Chapter: 01 Introduction
1.1. Introduction:
Bank is the financial institution dealing with money. The whole scenario of the economy of a
country can be ascertained by examining the condition of the banking sector. A Country’s
sustainable economic growth depends on her responsive banking business, as without banks
no one can imagine industrialization. Bank provides business and gives support to the
promising industries of a country. Both local and multi-national banks provide their banking
service for economic development. Citibank N.A. is the number one foreign private bank in
Bangladesh. In a relatively short period of time, it has become one of the industry's most
powerful platforms for financial products and services.
Trading is one of the basic activities of any economy which started thousands years back. It is
the movement of goods and services that develops from a business transaction between a
buyer and a seller. Bank is such intermediaries which made trading more quick and smooth.
Now trading has no boundary. It has become global and has been touched with millions of
customers all over the world. As trade has been global the involvement of global banking in
trading has been added a new dimension. Citibank N A is such a global bank which is serving
the trade sector of different region of world for more than 200 years. Citibank N.A.
Bangladesh’s one of the main activities to provide trade service to their client with full
satisfaction under strong regulation.
Financial performance of a bank measures economic strength. This is done in order to
evaluate the success of the business, determine any weaknesses of the business, compare
current and past performance, and compare current performance with industry standards.
Financial performance of Citibank N.A’s is measured by conducting different analysis of five
consecutive years’ financial data 2010 to 2014.
1.2. Objective of the study:
The main focus of the study is to critically examine the different aspects of “Trade Service
Department and Financial Performance of Citi Bank N.A: A View of Bangladesh”. For that:
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To study the trading scenario of Citibank N. A. Bangladesh
To study the process of trade operation and performance of trade department
To analysis Financial Performance of Citi Bank N. A .on yearly basis
To provide some recommendations on the basis of key findings
1.3. Methodology of the study:
Research Design & Data collection:
The research I have done is basically combination of descriptive and analytical report. This
report mainly focuses on trade service operation and analyzing financial performance of Citi
Bank N. A.: A view of Bangladesh by studying its financial statements.
Source of Data:
Mainly secondary data have been used to prepare the report. Annual reports of Citi Bank N A
from their websites, different journals from internet, data collected from different published
sources like research papers, newspapers. Necessary cross checking were done to ensure the
reliability, relevancy and timeliness of collected data.
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Primary Data Sources:
Direct observation, interviews of some of senior managers, higher authority people helped me
a lot by providing me a lot of knowledge on these topics. They also provided me with some
reading materials which helped me a lot in understanding the concepts.
Secondary Data Sources:
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Annual reports of Citi Bank N. A.
Banking journals
Research papers about related topic
Official Website
Google
Data Analysis:
For qualitative and quantitative analysis of data used:
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SWOT analysis of Citi Bank N. A.
Trend analysis of export , import and loan & guarantee operation
Trend analysis of financial statements
Common size & Year to year change analysis
CAMELS rating
Profitability analysis by using “Regression analysis & Hypothesis testing” on SPSS
1.4. Scope of the Study:
In the phase of doing internship report I found the opportunities to know about trade service
operation of multi-national bank like Citi Bank N. A. And evaluating the financial
performance got the scope to understand the financial activities that helps to gather
knowledge about competitive world.
1.5. Literature Review:
Different types of critical analysis conducted on trade service, like, “International trade in
services is defined by the Four Modes of Supply of the General Agreement on Trade in
Services (GATS). Mode:1 Cross border trade, which is defined as delivery of a service from
the territory of one country into the territory of other country; Mode:2 Consumption abroad this mode covers supply of a service of one country to the service consumer of any other
country; Mode:3 Commercial presence - which covers services provided by a service supplier
of one country in the territory of any other country, and Mode :4 Presence of natural persons which covers services provided by a service supplier of one country through the presence of
natural persons in the territory of any other country” (Shekhar , 2013: pg.15). “International
trade is consists of transaction between residents of different countries” (Wasserman and
Haltman). "Just as trade affects the prices of individual products, global markets influence
which individuals and nations accumulate wealth and political power. They determine who
will be employed and at what wage. They determine what natural resources will be used and
at what environmental cost. They shape opportunities and constraints in foreign policy. They
even affect the viability of domestic policies, the sustainability of economic growth, and the
integrity of a nation's culture and institutions". (Bruce, 1996) .Moreover, he clarifies on his
study, there are different models used to study and analyse international trade. The Ricardian
model puts forward the theory that countries should export what they are good at producing.
But the Heckscher-Ohlin model, established in the early 1900s in Sweden, remains the
standard theory of international trade, based on the idea that countries should specialize in
Page 2 of 35
exporting what they have in abundance, whether labour or capital intensive, and import what
they are short of – the cheapest things to produce as opposed to the most efficient. The
Gravity model predicts trade flow by the distance between countries and each country's
comparative economic size.
Foreign Exchange Regulation Act (1947I) implies foreign exchange as the mechanism which
forms the basis for the administration of the present exchange control in Bangladesh,
anything that conveys a right to wealth in another country is foreign exchange. These include
foreign currencies (bank notes), deposits, credits, drafts, traveller’s checks, letters of credit,
bills of exchange and balances payable in foreign currency.
Numerous studies have conducted on financial performance analysis of banks and financial
institutions around the world. It has been measured using a combination of financial ratios
analysis, benchmarking, measuring performance against budget or a mix of these
methodologies (Avkiran, 1995). By using two general approaches the performance of banks
can measured that can be concluded by gone through the literature review of many authors.
The bankers and securities exchange authorities were extensively relying on the financial
statements of the companies for analysis, monitoring and control of the activities and
performance of businesses. The first approach is based on accounting data, is the main
financial coefficients applying to banks while the second approach is based on econometric
techniques (Myer). On base of two authors investigated the performance of seven commercial
banks of Denmark during the period 1994-2001(Salkhan and Gulf, 2004). “Investors and
other external users of financial information will often need to measure the performance and
financial health of an organization. This is done in order to evaluate the success of the
business, determine any weaknesses of the business, compare current and past performance,
and compare current performance with industry standards”, (Gibson, 2010).
Authors define the ratio analysis of financial statements that use to represent the trend of
business. “Ratio analysis of financial statements is a study of relationship among various
financial factors in a business as disclosed by a single set of statements and a study of trend
of these factors as shown in a series of statements" (Myer). However, “Ratio analysis
involves methods of calculating and interpreting financial ratios to analyse and monitor
firm’s performance. The basic inputs to ratio analysis are the firm’s income statement and
balance sheet” (Gitman, 2009). An assessment of the financial performance of the company
through the financial ratio analysis to obtain a description of the financial development of the
company, To measure the company's financial performance, earnings growth is used, because
profit is as a tool to measure the performance of the company, which provides information
relating to the management responsibilities in the management of the resources entrusted to
them. (Munawir, 2007: pg.68).
1.6. Limitations
Every study has some limitations few or more. This study is not also free from it. But strong
motivation of my supervisor helped me in preparing this report within very short time. The
report would have been made more in depth and elaborated if I could overcome these
limitations:
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Issues of compliance were a barrier to share all information with intern.
The length internship program (12 Weeks) is not enough time to know the whole
operation process of such a multi-national bank.
Citibank N. A .does not share enough information to their public website
As Citibank N. A .deals mostly with corporate customers they rarely share any
information with non-employees.
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Chapter 02: Organization Overview
2.1. About Citi Bank N A:
Citi group is the world famous global financial services company with millions of customer
accounts in more than 100 countries. According to Forbes Global 2000, it is the world's
largest company and the most profitable financial services firm. Citi Bank N A is the
consumer and corporate banking division of leading financial services company Citigroup. In
around 1,700 locations of more than 40 countries worldwide this company has spread its
operations. Citibank is headquartered in New York. It delivers a wide array of banking,
lending and investment services to individual consumers, small businesses, large corporations
and governments, as well as institutional and individual investors. That focuses substantial
resources on growth in emerging markets. The company offers two transaction banking
businesses for these areas - eBusiness, eCommerce, cash-management and electronic-banking
business and Citibank global securities services, which provides securities-related services
such as custody, clearing, agency and trust, and depositary receipts. In addition, its sales and
trading business provides capital markets products to clients.
2.2. Citi Bank N A in Bangladesh:
Citibank N.A. is a foreign private bank inaugurated its banking
operations on 24th June 1995 after obtaining license from
Bangladesh Bank in January 1995. Although the bank already
had a foreign representative office here in Bangladesh back in
1987 but it launched its first full-service branch Dhaka in 1995.
The present branch of the bank is the upgraded and
transformed shape of the representative office. Citi Bank
encompasses its primarily on Corporate and commercial
banking services under the Institutional Clients Group (ICG)
since 1987. They provide a comprehensive range of financial
services including treasury management, transaction services,
foreign exchange and structured finance to corporate clients,
governments and financial institutions. The bank also provides remittance services to the
expatriate community all across the world and largely in the Middle East. It is the sole
shareholder of Citibank, N.A. and its head office in New York governs the businesses of its
Bangladesh branch. The bank commenced business in Bangladesh with a paid up capital of
Tk204 million and total assets of Tk809 million.
2.3. Vision Statement of Citi Bank N A:
“Empowerment of local community by developing and enhancing their economic vitality”.
With a motto of "Being the best in terms of Banking along with Bringing Global Corporate
Standards to Bangladesh" Citibank has successfully completed its 24th year of journey in
Bangladesh.
CITI SLOGAN:
NEVER SLEEPS
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2.4. Mission Statement and Key Principals of Citi:
On January 7, 2011, Citi CEO Vikram Pandit communicated Citi‘s mission and principles
globally as below:
“Citi works tirelessly to serve individuals, communities, institutions and nations. With 200
years of experience meeting the world’s toughest challenges and seizing its greatest
opportunities, we strive to create the best outcomes for our clients and customers with
financial solutions that are Simple, creative and responsible. An institution connecting over
1,000 cities, 160 countries and millions of people, we are your global bank; we are Citi.”
The four key principles that guide them as they perform this mission are:
Common Purpose : One team,
with one goal serving their clients
and stakeholders
Responsible Finance: Conduct
that is transparent, prudent and
dependable
Ingenuity:
Enhancing
their
clients’ lives through innovation
that harnesses the breadth and
depth of their information, global
network,
and
world-class
products.
Leadership: Talented people with
the best training who thrive in a
diverse meritocracy that demands
excellence, initiative and courage
2.5. Branches & Offshore banking units in Bangladesh:
Branches
Dhaka- Gulshan
Dhaka- Motijheel
Dhaka- Dhanmondi
Chittagong
Service Outlet
Uttara
OBU Outlet (EPZ)
Chittagong EPZ
Dhaka EPZ
Adamjee EPZ
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Chapter 03: Citi Trade Service (Department)
3.1. Introduction to Trade Service:
Citibank N.A.’s Trade Solutions for Corporate Customers provide an array of products that
help importers and exporters conduct, monitor, and control international commercial
transactions as well as mitigate their associated risks. Citibank customers, whether buyers
and/or sellers, involved in an international trade transaction rely on the expertise of a global
bank like Citibank for advice and assistance regarding these complex details.
Global
Consumer
Private client
services
Global Corporate
& Investment
bank
Capital Markets and Banking
Cash Management
Service
Trade Services
Trade Services
Trade Finance
(Import /Export
Finance)
Global
Investment
Management
Global Transaction Service
Securities
Service
Fund Service
Support Services
(Processing Platform, Citi
Service, Reporting Capability,
Electronic Banking
Figure: 3.1 Trade Services of Citibank N.A.
3.2. Citi trade processing structure:
Citi Bangladesh Trade truncations are processed through E-Serve of Central Processing
Center (CPC) in India, Which insures error free high volume transaction handling. Every
transaction document is registered and scanned and transmitted to E-Serve by using strong
secured network. So, every transaction is double checked, if any discrepancy found, it is
resolved by Citi Trade Services. And customer can check the status of transaction by Citi
Direct, the web based transaction solution point or direct inquiry.
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Figure: 3.2 Citi Trade Processing Structure
3.3. Trade payment mechanism:

Cash in advance: payment affected by the importer (buyer), in advance of the receipt of
merchandise or services.
 Most protection for the exporter (seller)
 Most risky for the importer (buyer)

Open account: payment affected by the importer (buyer) in the manner specified in the
invoice, generally after the receipt of merchandise.
 Least protection for the exporter (seller)
 Least risky for the importer (buyer)

Documentary collection: Goods are shipped to importer, and exporter sends the shipping
documents and draft through importer’s bank for payment. Bank acts as a ‘mediator’ to
collect payment and safe keep documents.

Letter of credit (L/C): A written undertaking by a bank (a “credit”) given to Exporter at
the Importer’s request to effect payment up to a stated amount within a stated time against
presentation of a specified document which comply with the terms and condition of the
Credit.
3.4. Various costs incurred during shipment of trade:
Figure: 3.3 Inco terms related to shipment
Maritime and inland waterway transport only
 FAS - Free Alongside Ship
 FOB - Free On Board
 CFR - Cost and Freight
 CIF - Cost, Insurance and Freight
 DEQ – Delivery Ex-Quay
 DES – Delivered Ex-Ship
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3.5. Some common trade documents:
These are Commercial, Transport, Financial Risk Covering and Other Documents those use
in trade purpose of Citi.
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Commercial documents:
A. Commercial invoice
B. Packing list

Transport documents:
A. Marine (ocean) bill of lading
B. Rail bill of lading
C. Air waybill.

Financial document:
Bill of exchange

Risk covering document:
Insurance policy
3.6. SWOT analysis on Citi trade service:
Strength(S)
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Strong Global Network
Automated Service Processing Structure
One Stop Service Delivery Proven
Efficiency
Citi Direct-The Total Customer Solution
Customer
Retention
Management
Program
Competitive Package with highest
facility offered to Corporate Customer
Strong Communication Network
Internal Control Unit
Automated Reporting System
Weakness(W)
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Opportunities(O)
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Trade friendly attitude of Present
government of Bangladesh.
Different Trade Agreements (TIFA,
Trade Agreement with India) of
Bangladesh.
Position of Taka against US Dollar.
Reduction of International Trade Cost
due to Global Crisis.
Increasing demand of Bangladeshi
products (RMG, Pharmaceuticals) in Int.
Market due to low cost production.
Improvement of Investment Climate of
Bangladesh.
Lack of necessary manpower
Central processing outside the Country
Exception Resolution
System Slow down and Maintenance
Centralized Decision Making and
Authorization
Less profit sharing
Personal life VS Professional life
After transaction period transaction
request
Manual Reporting to Regulatory Body
Threats(T)
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Negative effects of Global Economic
Crisis.
More competitive Product and Services
by offer by competitors.
More competitive Job offer by
competitors which may be a threat to
lose the experienced employees of Citi
Trade.
Negative effects of Cost cutting.
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3.7. Citi trade products:
Citi Trade Provides Products and Services in these broad CategoriesTrade
Import
Trade Services:
- LC & Amendment
Issuance
- Import Bills under LC
- Issuance of Shipping
Guarantees (ISG)
- Incoming Collection
- Delivery Order
- Advance Payments
- Export development fund
processing
- NULC (Not under LC)
issuance
Export
Trade Services:
-Export LC Advising
- Export LC Collection
- Export Collection
- Export LC Collection
Trade Finance:
- Export Bill
Negotiation
- Export Bill
Discounting
- Export Loan
OBU
Loan &
Guarantees
Issuance/
Amendment:
-Bid Bond
-Performance
Bond
- Advance
Payment Bond
- Other type of
Guarantees
Trade Services:
- UPAS
- Local bill
discounting
- Foreign currency
draft clearing
- VAT payment
- Export LC
advising
Regulatory
Reporting
Total 67 reports:
- Daily 09
- Weekly 04
-Fortnightly 04
- Monthly 35
- Quarterly 03
- Semi- Annual
02
-Annual 02
- Event Based 08
Figure: 3.4 classifications of Trade Product
3.8. LOP (Local operating process) of trading for Citi bank N A:
LOP is prepared by Citibank N A which is followed as rules for trade service. Like other
foreign banks, CITI follows the rules and regulation of trading conducted by Bangladesh
bank. Import and export of goods is regulated by the Ministry of Commerce in terms of the
Import and Export (control) Act, 1950 through Import Policy order (IPO) in force and public
notice issued from time to time by the office of Chief Controller of Import and Export (CCI
& E). The fundamental rule of trading department based on Dealing with known customer
 LC authorization form.
Dealing with known customers:
Citi must ensure that they deal only with the known customers having a place of business in
Bangladesh and can be traced easily if any occasion arises for this purpose. In case of a new
customer, Citi obtains a certificate from Authorized Dealer. Here they collect the
information about whether the customer has any no bill of entry is due/ overdue for
submission.
LC authorization form:
A letter of credit is an instrument issued by a bank on behalf of its customers, constituting an
undertaking by the bank to pay the beneficiary a stipulated some of money, either on demand
or at specified future, on presentation of documents in compliance with the term of the LC.
Citibank NA is authorized to issue “Letter of Credit Authorization Form’ (LCAF) in
conformity with the IPO allowing imports into Bangladesh. The LCAF available with Citi,
are issued in 5 copies each. On these one marked “For Exchange Monitoring Purpose” is used
for opening LC and for effecting remittance.
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Chapter 04: A brief of Citi’s Product &
Performance Analysis of Trade
Here as I will focus on the most three significant activities of trade operations unit. This is
mainly Import, Export and Loans and Guarantees. Try to give a clear view about how an
import ,an export take place, what are the requirements that take place prior to an Import or
Export, what are the products of them, Banks undertake the guarantee on behalf of the
Importer or Exporter & how they are liable for these activities are given in a brief.
4.1. Import:
Import is the buyer side of a transaction in terms of engaging into a business. It is the buying
of goods from a foreign country in exchange of a legally accepted currency which is accepted
by both countries. Import of goods into Bangladesh is regulated by the Ministry of
Commerce, under the Import and Export (Control) Act, 1950; with Import Policy Orders
issued biannually, and Public Notices issued from time to time by the office of the Chief
Controller of Imports and Exports (CCIandE). To do import one must need to be bound by
some strict rules and regulations under the Ministry of law of Bangladesh.
How an Import takes place in Citi N A:
From the perspective of a Client/Importer
From the perspective of a Bank
 Valid Import Registration Form (IRC)
 Commercial Credit Agreement(Credit
Documentation)
 Copy of Tin Certificate (Tax Identification
Number)
 VAT Registration Certificate (If applicable)
 Membership of any Trade Organization/
Chamber Of Commerce, established in
Bangladesh
 Trade License
 Permissible item under the Country’s law
 LC (Letter of Credit) application
form
 LCA (Letter of Credit Authorization
form)
 IMP form (Import form)
 IMP form (Import form)
 Valid or firm Performance Invoice
 Insurance Policy
5
Major Importer of Citi Bank N A:
Major Importer
Standard stitches Ltd.
Standard Garments Ltd.
Novartis BD Ltd.
Perfetti van Ltd
MBM Garments Ltd.
Regal Garments
Import work with:

LC & Amendment Issuance:
L/C’s are issued only for account of customers who have account relationship with the bank.
The final decision to issue a particular letter of credit will be governed by the Bank’s policy
and the branch through evaluation of all aspects of each transaction. The procedure starts on
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receipt of the requests for issuance/amendments from the customer and ends after dispatch
of the L/C issuance/amendment copy to the customers.
The procedures at the Bangladesh Trade Operations are divided into sub-procedures given:
 Pre-processing of the LC issuance/amendment application
 Resolutions of exceptions raised by CGSL (Citigroup service Ltd.)
 Post transaction processing-dispatch and archiving

Issuance of Shipping Guarantees (ISG):
Shipping guarantee is required when good have been shipped by vessel and goods arrive at
the port but original document have not been received by the bank. Importer wants to release
the good with the copy of B/L (Bill of Lading) and copy of invoice. The shipping company
releases the good, on the presentation of original B/L, to the person who hold the title of the
good. Here in this case, original is not available, this is why shipping companies required the
shipping guarantee from the bank in one year. Here, bank undertakes and indemnify against
all risks and costs, which may arrive from releasing the goods.

Customer Liability Acceptance (CLA):
Customer liability acceptance is the acceptance of the customers of an issuance bill under
LC. When the bill from overseas bank, comes to the issuing bank, issuing bank checks the
documents and forward an intimation letter to the customer for the acceptance of the bill.
Endorsing of Copy Documents (ECD)/ Advance Payment:
It’s an advance endorsement by the issuing bank of the copy document for the delivery of the
goods from the customs

Import Regulatory Reporting to Bangladesh Bank:
 IMP (Import) form.
 Bill of Entry.
 LC Monitoring System
4.1.1. Trend Analysis of Import Operations:
Here, trend analysis of import operation is given below through five consecutive years.
Volume of import
Table 4.1: Trend Analysis of Import Operations of Citibank N.A. from 2012 to 2014
Import (Volume)
Yearly (Volume)
Major Products
Import Bills
Import Payment
Bills of Entry
2012
13695
13276
41085
2013
12172
10883
36516
2014
12723
12729
27850
Source: Offical databse of Citibank N.A Bangladesh
Page 11 of 35
Import bills and import payment:
Import Bills
Import Payment
14000
15000
13000
10000
12000
5000
11000
0
2012
2013
2014
2012
Import Bills
2013
Import Payment
2014
Figure: 4.1 Import bills and payment
Interpretation of results:

Import bills:
The above graph is present that the amount of import bills decreases. From 2012 to 2013 this
amount has been decreases by 1523. But it increase quite in 2014, as it is essential because
this product affect other products of this unit. If the volume of this product increases, other
products volume will automatically increase. So billing unit (import unit) should be more
concern about this product.

Import payment:
The graph shows that the import payment also fluctuate as like as import bills. .As Import
payment is related with issuance of import bills. In 2013 import payment is lower than 2012
import payment. And little increase in 2014.
Bill of entry:
Interpretation of results:
Bills of Entry
60000
40000
20000
0
2012
2013
2014
Bills of Entry
Bills of entry related with report to
Bangladesh bank. In this graph it is
downward slopping in 2013 and 2014 it
has been decrease a lot from 2012 due to
operation volume, but not equal with it. So
billing unit should accelerate this task to
maintain equality between operation
volume and the reporting volume.
Figure: 4.2 Bills of entry
4.2. Export:
Export is the seller side of a transaction in terms of engaging into a business. Literally, when
people sell something in exchange of legally excepted currency between the two countries
that is called an export. Export of goods into Bangladesh is also regulated by the Ministry of
Commerce under the Import and Export (Control) Act, 1950; with Export Policy Orders
issued biannually, and Public Notices issued from time to time by the office of the Chief
Controller of Imports and Exports (CCI and E).
Page 12 of 35
How an Export takes place in Citi N A:
From the perspective of a Client/Exporter
From the bank’s perspective
 Valid Export Registration Form (ERC)
 Commercial Credit Agreement
 Copy
of
Tin
Certificate
(Tax
Identification Number)
 Membership
of
any
Trade
Organization/
 Chamber Of Commerce, established
in Bangladesh
 Export Trade License
 Permissible item under the Country’s law
 Export L/C application form
 Export L/C authorization form
 Export LC/Contract/Advance – submit to
bank
 BBK certify Exp. Form
 Shipment document and Insurance policy
 Valid document of Transportation
invoice/ Bill of lading
 Certificate of origin (lawfully produced at
home country)
Major Exporter of Citi Bank N A:
MBM Garments Ltd.
Standard stitches Ltd.
Refat Garments Ltd.
ACME Labratories Ltd
Major Exporter
Square Fashions Ltd
Mate Export Ltd
Novartis BD Ltd.
British American Tobacco
Perfetti van Ltd
Holcim BD Ltd
Regal Garments
Asia Asset Ltd.
Export work with:

Bills Negotiation:
The process of purchasing an export bill is also known as Bills negotiation.

Bills Discounting:
The process of an export bill by discounting the commissions and interests of a bill, when the
acceptance of the issuing bank is received by the Negotiating bank.

Export Collections:
When a bank sends the export bill on collection basis is considered as Export collection.

Export Financing:
It is the simplest step of an export procedure; it’s the financing to the exporter.
4.2.1. Trend Analysis of Export Operations:
Volume of Export
Table 4.2: Trend analysis of export operation of Citibank N.A. from 2012 to 2014
Major products
Export bill collection
Export bill payment
Exp Issuance
Other Products
Software and service export
Export (Volume)
Yearly (volume)
2012
2013
6225
5219
5900
5185
7105
6789
2014
5590
5496
6900
184
157
160
Source: Offical databse of Citibank N.A Bangladesh
Page 13 of 35
Export bill collection and export bill payment:
Export bill payment
(Yearly)
Export bill collection(yearly)
6000
5800
5600
5400
5200
5000
4800
6500
6000
5500
5000
4500
2012
2012
2013
2014
Export bill collection(yearly)
2013
2014
Export bill payment (Yearly)
Figure: 4.3 Export bill collection and payment
Interpretation of results:

Export bill collection:
The above graph shows that, there is a fluctuation in export bill collection over the years. In
2013 it has been decreases a lot but next year in 2014 it starts to increases. That means banks
trade condition in a positive direction in that year.

Export bill payments:
Export bill payment also showing positive improvement. Over the years bill payment to
customers has been increases. It is shows that in 2014 bill payments reach to around six
thousand, whereas in the last two year bill payment didn’t reach to five thousand five hundred
marks.
Exp Issuance and software and service export:
Software and service export
Exp Issuance
190
7200
180
7000
170
160
6800
150
6600
2012
2013
2014
140
2012
Exp Issuance
2013
2014
Software and service export
Figure: 4.4 Exp issuance and software service export
Interpretation of results:

Exp Issuance:
Exp issuance is very important in export unit, because this exp issuance affect all other
products. If exp issuance increases then bill payment and bill collection will increases and
Page 14 of 35
vice versa. Ultimately the banks income will increase. Here, the graph shows that over the
year’s exp issuance fluctuates .It decrease in a large volume in 2013 but in last year 2014 it
increases then previous year, which may indicate a good sign for the banks economic.

Software and service export:
Here the graph shows that over the period’s bank’s software and service export have been
decreasing .So, export unit should be more careful about this product. In 2012, software and
service export was 184 which has been decreases by around 24 in 20114(160) .So they should
enquire this matter and can take positive steps for future.
4.3. Loan and Guarantee:
4.3.1. Loan:
Citibank provide only institutional loan in Bangladesh, no personal loan is available.
Institutional Loans or commercial loans provided by Citibank, N.A. Bangladesh is given
below:


Working Capital Loans ( Day to day business loan, mature within 3 months)
Import loan: When a loan doesn’t repaid with principal, first that loan sent to the PDO
(past due over) for 90 days and if the loan doesn’t paid within this 90 days then that loan
moved to NAB (Non- accrued based).
4.3.2. Guarantee:
GARANTEE
A bank guarantee is an undertaking by the Bank on behalf of its client to pay a certain sum
of money to a beneficiary in case of default by the applicant in meeting certain Terms and
Conditions of an agreement and contract. Guarantee means an undertaking by which a bank
promise to pay to the beneficiary. It is an obligation to the bank to pay beneficiary on
demand. A guarantee is issued by Citibank on behalf and on request of customer (applicant)
in favor of a third party (beneficiary), for the fulfillment of certain defined obligations by the
applicant.
Parties in a Guarantee:




Applicant – principal
Counter guarantee issuing bank
Guarantee issuing bank
Beneficiary
Usually Citibank issues the following types of guarantees:

Tender Guarantees (Bid bonds):
Some tenders require the bidders (Citibank customers) to furnish bank guarantees to prevent
the bidder from withdrawal from the bid / contract if successful in the tender. Say:
construction of Padma Bridge

Performance Guarantees:
A performance guarantee, by Citibank on behalf of its customers, assures the beneficiary of
delivery of goods and services in accordance with the terms and conditions of the contract.
Say: Rahimafrooz IPS.
 Advance Payment Guarantees:
Citibank will guarantee that the advance payment by the beneficiary to Citibank's customers
Page 15 of 35
will be utilized for performance of the contract for which the cash was advanced.

Financial Guarantees:
Any guarantee provided by Citibank on behalf of the customer for any financial
requirements or deals can be broadly classified as financial guarantee.
 Open ended Guarantees:
These guarantees do not have an expiry date and a standard liability clause and return clause.
Major Clients of Loan & Guarantee:
Clients Name
Interest Rate
Square Pharmaceuticals Ltd → 11.50%
Rangs Electronics Ltd
→ 12.00%
Flora Ltd
→ 13.50%
Nitol Motors Ltd
→ 12.50%
ACME Laboratories Ltd
→ 13.00%
Computer Source Ltd
→ 13.75%
Sinha Knitwear Ltd
→ 13.75%
Transcom Mobile Ltd
→ 14.oo%
Regal Garment
→ 15.00%
Clients Name
Interest Rate
Transcom Distribution Ltd
→11.50%
Axiata BD
→13.00%
Nestle BD
→12.00%
British American Tobacco (BAT)→ 12.00%
Novartis BD
→12.00%
Siemens BD
→13.50%
Sinha Industries
→13.75%
Agricultural Marketing Ltd
→12.50%
Grameen Distribution
→14.00%
4.3.3. Trend Analysis of Loan and Guarantee Operations:
Volume of loans
Table 4.3: Trend analysis of loan operation of Citibank N.A. from 2012 to 2014
Loans (Volume)
Products
Short term or working capital loans
Long term loans
Yearly (Volume)
2013
4559
34
2012
4800
50
2014
4623
50
Source: Offical databse of Citibank N.A Bangladesh
Short term or working capital loans and long term loans:
Short term or working
capital loans
4800
Long term loans
60
40
4600
20
4400
2012
2013
2014
Short term or working capital loans
0
2012
2013
Long term loans
2014
Figure: 4.5 Short term or working capital loans and long term loans
Page 16 of 35
Interpretation of results:

Short term or working capital loans:
From the graph above it present that booking of short term or working capital loans is
increases from 2013 to 2014. Loan and guarantee units view that, this short terms loan
(periodical interest) is the major source of income of Citibank N.A. in Bangladesh.

Long term loans:
The graph shows that long term loan Citibank N.A. provides is increases in 2014 than 2013.
It provides long term loans to few institutional clients. According to the officials of Citibank
N.A. they provide this loan to only six or seven institutional clients. For example Grameen
phone, Nestle Bd Ltd, Novartis Bd etc.
Volume of Guarantee
Table 4.4: Trend analysis of Guarantee operation of Citibank N.A. from 2012 to 2014
Products
Foreign and Local guarantee
Guarantee (Volume)
Yearly (Volume)
2012
2013
1003
863
2014
880
Source: Offical databse of Citibank N.A Bangladesh
Guarantee:
Foreign and Local guarantee
Interpretation of results:
From the graph the results shows that
issuance of guarantee (foreign and local)
is in increasing position. From 2013 to
2014 it increases with 863 to
880.Though it decrease in 2012 to 2013.
1100
1000
900
800
700
2012
2013
2014
Foreign and Local guarantee
Figure: 4.6 Foreign and Local guarantee
Page 17 of 35
Chapter 05: Analysis of Citi Bank N. A.
Bangladesh Financial Performance
As Citibank N.A‘s one of main activity in Bangladesh is providing trade service. So their all
financial activities are in most cases related with it. The overall financial performance is
given below:
Analysis of Citi Bank N. A. Bangladesh Financial Statements:
5.1. Balance sheet Analysis of Citi Bank N. A:
5.1.1. Trend analysis of Assets, liability and equity:
Balance sheet of an organization represents the financial conditions on a particular day. That
is consisting of its assets, liability and equity of the bank. Here, the financial conditions of
Citibank N.A. is present analysis of balance sheet items from 2010 to 2014 .
Assets (A) = Liabilities (L) + Owner’s Equity (OE)
Total Asset,Liabilty & Equity of Citibank N.A.
Amount in BDT
50 000 000 000
40 000 000 000
30 000 000 000
Total Asset
20 000 000 000
Total Liability
10 000 000 000
Shareholder's Equity
0
2010
2011
2012
Year
2013
2014
Figure: 5.1 Total assets, liability and equity of Citibank N.A from.
(Appendix no: 9.1)
Interpretation:

There is a fluctuation of total assets and liabilities over the five years. In 2012 and 2013
these were in decreasing situation. But in 2014 it shows that these were higher than
previous years. Increase in asset shows a good sign for the bank.
 Equity portion of these years are upward slopping. And in 2014 there was maximum
volume of total assets BDT 40,711,479,674, total liabilities BDT 30,892,151,517, and
total shareholder’s equity BDT 9,819,328,157.
 Here bank’s debt to asset average ratio of last five years is 0.7:1, that indicate the lower
amount of leverage and bank placed itself a safe position.
Here, proportion of asset items and liability items of Citibank N.A is shown through
graphical presentation.
Page 18 of 35
5.1.2. Proportion of Asset items of Citibank N.A.:
0%
4%
5%
Proportion of Asset items of Citibank N.A
Cash
1%
25%
Balances with other banks and financial institutions
Investments
37%
11%
18%
Loans and advances
Fixed assets including premises, furniture and fixtures
Other assets
Non-banking assets
Money at call and short notice
Figure: 5.2 Average Proportion of Asset items of Citibank N.A (2010-2014)
(Appendix no: 9.2)
Interpretation:
Here average of five years from 2010 to 2014 of Citibank N.A. all asset items are given
below through a graphical presentation of pie chat. Every slices of the pie chart shows the
amount of asset proportion of total.






Here the maximum portion of assets is come from the sources of loan and advance. That
is 37%.Comes from loan, cash credit, and overdraft & bill purchases and discounted.
Then the large source of assets comes from its cash 25% (including in foreign currency).
Investment is 18% including government securities, reverse repo and others.
Balances with other bank and financial institutions of Citibank are 11% of total.
Money at call short notice 5%, other assets 4%, and fixed assets including premises,
furniture and fixture is 1% of total assets of Citibank N.A.
And there Non-banking assets is nil. There is no usages of it’s in these 5 years.
5.1.3. Proportion of Liability items of Citibank N.A.:
2%
8%
Proportion of Liability iteams of Citibank N.A.
90%
Borrowing from other banks and
financial institutions and agents
Deposits and other accounts
Other liabilities
Figure: 5.3 Average Proportion of Liability items of Citibank N.A (2010-2014)
(Appendix no: 9.3)
Interpretation:
The liability items of Citibank N.A. are divided into three proportions which are shows in
every slice of pie chart based on five years average data from 2010 to 2014.
Page 19 of 35


The maximum portion of liability comes from the source of deposits and other accounts
90% of its client having with them.
The portion of other liability of it is 8% of average and it has minor portion of borrowing
from other bank and financial institutions and agents 2%.
5.2. Income statement analysis of Citibank N.A:
An income statement is a financial statement that measures an organization’s financial
performance over a specific accounting period. Financial performance is assessed by giving a
summary of how the business incurs its revenues and expenses through both operating and
non-operating activities. Here, the financial conditions of Citibank N.A. is presented by
Vertical common size analysis and measuring year to year percentage changes of income
statement items in yearly basis from 2010 to 2014 .
Profits = Revenue - Expenses
5.2.1. Common-size Analysis of Citibank N.A. Income statement:
Table 5.1: Five year Common-size analysis of Income statement of Citibank N.A.
Common-size Analysis of Citibank N.A. Income statement
Year
2010
2011
2012
2013
2014
Total
100%
100%
100%
100%
100%
income
Total
32%
34%
30%
39%
36%
expense
Net profit
42%
37%
43%
35%
38%
Source:Annual Report of Citibank N.A.2010-2014
Common -Size Income Statement of Citibank N.A.
120%
100%
80%
60%
Total income
40%
Total expense
20%
Net profit
0%
2010
2011
2012
2013
2014
(Years)
Figure: 5.4 Common-size analysis of Income statement of Citibank N.A. from 2010 to 2014
Interpretation:


In above graph it present the bank’s financial state through vertical common size
analysis income statement items –total income, total expenses and net profit.
Here, percentage of total expenses and net profit are compare with total income 100%
the base amount of each year.
Page 20 of 35


It shows in 2012 the bank had maximum net profit 43% where the total expense is
minimum 30%. But in 2013 it had minimum net profit 35% and the total expense 39% is
maximum from other years based on their each year total income.
As the difference between total income and total expense is the net profit, so, it can
conclude there is negative correlation between total expense and net profits of Citibank
N.A.
5.2.2. Year to Year Change of Citibank N.A Income Statement:
Table 5.2: Five year: of percentage change of Income statement of Citibank N.A.
Year
Total income
Total expense
Net profit
Year to Year Change of Income Statement
2010
2011
2012
2013
-12%
7%
12%
-18%
31%
13%
0%
6%
-13%
-6%
31%
-34%
2014
5%
-4%
14%
Source:Annual Report of Citibank N.A.2010-2014
Yearly Percentange Change of Income Statement of Citibank N.A.
40%
30%
20%
10%
0%
-10%
-20%
-30%
-40%
31%
31%
13%
7%
12%
0%
-6%
-12%
-13%
14%
5%
-4%
6%
-18%
Total income
Total expense
Net profit
-34%
2010
2011
2012
2013
2014
(Years)
Figure: 5.5 Yearly Percentage Change of Income statement of Citibank N.A. from 2010 to
2014
Interpretation:
Here the graph presents how much percentage of every year increase or decrease from its
previous year and there trend by the year to year percentage change of income statement
items of 2010 to 2014. This year to year percentage change also shows the growth of the
bank’s, like growth of earning through change of net profit.

It shows the negative and positive fluctuation of all items from previous years. The
maximum negative fluctuation is year 2013 where total income (-18%) and net profit (34%) both are negatively fluctuate than previous year 2012; conclude the worst
condition among five years. And 2012 shows the good position among five years; total
income (12%) and net profit (31%) more than 2011.
Page 21 of 35
5.3. Cash Statement Analysis of Citibank N.A.
The cash flow statement provides aggregate data regarding all cash generated and used from
its ongoing operations and external investment sources, and pay for business activities and
investments during a given period. The period of time that the statement covers is chosen by
the company.
In below the five years trend analysis of cash flow statement of Citibank N.A. of BD is
showing through a graphical presentation.
Table no: Five years trend analysis of cash flow statement of Citibank N.A.
Cash flow Statement of Citibank N.A.
30 000 000 000
20 000 000 000
10 000 000 000
0
2010
-10 000 000 000
2011
2012
2013
2014
Net cash provided for operating activities
Net cash received from investing activities
Net cash provided for financing activities
Figure: 5.6. Trend analysis of Casf flows Statements of Citibank N.A.
(Appendix no: 9.4)
Interpretations:

Net operating cash-flows: In 2012 it falls a lot reached in a negative figure but in last
two years 2013 to 2014 shows an upward trend indicates a good sign, because for a
company's earnings to be of "quality," the amount of cash flow from operating activities
must be consistently.

Cash-flows from investment activities: These show negative figures which mean the
cash outflow exceeded the inflow form these activities and indicates an adverse sign. A
stable or growing business typically has negative net cash flow from investment
activities, which occurs when it buys more assets than it sells. In 2011 and 2012, the cash
flow from investment activities had a positive figure, but in other three years, there have
been loss incurred in investment activities.

Cash flow provided for financing activities: Basically a healthy business may
occasionally show positive net cash flow from financing activities. A negative figure
indicates that the company has paid out capital, such as paying off long-term debt or
making a dividend payment to shareholders. Here it had negative cash flow in previous
four years. Only in 2010 this bank had positive flow in financing activities.

Closing cash and equivalents: It shows a positive and increasing trend from last two
years which is again a good sign. The maximum amount was seen in 2014 BDT
19,605,311,289.
Page 22 of 35
Chapter 06: CAMELS rating Analysis of Citi
Bank N. A Bangladesh
CAMELS (Capital, Asset, Management, Earning, Liquidity and Sensitivity) Rating is a very
popular term using to evaluate the overall performances of various commercial banks by
Bangladesh Bank. In 2008 this rating was done by the regulatory authority. The serial is made
on the basis of performance of June 2011 .According to performance; banks are categorized
in 5 categories1.
2.
3.
4.
5.
Strong or A-class banks
Satisfactory or B-class banks
Fair or C-class banks
Marginal or D-class banks
Unsatisfactory or E-class banks
Among these 5 categories, Citibank N.A. Bangladesh is rated as- Satisfactory or B-class.
Now by analyzing the ratio of CAMELS rating evaluate the financial performance of
Citibank N.A. Bangladesh.
6.1. Capital Adequacy
Capital adequacy has emerged as one of the major indicator of the financial health of an
institution like bank. It reflects the overall financial condition and also the ability of
management to meet the need for additional capital. The ratios use to calculate capital
adequacy of a financial institution like Citibank N.A.

Capital Adequacy Ratio (CAR):
Table 6.1: Analysis of Capital Adequacy Ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
2012
2013
2014
CAR=(Tier 1 Capital + Tier 2 Capital)/Risk
Weighted assets
(8,238,842,250+ 422,482,117)÷45,532,422,884
=19.02%
(8,733,040,961+422,395,353)÷32,657,562,4
85=28.03%
(9,103,804,259+424,768,986)÷30,387,559,0
95=31.36%
(9,019,129,647+373,303,420)÷34,213,252,4
21=27.45%
(9,726,484,714+366,065,909)÷25,516,812,2
79=39.55%
Interpretation
- Capital adequacy ratio (CAR) is a
specialized ratio used by banks to
determine the adequacy of their capital
keeping in view their risk exposures.
- Its required CAR ratio is 9% as it’s
every year ratio is greater than the
required rate it proves bank has
minimum adequate capital to provide
the banks with a cushion to absorb
losses before they become insolvent.
Source:Annual Report of Citibank N.A.2010-2014
CAR Ratio
50,00%
0,00%
2010
2011
2012
CAR Ratio
2013
2014
Years
Figure: 6.1 Analysis of Capital Adequacy Ratio of Citibank N.A.
Page 23 of 35

Debt to Equity Ratio:
Table 6.2: Analysis of Debt to Equity Ratio of Citibank N.A. from 2010 to 2014
Year
2010
D/E= Total Debt ÷ Total Equity
25,300,347,709 ÷ 8,239,015,681=3.07
2011
27,495,800,194 ÷ 8,733,040,961=3.15
2012
24,398,947,787 ÷ 9,108,551,525=2.68
2013
24,559,020,906 ÷ 9,541,426,443=2.57
2014
30,892,151,517 ÷ 9,819,328,157=3.15
Interpretation
- A high debt-to-equity ratio indicates that a
bank may not be able to generate enough
cash to satisfy its debt obligations. However,
a low debt-to equity ratio may also indicate
that a company is not taking advantage of the
increased profits that financial leverage may
bring.
- Citi has high D/E ratio in 2011 and 2014
among five years. But it’s overall D/E ratio
is low indicate that it is not taking advantage
of the increased profits.
Source:Annual Report of Citibank N.A. 2010-2014
D/E Ratio
4,00
2,00
D/E Ratio
0,00
2010
2011
2012
2013
2014
(Years)
Figure: 6.2: Analysis of Debt to Equity Ratio of Citibank N.A.
6.2. Asset Quality
The quality of assets is an important parameter to gauge the degree of financial strength. Each
financial institution makes its own decisions as to how deposited funds should be allocated,
and these decisions determine its level of credit risk.

NPL to Total Loan:
Table 6.3: Analysis of NPL to Total Loan Ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
Gross and net non-performing loans
(NPLs)/ total advances.
149,097,856÷19,295,322,778=0.77%
181,241,695÷12,708,047,237=1.43%
2012
203,741,107÷12,572,329,765=1.62%
2013
205,892,965÷11,053,644,783=1.86%
2014
219,215,308÷10,789,220,615=2.03%
Interpretation
-Non- performing loan (NPL) is a loan that
borrower is not making interest payments or
repaying any principal. So NPLs to total loan
ratio shows its ratio in total loan. Higher this
ratio indicate the risk of the bank’s .That is in
increasing condition of Citibank indicate a bad
sign for it.
Source:Annual Report of Citibank N.A. 2010-2014
Page 24 of 35
NPLs to Total loan ratio
4,00%
2,00%
0,00%
2010
2011
2012
2012
2013
NPLs to Total loan ratio
Figure: 6.3: Analysis of NPL to Total Loan Ratio of Citibank N.A.

NPLs to total equity :
Table 6.4: Analysis NPLs to total equity Ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
Gross and net non-performing loans
(NPLs)/ total equity
149,097,856÷8,239,015,681=1.81%
181,241,695÷8,733,040,961=2.08%
2012
203,741,107÷9,108,551,525=2.24%
2013
2014
205,892,965÷9,541,426,443=2.16%
219,215,308÷9,819,328,157=2.23%
Interpretation
-As NPLs present the loan that not able to
make interest and principle of that loan. So this
has a bad effect on equity of bank. It
minimizes the asset of the banks. So higher it
is present the bad position. In 2012 it was
2.24% the maximum ratio.
Source:Annual Report of Citibank N.A. 2010-2014
NPLs to Total Equity ratio
2014
2013
2012
2011
2010
0,00%
0,50%
1,00%
1,50%
2,00%
2,50%
NPLs to Total Equity ratio
Figure: 6.4: Analysis NPLs to total equity Ratio of Citibank N.A.
6.3. Management Quality
Management efficiency is another vital component of the CAMELS rating model that ensures
the survival and growth of an institution. The management efficiency takes crucial decisions
depending on the risk perception. The ratios used to evaluate management efficiency are:
Page 25 of 35

Total loans and advances to total deposits:
Table 6.5: Analysis of Total loans and advances to total deposits Ratio of Citibank N.A.
Total loans and advances ÷ total
deposits
2010 19,295,322,778÷23,387,196,816=
82.50%
2011 12,708,047,237÷25,073,055,838=
50.68%
Year
2012
12,572,329,765÷20,465,153,471=
61.43%
2013
11,053,644,783÷22,426,604,365=
49.29%
2014
10,789,220,615÷28,138,725,316=
38.34%
Interpretation
- If the ratio is too high, it means that banks might
not have enough liquidity to cover any unforeseen
fund requirements and if the ratio is too low, banks
may not be earning as much as they could be.
-In 2010 there were highest 82.50% ratio means
bank use maximum deposit for earning though
quite risky position but it fall to 50.68% in 2011.
-Again increase next year but after that this ratio is
downward sloping in consecutive next two years
49.29% & 38.34% indicates that banks earns low
than its capability.
Source:Annual Report of Citibank N.A. 2010-2014
Total advance to Total deposit
Years
2014
2012
2010
0,00%
20,00%
40,00%
60,00%
80,00%
100,00%
Total advance to Total deposit
Figure: 6.5: Analysis Total loans and advances to total deposits Ratio of Citibank N.A.

Interest Expenses to Deposit:
Table 6.6: Analysis Interest Expenses to Deposit Ratio of Citibank N.A. from 2010 to 2014
Year
2010
Interest Expenses ÷Deposit
929,273,426÷23,387,196,816=4%
2011
1,160,853,196÷25,073,055,838=5%
2012
1,144,870,594÷20,465,153,471=6%
2013
635,566,093÷22,426,604,365=3%
2014
339,421,253÷28,138,725,316=1%
Interpretation
- Deposit interest expense primarily includes
interest expense related to banking deposits and
investment certificates.
- Here, in 2012 Citibank N.A. has maximum 6%
rate of it that shows bank had high interest
expense on its deposit but this expense falling
down next two consecutive years 3% & 1% than
its deposit. Shows the positive condition.
Source:Annual Report of Citibank N.A. 2010-2014
Interest expense to Deposit Ratio
10%
0%
2010
2011
2012
2013
Years
2014
Interest expense to Deposit Ratio
Figure: 6.6: Analysis Interest Expenses to Deposit Ratio of Citibank N.A.
Page 26 of 35

Operating expenses to Deposit:
Table 6.7: Operating expenses to Deposit Ratio of Citibank N.A. from 2010 to 2014
Year
2010
Operating Expenses ÷Deposit
802,519497÷23,387,196,816=3%
2011
908,415,682÷25,073,055,838=4%
2012
910,979,553÷20,465,153,471=4%
2013
969,123,189÷22,426,604,365=4%
2014
928,727,171÷28,138,725,316=3%
Interpretation
- Operating expenses like- salaries, insurance,
rents, auditors’ fee, maintenance expense etc. that
incurred for used and collection of deposit .If this
ration increases create negative impact on
income.
- Here, bank’s this ratio increase than 2010, 3% to
2011, 4% but it remain same consecutive three
years shows stable condition and then fall down
to prior rate.
Source:Annual Report of Citibank N.A. 2010-2014
Operating expense to Deposit Ratio
5%
0%
2010
2011
2012
2013
2014
Operating expense to Deposit Ratio
Figure: 6.7: Operating expenses to Deposit Ratio of Citibank N.A.
6.4. Earning Quality
Earning quality reflects quality of institution profitability and its ability to earn consistency.
The quality of earning is a very important criterion that determines the ability of an institution
to earn consistently, going into the future.

Net interest margin:
Table 6.8: Net interest margin Ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
2012
2013
2014
NIM = ((Interest Income – Interest
Expense) ÷ Average Total Asset)
×100
(1,875,445,573-929,273,426)÷
33,539,363,390=2.82%
(2,217,866,234-1,160,853,196)÷
36,228,841,155=2.92%
(2,358,780,593-1,144,870,594)÷
33,507,499,312=3.62%
(1,506,136,614-635,566,093)÷
34,100,447,349=2.55%
(1,212,785,038-339,421,253)÷
40,711,479,674=2.15%
Interpretation
- If a bank NPA (non-performing assets) are
high, their NIM will go down. Higher NIM
would increase the profitability of the bank. .A.
Citibank N.A has high NIM in 2012, 3.62%
among five years, which was good. Shows it
has gain more profit spent on investment.
- But after that its NIM shows a downward
trend next two years is not so good position.
-Should be careful to gain high NIM to
maintaining the position.
Source:Annual Report of Citibank N.A. 2010-2014
Page 27 of 35
NIM Ratio
Years
2014
2012
2010
0,00%
1,00%
2,00%
3,00%
4,00%
NIM Ratio
Figure: 6.8: Net interest margin Ratio of Citibank N.A.

Return on Assets (ROA) :
Table 6.9: Return on Assets Ratio of Citibank N.A. from 2010 to 2014
2010
ROA = (Net Profit before Tax ÷
Total Assets) ×100
1,707,138,374÷33,539,363,390=5%
2011
1,771,057,066÷36,228,841,155=5%
2012
2,141,918,724÷33,507,499,312=6%
2013
2014
1,563,488,508÷34,100,447,349=5%
1,657,936,069÷40,711,479,674=4%
Year
Interpretation
- As ROA of an institution is less than 5% is
quite unimpressive.
- The average five years ROA of Citibank
N.A. s is 5% that present the stable condition.
- The maximum ROA was in 2012, 6% among
five years, where net profit before tax was
quite high then other years.
Source:Annual Report of Citibank N.A. 2010-2014
ROA
10%
0%
2010
2011
2012
ROA
ROA
2013
Years
2014
Figure: 6.9: Return on Assets Ratio of Citibank N.A.

Return on Equity (ROE):
Table 6.10: Return on Equity Ratio of Citibank N.A. from 2010 to 2014
2010
ROE = (Net Income ÷ Shareholders
Equity)× 100
1,056,306,072÷8,239,015,681=12.82%
2011
997,500,423÷8,733,040,961=11.42%
2012
2013
2014
1,304,613,347÷9,108,551,525=14.32%
861,709,754÷9,541,426,443=9.03%
984,086,786÷9,819,328,157=10.02%
Year
Interpretation
-As the higher the ROE the better it is.
-The maximum rate of ROE of Citi is 14.32%
in 2012.but it was in downward trend in 2013,
9.03% and 2014, 10.02%.
-The falling ROE is a problem as it indicates
that it is not able to generate profit without
capital.
Source:Annual Report of Citibank N.A. 2010-2014
Page 28 of 35
ROE
20,00%
10,00%
ROE
0,00%
2010
2011
2012
2013
2014
Figure: 6.10: Return on Equity Ratio of Citibank N.A.
6.5. Liquidity

Working Capital ratio:
Table 6.11: Working Capital ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
2012
2013
2014
Current Asset/ Current Liability=
Working Capital
32,211,138,516÷23,387,196,816=1.38
32,152,048,191÷25,073,055,838=1.28
30,867,965,034÷22,105,153,471=1.40
31,481,486,764÷22,767,986,645=1.38
34,910,160,731÷28,275,172,879=1.23
Interpretation
-Its shows the mixed trend.
-It was maximum in 2012 due to its high level of
current assets than its current liabilities. But it
was less than other years. After that in 2013 and
2014 this ratio was downward, though the
current assets increase the current liabilities also
increases.
Source:Annual Report of Citibank N.A. 2010-2014
Working Capital Ratio
1,50
1,00
2010
2011
2012
2013
Working Capital Ratio
2014
Figure: 6.11: Working Capital ratio of Citibank N.A.

Total liquid assets to total assets:
Table 6.12: Total liquid assets to total assets ratio of Citibank N.A. from 2010 to 2014
Year
2010
Total liquid assets ÷ Total assets
32,211,138,516÷33,539,363,390=96.04%
2011
32,152,048,191÷36,228,841,155=88.75%
2012
30,867,965,034÷33,507,499,312=92.12%
2013
31,481,486,764÷34,100,447,349=92.32%
2014
34,910,160,731÷40,711,479,674=85.75%
Interpretation
-Total liquid assets presents the amount of
asset those can be convert into cash in time
of need. It shows the mixed tend of this
ratio.Itis an important liquidity management
tool to assess on ongoing basis the extent
liquid assets can support its asset base. The
maximum ratio was 96.04% in 2010.But in
2014 it was 85.75% is matter of concern.
Source:Annual Report of Citibank N.A. 2010-2014
Page 29 of 35
Totla liquid assets to Total assets
100,00%
80,00%
2010
2011
2012
2013
2014
Totla liquid assets to Total assets
Figure: 6.12: Total liquid assets to total assets ratio of Citibank N.A

Liquid assets to Total deposits:
Table 6.13: Liquid assets to total deposits ratio of Citibank N.A. from 2010 to 2014
Year
2010
2011
Liquid Assets ÷Total Deposit
32,211,138,516÷23,387,196,816=1.38
32,152,048,191÷25,073,055,838=1.28
2012
2013
30,867,965,034÷20,465,153,471=1.51
2014
34,910,160,731÷28,138,725,316=1.24
31,481,486,764÷22,426,604,365=1.40
Interpretation
-It shows the ratio of liquid assets that can be
used to pay deposit amount for meeting
customer needs .If the ratio is high that
presents the bank is in safe position to meet
customers for which bank is liable.
-Here, in 2012 bank had maximum ratio 1.51
but it in downward trend last two years.
Source:Annual Report of Citibank N.A. 2010-2014
Total liquid asset to total deposit
2,00
1,50
1,00
0,50
0,00
2010
2011
2012
2013
2014
Total liquid asset to total deposit
Figure: 6.13: Liquid assets to total deposits ratio of Citibank N.A.
6.6 Sensitivity:
Regulators also assess the degree to which an institution might be exposed to adverse
financial markets conditions. Institutions could be rated in terms of recent earnings, liquidity,
and other characters .Institution that is more sensitive to rising interest rates is more likely to
experience financial problems. As Citibank is a foreign private bank, its sensitivity analysis
could not possible for unavailable of data. Yearly financial statement is not enough to support
the formula for calculation bank’s sensitivity.
Page 30 of 35
Chapter 07: Analysis results of the determinants
Of the Profitability of Citibank N.A. Bangladesh
The study is conducted to find out the relationship and effect of ROA, ROE and NPM on the
Earnings growth of Citibank N.A. based on 2010 to 2014 data. A multiple linear regression
model is run to find out the relationship of these variables for profitability analysis. There are
three independent variables ROA, ROE and NPM and one dependent variables Earnings
growth.
(Appendix: 9.5)
Observations: 5, five years data of these variables are used.
Interpretation of output summary:
Table 7.1: Model Summary
Change Statistics
Mod
el
R
R
Adjusted R
Std. Error of
R Square
Square
Square
the Estimate
Change
Sig. F
F Change
.999a
.999
.995
.018
.999
271.218
Predictors: (Constant), Net Profit Margin, Return On Asset, Return On Equity
1
a.
df1
df2
3
Change
1
.045
Figure: 7.1: Analysis of Model Summary

Relationship among the variables in relative terms:
Multiple R: 0.999 = This is the correlation coefficient. It represents the degree of
relationship. If the value is 1 that means perfect positive relationship. Here, 0.999 means
almost 1 that indicates there exist a high degree of positive relationship among the variables.

Explanatory power of independent variables:
𝑹𝟐 : 0.999 = It shows how much of the variance of "Y" is explained in the regression. Here, 0
.999 indicates 99.9% of variations of earning growth are explained by the variation of number
of ROA, ROE and NPM.
Adjusted R^2:0.995 = It should be always less than R Square .And here it is.
Table 7.2: Coefficients
Model
1 (Constant)
Return On Asset
Return On
Equity
a.
Unstandardized
Standardized
95.0% Confidence Interval for
Coefficients
Coefficients
B
B
Std. Error
Beta
t
Sig.
Upper Bound
.024
-2.712
-.975
-1.843
.068
44.540
2.075
1.735
21.469
.030
18.180
70.901
33.513
1.313
2.840
25.526
.025
16.831
50.196
6.824
-3.174
-21.511
.030
-233.485
-60.081
Net Profit Margin
-146.783
Dependent Variable: Growth Earning
-26.974
Lower Bound
Figure: 7.2: Analysis of Coefficients
Page 31 of 35

Unit measurement:
The regression model is:
Y=a+ROAx1+ROEx2+NPMx3
Earnings Growth= -1.843+44.540x1+33.513x2-146.783x3
The equation indicates that if ROA and ROE increase by 1 unit earning growth increase by
44.540 units and 33.513 units but NPM increase by 1 unit, earnings growth decrease by
146.783 units.

Influencing power of independent variables:
𝜷ROE=2.840>βROA=1.735 >βNPM= - 3.174
Here shows ROE has more influencing power than ROA on Earning Growth but NPM has
negative influencing power.

Measuring the significance of coefficient:
T-Value: ROA=21.469, ROE=25.526, NPM= - 21.511
Larger t-values translate into smaller P-values. So the larger the t-value is the more likely the
correlation is significant. So for a "critical t-value" is the minimum t-value need in order to
have P < 0.05
Significance of coefficient: ROA=.030, ROE=.025, NPM=.030
From the co-efficient table it is evident that the regression co-efficient of ROA,ROE and
NPM are statistically significant because there significant level are 3.0%, 2.5% and 3.0%
respectively which are lower than 5%.

Significance of the result (Through ANOVA table):
Hypothesis Testing:
A hypotheses testing was done to find out the significant effect on Earnings growth of ROA,
ROE and NPM.
Ho: There is no significant effect of ROA, ROE and NPM on the Earnings growth
H1: There is a significant effect of ROA, ROE and NPM on the Earnings growth
Level of significance α = .05
Decision rule: This test aims to determine the significant effect of independent variables
ROA, ROE and NPM together on the dependent variable Earnings growth to see significant
value F. To reject the null hypothesis the significance F must be less than .05 or 5%. That
means statistically independent variables affect the dependent variable together. If F is
greater than .05 that means null hypothesis is accepted.
Page 32 of 35
Here, T statistical test basically shows how far the effect of the independent variables on the
dependent variable.
Table 7.3: ANOVA
Model
1
Sum of Squares
df
Mean Square
Regression
.250
3
.083
Residual
.000
1
.000
Total
.251
4
F
271.218
Sig.
.045b
a. Dependent Variable: Growth Earning
b.
Predictors: (Constant), Net Profit Margin, Return On Asset, Return On Equity
Figure: 7.3: Analysis of ANOVA
Significance F: 0.045
Decision: The critical P-Value is 0.05 because the confidence interval is 95% and the
calculated P-value is 0. 045. So, Calculated P=0.045 < Critical P=0.05
So, at 95% confidence interval, the null hypothesis is rejected.
Hence,
The independent variables ROA, ROE and NPM have a significant effect on the dependent
variable Earning Growth that represents the profitability of the bank.
Page 33 of 35
Chapter: 08 Findings, Recommendations and
Conclusion
8.1. Key Findings:













Citibank has successfully established their place at the highest stage of banking in
Bangladesh, which they basically provide in the form of corporate banking.
Citibank use their own Local operating procedure (LOP) in case of trading besides
Bangladesh Bank regulations for proper maintenance.
Lack of necessary manpower that create the tough situation to maintain all job properly
and timely.
In 2012 Citibank‘s income was high than before for high level of transaction but next
year it was slowdown in a large level, due to cutoff their business with a large number of
risky clients.
Bills of entry related with report to Bangladesh bank. But the result shows that was not
equal with operation volume. That an important part to be concern.
This bank provide long term loan to a limited client like six or seven institutional clients
that keep their business in a limited area.
Fluctuation of bank’s total assets and liabilities over the five years. And equity is in
upward slopping. But increase in asset in 2014 than previous years shows a good sign for
the bank. And its debt equity ratio is quite low.07:1.
Net profit growth of the bank also has a negative growth that creates threats for the bank’s
profitability.
Its CAR ratio is always greater than its required kept the bank in safe position.
Total loans and advance to deposit of last two years 2013 and 2014, 49.29% & 38.34%
indicates that banks earns low than its capability.
Low interest expense to deposit and operating expense to deposit of last two shows the
positive condition of bank’s efficient management quality in CAMELS rating.
NIM, ROA, ROE shows the earning quality of a bank but in last two years bank’s these
ratios are shows a downward trend is not so good position.
By profitability analysis shows that Citibank N.A. has significant effect of its earning
quality ratios on its earnings growth.
8.2. Recommendations
Citi Trade Services is one of the major profit contributing departments in Citibank,
Bangladesh. To keep the profit growth and face the challenges, the following measures are
recommended for Citi Trade Services and increase its overall financial performance.
 Citibank N.A. can start operating in the Retail Banking sector in Bangladesh. By providin
g retail banking Citibank will be able to capture even a greater share of the financial resou
rces like Hong Kong Shanghai Bank (HSBC) and Standard Chartered Bank (SCB).
 One of major problem of the bank is that it is overshadowed by India. For that they use
their own Local operating procedure (LOP). The main process of trade operations of
Citibank, N.A. Bangladesh is carried out by E Serve at Mumbai. By controlling with in
country less time is taken for issuing a Letter of Credit (L/C).
Page 34 of 35








To remove the shortage of man power Citi can increase some new job position in trade
service department. It will ensure backup of existing employees and will increase the
level of satisfaction among employee.
To overcome the effect after 2012 as Citibank now trying to spread their area that they
limited at certain time should be more cautious in that case.
Citi doesn’t do any business with the companies with whom U.S. Government has any
problem. So the Compliance Policies need to be customized and flexible. As a result time
will be saved and process will be easier.
Citi can be flexible for some level of transactions. Depending on urgency trade service
can avoid TCS to make a transaction quick. Based on customer loyalty they can be a little
bit flexible on documentation.
The income trend of this bank shows more negative fluctuation should be alert about it.
High level of NPL to advance and equity is a matter of concern.
Website of Citibank N.A. Bangladesh need to be enriched for availability of information.
The result of regression analysis of profitability it’s earning growth has a dependency on
ROA, ROE and NPM so the bank should be more concern about its earning quality.
8.3. Conclusion:
Citibank N.A. the world largest financial institution enhanced its market presence and
operations within a very short time. Trade service department of Citi N.A. Bangladesh
working with the corporate client and financial institute, has showed the excellence of their
activity from the beginning. To improve their service for the customers they emphasize on
the new product development. And to run their activities smoothly, they ensure quality about
the management information system (MIS) and overall technological improvements. By
analyzing the overall financial performance of Citibank N.A. from 2010 to 2014 shows that
in 2012 it was in worthy position than other years .But in next year’s its position quite
slowdown for cutoff their business with some risky client as par as U.S Government
instructions, is define by Citi employee. That had brought a large effect in every sector
Citibank operates their work. But now they are trying to spread the area with cautious way.
This time they are more cautious, careful and willing to open their each possible door for
both their present and upcoming clients, as they do have plans to provide retail and consumer
banking service in Bangladesh very soon. They are trying to facilitate variety of services and
activities, so that they can beat the competitors easily and continue their position as one of the
largest multinationals in Bangladesh.
Page 35 of 35