFIs established before 1990 had the highest negative growth rate

indicating the gradual reduction of their CL&LS.

Table 9: Asset Quality Performance: Total Loan & Lease to Total Asset

(TL&LS to TA), Total Investment to Total Asset (TIv to TA) and Classified

Loan & Lease to Total Asset (CL&LS to TA)


4Investment in Securities of Government and other Financial Institutions.


5. Earning Performance

Like all organizations, earning of financial institutions is very important for achieving the goals,

attracting good customers, retaining quality manpower, contributing to the development

process of a country and satisfying the stockholders. The profitability has been examined by

using ratios like Return on Asset (ROA), Return on Equity (ROE), and Interest Income to Total

Operating Income (II to TOI) (Table-10). The ROA has been calculated by using three ratios,

namely, ROA-1: Operating Profit to Total Asset (OP to TA), ROA-2: Net Income Before Tax to

Total Asset (NIBT to TA) and ROA-3: Net Income After Tax to Total Asset (NIAT to TA).

NBFIs established before 1990 have shown a high growth of the ratio (ROA-1), followed by the

group established after 2000. But the NBFIs established before 1990 experienced the highest

variation (34.38%) among the groups. The other two groups (1991-1995, after 2000) have

lower CAGR with lower degree of variation.

ROA-2 shows that highest CAGR for the NBFIs established before 1990 is 13.74. The second

highest growth rate is achieved by the NBFIs established during the period of 1996-2000. The

NBFIs established after 2000 have CAGR of 5.43. But the CAGR of the NBFIs established during

1991-95 is negative.

As per ROA-3, the group of 1996-2000 holds the highest CAGR (25.94%) compared to three

other groups. It means, this group earns more by using lesser assets. But the group has very

high value of CV of 78.51 per cent. The next best result found in the group established before

1990 with CAGR of 13.16 per cent and CV of 26.06 per cent. The remaining two groups have

not shown good performance during the observed period compared to prior groups.

As per all ratios, NBFIs established before 1990 hold the best position whereas the other

groups show mixed performance which means that they are not consistent in profit earnings

during the observed period.


Tab

le 1

0: E

arn

ing

Per

form

ance

: RO

A 1

- O

per

atin

g P

rofi

t to

Tota

l Ass

et (O

P t

oTA

), R

OA

2 N

et In

com

e B

efo

reTa

x

toTo

tal A

sset

(NIB

T to

TA) a

nd

RO

A 3

- N

et In

com

e A

fter

Tax

toTo

tal A

sset

(NIA

T to

TA)

(%)

Sou

rce:

Au

tho

rs' C

alcu

lati

on

R

OA

1 -

OP

to

TA

R

OA

2 -

NIB

T to

TA R

OA

3 -

NIA

T to

TA

Year

20

07

20

08

20

09

20

10

CA

GR

CV

Bef

ore

19

90

3.15

3.30

5.37

6.31

18.9

3

34.3

8

Du

rin

g

19

91

-19

95

4.45

5.75

4.85

5.30

4.47

10.9

9

Du

rin

g

19

96

-20

00

8.89

6.51

4.96

7.19

-5.1

6

23.6

4

Aft

er

20

00

4.34

4.24

5.95

7.20

13.4

9

26.0

2

Bef

ore

19

90

3.14

3.23

4.16

5.26

13.7

4

24.9

9

Du

rin

g

19

91

-19

95

5.83

6.38

4.22

5.09

-3.3

17.4

0

Du

rin

g

19

96

-20

00

5.17

4.86

3.74

6.73

6.80

24.0

3

Aft

er

20

00

4.43

4.21

4.46

5.47

5.43

12.1

7

Bef

ore

19

90

2.36

2.30

2.70

3.88

13.1

6

26.0

6

Du

rin

g

19

91

-19

95

3.61

3.57

2.61

3.61

3.15

14.7

4

Du

rin

g

19

96

-20

00

3.70

3.17

17.3

0

9.30

25.9

4

78.5

1

Aft

er

20

00

2.57

2.53

3.01

3.46

7.72

15.1

2


Table 11: Earning Performance: Return on Equity - Net Income After

Tax to Total Equity (NIAT to TE)


Year

2007

2008

2009

2010

CAGR

CV

Before

1990

10.9

09.9

144.0

15.0

8.25

146.69

During

1991-1995

17.9

17.6

21.5

20.0

2.81

9.68

During

1996-2000

19.4

17.1

153.7

45.6

23.77

109.30

After

2000

12.9

12.1

15.8

19.6

10.99

22.31

Considering ROE, the NBFIs established

between 1996 and 2000 has shown the

best performance in terms of CAGR

(23.77%) (Table-11). The second best

performer is the group of NBFIs

established after 2000 with the CAGR of

10.99 per cent. The remaining groups

have performed reasonably well during

the observed period although their

positions are behind the above two

groups. In case of ROE, the highest

variation is found with the group

established before 1990. The group of

1996-2000 has the second highest variation. The other two groups that are 1991-1995 and

after 2000 have substantially less variation than the prior groups.

Table 12: Earning Performance: Interest Income to Net Operating Income

(II to NOI)


Table-12 indicates that the highest value of CAGR is held by the group of NBFIs established

during 1996-2000 with relatively lower value of CV. The other three groups are showing

negative growth during the observed period. The second highest CAGR is found for the group

of 1991-1995 with lowest amount of variation (9.68%). The other two groups are carrying the

CAGR of -22.89 and -16.77. The lowest value of CAGR remains with the group established

before 1990 including relatively a high variation of 52.26 per cent.

ROE - NIAT to TE (%)

Year

2007

2008

2009

2010

CAGR

CV

Before 1990

2.19

2.24

0.90

0.77

-22.89

52.26

During 1991-1995

17.9

17.6

21.5

20.0

2.81

9.68

During 1996-2000

0.96

0.72

1.33

1.40

9.79

28.73

After 2000

1.31

3.24

0.97

0.63

-16.77

75.31

II to NOI (X)


6. Operational Efficiency Performance

Management efficiency has great importance to judge the performance of the NBFIs. Efficient

management enables the institutions to gauge cost management problems and ensures

better marginal productivity of funds. The management efficiency has been evaluated by

using three important ratios, namely Operating Expense to Net Operating Income (OE to NOI),

Staff Expense to Net operating Income (SE to NOI) and Staff Expense to Total Operating

Expense (SE to TOE).

The CAGR of the '1991-1995 NBFI' group has the lowest value of OE to NOI, indicating better

cost management during the period than the other three groups (Table-13). The next CAGR

value remains with the 'After 2000' group. But the value is very close to the NBFIs established

during 1996-2000. In terms of SE to NOI, the lowest CAGR lies with the NBFIs established

before 1990. The group has also the lowest CV among all groups. Thus, considering the CAGR

and CV value, the NBFIs established before 1990 are the best performers among the groups.

In terms of CAGR and CV of SE to TOE, the NBFIs established before 1990 also showed the best

performance among the four groups.

Table 13: Operational Efficiency Performance: Operating Expense to Net

Operating Income (OE to NOI), Staff Expense to Net Operating Income (SE

to NOI), Staff Expense to Total Operating Income (SE to TOI)


OE to NOI (X) SE to NOI (X) SE to TOE (%)

Year

2007

2008

2009

2010

CAGR

CV

Before

1990

2.64

2.64

0.40

0.37

-38.86

85.87

During

1991-

1995

3.67

2.91

0.22

0.22

-50.05

102.21

During

1996-

2000

2.37

2.73

0.23

0.22

-44.48

97.13

After

2000

2.69

2.74

0.29

0.20

-47.64

96.22

Before

1990

0.25

0.28

0.48

0.45

15.80

31.54

During

1991-

1995

0.02

0.03

0.42

0.46

103.29

101.50

During

1996-

2000

0.08

0.16

0.34

0.37

47.57

58.68

After

2000

0.04

0.25

0.78

1.43

141.82

98.85

Before

1990

31.52

26.75

48.43

45.36

9.52

25.49

During

1991-

1995

14.33

17.52

42.21

46.26

34.04

54.79

During

1996-

2000

8.00

16.92

34.75

37.92

47.57

58.68

After

2000

4.19

25.35

39.94

39.57

75.31

61.67



In the context of liquidity, it is seen that all groups of NBFIs maintain liquidity properly in terms

of regulatory and non regulatory measures. One discernible finding is that CAGR of all ratios is

negative meaning that NBFIs progressively decrease excess amount blocked in current assets

and increase business volume in loan, lease and other business after keeping only required

amount to maintain liquidity. Only exception is NBFIs established after 2000. Still these

organizations have inclination to keep more current assets which is evidenced from their

positive CAGR of CRR and CRs. Limited opportunity of investment and more caring attitude for

liquidity may be the causes for maintaining excess amount for liquidity of these lastly

established NBFIs.

In management of capital, NBFIs established before 1990 outperform other groups of NBFIs as

confirmed by positive CAGR of ratios of paid-up capital to total asset and total capital to total

asset with a tolerable coefficient of variation. This is again supported by negative debt equity

ratio. It means that this group of NBFIs increases their amount of capital on the one hand and

decreases their debt equity ratio on the other hand. Other groups of NBFIs more or less also

maintain capital more than required amount of capital. These groups also reduce their debt,

consequently CAGR of debt equity ratio is negative.

In utilization of funds, NBFIs established before 1990 are more efficient and consistent

followed by NBFIs established during 1991-1995. An excessive variation has been observed in

case of NBFIs established after 2000 in utilizing both deposit and borrowing which is

substantiated by their coefficient of variation. One common observation is that CAGRs of Total

Loan and Lease to Total Deposit and Borrowing are negative in all groups except NBFIs

established before 1990. It indicates that aggressiveness in providing loan and lease over

availability of funds has been reduced during the period.

In terms of composition and quality of assets, it is observed that apart from maintaining a

moderate growth of ratio between Total Loan and lease to Total Asset, all except NBFIs

established during 1991-1995 increased their investment portfolio too. In investment

portfolio, growth rates for NBFIs before 1990 and after 2000 show a high rate but with a high

rate of volatility which is evidenced from the calculated co-efficient of variation. In case of

classified loan, it is observed that all except group established during 1996-2000 are gradually

lessening the share of classified Lease and Loan to Total Asset. Particularly NBFIs established

before 1990 achieved more success.


In earning performance, NBFIs established before 1990 clearly shows the best performance in

consistently increasing their earning which is reflected in achieving a double digit CAGR for

three ratios used to calculate ROA with a moderate CV. However, in terms of ROE and Interest

Income to Total Income, the picture is not so rosy. NBFIs established during 1996-2000 show a

good earning performance but with a high variation in considering growth rate of Net Income

after Tax to Total Asset, ROE and Interest Income to Net Operating Income. Other groups show

a mixed result, maintaining positive earning in all observed periods.

In case of operational efficiency, all groups are very successful in reducing their operating

expenses compared to their net operating income at almost the same rate with same

variation. But staff expenses increased at a very high rate for all groups except NBFIs

established before 1990 and during 1996-2000.


Part 4Comparative Performance Evaluation

Based on Listing Status of NBFIs

Comparative Performance Evaluation Based on Listing Status of NBFIs

In this section of Review of Non-bank Financial Sector, a comparative performance has been

shown by grouping the NBFIs as listed and non-listed. A total of twenty (20) listed NBFIs have

been grouped under the first cluster and the remaining eight (8) NBFIs are grouped under the

second cluster (Appendix-III). To see the performance, contemplated areas and ratios like

earlier remain the same in this section too (Appendix-I).


To determine the liquidity performance as per Bangladesh Bank (BB) regulation, like before,

two measures namely Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are

considered which are placed in Table-14. It is seen that Compound Annual Growth Rate

(CAGR) of CRR of NBFIs listed with stock exchanges is negative indicating this group of NBFIs is

persistently decreasing its CRR whereas CAGR of CRR of NBFIs not listed with stock exchanges

is positive indicating this group of NBFIs is continuously increasing its CRR. But CAGRs of SLR

of both groups are negative. The coefficients of variation (CVs) of both CRR and SLR of the

NBFIs listed with stock exchanges are higher than that of the NBFIs not listed with stock

exchanges.

Table 14: Liquidity Performance: Regulatory - Cash Reserve Ratio (CRR),

Statutory Liquidity Ratio (SLR) and Non-regulatory Performance - Current

Ratio (CR), Liquid Asset to Total Asset (LA to TA)

Source: Annual reports, All NBFIs and Authors' Calculation

Year

2007

2008

2009

2010

CAGR

CV

Listed

N/A

7.77

3.14

3.72

-21.79

51.76

Non-listed

N/A

3.04

2.70

3.78

7.46

17.31

Listed

N/A

352.63

22.70

23.21

-59.62

143.28

Non-listed

N/A

41.25

16.00

32.39

-7.74

42.87

Listed

1.39

1.31

1.15

1.34

-0.85

7.98

Non-listed

2.19

3.03

1.33

2.08

-11.80

32.24

Listed

0.49

0.44

0.38

0.38

-5.86

12.07

Non-listed

2.68

0.48

0.48

0.42

-36.90

112.07

CRR (%) SLR (%) CR (X) LA to TA (%)

Regulatory Non-regulatory



From Table-14, it is seen that NBFIs not listed with stock exchanges are maintaining more

current ratio but the CAGR of current ratio of these NBFIs is negative. The CV of current ratio of

the NBFIs not listed with stock exchanges is higher than those of the NBFIs listed with stock

exchanges. The CAGRs of LA to TA of both the NBFIs listed with stock exchanges and not listed

with stock exchanges are negative whereas the CVs of LA to TA of non listed NBFIs are more

than NBFIs listed with stock exchanges.

2. Capital Management Performance

To determine capital management performance, as per Table-15, it is seen that NBFIs not

listed in the exchange achieved a high growth rate (15.96%) of their Paid-up Capital to

Required Capital (PC to RC) although the CV was high (27.04%). In terms of percentage of Total

Capital to Total Asset (TC to TA), listed NBFIs show a CAGR of 2.82 per cent with a lower degree

of variation (7.29%), whereas the group of non-listed companies show a negative growth rate

of -6.17 with a higher degree of variation (20.79%).

Table 15: Capital Management Performance: Paid-up Capital to Required

Capital (PC to RC), Total Capital to Total Asset (TC to TA) and Debt to Equity

(DE) Ratio


From Table-15, the CAGR of DE Ratio of listed NBFIs shows a negative growth rate of -4.29

per cent with a lower CV (10.82%) which means that this group consistently reduced their

debt load. On the other hand, the group of non-listed companies demonstrates a positive

growth rate (9.65%) of such ratio with the higher CV (15.20%) indicating their persistent high

dependency on the debt capital.

Year

2007

2008

2009

2010

CAGR

CV

Listed

123

129

80

111

-2.53

19.70

Non-listed

73

82

97

132

15.96

27.04

Listed

17

17

16

19

2.82

7.29

Non-listed

40

35

24

31

-6.17

20.79

Listed

6.75

7.26

7.14

5.67

-4.29

10.82

Non-listed

3.51

4.20

4.58

5.08

9.65

15.20

PC to RC (%) TC to TA (%) DE Ratio (X)

Year

2007

2008

2009

2010

CAGR

CV

Listed

227

196

206

215

-1.29

6.27

Non-listed

429

412

222

302

-8.38

28.52


Listed

275

277

360

447

12.91

24.08

Non-listed

588

892

645

598

0.44

21.03

Listed

106

113

112

110

0.94

2.79

Non-listed

534

501

519

518

-0.76

2.68

TL&LS to TD (%) TL&LS to TB (%) TL&LS to TD&B (%)

3. Fund Utilization

In examining performance of fund utilization, according to Table-16, it is observed that both

the group of listed and non-listed NBFIs represent a negative growth rate (-1.29% and -8.38%,

respectively) in terms of Total Loan & Lease to Total Deposit (TL&LS to TD) with higher degree

of variation (28.52%) for non-listed NBFIs. But in case of Total Loan & Lease to Total Borrowing

(TL&LS to TB), the listed NBFIs achieved high positive growth rate of 12.91 per cent with almost

the same degree of variation in comparison to the non-listed NBFIs.

Table 16: Funds Utilization Performance: Total Loan & Lease to Total Deposit

(TL&LS to TD), Total Loan & Lease to Total Borrowings (TL&LS to TB) and

Total Loan & Lease to Total Deposit & Borrowings (TL&LS to TD&B)


In considering the Total Deposit and Borrowing (TD&B) in TL&LS, Table-16 depicts that the

listed NBFIs enjoyed a positive growth rate of 0.94 although the rate is very insignificant. On

the other hand, the non-listed NBFIs show a negative growth rate (-0.76%) with almost the

identical CV.


According to Table-17, both listed and non-listed NBFIs achieved a positive growth rate, where

the listed NBFIs demonstrated the high CAGR of 11.45 per cent with relatively high CV

(19.70%). On the other hand, in case of Total Investment to Total Asset (TIv To TA), non-listed

NBFIs showed a higher positive CAGR (32.36%) with the high CV of 59.92 per cent than the

listed NBFI group (CAGR = 26.85% and CV = 45.58%). Both the group of listed and non-listed

NBFIs showed positive growth rate of Classified Loan & Lease to Total Asset (CL&LS to TA) with

almost the same CV but the listed NBFIs reveals the higher growth rate of Classified Loan &

Lease to Total Asset (17.15%).


Year

2007

2008

2009

2010

CAGR

CV

Listed

43

53

66

67

11.45

19.70

Non-listed

58

67

63

61

1.34

6.11

Listed

4

5

10

10

26.85

45.58

Non-listed

3

3

10

9

32.36

59.92

Listed

N/A

7

13

12

17.15

26.58

Non-listed

N/A

12

19

13

4.54

25.93

TL&LS to TA TIv to TA CL&LS to TA

Year

2007

2008

2009

2010

CAGR

CV

Listed

4.9

4.8

5.2

7.2

10.04

20.17

Non-listed

10.6

6.7

5.2

6.0

-13.31

33.88

Listed

4.1

3.9

4.0

6.3

11.23

24.97

Non-listed

6.1

6.1

3.9

5.4

-2.82

19.25

Listed

3.0

2.6

13.8

7.9

26.93

75.82

Non-listed

3.5

3.4

2.4

3.4

-0.74

16.09

ROA 1 - OP to TA ROA 2 - NIBT to TA ROA 3 - NIAT to TA

Table 17: Asset Quality Performance: Total Loan & Lease to Total Asset

(TL&LS to TA), Total Investment to Total Asset (TIv to TA) and Classified


(%)



In investigating earning performance, calculated ratios are placed in Table-18. ROA-1 (Return

on Asset) shows the better performance for the listed NBFIs. The difference of CAGR between

the groups is about 23. The listed group has lower (20.17 %) CV of the ratio than the non-listed

group.

Table 18: Earning Performance: ROA 1 - Operating Profit to Total Asset (OP

to TA), ROA 2 - Net Income Before Tax to Total Asset (NIBT to TA) and

ROA 3 - Net Income After Tax to Total Asset (NIAT to TA)

(%)


The result is almost the same in case of ROA-2 regarding CAGR. But in this particular ratio the

listed companies are showing higher variation than the other. ROA-3 shows the listed


Year

2007

2008

2009

2010

CAGR

CV

Listed

18.7

16.6

120.9

39.3

20.31

100.37

Non-listed

10.6

10.2

93.3

16.5

11.63

123.92


Year

2007

2008

2009

2010

CAGR

CV

Listed

1.69

2.19

1.31

1.30

-6.32

25.86

Non-listed

0.826

0.600

0.678

0.418

-15.64

26.92

II to NOI (X)

companies' CAGR is about 28 per cent higher than the non-listed companies. The difference

between the CV of these two groups is 59.73 (75.82-16.09). So the listed companies have

shown higher growth in the earning but the variation is significantly higher than the

non-listed companies.

Table 19: Earning Performance: Return on Equity - Net Income After Tax to

Total Equity (NIAT to TE)


The CAGR of the listed group in the context of stockholders' earning is 20.31 and the CAGR of

the non-listed group is 11.63 which is more than 74 per cent higher than the later group

(Table-19). In case of CV of both groups have a very high variation although the CV of

non-listed group is higher than the listed group. It states that listed companies show better

earning capacity against the amount of the shareholders equity with less variation to

non-listed companies.


(II to NOI)


From the ratio of interest income to net operating income, it is clear that the listed NBFIs have

shown better growth in the interest income than the other group (Table-20).



Both the groups have negative CAGRs for Operating Expenses to Net Operating Income (OE to

NOI) during the observed period but the variation is lower in case of the non-listed NBFIs

(Table-21). In terms of Staff Expenses to Net Operating Income (SE to NOI), the non-listed NBFIs

performed better in terms of CAGR but the listed NBFIs show very high growth in staff

expense as well as higher variation compared to the Non-listed NBFs. The performance of

non-listed NBFIs is extremely well in terms of CAGR of Staff Expenses to Total Operating

Expenses (SE to TOE) and the value of CV is also low for the group. The CAGR of the listed

NBFIs is very high with higher variation compared to non-listed NBFIs.

Table 21: Operational Efficiency Performance: Operating Expense to Net

Operating Income (OE to NOI), Staff Expense to Net Operating Income

(SE to NOI), and Staff Expense to Total Operating Expense (SE to TOE)



In liquidity management, it is seen that both listed and non-listed NBFIs never compromised

with the regulatory requirements of Bangladesh Bank in maintaining their liquidity although

variation has been observed. However, it is observed that both groups are persistently

lessening their amount of liquid assets during the period which is confirmed by the negative

CAGR of all ratios, except CRR for Non-listed NBFIs, used for determining liquidity

performance.

In managing capital, listed NBFIs maintain capital above the regulatory requirement in all

observed years except in 2009 whereas paid-up capital of non- listed NBFIs reach required

capital only in 2010. While as per CAGR, it seems that non-listed NBFIs performed better than

listed NBFIs. In terms of Total Capital to Total Asset (TC to TA) and Debt to Equity ratio (DE

Ratio), listed NBFIs undoubtedly do well compared to non-listed NBFIs.

Year

2007

2008

2009

2010

CAGR

CV

Listed

2.63

3.10

0.25

0.26

-43.90

97.14

Non-listed

2.47

1.84

0.32

0.21

-46.01

92.64

Listed

0.04

0.09

0.44

0.44

77.08

84.35

Non-listed

0.36

0.40

0.57

1.12

32.88

56.95

Listed

4.56

9.48

44.11

44.84

77.08

60.67

Non-listed

36.03

40.38

32.19

34.58

-1.01

9.61



In utilization of funds, listed NBFIs display a negative CAGR of total loan and lease compared to

deposits whereas the same group has a positive CAGR for total loan and lease compared to

borrowing. It means that listed NBFIs are gradually collecting more deposit, thus reducing

dependency on borrowing. Non-listed NBFIS also follow the footprint of the listed NBFIs,

however movement is relatively slow. In addition, non-listed NBFIs is more aggressive than

listed NBFIs in extending loan and lease compared to their sources of funds.

In terms of asset quality, listed NBFIs demonstrate a steady growth rate in their loan, lease and

investment as evidenced from a respectable positive compound annual growth rate.

Non-listed NBFIs also show a good performance in growing their investment, while growth

rate of loan and lease of the same group of NBFIs is very small. In classified loan, non-listed

NBFIs do better than listed NBFIs although classified loan is growing both for listed and non-

listed NBFIs.

In earning performance, listed NBFIs record a high performance compared to non-listed NBFIs

in terms of CAGR of all ratios used for examining profitability. Even though Non-listed NBFIs

show negative growth rates, these organizations always earn a respectable amount of profit

during the period. It is noted that both groups have a negative trend of interest income in

their total operating income.

In case of operational efficiency, both groups have successfully reduced operating expenses

compared to their net operating income almost at the same rate with same variation. But staff

expenses increase at a very high rate for both the groups particularly for listed NBFIs .


Part 5Comparative Performance Evaluation Based

on Ownership Patterns of NBFIs

Comparative Performance Evaluation Based on Ownership Patterns of NBFIs

With a view to reviewing Non-bank Financial Sector, a comparative performance has been

analyzed in terms of ownership pattern by grouping NBFIs into two groups namely NBFIs

under local and NBFIs under Joint venture. A total of 20 (twenty) local NBFIs and the other 8

(eight) NBFIs have been classified under local and joint venture, respectively (Appendix-IV)

and their performance has been examined by following the same indicators (Appendix-1) like

the previous part of the report.


Both groups of NBFIs always maintain liquidity above their regulatory requirement.

In addition, CAGRs of CRR of both NBFIs under joint venture and NBFIs under local ownership

are negative though the CVs of CRR of NBFIs under joint venture are more than that of NBFIs

under local ownership (Table-22). But the CAGRs of SLR of NBFIs under local ownership is

negative whereas CAGRs of SLR of NBFIs under joint venture is positive. The CVs of SLR of

NBFIs under local is significantly higher than those of NBFIs under joint venture ownership.


From Table-22, it is observed that the CAGRs of current ratio of NBFIs under joint venture is

more negative than NBFIs under local ownership. In addition, CVs of current ratio of Joint

venture NBFIs are more than that of local NBFIs. The CAGRs of LA to TA of NBFIs under joint

venture is highly negative compared to CAGR of NBFIs under local can have use both. The CVs

of LA to TA of joint venture NBFIs are excessively high.

Table 22: Liquidity Performance: Regulatory - Cash Reserve Ratio (CRR), StatutoryLiquidity Ratio (SLR)) and Non-regulatory - Current Ratio (CR), Liquid Asset to

Total Asset (LA to TA Ratio)

Source: Annual Reports, All NBFIs and Authors' Calculation

Year

2007

2008

2009

2010

CAGR

CV

Local

N/A

4.37

2.91

3.83

-4.31

19.98

Joint

Ventures

N/A

19.17

3.47

3.44

-43.59

104.34

Local

N/A

320.07

19.08

27.13

-56.07

140.47

Joint

Ventures

N/A

18.20

27.97

19.11

1.65

24.81

Local

1.63

1.66

1.24

1.59

-0.61

12.61

Joint

Ventures

1.37

1.44

0.97

1.13

-7.70

17.78

Local

N/A

0.48

0.43

0.41

0.41

-4.08

Joint

Ventures

2.69

0.53

0.34

0.36

-39.44

116.47

CRR (%) SLR (%) CR (X) LA to TA (%)

Liquidity Ratio Non-liquidity Ratio



To investigate capital management performance, Paid-up Capital to Required Capital (PC to

RC), Total Capital to Total Asset (TC to TA) and Debt to Equity (DE) Ratio are shown in Table-23.

Table 23: Capital Management Performance: Paid-up Capital to Required

Capital (PC to RC), Total Capital to Total Asset (TC to TA) and Debt to Equity

(DE) Ratio


From Table-23, it is observed that the group of locally owned NBFIs enjoys a small growth rate

(0.23%) of PC to its RC with higher degree of CV (20.66%) compared to joint venture NBFIs.

However, both local and joint venture NBFIs maintain high PC than the regulatory

requirement in 2010. In terms of TC to TA ratio, local NBFIs depict the negative growth (-2.35%)

and the joint venture NBFIs fail to generate any growth at all (0.00%). The local NBFIs pose 3.28

per cent negative growth in their DE Ratio with the higher CV (10.21%) which indicates that

from 2007 to 2010 their debt load has decreased. On the other hand, the growth rate of the

same ratio for the group of joint venture NBFIs was 3.24 per cent because of their increasing

dependency on debt capital. But the CV for this group was lower (5.58%).


For fund utilization, the local NBFIs show the negative growth rates of -2.72 in terms of Total

Loan & Lease to Total Deposit (TL&LS to TD), although their TL&LS are far above over the TDs

even in 2010 (Table-24). This happened because of their gradual increase in deposit

mobilization. Locally owned NBFIs demonstrate the lower degree of variation (9.65%).

Year

2007

2008

2009

2010

CAGR

CV

Local

108

121

72

109

0.23

20.66

Joint

Ventures

134

123

117

138

0.74

7.57

Local

22

20

18

20

-2.35

8.16

Joint

Ventures

28

27

20

28

0.00

15.00

Local

6.01

6.56

6.59

5.26

-3.28

10.21

Joint

Ventures

5.36

5.94

5.97

6.09

3.24

5.58

PC to RC (%) TC to TA (%) DE Ratio (X)


Table 24: Funds Utilization Performance: Total Loan & Lease to Total Deposit

(TL&LS to TD), Total Loan & Lease to Total Borrowings (TL&LS to TB) and

Total Loan & Lease to Total Deposit & Borrowings (TL&LS to TD&B)

(%)


The scenario of Total Loan & Lease to Total Borrowing (TL&LS to TB) is different. Table-24

reveals that both groups have the positive growth rates even though the joint venture NBFIs

achieve a significant growth rate (13.58) with a high rate of CV (26.13%). In case of Total Loan &

Lease to Total Deposit and Borrowing (TL&LS to TD&B), both the groups show a small negative

growth (-0.29% and -0.04%) and the group of local NBFIs represent high degree of CV (6.35%).

It means that their dependency on borrowing to give loan and lease is gradually decreasing.

These tiny negative growths indicate that besides deposits and borrowings NBFIs are

gradually increasing their total Paid-up capital5 as sources of funds to give loan and leases.


In examining asset quality performance, both the groups of NBFIs demonstrate the positive

growth rate, where locally owned NBFIs show the higher rate (5.89%), although the CV

(20.71%) is high in comparison to the joint venture NBFIs (Table-25). The growth of Total

Investment (TIv) to Total Asset (TA) reveals that locally owned NBFIs achieve the higher rate of

33.09 per cent with relatively high CV (56.13%) whereas the joint venture NBFIs show the

lower CAGR (13.88%) with a lower CV (28.67%).

5 As per the regulatory requirements, the amount of required capital is mentioned in the earlier part of the report

Year

2007

2008

2009

2010

CAGR

CV

Local

280

243

222

251

-2.72

9.65

Joint

Ventures

126

211

169

175

8.63

20.59

Local

254

254

284

280

2.39

5.92

Joint

Ventures

647

631

862

1077

13.58

26.13

Local

112

126

114

110

-0.29

6.35

Joint

Ventures

518

476

514

517

-0.04

3.94

TL&LS to TD TL&LS to TB TL&LS to TD&B


Year

2007

2008

2009

2010

CAGR

CV

Local

53

41

63

66

5.89

20.71

Joint Ventures

65

71

60

66

0.64

6.89

Local

3

4

10

9

33.09

56.13

Joint Ventures

6

6

9

10

13.88

28.67

Local

NA

7

13

12

20.23

29.56

Joint Ventures

NA

20

12

16

-8.44

24.78

TL&LS to TA TI to TA CL&LS to TA

Year

2007

2008

2009

2010

CAGR

CV

Local

05.6

05.5

05.5

07.5

7.54

16.51

Joint Ventures

08.9

05.1

04.5

05.2

-12.28

33.30

Local

04.9

04.9

04.2

06.6

7.44

19.69

Joint Ventures

04.0

03.5

03.4

04.7

3.99

14.26

Local

03.3

03.0

13.7

07.9

23.89

71.05

Joint Ventures

02.7

02.4

02.5

03.4

5.35

15.62

ROA 1 - OP to TA ROA 2 - NIBT to TA ROA 3 - NIAT to TA

Table 25: Asset Quality Performance: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment to Total Asset (TIv to TA) and Classified


(%)


From Table-25, in terms of Classified Loan & Lease to Total asset (CL&LS to TA), locally owned

NBFIs show the positive growth rate (20.23) that represent their gradual increase in CL&LS

whereas the joint venture NBFIs show the negative growth rate (-8.44%) and achieve better

efficiency in managing classified loan and leases.


In earning performance, from CAGR it is clear that all the three ratios of ROA (Table-26) of the

local NBFIs have higher values than the joint ventures. Considering CV, the joint venture NBFIs

have lower variation of ROA-2 (Return on Asset) and ROA-3. But the Local NBFIs have lower

variation in case of ROA-1.

Table 26: Earning Performance: ROA 1 - Operating Profit to Total Asset (OP to TA), ROA 2 - Net Income Before Tax to Total Asset (NIBT to TA) and ROA 3

- Net Income After Tax to Total Asset (NIAT to TA)

(%)



Year

2007

2008

2009

2010

CAGR

CV

Local

17.5

15.8

118.7

38.2

21.43

101.89

Joint Venture

13.5

12.3

98.8

19.1

9.05

116.78


Table 27: Earning Performance: Return on Equity (ROE) - Net Income After

Tax to Total Equity (NIAT to TE)


The local NBFIs show higher growth in the ROE during the observed period as indicated by the

higher value of CAGR than the joint venture. The difference in the variation of ROE is minimal

between the groups (Table-27).


(II to NOI)


In head to head comparison the local NBFIs were better in earning interest from their

investment activities. This is evident from the higher CAGR value of the locals than the Joint

Ventures. Besides, the variation of interest income for both the groups is almost equal (Table-28).


In terms of CAGR, the performance of the local NBFIs is better than the Joint ventures, while

the variation is higher than the joint ventures (Table-29). As per CAGR and CV of SE to NOI , the

Joint venture NBFIs is better than the Local NBFIs. The Joint venture NBFIs have lower CAGR

and CV for SE to TOE showing better cost efficiency during the observed period.

Year

2007

2008

2009

2010

CAGR

CV

Local

1.41

1.85

1.18

1.14

-5.19

23.42

Joint Venture

1.51

1.26

1.00

0.82

-13.96

25.96

II to NOI (X)


Year

2007

2008

2009

2010

CAGR

CV

Local

2.85

2.92

0.25

0.23

-46.61

97.58

Joint Ventures

1.93

2.28

0.32

0.28

-38.12

87.03

Local

0.07

0.17

0.50

0.73

77.22

81.13

Joint Ventures

0.25

0.24

0.45

0.46

16.98

35.23

Local

9.02

19.71

50.99

73.65

69.05

76.98

Joint Ventures

25.09

24.05

45.14

46.99

16.98

35.23


Table 29: Operational Efficiency: Operating Expense to Net Operating Income (OE to NOI), Staff Expense to Net Operating Income (SE to NOI),

Staff Expense to Total Operating Expense (SE to TOE)



In case of managing liquidity, both groups of NBFIs all the time maintained their liquidity

above the regulatory requirement. Besides maintaining liquidity, it is also observed that, step

by step, these organizations are becoming more efficient in managing liquidity and

structuring portfolio. However, in this context, joint ventures NBFIs do better than local NBFIs.

This is evidenced from the negative CAGR of almost all liquidity ratios, indicating that not by

blocking more assets unnecessarily for liquidity purpose, these organizations use more funds

for loan, lease and other business. However joint venture NBFIs suffer from variation more

than local NBFIs as supported by CV.

In managing capital, joint venture NBFIs have more deepness over local NBFIs though the

both groups have more capital over the regulatory requirement. Year wise calculated ratios

and CAGRs support this finding. One more observation emerged from the DE ratio, although

joint venture NBFIs have more deepness in capital management, but these organizations are

persistently enhancing their debt portion equity over the period.

In utilization of funds, joint ventures are more aggressive as compared to local NBFIs. Joint

venture NBFIs provide facilities almost five times higher than their total borrowing and

deposits whereas this is only one time in case of local NBFIs. One more observation is that

joint venture NBFIs step by step reduces their dependency on borrowing.


In respect to asset quality, almost the 60 per cent of total assets of both groups is in lease and

loan. In considering CAGR, local NBFIs are continuously enhancing this segment of business

more as compared to Joint ventures. Even in case of investment, local NBFIs are performing

consistently better than joint venture as per CAGR. The performance of joint venture is

significantly better in reducing classified loan compared to local NBFIs.

In earning performance, local NBFIs outperform joint venture with a tolerable variation as

documented by three ratios used here to figure out the ROA. In Case of ROE, local NBFIs also

perform better than joint venture. However, CAGR of interest income to net operating income

of both groups is negative indicating percentage of interest income to total operating income

of the groups is declining.

In case of operational efficiency, both groups have successfully reduced operating expenses

compared to their net operating income at almost the same rate with same variation. But staff

expenses increased at a very high rate for both the groups, particularly for listed NBFIs.


Part 6

Pictorial Views of All Tables


0

500

1000

1500

2000

2500

3000

3500

4000

NBFIs BFIs NBFIs BFIs NBFIs BFIs NBFIs BFIs NBFIs BFIs


Loan & Advance

Deposit Borrowings Profit

(Tk.

In B

illio

n)

2007

2008

2009

2010

25

30

-20

-15

-10

-5

0

5

10

15

20

NBFIs BFIs BFIsNBFIs NBFIs BFIs NBFIs BFIs NBFIs BFIs

Paid-up Capital& Reserve

Loan & Advance Deposit Borrowings Profit


Figure 1: NBFIs and BFIs: Paid-up Capital & Reserve, Loan & Advance, Deposit,

Borrowings and Profit

NBFIs BFIs BFIsNBFIs NBFIs BFIs NBFIs BFIs NBFIs BFIs

Paid-up Capital& Reserve

Loan & Advance Deposit Borrowings Profit0

10

20

30

40

50

60

Pe

rce

nta

ge

Pe

rce

nta

ge

Figure 2: CAGR of NBFIs and BFIs

Figure 3: CV of NBFIs and BFIs


Figure 4: Sector-wise Allocation of NBFIs in 2010

Figure 6: Cash Reserve Ratio (CRR) Figure 7: Statutory Liquidity Ratio (SLR)

A Pictorial View of the Comparative Performance Evaluation Based on Establishment Year of NBFIs

1a. Liquidity Performance (Regulatory)

Figure 5: Sector-wise Allocation of BFIs in 2010

Merchant Banking &

Margin Loan

Trade andCommerce

6% Merchant Banking &

Margin Loan 0%

Others27% Trade and

Commerce38%

Industry22%

Agriculture6%

Housing7%

Industry44%

Agriculture1%

Housing17%

Others 17%

Before1990

During1991-1995

During1996-2000

After 2000

0

5

10

15

20

25

30

35

40

2008 2009 2010

Pe

rce

nta

ge

Year

0

1

2

3

4

5

6

7

8

9

10

2008 2009 2010

Per

cen

tag

e

Year

Before1990

During1991-1995

During1996-2000

After 2000


Figure 8: Current Ratio (CR)

Figure 10: CAGR of Liquidity Performance Based on

Establishment Year (1997-2010)

Figure 11: CV of Liquidity Performance Based on

Establishment Year (1997-2010)

Figure 9: Liquid Asset to Total Asset (LA to TA)

1b. Liquidity Performance (Non-regulatory)

Before1990

During1991-1995

During1996-2000

After 2000

0

0.5

1

1.5

2

2.5

3

2007 2008 2009 2010

Tim

es

Year

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

0

0.5

1

1.5

2

2.5

3

3.5

4

Pe

rce

nta

ge

-60

-40

-20

0

20

40

60

Before 1990 1991 to 1995 1996 to 2000 After 2000

Pe

rce

nta

ge

/ Ti

me

s

Cash Reserve Ratio (%) Statutory liquidity Ratio (%)

Current Ratio (X) Liquid Asset to Total Asset (%)

0

10

20

30

40

50

60

70


Pe

rce

nta

ge

/ Tim

es

Cash Reserve Ratio (%) Statutory liquidity Ratio (%)Current Ratio (×) Liquid Asset to Total Asset (%)


Figure 12: Paid up Capital to Required Capital (PC to RC)

Figure 15: CAGR of Capital Management Based on Establishment

Year (2007-2010)

Figure 16: CV of Capital ManagementBased on Establishment Year

(2007-2010)

Figure 14: Debt to Equity (DE) Ratio

Figure 13: Total Capital toTotal Asset (TC to TA)


Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

20

40

60

80

100

120

140

160

180

Pe

rce

nta

ge

Pe

rce

nta

ge Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

5

10

15

20

25

30

35

40

45

Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

1

2

3

4

5

6

7

8

9

10

Tim

es

-15

-10

- 5

0

5

10

15


Pe

rce

nta

ge

/ Ti

me

s

Paid-up Capital to Required Capital (%)

Total Capital to Total Asset (%)

Debt Equity Ratio (x)

Pe

rce

nta

ge

/ Ti

me

s

Paid-up Capital to Required Capital (%)

Total Capital to Total Asset (%)


0

5

10

15

20

25

30

35



Figure 19: Total Loan & Lease to Total Deposit & Borrowings (TL&LS to TD&B)

Figure 17: Total Loan & Lease to Total Deposit (TL&LS to TD)

Figure 20: CAGR of Fund Utilization Based on Establishment Year

(2007-2010)

Figure 21: CV of Fund Utilization Based on Establishment Year

(2007-2010)

Figure 18: Total Loan & Lease toTotal Borrowings (TL&LS to TB)

3. Fund Utilization PerformanceP

erc

en

tag

e Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

50

100

150

200

250

300

350

Pe

rce

nta

ge Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

Tim

es

0

100

200

300

400

500

600

700

800

900

-15

-10

-5

0

5

10

15

20


Pe

rce

nta

ge

/ Ti

me

s

Total Loan & Lease to Total Deposits (%)

Total Loan & Lease to Total Borrowing (%)

Total Loan & Lease to Total Deposit and Borrowing (X)

Pe

rce

nta

ge

/ Ti

me

s

Total Loan & Lease to Total Deposits (%)

Total Loan & Lease to Total Borrowing (%)

Total Loan & Lease to Total Deposit and Borrowing (X)

0

5

10

15

20

25

30

35



Figure 24: Classified Loan & Lease to Total Asset (CL&LS to TA)

Figure 22: Total Loan & Lease to Total Asset (TL&LS to TA)

Figure 23: Total Investment to Total Asset (TIv to TA)


Pe

rce

nta

ge

Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

10

20

30

40

50

60

70

Pe

rce

nta

ge

Before1990

1991-1995

1996-2000

After 2000

2007 2008 2009 2010

Year

0

2

4

6

8

10

12

Figure 25: CAGR of Asset Quality Based on Establishment Year (2007-2010)

Figure 26: CV of Asset Quality Based on Establishment Year (2007-2010)

Before1990

1991-1995

1996-2000

After 2000

Year

0

2

4

6

8

10

12

14

16

2008 2009 2010

Pe

rce

nta

ge

-30

-20

-10

0

10

20

30

40


Pe

rce

nta

ge

Total Loan & Leases to Total Assets

Total Investment to Total Asset

Classified Loan & Leases to Total Asset

0

10

20

30

40

50

60


Pe

rce

nta

ge


Total Investment to Total Asset

Classified Loan & Leases to Total Asset


Figure 29: ROA-3 - Net Income After Tax to Total Asset (NIAT to TA)

Figure 27: ROA-1 - Operating Profit to Total Asset (OP to TA)

Figure 28: ROA-2 - Net Income Before Tax to Total Asset (NIBT to TA)


Figure 30: CAGR of Return on Assets Based on Establishment Year

Figure 31: CV of Return on Assets Based on Establishment Year

Pe

rce

nta

ge

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

0

1

2

3

4

5

6

7

8

9

10

Pe

rce

nta

ge

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

0

1

2

3

4

5

6

7

8

Before1990

During1991-1995

During1996-2000

After 2000

Year

0

2

4

6

8

10

12

14

16

18

20

2007 2008 2009 2010

Perc

enta

ge

-10

-5

0

5

10

15

20

25

30

Before 1990 During 1991-1995

During 1996-2000

After 2000Pe

rce

nta

ge

Operating Profit to Total Asset

Net Income Before Tax To Toral Asset

Net Income After Tax to Total Asset

Pe

rce

nta

ge

Operating Profit to Total Asset

Net Income Before Tax To Toral Asset

Net Income After Tax to Total Asset

0

10

20

30

40

50

60

70

80

90

Before 1990 During 1991- During 1996- After 2000


Figure 32: Return on Equity - Net Income After Tax to Total Equity

(NIAT to TE)

Figure 33: Interest Income to Net Operating Income (II to NOI)

Figure 34: CAGR of Return on Equity and Interest Income to Net Operating Income Based on Establishment Year

Figure 35: CV of Return on Equity and Interest Income to Net Operating

Income Based on Establishment Year

Pe

rce

nta

ge

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

0

20

40

60

80

100

120

140

160

180

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

0

0.5

1

1.5

2

2.5

3

3.5

Tim

es

Pe

rce

nta

ge

-30

-20

-10

0

10

20

30

Before 1990 During 1991 -

1995

During 1996 -

2000

After 2000

Net Income After Tax to Total Equity

Interest Income to Net Operating Income

Pe

rce

nta

ge

0

20

40

60

80

100

120

140

160

Before 1990 During 1991-1995

During1996-2000

After 2000

Net Income After Tax to Total Equity

Interest Income to Net Operating Income


Figure 38: Staff Expense to Total Operating Income (SE to TOI)

Figure 36: Operating Expense to Net Operating Income (OE to NOI)

Figure 37: Staff Expense to Net Operating Income (SE to NOI)


Figure 39: CAGR of Operating Expense to Net Operating Income (OE to NOI), Staff Expense

to Net Operating Income (SE to NOI), and Staff Expense to Total Operating Income (SE

to TOI) Based on Establishment Year

Figure 40: CV of Operating Expense to Net Operating Income (OE to NOI), Staff Expense

to Net Operating Income (SE to NOI), Staff Expense to Total Operating Income (SE to

TOI) Based on Establishment Year

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

Tim

es

0

0.5

1

1.5

2

2.5

3

3.5

4

Before1990

During1991-1995

During1996-2000

After 2000

2007 2008 2009 2010

Year

Tim

es

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Before1990

During1991-1995

During1996-2000

After 2000

Year

2007 2008 2009 2010

Perc

enta

ge

0

0.1

0.2

0.3

0.4

0.5

0.6

-100

-50

0

50

100

150

200

Before 1990 During 1991-1995 During 1996-2000 After 2000

Pe

rce

nta

ge

Operating Expense To Net Operating Income

Staff Expense To Net Operating Income

Staff Expense to Total Operating Expense

0

20

40

60

80

100

120

Before 1990 During 1991-1995 During 1996-2000 After 2000

Pe

rce

nta

ge

Operating Expense To Net Operating Income

Staff Expense To Net Operating Income

Staff Expense to Total Operating Expense


Figure 42: CAGR of Liquidity Performance Based on

Listing in the Exchanges (2007-2010)

Figure 43: CV of Liquidity Performance Based on

Listing in the Exchanges (2007-2010)

A Pictorial View of the Comparative Performance Evaluation Based on Listing Status of NBFIs

1. Liquidity Performance

Figure 41: Liquidity Performance: Regulatory - Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR)) and Non-regulatory Performance - Current Ratio

(CR), Liquid Asset to Total Asset (LA to TA)

2007

2008

2009

2010

0

50

100

150

200

250

300

350

400

Listed Non-Listed Non-Listed Non-Listed Non-ListedListed Listed Listed

Cash Reserve Ratio (%) Statutory LiquidityRatio (%)

Current Ratio (X) Liquid Asset to TotalAsset (%)

Perc

enta

ge/

Tim

es

-70

-60

-50

-40

-30

-20

-10

0

10

20

Cash ReserveRatio (%)

StatutoryliquidityRatio (%)

Current Ratio(X)

Liquid Assetto Total Asset

(%)

Pe

rce

nta

ge

/ Ti

me

s

Listed Non-listed

Pe

rce

nta

ge

/ Ti

me

s

Listed Non-listed

-20

0

20

40

60

80

100

120

140

160

Cash ReserveRatio (%)

Statutory liquidityRatio (%)

Current Ratio(X)

Liquid Asset to TotalAsset (%)


Figure 45: CAGR of CapitalManagement Based on

Listing in the Exchange (2007-2010)

Figure 46: CV of Capital Management Based on



Figure 44: Paid up Capital to Required Capital (PC to RC), Total Capital to

Total Asset (TC to TA) and Debt to Equity (DE) Ratio

-10

-5

0

5

10

15

20

Paid-up Capital toRequired Capital (%)

Total Capital toTotal Asset (%)

Debt Equity Ratio(X)

Pe

rce

nta

ge

/ Ti

me

s

Listed Non-listed

0

5

10

15

20

25

30



Debt Equity Ratio(X)

Non-ListedListed

Pe

rce

nta

ge

/ Ti

me

s

2007

2008

2009

2010

0

20

40

60

80

100

120

140

Listed Non-listed Listed Non-listed Listed Non-listed

Paid-up Capital to Required Capital (%) Total Capital to Total Asset (%) Debt Equity Ratio (X)

Pe

rce

nta

ge/

Tim

es


Figure 48: CAGR of Fund Utilization Based on


Figure 49: CV of Fund Utilization Based on



Figure 47: Total Loan & Lease to Total Deposit (TL&LS to TD),

Total Loan & Lease to Total Borrowings (TL&LS to TB) and Total Loan & Lease to Total Deposit & Borrowings (TL&LS to TD&B)

2007

2008

2009

2010

Listed Non-Listed Listed Non-Listed Listed Non-Listed0

100

200

300

400

500

600

700

800

900

1000

Total Loan & Lease toTotal Deposits (%)

Total Loan & Lease toTotal Borrowing (%)

Total Loan & Lease to Total Deposit & Borrowing (X)

Pe

rce

nta

ge/

Tim

es

-10

-5

0

5

10

15

Total Loan & Leaseto Total Deposits

(%)

Total Loan & Leaseto Total Borrowing

(%)

Total Loan & Leaseto Total Deposit

and Borrowing (X)

Per

cen

tag

e/ T

imes

Listed Non-listed

Total Loan & Leaseto Total Deposits

(%)

Total Loan & Leaseto Total Borrowing

(%)

Total Loan & Leaseto Total Deposit

and Borrowing (X)

Per

cen

tag

e/ T

imes

Listed Non-listed

0

5

10

15

20

25

30


Figure 51: CAGR of Asset Quality Based on Listing in the Exchange (2007-2010)

Figure 52: CV of Asset Quality Based on Listing in the Exchange (2007-2010)


Figure 50: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment to Total Asset (TIv to TA) and Classified Loan & Lease to Total Asset (CL&LS to TA)

2007

2008

2009

2010

0

10

20

30

40

50

60

70

80

Listed Non-Listed Non-Listed Non-ListedListed Listed

Total Loan & Leases toTotal Asset

Total Investment to Total Asset Classified Loan and Lease to Total Asset

Pe

rce

nta

ge

Listed Non-listed

0

5

10

15

20

25

30

35


Total Investmentto Total Asset

Classified Loan &Leases to Total Asset

Pe

rce

nta

ge

Listed Non-listed

0

10

20

30

40

50

60

Pe

rce

nta

ge





Figure 55: CV of Return on Assets Based on Listing with Stock Exchange

Figure 54: CAGR of Return on Assets Based on Listing with Stock Exchange


Figure 53: ROA-1 - Operating Profit to Total Asset (OP to TA,

ROA-2 - Net Income Before Tax to Total Asset (NIBT to TA) and ROA-3 - Net Income After Tax to Total Asset (NIAT to TA)

2007

2008

2009

2010

0

2

4

6

8

10

12

14

16

Listed Non-Listed Listed Non-Listed Listed Non-Listed

Operational Profit to Total Asset Net Income Aefore Tax Net Income After Tax to Total Asset

ROA-1 ROA-2 ROA -3

Per

cen

tag

e

Listed Non-listed

-20

-15

-10

-5

0

5

10

15

20

25

30

Operating profitto Total Asset

Net Income BeforeTax To toral Asset

Net Income AfterTax to Total Asset

Pe

rce

nta

ge

Listed Non-listed

0

10

20

30

40

50

60

70

80


Net Income Before Taxto Total Asset

Net Income After Taxto Total Asset

Per

cen

tag

e


Figure 56: Return on Equity (ROE) Based on Listing with Stock Exchange

Figure 58: CAGR of Return on Equity and Interest Income to Net Operating

Income Based on Listing with Stock Exchange

Figure 59: CV of Return on Equityand Interest Income to Net Operating

Income Based on Listingwith Stock Exchange

Figure 57: Interest Income to Net Operating Income (II to NOI) Based on

Listing with Stock Exchange

Pe

rce

nta

ge

2007

2008

2009

2010

0

20

40

60

80

100

120

140

Listed Non-Listed

2007

2008

2009

2010

0

0.5

1

1.5

2

2.5

Listed Non-Listed

Tim

es

Listed Non-listed-20

-10

0

10

20

30

Return on Equity Interest Income to NetOperating income

Perc

enta

ge

Listed Non-listed

0

20

40

60

80

100

120

140

Pe

rce

nta

ge


Figure 63: CAGR of Operating Expense to Net Operating Income (OE to NOI), Staff Expense to

Net Operating Income (SE to NOI), and Staff Expense to Total Operating Expense (SE to TOE)

Figure 64: CV of Operating Expense to Net Operating Income (OE to NOI), Staff Expense to

Net Operating Income (SE to NOI), and Staff Expense to Total Operating Expense (SE to TOE)

Figure 60: Operating Expense to Net Operating Income (OE to NOI)

Figure 61: Staff Expense to Net Operating Income (SE to NOI)


Figure 62: Staff Expense to Total Operating Expense (SE to TOE)

2007

2008

2009

2010

Listed Non-Listed

Tim

es

0

0.2

0.4

0.6

0.8

1

1.2

2007

Listed Non-Listed

2008

2009

2010

0

0.05

0.1

0.15

0.2

0.25

0.3

0.35

0.4

0.45

0.5

Pe

rce

nta

ge

Listed Non-listed

-60

-40

-20

0

20

40

60

80

100

Operating Expense to

Net Operating Income

Staff Expense to Net

Operating Income

Staff Expense to Total

Operating Epense

Pe

rce

nta

ge

2007

2008

2009

2010

0

0.5

1

1.5

2

2.5

3

3.5

Listed Non-Listed

Tim

es

Listed Non-listed

0

20

40

60

80

100

120

Operating Expense to Net Operating Income

Staff Expense to Net Operating Income

Staff Expense to Total Operating Epense

Per

cen

tag

e


Figure 66: CAGR of Liquidity Performance Based on Ownreship

Structure (2007-08)

Figure 67: CV of Liquidity Performance Based on Ownreship

Structure (2007-08)

A Pictorial View of the Comparative Performance Evaluation of NBFIs Based on Ownership Patterns of NBFIs

1. Liquidity Performance

Figure 65: Liquidity Performance: Regulatory Performance - Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) and Non-regulatory Performance - Current

Ratio (CR), Liquid Asset to Total Asset (LA to TA Ratio)

2007

2008

2009

2010

0

50

100

150

200

250

300

350

Local Joint Ventures Local Joint Ventures Local Joint Ventures Local Joint Ventures

Cash Reserve Ratio (%) Statutory Liquidity Ratio (%) Current Ratio (X) Liquid Asset to Total Asset (%)

-60

-50

-40

-30

-20

-10

0

10

Cash Reserve Ratio (%)

Statutory liquidity

Ratio (%)

Current Ratio(X)

Liquid Asset toTotal Asset (%)

Per

cen

tag

e/ T

imes

Local Joint Venture

0

20

40

60

80

100

120

140

160

Cash Reserve

Ratio (%)

Statutory liquidity

Ratio (%)

Local Joint Venture

Current Ratio(X)

Liquid Asset to

Total Asset (%)

Per

cen

tag

e/ T

imes


Figure 69: CAGR of Capital Management Based on Ownership

Structure (2007-2010)

Figure 70: CV of Capital Management Based on Ownership Structure

(2007-2010)


Figure 68: Paid up Capital to Required Capital (PC to RC), Total Capital to Total

Asset (TC to TA) and Debt to Equity (DE) Ratio

2007

2008

2009

2010

Pe

rce

nta

ge/

Tim

es

0

20

40

60

80

100

120

140

160

Local Joint Venture Local Joint Venture Local Joint Venture

Paid-up Capital to RequiredCapital (%)


Debt Equity Ratio (X)

-4

-3

-2

-1

0

1

2

3

4



Debt EquityRatio (x)P

erc

en

tag

e/ T

ime

s

Local Joint Venture

0

5

10

15

20

25


Total Capital to TotalAsset (%)

Local Joint Venture


Per

cen

tag

e/ T

imes


Figure 72: CAGR of Fund Utilization Based on Ownership Structure

(2007-2010)

Figure 73: CV of Fund Utilization Based on Ownership Structure

(2007-2010)


Figure 71: Total Loan & Lease to Total Deposit (TL&LS to TD), Total Loan & Lease

to Total Borrowings (TL&LS to TB) and Total Loan & Lease to Total Deposit & Borrowings (TL&LS to TD&B)

2007

2008

2009

2010

0

200

400

600

800

1000

1200




Total Loan & Lease to TotalDeposit & Borrowing (x)

Pe

rce

nta

ge

/ Tim

es

-4

-2

0

2

4

6

8

10

12

14

16



Total Loan & Lease toTotal Deposit and

Borrowing (x)

Pe

rce

nta

ge

/ Tim

es

Local Joint Venture

0

5

10

15

20

25

30

Total Loan & Lease to

Total Deposits (%)


Total Borrowing (%)


Total Deposit and

Borrowing (x)

Pe

rce

nta

ge/

Tim

es

Local Joint Venture


Figure 75: CAGR of Asset Quality Based on Ownership Structure (2007-2010)

Figure 76: CV of Asset Quality Based on Ownership Structure (2007-2010)


Figure 74: Total Loan & Lease to Total Asset (TL&LS to TA), Total Investment to Total Asset (TIv to TA) and Classified Loan & Lease to Total Asset (CL&LS to TA)

2007

2008

2009

2010

0

10

20

30

40

50

60

70

80


Total Loan & Leasesto Total Asset

Total Investment toTotal Asset

Classified Loan and Leaseto Total Asset

Per

cen

tag

e

-15

-10

-5

0

5

10

15

20

25

30

35

40

Total Loan & Leasesto Total Assets


Classified Loan & Leasesto Total Asset

Pe

rce

nta

ge

Local Joint Venture

0

10

20

30

40

50

60

Total Loan & Leasesto Total Assets



Joint VentureLocal

Per

cen

tag

e


Figure 78: CAGR of Return on Assets Based on Ownership Structure

Figure 79: CV of Return on Assets Based on Ownership Structure


Figure 77: ROA-1 (Operating Profit to Total Asset (OP to TA), ROA-2 (Net

Income Before Tax to Total Asset (NIBT to TA) and ROA-3 (Net Income After Tax to Total Asset (NIAT to TA) Based on Ownership Structure (2007-2010)

2007

2008

2009

2010

0

2

4

6

8

10

12

14

16


Operational Profit to Total Asset Net Income Before Tax to Total Asset Net Income After Tax to Total Asset

ROA-1 ROA-2 ROA-3

Pe

rce

nta

ge

-15

-10

-5

0

5

10

15

20

25

30


Net Income Before Tax to toral Asset


Pe

rce

nta

ge

Local Joint Venture

0

10

20

30

40

50

60

70

80


Net Income Before Taxto toral Asset


Pe

rce

nta

ge

Local Joint Venture


Figure 80: Return on Equity - Net Income after Tax to Total Equity (NIAT to TE) Based on Ownership Structure

(2007-2010)

Figure 82: CAGR of Return on Equity and Interest Income to Net Operating

Income Based on Ownership Structure (2007-2010)

Figure 83: CV of Return on Equity and Interest Income to Net Operating

Income Based on Ownership Structure (2007-2010)

Figure 81: Interest Income to Net Operating Income (II to NOI) Based on

Ownership Structure (2007-2010)

0

20

40

60

80

100

120

140

Local Joint Venture

Pe

rce

nta

ge

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Local Joint Venture

Tim

es

-20

-15

-10

-5

0

5

10

15

20

25


Pe

rce

nta

ge

Local Joint Venture

0

20

40

60

80

100

120

140


Pe

rce

nta

ge

Local Joint Venture


6. Productivity and Efficiency Performance

Figure 86: Staff Expense to Total Operating Expense (SE to TOE) Based on Ownership Structure (2007-2010)

Figure 87: CAGR of Operating Expense to Net Operating Income (OE to NOI), Staff Expense to

Net Operating Income (SE to NOI), Staff Expense to Total Operating Expense (SE to TOE)

Figure 88: CV of Operating Expense to Net Operating Income (OE to NOI), Staff Expense to

Net Operating Income (SE to NOI), Staff Expense to Total Operating Expense (SE to OE)

Figure 84: Operating Expense to Net Operating Income (OE to NOI) Based on


Figure 85: Staff Expense to Net Operating Income (SE to NOI) Based on


2007

2008

2009

2010

0

0.5

1

1.5

2

2.5

3

3.5

Local Joint Venture

Tim

es

2007

2008

2009

2010

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Local Joint Venture

Tim

es

2007

2008

2009

2010

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

Local Joint Venture

Per

cen

tag

e

-60

-40

-20

0

20

40

60

80

100

Operating Expense toNet Operating Income

Staff Expense to Net operating Income

Staff Expense to Total

Operating Expense

Pe

rce

nta

ge

Local Joint Venture

0

20

40

60

80

100

120

Operating Expense toNet Operating Income

Staff Expense to Netoperating Income

Staff Expense to TotalOperating Expense

Pe

rce

nta

ge

Local Joint Venture

References

Bangladesh Bank, Annual Report 2009-2010, p 58.

Bank and Financial Institution Activities, Ministry of Finance.

Banerjee, Prashanta, K. and Ashraf Al Mamun (2003), Lease Financing in Bangladesh, BIBM, Memo.

Choudhury, A. Jalil (1999), "An Appraisal of Non-Banking Financial Institutions in the Context of Economic Development of Bangladesh", Bank Parikrama, Vol. XXIV, No. 1, March, pp. 171-194.

Chowdhury, A. Quadir (2001), "Leasing in Bangladesh-Problems and Prospects", The Daily Bangladesh Observer, April 4.

European Central Bank (2010), Definition and Approaches to Performance Measurement for Financial Institutions, Germany: European Central Bank.Financial Stability Report (2010), Bangladesh Bank.

Harker, Patrick, T. and Stavros A. Zenious (2000), Performance of Financial Institutions: Efficiency, Innovation, Regulation, UK: Cambridge University Press.

Saha, Sujit, R., Munim K. Barai and Ashraf Al Mamun (1999), "Progress and Prospects of Non Banking Financial Institutions in Bangladesh", Bank Parikrama, Vol. XXIV, No. 1, March, pp. 171-194.

www.esnai.com


Appendices

Appendix I: Indicators and Definitions

I. Liquidity:

a. Regulatory Measures:

1. Cash Reserve Ratio (CRR) (%)

2. Statutory Liquidity Ratio (SLR) (%)

b. Non-regulatory Measures:

1. Current Ratio (CR): Current Asset to Current Liability (CA to CL) (X)

2. Liquid Assets to Total Assets (LA to TA) (%)

II. Capital Management:

1. Paid-up Capital to Total Capital (PC to TC) (%)

2. Total Capital to Total Asset (TC to TA) (%)

3. Debt to Equity (DE) Ratio (X)

III. Fund Utilization:

1. Total Loan & Lease to Total Deposit (TL&LS to TD) (%)

2. Total Loan & Lease to Total Borrowing (TL&LS to TB) (%)

3. Total Loan & Lease to Total Deposit and Borrowing (TL&LS to TD&B) (X)

IV. Asset Quality:

1. Total Loan & Lease to Total Asset (TL&LS to TA) (%)

2. Total Investment to Total Asset (TIv to TA) (%)

3. Classified Loan & Leases to Total Asset (CL&LS to TA) (%)

V. Earnings:

1. Return on Assets (ROA):

a. ROA-1: Operating Profit to Total Asset (OP to TA) (%)

b. ROA-2: Net Income Before Tax to Total Asset (NIBT to TA) (%)

c. ROA-3: Net Income After Tax to Total Asset (NIAT to TA) (%)

2. Return on Equity: Net Income After Tax to Total Equity (NIAT to TE) (%)

3. Interest Income6 to Net Operating Income (II to NOI) (X)

VI. Operational Efficiency:

1. Operating Expense to Net Operating Income (OE to NOI) (X)

2. Staff Expense to Net Operating Income (SE to NOI) (X)

3. Staff Expense to Total Operating Expense (SE to TOE) (%)

6 Includes income from Lease Finance, Real Estate Finance, Term Finance, Short Term Finance

and Consumer Finance.Review of Non-Bank Financial Sector 2010 73

Establishment

Year

Before 1990

1981

1984

1985

1989

1989

1991 to 1995

1995

1995

1996 to 2000

1996

1996

1996

1996

1996

1996

1996

1996

1997

1997

1998

1998

1998

2000

2000

After 2000

2001

2001

2001

2001

2001

2002

Short Name

IPDC

SABINCO

IDLC

UBICo

ULCL

PHOENIX

UFI

BAY

DBH

FIRST LIL

GSPFCBL

ILFSL

Reliance

PRIME

PLFSL

IDCOL

LANKA

BIFC

NHFIL

UCL

BdFICL

MIDAS FL

FIDELITY

FAREAST

Islami FIL

IIDFCL

NatFin

Premier

Name of the NBFI

Full Name

Industrial Promotion and Development Company of Bangladesh Ltd.

Saudi-Bangladesh Industrial & Agricultural Investment Company Ltd.

IDLC Finance Limited

The UAE-Bangladesh Investment Company Limited

United Leasing Company Limited

Phoenix Finance and Investments Limited

Uttara Finance and Investments Limited

Bay Leasing and Investment Limited

Delta BRAC Housing Finance Corporation Limited

First Lease Finance & Investment Limited

GSP Finance Company (Bangladesh) Limited

International Leasing and Financial Services Limited

Reliance Finance Limited (Oman-BD)

Prime Finance and Investment (PFI) Limited

People's Leasing and Financial Services Limited

Infrastructure Development Company Limited

LankaBangla Finance Limited

Bangladesh Industrial Finance Company Limited

National Housing Finance and Investments Limited

Union Capital Limited

Bangladesh Finance & Investment Company Limited

MIDAS Financing Limited

Fidelity Assets and Securities Company Limited

Fareast Finance & Investment Limited

Islamic Finance and Investment Limited

Industrial and Infrastructure Development Finance Company Ltd.

National Finance Limited (NFL)

Premier Leasing & Finance Limited

#

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Appendix II: Non-bank Financial Institutions Grouped as Per Year of

Establishment


DSE & CSEListed/

Non-listed

DSE-Listed

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

Non-Listed

N

N

N

N

N

N

N

N

Short Name

BdFICL

BIFC

BAY

DBH

FIDELITY

FIRST LIL

IDLC

Islami FIL

IIDFCL

IPDC

LANKA

MIDAS FL

NHFIL

PRIME

PHOENIX

PLFSL

Premier

UCL

UFI

ULCL

FAREAST

GSPFCBL

IDCOL

ILFSL

NatFin

Reliance

SABINCO

UBICo

Name of the NBFI

Full Name

Bangladesh Finance and Investment Company Limited


Bay Leasing and Investment Limited


Fidelity Assets and Securities Company Limited

First Lease Finance and Investment Limited


Islamic Finance and Investment Limited

Industrial and Infrastructure Development Finance Company Ltd.


LankaBangla Finance Limited (LBFL)

MIDAS Financing Limited (MFL)

National Housing Finance and Investments Limited (NHFIL)

Prime Finance and Investment (PFI) Limited

Phoenix Finance and Investments Limited (PFIL)

People's Leasing and Financial Services Limited (PLFSL)

Premier Leasing and Finance Limited (PLFL)

Union Capital Limited (UCL)

Uttara Finance and Investments Limited (UFI)

United Leasing Company Limited (ULCL)

Fareast Finance and Investment Limited (FFIL)

GSP Finance Company (Bangladesh) Limited (GSPB)

Infrastructure Development Company Limited (IDCOL)

International Leasing and Financial Services Limited (ILFSL)

National Finance Limited (NFL)

Reliance Finance Limited (Oman-BD) (REFL)

Saudi-Bangladesh Industrial and Agricultural Investment Company Ltd.

The UAE-Bangladesh Investment Company Limited (UAEBIC)

#

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

Appendix III: Non-bank Financial Institutions Grouped as Per Listing Status

with the Secondary Market



Ownership

Status

Local

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

L

Joint Venture

J

J

J

J

J

J

J

J

Short Name

BdFICl

BAY

FIDELITY

FAREAST

FIRST LIL

GSPFCBL

IDCOL

IDLC

Islami FIL

ILFSL

IIDFCL

MIDAS FL

NatFin

NHFIL

PRIME

PHOENIX

PLFSL

Premier

UCL

ULCL

BIFC

DBH

IPDC

LANKA

Reliance

SABINCO

UBICo

UFI

Name of the NBFI

Full Name

Bangladesh Finance & Investment Company Limited

Bay Leasing & Investment Limited

Fidelity Assets & Securities Company Limited

Fareast Finance & Investment Limited

First Lease Finance & Investment Limited

GSP Finance Company (Bangladesh) Limited

Infrastructure Development Company Limited


Islamic Finance and Investment Limited (IFIL)

International Leasing and Financial Services Limited

Industrial and Infrastructure Development Finance Company Limited

MIDAS Financing Limited (MFL)

National Finance Limited (NFL) (Operation Started 2007)

National Housing Finance and Investments Limited (NHFIL)

Prime Finance & Investment (PFI) Limited

Phoenix Finance and Investments Limited (PFIL)

People's Leasing and Financial Services Limited (PLFSL)

Premier Leasing & Finance Limited (PLFL)

Union Capital Limited

United Leasing Company Limited




LankaBangla Finance Limited

Reliance Finance Limited (Oman-BD) (REFL)

Saudi-Bangladesh Industrial & Agricultural Investment Company Ltd.

The UAE-Bangladesh Investment Company Limited

Uttara Finance and Investments Limited (UFI)

Appendix IV: Non-bank Financial Institutions Grouped as Per Ownership

Pattern


A. Liquidity CRR

SLR

Current Ratio

LA/TA

B. Capital ManagementPaid-up Cap. /Required Cap

Total Capital/Total Asset

Debt Equity Ratio

C. Utilization of FundsTotal Loan & Lease/Total Deposits

Total Loan & Lease/Total Borrowing

Total Loan & Lease/Total Deposit & Borrowing

D. Asset QualityTotal Loan & Leases/ Total Asset

Total Investment/Total Asset

Classified Loan & Leases/ Total Asset

E. EarningsOperating Profit/Total Asset

Net Income Before Tax/ Total Asset

Net Income After Tax/ Total Asset

Net Income After Tax/ Total Equity

Interest Income /Net Operating Income

F. Operational EfficiencyStaff Expense /Net Operating Income

Operating Expense/Net operating Income

Staff Expense /Total Operating Expense

Appendix V: CAGR and CV of Different Parameters of NBFIs from 2007-2010 (Based on Establishment Year)

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGR

CVCAGR

CVCAGR

CV

CAGRCV

CAGRCV

CAGRCV

CAGR

CVCAGR

CVCAGR

CV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGR

CVCAGR

CVCAGR

CV

Before 1990-0.221.40-7.5112.259.31

13.36-39.8323.29

13.6323.374.94

18.37-17.4431.98

7.8921.4916.0630.841.444.52

3.0412.6628.0851.27-21.8534.69

18.9334.3813.7424.9913.1626.068.25

146.69-22.8952.26

15.8031.54-38.8685.879.52

25.49

1991-19958.32

12.04-21.7737.57-10.4344.68-22.4258.17

-5.3328.63-4.3023.9015.0739.80

0.028.114.22

14.17-2.279.04

16.4827.44-3.6134.02-5.138.06

4.47

10.99-3.3

17.400.03

14.742.819.68-7.8221.51

103.29101.50-50.05102.2134.0454.79

1996-2000-27.8165.27-62.348.82-10.3833.66-7.2215.13

-0.2320.29-2.579.56

17.3539.82

-10.2444.660.50

45.69-1.1373.43

8.37

17.0210.5022.8612.0831.65

-5.1623.646.80

24.0325.9478.5123.77

109.309.79

28.73

47.5758.68-44.4897.1347.5758.68

After 20003.22

26.42-3.5646.0817.1533.87-7.6915.56

-1.6025.20-4.8610.6454.5674.87

2.8712.030.467.54-8.9617.49

5.668.97

29.8342.35-1.4210.03

13.4926.025.43

12.177.72

15.1210.9922.31-16.7775.31

141.8298.85-47.6496.2275.3161.67


A. Liquidity CRR

SLR

Current Ratio

LA/TA



Debt Equity Ratio















Appendix VI: CAGR and CV of Different Parameters of NBFIs from 2007-2010 (Based on Listing in the Stock Exchange)

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

Listed-21.7951.76-59.62143.28-0.857.98-5.8612.07

-2.5319.702.827.299.68

23.22

-24.2756.3512.9121.010.942.79

11.4519.7026.8545.5817.1526.58

10.0420.1711.2324.9726.9375.8220.31

100.37-6.3225.86

77.0884.35-43.9097.1477.0860.67

Non-Listed7.46

17.31-7.7442.87-11.8032.24-36.90112.07

15.9627.04-6.1720.791.23

53.40

-8.3828.520.44

21.03-0.762.68

1.346.11

32.3659.924.54

25.93

-13.3133.88-2.8219.25-0.7416.0911.63

123.92-15.6426.92

32.8856.95-46.0192.64-1.019.61


A. Liquidity CRR

SLR

Current Ratio

LA/TA



Debt Equity Ratio















Appendix VII: CAGR and CV of Different Parameters of NBFIs from 2007-2010 (Based on Ownership Structure)

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

CAGRCV

Local-4.3119.98-56.07140.47-0.6112.61-4.088.18

0.2320.66-2.358.165.87

20.57

-21.3151.132.395.92-0.2959.45

5.8920.7133.0956.1320.2329.56

7.5416.517.44

19.6923.8971.0521.43

101.89-5.1923.42

77.2281.13-46.6197.5869.0576.98

Joint Venture-43.59104.34

1.6524.81-7.7017.78-39.44116.47

0.747.570.00

15.0019.7964.26

-13.0229.3813.5826.13-0.043.94

0.646.89

13.8828.67-8.4424.78

-12.2833.303.99

14.265.35

15.629.05

116.78-13.9625.96

16.9835.23-38.1287.0316.9835.23

Support Team

Data Processing

Papon Tabassum

Md. Nasir Uddin

Md. Faysal Alam

Mia Sakib Anam

Administrative

Md. Nuruzzaman

Sufia Khatun

Sharmina Nargish

Md. Golam Quader

Md. Habibur Rahman

Sarder Aktaruzzaman

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Email: [email protected], Web: www.bibm.org.bd

April 2012

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