Financial Report analysis of Southeast Bank
Limited
7th December, 2018
To
Professor Khaleda Khatun
Professor,
Department of Finance,
Faculty of Business Studies (FBS),
University of Dhaka.
Subject: Term Paper Submission.
Dear Madam,
This is our immense pleasure submitting this Term Paper based on the topic “Financial Report
analysis of Southeast Bank Limited”. This report is part of the requirements of our Course:
Financial Accounting & Reporting. During our working period, we tried our best to gather
relevant information for constructing a complete report as outlined. We would like to express our
profound gratitude for your kind and conscious mind for reading our report.
We beg your kind excuse for unintentional errors, if any, in preparing the report despite our best
efforts. We hope that you would be kind enough to receive this report and oblige us thereby.
Sincerely yours,
Md. Mahadi Hassan 40020
Farzana Akter Runa 37028
A.M. Asif Faisal 39003
Md. Rakib Hossain 39039
Sonia Akhter 37048
Abdur Rahim Shujon 38039
Introduction
Southeast Bank Limited is a fast growing 2nd generation bank. The Bank has been achieving a
continuous growth rate in different spheres of banking operations since its establishment in the
year 1995. The philosophy of the bank is “A Bank with Vision” that indicates its sincerity, integrity
as well as the strength of mind to cope with the global competitiveness and advancement. The
emergence of Southeast Bank Limited was at the juncture of liberalization of global economic
activities. It is a scheduled commercial bank in the private sector established under the ambit of
Bank Company Act 1991 and incorporated as a Public Limited Company under Companies Act
1994 on March 12, 1995. The Bank started commercial banking operations with the vision to stand
out as a pioneer banking institution in Bangladesh and contribute significantly to the national
economy on May 25, 1995.
It is a second generation Bank and its Certificate of commencement of business of the Bank was
issued by the Registrar of Joint Stock Companies & Firms and was also dated March 12, 1995.
The Banking License for the Bank was issued by Bangladesh Bank on March 23, 1995. The Bank
inaugurated its first branch at the busiest commercial hub of the country at 1, Dilkusha Commercial
Area, Dhaka and was opened on May 25, 1995 by Mr. M. Saifur Rahman, former Finance Minister,
Government of the People’s Republic of Bangladesh as the chief guest. The Bank is managed by
a team of efficient professionals. There prevails a positive organizational climate in the Bank that
generates feeling of dignity, trust, discipline and openness in its people that result in motivating
them to post better result continuously in the Bank. The cultures of maintaining congenial workenvironment in the Bank has further enabled the staff to benchmark themselves better against
management expectations. A commitment to quality and excellence in service is the benchmark of
their identity. Southeast Bank today is a synonym of quality banking products; it has a diverse
array of carefully tailored products and services to cater to the needs of all customer segments. The
Bank structured its operational strategies to address the special and often complex needs of the
customers.
Mission of Southeast Bank Ltd.
The mission of the Bank is to obtain a sustainable position in the banking sector of Bangladesh as
well as international banking area. For this, the bank has been consolidating its position and
preparing itself for the new age by upgrading technology, training its workforce, recruiting
organizationally, and creating a better work culture.
 The purpose of the bank is to give high quality financial services with state of the art
technology.
 Provide fast customer service.
 Maintain sustainable growth strategy.
 SEBL always follow ethical standard in business.
 The bank believes on steady return shareholders equity.
 Innovative banking at a competitive price.
Vision of Southeast Bank Ltd.
To be a premier banking institution in Bangladesh and contribute significantly to the national
economy.
Strategic Objectives
a) Maintaining a high quality assets portfolio to achieve strong and sustainable returns and to
continuously build shareholders’ value.
b) Maintaining adequate capital in line with risk appetite of the Bank.
c) Strengthening trust and partnerships with customers by focusing on the Bank’s core values of
quality customer service, professionalism, teamwork and integrity.
d) Hiring professionals with strong background and knowledge.
e) Strengthening technologies that reduce operational risks and promote the implementation of
best practices in the industry.
f) Developing innovative products and services that attract our targeted customers and market
segments.
g) Exploring new avenues for growth and profitability.
h) Practicing efficient risk management principles in line with all six core risks in banking
operation, green banking and environmental risk management.
i) Practicing efficient corporate governance and compliance processes through meeting all
regulatory requirements and disclosures in line with national and international best practices by
ensuring best internal control monitoring practices.
j) Upholding Bank’s brand image as a customer friendly bank through efficient and prompt
customer service, product diversification with a view to establishing a long term profitable
relationship with our customers.
k) Serving the society as part of our Corporate Social Responsibility (CSR) by giving stipends to
poor students, distributing warm clothes to winter-hit people, providing financial assistance to
disadvantaged people and contributing to different relief funds. We also contribute to the society
by paying taxes to the national exchequer timely.
l) Extending banking services to the un-banked people for financial inclusion for meeting socioeconomic requirements.
Values
Our Values Serve as a compass for our action and describe our direction.
Core Values
⁕ Integrity
⁕ Respect
⁕ Fairness
⁕ Harmony
⁕ Team spirit
⁕ Courtesy
⁕ Commitment
⁕ Service Excellence
⁕ Insight and Spirit
⁕ Enthusiasm for work
⁕ Business Ethics
Core Strength
⁕ Professionally Strong Board of Directors
⁕ Strong Capital Base
⁕ Transparent and Quick Decision Making
⁕ Efficient Team of Performers
⁕ Satisfied Customers
⁕ Effective Internal Control
⁕ Skilled Risk Management
⁕ Focus on Diversification
⁕ Quality Customer Service
⁕ Quality Customer Service
⁕ Sharp bifurcation Between Board and Management Functions
⁕ Strong Asset Base
Core Competencies
⁕ Knowledge
⁕ Experience and Expertise
⁕ Customer Orientation and Focus
⁕ Transparency
⁕ Determination
⁕ Zeal for Improvement
⁕ Pursuit of Disciplined Growth Strategies
⁕ Reliability
Corporate Profile
Name of the Company: Southeast Bank Limited
Legal Form: Public Limited Company
Date of Inception: March 12, 1995
Company Registration No.: C-27985 (1831)/95
Authorized Capital: BDT 15,000 million
Paid Up Capital: BDT 9,169.50 million
Registered Office: Eunoos Trade Centre
52-53, Dilkusha C/A (Level 2,3,4,6 & 16), Dhaka-1000, Bangladesh
Phone: +88 02 9571115, 9576415, 9555466 & 9578324
Fax: +88 02 9550093, 9550094 & 9550086
SWIFT: SEBDBDDH, E-mail: info@southeastbank.com.bd
Website: www.southeastbank.com.bd
Tax Payer Identification No.: 555495486932
VAT Registration No.: 19011025625
Chairman: Alamgir Kabir, FCA
Vice Chairperson: Duluma Ahmed
Chairman of the Audit Committee: A.H.M. Moazzem Hossain
Managing Director: M. Kamal Hossain
Chief Risk Officer: S. M. Mainuddin Chowdhury
CAMLCO: A.K.M. Nurul Alam
Company Secretary: A.K.M. Nazmul Haider (Acting)
Chief Financial Officer: Rasedul Islam, ACA (Acting)
Auditors: Pinaki & Company, Chartered Accountants
Tax Consultant: Akhter Abbas Khan & Co.
Credit Rating Agency: Credit Rating Information and Services Limited (CRISL)
Date of Opening of First Branch: May 25, 1995
Year of Initial Public Offer: 1999
Number of Employees: 2,837
No. of Branches: 134
No. of Islamic Banking Branches: 05 (five)
No. of Ladies Branches: 02 (two)
No. of Off-Shore Banking Units: 02 (two)
No. of Foreign Correspondents: 825
Number of Outstanding Shares: 916,950,176
Listing Status (Shares): Dhaka Stock Exchange (DSE)
Symbol: SOUTHEASTB, Listing Date: April 10, 2000
Chittagong Stock Exchange (CSE)
Symbol: SOUTHEASTB, Listing Date: April 24, 2000
Market Price Information
(as on 31.12.2017)
DSE: BDT 22.20, Category A
CSE: BDT 22.20, Category A
Investors’ Enquiry: Investor Relations Division
Phone: +88 02 9567271, Fax: +88 02 9567273
Eunoos Trade Centre, 52-53, Dilkusha C/A (Level-2), Dhaka-1000.
Name of the Bank’s Subsidiaries: Southeast Bank Capital Services Limited
Southeast Financial Services (UK) Limited
Southeast Financial Services (Australia) Pty Limited
Southeast Exchange Company (South Africa) Pty Limited
Balance Score Card
Financial Highlights
Financial Results
Revenue
Provision for Credit Losses
Operating Expenses
Net Revenue
Financial Results(%)
2017
2016
2015
In million
27,305.90
6,628.68
4,870.74
1,168.63
25,617.57
3,728.28
4,349.23
2,435.07
26,260.72
3,728.28
3,570.11
3,069.42
Reported/Adjusted efficiency ratio
Return on common shareholder's
equity (ROE)
Net Interest Margin (NIM)
Total Shareholder return
Common Share Performance
34.96%
4.46%
33.84%
9.06%
30.77%
11.86%
3.42%
4.95
3.77%
3.10
3.80%
(0.30)
Market Capitalization
Dividends (%)
20,356.29
17,146.97
16,230.02
Dividend yield
Reported/Adjusted dividend payout
ratio
0.07
1.18
0.11
0.75
0.08
0.45
Particulars
2017
2016
2015
2014
2013
Authorized Capital
Paid up Capital
Reserve Fund/ Others
Total Capital
Deposit
Advance
Investment
Import Business
Export Business
Foreign Remittance
Guarantee Business including ILC
Total Income
Total Expenditure
Operating Profit
Net Profit after Tax and Provision
Fixed Assets
Total Assets
15000
9,169.50
24,595.63
33,765.13
269,828.08
234,316.72
62,911.04
215,379.77
167,562.98
95,405.40
16,407.09
27,305.90
18,243.60
9,062.30
1,168.63
9,321.80
339,288.05
15000
9,169.50
24,886.78
34,056.28
229,973.43
191,865.59
61,731.63
171,531.73
146,606.09
64,665.84
16,369.36
25,617.57
17,114.35
8,503.22
2,435.07
8,947.16
291,798.01
15000
9,169.50
19,340.03
28,509.53
210,431.09
168,878.46
58,829.27
151,812.58
126,423.89
60,708.50
15,245.19
26,260.72
18,226.45
8,034.27
3,069.42
7,885.23
260,718.03
15000
9,169.50
18,292.59
27,462.09
189,472.54
147,070.81
56,378.59
155,691.00
112,137.60
48,740.50
13,603.30
27,667.10
19,377.34
8,289.76
3,836.94
7,913.00
236,608.40
10000
8,732.86
13,074.71
21,807.57
177,519.46
134,863.82
57,589.06
131,644.82
95,220.40
39,299.10
17,226.41
26,918.30
20,218.11
6,700.20
3,378.82
7,795.65
220,930.85
Financial Indices of South East Bank Ltd.
Amounts in Million
Trend Analysis:
To do trend analysis, I take 2013 as the base year and will calculate the percentage change
(increase/decrease) with the following formula:
Particulars
2017
2016
2015
2014
2013
Authorized Capital
150%
150%
150%
150%
100%
Paid up Capital
105%
105%
105%
105%
100%
Reserve Fund/ Others
188.11%
190.34%
147.92%
139.91%
100%
Total Capital
154%
156%
130.73%
125%
100%
Deposit
152%
129%
118.54%
106.05%
100%
Advance
173.74%
142.27%
125.22%
109.05%
100%
Investment
109.24%
107.19%
102.15%
97.9%
100%
Import Business
163.61%
130.3%
115.32%
118.27%
100%
Export Business
175.97%
153.97%
132.77%
117.77%
100%
Foreign Remittance
242.77%
164.55%
154.48%
124.02%
100%
Guarantee Business including ILC
95.24%
95.02%
88.5%
78.97%
100%
Total Income
103.67%
95.17%
97.56%
102.78%
100%
Total Expenditure
90.23%
84.65%
90.15%
95.84%
100%
Operating Profit
135.25%
126.91%
119.91%
123.72%
100%
Net Profit after Tax and Provision
34.59%
72.07%
90.84%
113.56%
100%
Fixed Assets
119.58%
114.77%
101.15%
101.51%
100%
Total Assets
153.57%
132.08%
118%
107%
100%
𝐴𝑛𝑦 𝑦𝑒𝑎𝑟 $
Trend analysis =
𝐵𝑎𝑠𝑒 𝑦𝑒𝑎𝑟 $
× 100
Trend Analysis
Ratio Analysis
Liquidity Ratios
Net Working Capital = Current Assets - Current Liabilities
2016
2017
Current Assets
5,473,896,220
5,184,493,803
Current Liabilities
338,120,484
303,149,401
Net Working Capital
5,135,775,736
4,881,344,402
Southeast Bank have the liquid reserve available to satisfy contingencies and uncertainties. The
firm can pay its current liabilities when due.
Current Ratio = Current Assets ÷ Current Liabilities
2016
2017
Current Assets
5,473,896,220
5,184,493,803
Current Liabilities
338,120,484
303,149,401
Current Ratio
16.19
17.10
A current ratio significantly higher than the industry average could indicate the existence of
redundant assets. Conversely, a current ratio significantly lower than the industry average could
indicate a lack of liquidity.
Here, the current ratio increased in 2017, so assets have increased.
Liquidity Ratio
Acid Test Ratio = (Current Assets - Inventory) ÷ Current Liabilities
Same as previous as inventory was not there in annual report.
2016
2017
Current Assets
5,473,896,220
5,184,493,803
Inventory
0
0
Current Liabilities
338,120,484
303,149,401
Acid Test Ratio
16.19
17.10
Efficiency Ratios
Receivable Turnover = Net Credit Sales ÷ Average Accounts Receivable
2015
2016
2017
17,631,297
35,890,284
21,241,611
Average Accounts Receivable
26760790.5
28565947.5
Net Credit Sales
2435070000 1168630000
Receivable Turnover
90.994
Accounts Receivable
This Indicates that liquidity of the SEB’s receivables has decreased.
Solvency Ratios
40.910
Debt Ratio = Total Liabilities ÷ Total Assets
2016
2017
Total Assets
291,993,002,059
338,909,245,125
Total Liabilities
265,470,137,428
313,147,501,113
Debt Ratio
0.9092
0.9240
Provides information about the company's ability to absorb asset reductions arising from losses
without jeopardizing the interest of creditors.
A debt ratio greater than 100% tells you that a company has more debt than assets. Meanwhile, a
debt ratio less than 100% indicates that a company has more assets than debt.
SEB has more assets than debt but if this continues SEB will reach more debt.
Debt-Equity Ratio = Total Liabilities ÷ Total Equity
2016
2017
Total Liabilities
265,470,137,428
313,147,501,113
Total Equity
26,522,864,631
25,761,744,012
Debt-Equity Ratio
10.0091
12.1555
Evaluates the capital structure of a company. A D/E ratio of more than 1 implies that the
company is a leveraged firm; less than 1 implies that it is a conservative one.
Times Interest Earned = EBIT ÷ Interest Expense
2016
2017
EBIT
5,246,371,223
4,098,296,703
Interest Expense
12765120000
13372860000
Times Interest Earned
0.4110
0.3065
Measures the number of times interest expense is converted to income, and if the company can
pay its interest expense using the profits generated.
Here in 2016 it was 0.4110 times and 2017 it is 0.3065 times, the company was in a better
condition in 2016, company can still pay of its interest expense using the profits.
Return on Assets = Net Income ÷ Average Total Assets
2015
2016
2017
2,416,371,223
1,118,296,703
291,993,002,059
338,909,245,125
Avg. Total Assets
276,123,022,112
315,451,123,592
ROA
0.0088
0.0035
Net Income
Total Assets
260,253,042,164
In financial analysis, it is the measure of the return on investment. ROA is used in evaluating
management's efficiency in using assets to generate income.
In 2016 it was 0.88% and now it is 0.35%, so management is still managing efficiently the assets
to generate income but compared to that 2016 was better.
Return on Stockholders' Equity = Net Income ÷ Average Stockholders' Equity
2015
Net Income
Stockholder's Equity
Avg. Stockholder's Equity
27,224,915,051
2016
2017
2,416,371,223
1,118,296,703
26,522,864,631
25,761,744,012
26,873,889,841
26,142,304,322
ROE
0.09
0.04
Measures the income earned on the shareholder's investment in the business.
Earnings per Share = Net Income ÷ Number of Ordinary Shares Outstanding
2016
2017
Net Income
2,416,371,223
1,118,296,703
Number of Ordinary Shares Outstanding
916,950,176
916,950,176
2.64
1.22
EPS
EPS shows the rate of earnings per share of common stock.
Dividend Yield= Dividend Per Share ÷ Market Price per Share
2016
2017
Dividend Per Share
1.50
2.00
Market Price per Share
18.75
22.20
Dividend Yield
0.08
0.09
Measures the percentage of return through dividends when compared to the price paid for the
stock. A high yield is attractive to investors who are after dividends rather than long-term capital
appreciation.
Recommendations & Conclusions
 The asset of the bank is in growing trend from 2013-2017
 After tax, there was a significant increase of profit in 2014, afterwards it has been
decreased
 Bank can encourage business loan nearby consumer loan that will be helpful for the
economy by increasing investment.
 Term loan should be encouraged so that businessmen can take this loan easily.
 As the receivable’s turnover has decreased from 2016 to 2017, it is risky for the company
 As the Debt ratio is near 90% to 92% so it is risky for the business as they have to give
more interest.