Financial Services and CAMEL
Ratio Analysis of Trust Bank
Limited
Date of Submission: 14.12.2023
Prepared for
Ranet John Paul Gomes
Asst. Professor
Department of Business Administration
Notre Dame University Bangladesh
Prepared by
Md Maynul Islam Safat
ID: 201010004
Major: Finance
BBA, Batch 16th
Department of Business Administration
Notre Dame University Bangladesh
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Letter of Transmittal
14th December, 2023
Ranet John Paul Gomes
Asst. Professor
Notre Dame University Bangladesh
Department of Business Administration
Subject: An analysis of a “Financial Services and CAMEL Ratio Analysis of Trust Bank
Limited”
Sir,
I would like to inform you that I am doing my internship in Trust Bank Limited, Dilkusha Branch.
As my BBA program requirements I am glad to prepare a report on topic of “Financial Services
and CAMEL Ratio Analysis of Trust Bank Limited”. This report is an outcome of the working
experience as an intern. Working with such an interesting subject has given me the opportunity to
experience practical knowledge of a commercial bank operating in Bangladesh. I have tried to
collect reliable data from reliable source as possible as can to complete the report.
Therefore, I would like to request you to examine my report and give me kind approval so that I
can complete my internship process.
Sincerely Yours,
Md Maynul Islam Safat
ID-201010004
BBA 16th Batch
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
II
Bonafide Certificate
Certified that the work presented in this internship report, "Financial Services and CAMEL Ratio
Analysis of Trust Bank Limited," was indeed completed by Md. Maynul Islam (ID: 201010004),
who worked under my supervision. Furthermore, I certify that, to the best of my knowledge, the
work described here has not been included in any project report or dissertation that served as the
foundation for the previous awarding of a degree to this or any other applicant.
…………………………………….
Ranet John Paul Gomes
Assistant Professor
Department Of Business Administration
Notre Dame University Bangladesh,
Motijheel, Dhaka
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Acknowledgment
The internship program is required to complete the Bachelor of Business Administration (BBA),
yet without certain people's honest collaboration, no one could possibly complete it. It gives me a
great deal of joy that I have the opportunity to thank some people for their support and
encouragement in making the internship effective.
I want to start by thanking the All-Mighty Allah for granting me the patience and capacity to finish
my internship. Then, I express my gratitude to Trust Bank Limited's Head of Human Resources
Division for allowing me to fulfil my internship obligation there.
I would especially want to thank Ranet John Paul Gomes, Assistant Professor in the Department
of Business Administration at Notre Dame University Bangladesh, who is my supervisor. His
ongoing direction and counsel were really helpful to me in finishing this report successfully.
Additionally, Mr. Md. Bashir Ahmed, a senior officer at Trust Bank's Dilkusha Branch,
corroborated my report by giving me pertinent documents to assist me. Ms. Jannatul Ferdous
Mishu, Junior Officer of the General Bank Division, also offers me helpful advice that greatly aids
in the creation of a successful report.
My heartiest gratitude to all the officers of Trust Bank's Dilkusha Branch and special thanks to,
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Bidhan Chandra Pramanik, SAVP and Chief Manager of Branch
Md. Kamrul Hasan, AVP and Operation Manager
Md. Aminul Islam, SAVP and Manager Credit & Foreign Trade
Rahidza Khatun, FAVP and General Banking Incharge
Jakir Ahmed, AVP and Manager Islamic Window
Kanika Mistry, FAVP
Finally, I want to express my deep gratitude to my parents and other family members and also
remember my friends whose enormous helps assist me to complete my report.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
V
Table of Content
1.1
1.2
1.3
1.4
1.5
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
4.1
4.2
4.3
4.4
4.5
4.6
4.7
6.1
6.2
Description
Chapter 1: Introduction
Background of the study
Statement of the Project Issue
Objective of the Study
Significance and Rationale of the Study
Scope and Limitations
Chapter 2: Literature Review
Chapter 3: Organizational Profile
Backgrounds
History
Vision
Mission
The Values of Trust Bank Limited (TBL)
Board of Directors
Executive Committee
Financial Services of Trust Bank Limited
Management Hierarchy of Trust Bank
Chapter 4: Methodology
Research Types
Data Types
Population parameters
Sampling Design
Variables Covered
Methods of data collection and instruments used in data collection
Data processing and analysis
Chapter 5: Study Results and Findings
Chapter 6: Conclusion and Recommendations
Conclusion
Recommendations
References
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VI
Executive Summary
The report was written based on the author's internship experience at Trust Bank and an analysis
of Trust Bank's annual reports. The report's main focus is on Trust Bank Limited's financial
services and camel ratio analysis. The paper illustrates how Trust Bank Limited's financial services
relate to several facets of Bangladesh's financial industry. CAMEL is the acronym for the five
factors that are considered while ranking. It is only used by upper management to understand
and manage possible risks. A comprehensive analysis of Trust Bank's annual reports spanning
from 2018 to 2022 is necessary. by looking over every annual report and every element required
to compute various CAMEL ratios. Gaining a thorough grasp of Trust Bank Limited's financial
operations is the primary objective of this study. Furthermore, a CAMEL ratio analysis of TBL is
performed in order to determine the overall performance and strength of the bank's financial
position.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Chapter 1:
Introduction
1.1 Background of the study
The banking sector plays an important executes in the money-making business to support a
nation's economy. Commercial banks are facing more competition nowadays. When the
government decided to let businesses in the private sector, the real shift began.
One of the top private commercial banks in Bangladesh, Trust Bank Limited has a network of 115
branches and SME centers, 7 sub-branch offices, 256 ATM booths, and more than 500 point-ofsale locations. It also has plans to open additional branches to cover key commercial areas in
Dhaka, Chittagong, Sylhet, and other cities. The bank is the first of its kind in the nation and is
supported by the Army Welfare Trust (AWT). Trust Bank has been in business in Bangladesh since
1999 and has gained the public's trust as a reliable and stable bank thanks to its extensive offering
of contemporary corporate and consumer financial products.
The main goal of this research is to gain a complete understanding of Trust Bank Limited's
financial operations. In addition, a CAMEL ratio analysis of TBL is carried out to ascertain the
overall strength and performance of the bank's financial situation. With a focus on financial
services and annual reports of TBL, it will reflect TBL's position in banking sector procedures and
rules. While interned with TBL, it is able to closely examine their operations, learn about financial
institutions, and gain expertise with their procedures.
1.2 Statement of the Project Issue
Assuring the stability and soundness of banks is crucial in the quickly changing financial services
industry. Depositors, investors, and the whole economy are all impacted by the financial health
of banks, which has a direct impact on the stability of the entire financial system. However, in
today's intricate and interwoven financial environment, determining a bank's financial health
with accuracy necessitates a thorough methodology.
The problem is that many stakeholders still find it difficult to completely comprehend and make
good use of recognized frameworks like the CAMEL ratio analysis (Capital Adequacy, Asset
Quality, Management Quality, Earnings, and Liquidity). Banks themselves, regulatory agencies,
investors, and clients all struggle to understand CAMEL ratios and use the knowledge learned to
make wise decisions.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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By analyzing a thorough investigation of financial services and the CAMEL ratio analysis for the
Trust Bank Limited, this study seeks to solve this issue. It aims to accomplish the following goals
by carefully analyzing the bank's financial statements and operational data:
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Analyze CAMEL ratios with an emphasis on Capital Adequacy, Asset Quality, Management
Quality, Earnings, and Liquidity to evaluate the financial stability and health of the chosen
bank.
Determine Key Challenges: Determine any significant issues or problems that the CAMEL
analysis identified as being at risk to the operations and soundness of the bank's finances.
Give advice: Based on the analysis, offer the bank strategic suggestions and insights to
improve its operational and financial efficiency.
Improve Stakeholder grasp: To support better decision-making, stakeholders, such as the
bank's management, regulators, investors, and customers, should have a better grasp of
CAMEL ratio analysis.
By addressing these problems, the report hopes to further the overarching objective of
promoting financial stability within the banking industry and making sure that stakeholders have
the resources and information required to evaluate and protect the soundness of financial
institutions.
1.3 Objective of the Study
Major Objectives:
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To evaluate the overall financial stability and performance of the bank by employing the
CAMEL (Capital Adequacy, Asset Quality, Management Quality, Earnings Quality,
Liquidity) framework.
Specific Objectives:
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To summarize the findings, analysis, and recommendations in a comprehensive report
suitable for stakeholders, including bank management, regulatory bodies, and investors.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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1.4 Significance and Rationale of the Study
The significance of the study for the project of 'Financial Services and CAMEL Ratio Analysis of a
Bank' can be further elaborated by highlighting its importance in various contexts:
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Policymakers can learn from the study's findings how successful current banking laws and
policies are. It may result in the need for regulatory frameworks to be improved or
adjusted.
The study's evaluation of TBL's financial soundness makes it important. For a bank to be
successful in the long run and for the financial system to continue to be trusted, it is
essential to understand its financial situation.
It aids in recognizing and controlling hazards in the functioning of the bank. This is crucial
since financial crises can have a significant impact on both the bank and the entire
economy.
The investigation makes sure that the bank follows all rules and regulations. This is
necessary to safeguard the interests of investors and depositors as well as the financial
system's integrity.
CAMEL analysis can be used as an early warning system to spot impending financial crises
or problems in the banking industry. Systemic issues can be prevented with prompt
treatments.
Making educated decisions can be aided by comparative analysis of several banks or
financial institutions, which can reveal market trends and best practises.
These studies add to the body of general academic and business research. They can
provide as a starting point for additional research and conversations about banking and
financial stability.
Financial stability depends on the general public's confidence in the banking industry.
Public confidence in the banking system is increased by the financial services industry's
transparency and adherence to regulatory requirements.
The rationale for conducting a study on 'Financial Services and CAMEL Ratio Analysis of a Bank'
can be outlined as follows:
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The stability of the financial system and the overall economy depends heavily on banks.
Their ability to endure economic shocks and crises is assessed using CAMEL ratios,
averting systemic disruptions.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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A bank provides services to a variety of stakeholders, including shareholders, borrowers,
employees, and depositors. By detecting potential risks and vulnerabilities, evaluating its
financial services and CAMEL ratios protects the interests of these stakeholders.
Strict regulatory requirements for banks are in place to protect the integrity of the
financial system. This research confirms the bank's adherence to these guidelines,
guaranteeing that it operates within the bounds of the law and morality.
The study contributes to improving risk management procedures by identifying and
evaluating hazards in the bank's operations. By doing this, the chance of financial distress
that could have an impact on the larger financial system is reduced while still protecting
the bank.
Policymakers may be influenced by the study's findings when drafting banking laws and
regulations. A more resilient and stable financial system may result from this.
By serving as an early warning system, CAMEL analysis enables prompt responses to avert
possible systemic or financial catastrophes.
The study advances our knowledge of banking and financial stability by adding to the body
of academic and industry-specific research.
Public confidence in the banking industry is increased by transparency and conformity to
regulatory requirements. For drawing in deposits and preserving economic stability, a
stable banking system is necessary.
1.5 Scope and Limitations
Scope: A variety of people and organizations can benefit from this report on the "Financial
Services and CAMEL Ratio Analysis of Trust Bank Limited" for different reasons. The following are
some possible uses and advantages of this report for various parties involved:
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Investors, whether individual or institutional, can use the report to assess the bank's
financial health and risk profile. This information can help them make informed decisions
about investing in the bank's stock or bonds.
Existing shareholders can use the report to evaluate the bank's financial performance and
the effectiveness of its management. This information can guide decisions related to
holding or selling their shares.
Bank executives can use the report to identify areas that require improvement and adjust
their strategic plans accordingly. For example, if the report identifies weaknesses in asset
quality, the bank may focus on improving loan portfolio management.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Lenders and creditors can assess the bank's creditworthiness based on the CAMEL
analysis. This can influence their decisions on extending credit or providing financing.
Customers who have accounts or financial relationships with the bank may use the report
to assess the safety of their deposits and investments. This can influence their decision to
continue or change their banking relationships.
The report can serve as a source of information for the general public, increasing
awareness about the financial health of the bank and its impact on the broader economy.
Limitations: It is imperative to acknowledge the limits of this report on the "Financial Services
and CAMEL Ratio Analysis of Trust Bank Limited" before utilizing it as a useful resource for
comprehending the bank's financial status. A few possible restrictions on this report are as
follows:
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With only three months for the internship, it was insufficient time to assess every aspect
of Trust Bank Ltd.
Due to limitations on intern access to bank classified information, the report focused on
factors that are readily apparent to the general public.
Although some primary data are included, the majority of the data utilized are secondary,
which is one of the report's limitations.
The report primarily relies on historical financial data. While this data provides valuable
insights, it may not fully capture the current or future conditions of the bank. Economic,
regulatory, and market changes can impact the bank's situation.
The CAMEL analysis relies on various assumptions and benchmarks. Different analysts or
institutions may use different assumptions, leading to varying results. It's important to
understand the specific assumptions used in the report.
The report focuses primarily on financial aspects, and while the CAMEL framework covers
important dimensions of a bank's stability, it does not encompass all aspects of a bank's
operations, such as market reputation, customer service, or future growth potential.
The report may not consider external economic, political, or global factors that can
influence a bank's performance. Changes in interest rates, economic crises, or political
instability can significantly affect a bank's stability.
The CAMEL framework assesses financial risk but may not comprehensively evaluate
other types of risks, such as operational, cybersecurity, or reputational risks.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Chapter 2:
Literature Review
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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The CAMEL Rating System was created in the US as a supervisory rating system to evaluate the
general health of a bank. The five variables that are taken into account for the ranking are
abbreviated as CAMEL. The CAMEL rating is private, in contrast to other regulatory ratios or
ratings. Only top management uses it to comprehend and control potential hazards. Bank
regulatory authorities utilize the internationally known CAMEL rating system to assign financial
organizations a score based on the five criteria that make up the acronym. Authorities in charge
of supervision rate each bank on a scale. For each factor, a score of one indicates the best and a
score of five indicates the worst.
The CAMEL acronym stands for
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Capital adequacy,
Asset quality,
Management quality,
Earnings quality,
Liquidity
Capital adequacy:
Capital adequacy assesses an institution’s compliance with regulations on the minimum capital
reserve amount. Regulators establish the rating by assessing the financial institution’s capital
position currently and over several years.
There are two ratios for capital adequacy:
CAR Ratio:
Equity to asset:
Increase in capital adequacy id positive sign for the bank.
Asset quality:
This category assesses the quality of a bank’s assets. Asset quality is important, as the
value of assets can decrease rapidly if they are high risk. For example, loans are a type of
asset that can become impaired if money is lent to a high-risk individual.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Asset quality also consists of two ratios:
𝑁𝑃𝐿
NPL ratio:
NPL to equity;
Management quality:
Management capability measures the ability of an institution’s management team to
identify and then react to financial stress. The category depends on the quality of a bank’s
business strategy, financial performance, and internal controls. In the business strategy
and financial performance area, the CAMELS examiner looks at the institution’s plans for
the next few years. It includes the capital accumulation rate, growth rate, and
identification of the major risks.
It also consists of two ratios:
Asset growth:
Loan Growth:
Earnings quality:
Earnings help to evaluate an institution’s long term viability. A bank needs an appropriate
return to be able to grow its operations and maintain its competitiveness. The examiner
specifically looks at the stability of earnings, return on assets (ROA), net interest margin
(NIM), and future earnings prospects under harsh economic conditions.
It also consists of two ratios:
ROA:
ROE:
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Liquidity
For banks, liquidity is especially important, as the lack of liquid capital can lead to a bank
run. This category of CAMELS examines the interest rate risk and liquidity risk. Interest
rates affect the earnings from a bank’s capital markets business segment. If the exposure
to interest rate risk is large, then the institution’s investment and loan portfolio value will
be volatile. Liquidity risk is defined as the risk of not being able to meet present or future
cash flow needs without affecting day-to-day operations.
It also consists of two ratios:
Deposit to asset:
Loan to deposits:
History and Evolution
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Origin and Development: The CAMEL rating system was introduced by regulatory
agencies like the Federal Reserve in the United States in the 1970s. It was initially a
qualitative rating system but later evolved into a quantitative framework with specific
ratios and indicators.
International Adoption: The CAMEL framework has been adopted internationally, with
variations such as the CAMELS framework in the United States and the CAMELIA
framework in Europe, reflecting regional nuances in financial regulation.
Relevance and Applications
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Regulatory Compliance: CAMEL ratios are used by regulatory authorities to ensure that
financial institutions meet minimum capital and risk management standards.
Risk Assessment: Researchers and practitioners use CAMEL ratios to identify and assess
the risk profile of financial institutions, helping investors make informed decisions.
Performance Benchmarking: CAMEL ratios are employed to compare the performance of
different banks and to track performance over time.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Strengths and Weaknesses
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Strengths: CAMEL provides a comprehensive framework for assessing financial
institutions. It is well-established, easy to understand, and widely accepted. It helps in
early identification of potential problems in banks.
Weaknesses: Critics argue that CAMEL may not capture all relevant risks and may be
backward-looking. It also doesn't consider macroeconomic factors and systemic risks.
Recent Developments and Future Trends
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Technology and Data Analytics: Recent developments include the use of advanced data
analytics and machine learning techniques to enhance the assessment of CAMEL ratios,
making it more predictive and forward-looking.
Integration with Stress Testing: CAMEL ratios are increasingly integrated with stress
testing exercises to assess how banks would perform under adverse economic conditions.
Majumdar (2016), measured the financial performance of 15 banks in Bangladesh with CAMEL
Model. Using Composite Ranking, average and ANOVA he concluded that there had been
significant difference in the performance of selected banks. The study suggested that banks
should take required steps to recover their shortcomings. Erol (2014), compared the
performance of Islamic banks against conventional banks in Turkey by using CAMEL model. The
results showed that Islamic banks performed better in profitability and asset management ratios
compared to conventional banks but slow in sensitivity to market risk criterion.
Anita Makkar (2013), analyzed comparative analysis of the financial performance of Indian
commercial banks.The study concluded that on an average, there is no statistically significant
difference in the financial performance of the public and private sector banks in India, but still,
there is a need for overall improvement in the public sector banks to make their position strong
in the competitive market.Sushendra KumarMisra(2013), assessed the performance and financial
soundness of State Bank Group using CAMEL approach, and concluded that there is a
requirement to improve its position in respect to asset quality and capital adequacy.
Aswini Kumar Mishra and et.al (2013), analyzed the soundness and the efficiency of 12 public
and private sector banks based on market cap. CAMEL approach has been used over a period of
twelve years (2000-2011), and it is established that private sector banks are at the top of the list,
with their performances in terms of soundness being the best. PriyaPonraj and
GurusamyRajendran (2012), measured the bank competitiveness among the select Indian
commercial banks in terms of financial strength. Financial strength of the bank is measured in
terms of financial ratios viz. efficiency ratio, profitability ratio, capital adequacy ratio, incomeexpenditure ratio, deposits and return ratios. It is found that foreign banks are the most
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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competitive compared to the private and public sector banks in terms of the profitability ratio,
returns ratio and capital adequacy ratio.
Sufian Fadzlan (2012) examined the internal and external factors that influenced the
performance of banks operating in the Indian banking sector during the period 2000-2008. The
empirical findings from this study suggest that credit risk, network embeddedness, operating
expenses, liquidity and size have statistically significant impact on the profitability of Indian
banks. Ashok Khurana and KanikaGoyal (2011), analysed the financial performance of publicsector banks and commercial banks in India , using the trend of operating cost / total cost, cost
to income, labor/non labor cost, net interest income, NPA and capital to risk weighted asset ratio,
the study observed that there is a need for increased absorption of enhanced technological
capability by several banks to further argument yield of the banking sector and this would call for
changes in processes and improvement in human resource skills.
Ramachandran and Kavitha (2009), analyzed the importance of improving the profitability
performance of the banking sector in recent years, a census study has been adopted by covering
all the Indian scheduled commercial banks. The nationalized banks group showed a position of
provisions and contingencies to total expenses in the first half of the study period and Capital
Adequacy Ratio (CAR) during the second half of the study period. In relation to the private banks
group, it has changed from other interest expenses ratio to capital adequacy ratio.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Chapter 3:
Organizational Profile
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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3.1 Backgrounds:
Trust Bank Limited (TBL) is one of the leading commercial banks in Bangladesh. The bank is
sponsored by the Army Welfare Trust (AWT) first of its kind in Bangladesh. With a wide range of
corporate, retail, SME, and Islamic Banking products TBL has been operating in Bangladesh from
1999 and has since achieved public confidence as a sound and stable financial institution. One of
the top private commercial banks in Bangladesh, Trust Bank Limited has a network of 115
branches and SME centers, 7 sub-branch offices, 256 ATM booths, and more than 500 point-ofsale locations. It also has plans to open additional branches to cover key commercial areas in
Dhaka, Chittagong, Sylhet, and other cities. The bank is the first of its kind in the nation and is
supported by the Army Welfare Trust (AWT). Trust Bank has been in business in Bangladesh since
1999 and has gained the public's trust as a reliable and stable bank thanks to its extensive offering
of contemporary corporate and consumer financial products. Here is where TBL stand today
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TBL has a network of 115 branches all across Bangladesh
TBL holds 242 ATM Booths, over 20,000 pay points and 65 POS in 55 branches
TBL have over 2,000 employees
TBL serve millions of consumers, many of the prominent corporates in Bangladesh, small
businesses, institutional and government clients
3.2 History:
The Army Welfare Trust (AWT) supported the founding of Trust Bank Limited (TBL), the first
institution of its kind in Bangladesh, in 1999. In order to boost productivity and enhance customer
service, the bank developed an automated branch banking system in 2001. The bank took a
further step in 2005 and started offering ATM services to its clients. Trust Bank successfully
introduced online banking services in January 2007 that enable users to do transactions through
any branch, ATM, phone, SMS, and internet. Customers no longer have to open multiple
accounts at various Branches of Trust Bank in order to deposit or withdraw money. Customers
can now access account information from ATMs 24 hours a day, seven days a week via online
services and Visa Electron (Debit Card), including checking their account balance through ministatements and making cash withdrawals. In order to better serve its loyal customers, both
current and potential, Trust Bank introduced Visa Credit Cards with success. Credit cards can
now be used in restaurants and businesses both domestically and abroad, including Bangladesh.
Trust Bank is a financial firm that prioritizes its customers. Because the customer is always put
first at Trust Bank, it continues to be committed to meeting the ever-growing expectations of the
clientele.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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3.3 Vision:
Building a long-term sustainable financial institution through financial inclusion and providing the
best value to all stakeholders while maintaining the highest degree of compliance is the mission
of Trust Bank Ltd.
3.4 Mission:
The mission Trust Bank prioritizes throughout time are:
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Diversified business with long-term, sustainable growth and effective risk management.
Through low-cost, technology-based service delivery, financial inclusion aims to bring the
unbanked people into the banking system.
accountable to all parties involved, including regulators, employees, shareholders, and
clients.
At all stages of operation, the highest level of compliance and openness.
3.5 The Values of Trust Bank Limited (TBL):
The values that Trust Bank Limited (TBL) Focuses on are:
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Fair: TBL respect and treat everyone equally.
Reliable: TBL keeps their promises.
Dependable: TBL is dependable and does its work to the best of its abilities.
Professional: TBL promote a climate of professionalism.
Dynamic: TBL are driven to succeed.
Trustworthy: TBL act morally upright
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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3.6 Board of Directors:
The Board of Directors is the supreme authority in the bank’s affairs. The Board of Trust Bank
Limited is committed to the bank to achieve superior financial performance and long-term
prosperity while meeting stakeholder’s expectations of sound corporate governance. It handles
the bank’s affairs and ensures that the organization and its operation are at all times in correct
and appropriate order. The Board is responsible for ensuring that the bank is led within a
framework of effective control. Among other things the Board is, responsible for setting business
objectives, strategies, business plan and formulating policies. The Board approves the business
budget and reviews the business plan from time to time to give direction as per changing
economic and market environment. The Board also reviews the policies and guidelines issued by
Bangladesh Bank and thereby gives directions for due compliance. Furthermore, Board of
Directors develops and reviews corporate governance framework as well as recommends to
shareholders to appoint external auditor. The Board of Trust Bank Limited consists of 12(Twelve)
members including the Managing Director and CEO as ex-officio member of the Board. As per the
guideline of Bangladesh Bank and in compliance with the Bangladesh Securities and Exchange
Commission’s corporate governance guideline, the Board consists of 02(two) Independent
Directors.
3.7 Executive Committee:
An efficient Executive Committee is in place at the Bank to carry out its daily operations. The
Board of Directors proposes candidates for the committee's membership. The committee mostly
examines the ideas submitted for consideration by the Board of Directors. However, the Board
has given the Executive Committee approval authority in order to ensure efficient and timely
handling of loan offers and other pertinent matters. suggestions that would, within a given range,
expedite the numerous decisions that would otherwise need to wait for a board meeting. At the
next Board meeting, the committee's decision is confirmed.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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3.8 Financial Services of Trust Bank Limited:
Customers of Trust Bank Limited can choose between traditional and Islamic banking services.
The Financial Services of Trust Bank Limited are displayed in the table below:
Conventional
Deposits:
Savings Account
Trust Maxmill Deposit Scheme
Current Account
Fixed Deposit Scheme
Lakhopati Scheme
Special Notice Deposit
Trust Assurance Deposit Scheme
Trust Money Double Scheme
Trust Echo
Trust Echo Plus
Trust Kotipoti Scheme
Trust Kotipati Plus
Trust Payroll
Trust Student Account
Trust Youth Account
Trust Student DPS
Trust Smart Savers
Loans:
House Building Loan for Govt Employees
Apon Nibash Loan
Car Loan
Doctor’s Loan
Loan Against Salary
Personal Loan
Trust Student Loan
Defense Personnel Loans:
Any Purpose Loan-Defense Officers
Army Officers Housing Loan Scheme–2 (AOHLS -2)
Car Loan Defence Officers
Defence Personnel Special Loan -1 (for Defence
Officers) (DPSL-1)
Defence Personnel Special Loan – 2(other than Officer)
(DPSL-2)
House Building Loan against Registered Mortgage
Marriage Loan Scheme for ORs
Motor Cycle loan for JCO, NCO & ORs of Bangladesh
Army
OD against Salary
Islamic
Deposits:
▪ Current Deposit:

Al-Wadiah Current Account (AWCA)
▪ Savings Deposit:








Mudaraba Savings Account
TEMSA
TIB Payroll
Provident Fund Account (TIB Payroll)
10 Taka Farmers MSA
Mudaraba Short Notice Deposit
MSDA
DPMSA
▪ Other Services:


Quard facility
TBMCW
▪ Scheme Deposit:





MMSS
MKS
MMS
BHDS
TMDS
▪ Term Deposit:
 MTDR
 MMPS
 MMDS
Investment Products:
▪ Corporate Investment





Bai-Muajjal
Bai-Murabaha TR
Bai-Salam
Project Financing [HPSM]
Trade Financing
▪ Defense Personnel





TIB Car Scheme
TIB Doctors Scheme
AOHS
TIB CNG Scheme
House Building Scheme-Defense Officers
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
16
SME Banking:
▪ Agriculture Loans







Cow integrated Farm
Loan for Solar Mini grid
Rural Farming
Rural Manufacturing
Solar Energy Plant
Solar Irrigation Pumping
Vermin Compost Loan



Household Durables Scheme
Housing Scheme
DPSI
▪ Retail Investment




IHSAN Apartment Purchase Scheme &
Barakat Home Construction Scheme
Barakat Car Scheme
Barakat Doctor’s Scheme
Household Durables & Others Scheme
▪ Engineering Loans
▪ SME Investment








Trust Projukti
▪ Entrepreneur Loans




Peak Season Loan
Trust Bunon
Trust Ekota
Trust Muldhan
▪ Women Entrepreneur
Trust Power
Trust Nibash
HPSM
Trade Financing
Bai-Muajjal
Murabaha TR
Bai- Salam
 Trust Ekota
 Trust Nondini
 Trust Sukannaya
Corporate Banking:
 Trade Finance
 Off-Shore Banking
 Term Finance
 Working Capital Finance
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
17
3.9 Management Hierarchy of Trust Bank:
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
18
Chapter 4:
Methodology
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
19
4.1 Research Types
Since the results of the CAMEL ratio analysis are based on a systematic empirical research
method that primarily deals with the systematic collection and interpretation of numerical data,
the study primarily focuses on quantitative research. Quantitative research is a systematic
empirical research method that deals mainly with the systematic collection and interpretation of
numerical data. It is used to study phenomena by gathering measurable data and performing
statistical, mathematical, or computational analysis. Quantitative research is often contrasted
with qualitative research, which focuses on understanding the underlying reasons, motivations,
and meanings behind human behavior.
A systematic research design is used in this study to compute the various ratios needed for the
CAMEL ratio analysis. The research questions or hypotheses to be tested, as well as the
techniques and protocols for data collection and analysis, are described in this design. Numerical
data collecting is a part of the research. Numerous techniques, including surveys, experiments,
observations, and the analysis of pre-existing datasets, can be used to collect this data. The
information gathered from Trust Bank Ltd.'s annual report is numerical and therefore amenable
to statistical analysis. After the ratios are examined, a suitable conclusion that demonstrates
Trust Bank Ltd.'s profitability is eventually produced.
In addition, this study does some qualitative research to identify Trust Bank Ltd.'s financial
services and background in general.
4.2 Data Types
Although this report mainly relies on secondary data, the data used is considerably different from
traditional reports. Although some primary data is included, secondary data is the major source
of all information. Secondary data for the CAMEL ratio study is gathered from Trust Bank's annual
reports for the years 2018 through 2022. In addition, I've focused on the useful observation. Inperson interviews are used to get the required data. Ratio analysis was used to evaluate the Trust
Bank Dilkusha branch's performance. However, in the end, my own personal expertise makes up
practically the whole report.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
20
Sources of Data:
While preparing the report, I have taken information from the following sources:
Primary Sources:



Observation of banking activities.
Overflowing Conversation with the manager and employees of Trust Bank Limited,
Dilkusha Corporate Branch.
Working with my own experience while internship program.
Secondary Sources:





Daily diary (containing my activities of practical orientation in Trust Bank Ltd) maintained
by me.
Website of Trust Bank,
Annual Reports of the bank,
Consultations of related books and publications.
Internal Financial Statement.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
21
4.3 Population parameters
This study is predicated on Trust Bank Limited's CAMEL ratio analysis, which reveals the bank's
profitability as well as the capability for an investor to discern the bank's performance over time.
The study is based on Trust Bank's financial performance from 2018 to 2022. The CAMEL ratios
are analyzed based on the following criteria: asset quality (NPL ratio and equity to asset ratio),
management quality (asset growth and loan growth inverse), earning quality (return on equity
and asset growth), liquidity (deposit to asset ratio and loan to deposit ratio inverse), and capital
adequacy (car ratio and equity to asset ratio).
The findings of the research can assist investors in Bangladeshi stock markets, specifically those
involved in the Dhaka and Chittagong stock exchanges, in making better-informed investments
in these institutions. The present study draws upon the author's internship experience at Trust
Bank, observation of the internship period, and personal experience. Additionally, the CAMEL
ratio calculation is entirely reliant on the bank's annual reports from 2018 to 2022. This
information may be useful to prospective investors considering financial investments in
Bangladeshi banks generally, or in Trust Bank Limited specifically.
4.4 Sampling Design
The report gives readers an overview of Trust Bank Limited's total financial performance from
2018 to 2022, making it simple for them to determine the bank's profitability and potential for
future growth. A prospective investor will benefit from investing in Bangladeshi general bank
stocks because the end results display the bank's entire success in the financial market. In
addition, the report includes information about Trust Bank's financial services to help readers
understand what the bank offers to its customers.
The research is based on CAMEL ratio analysis, which examines the balance sheets, income
statements, and cash flow statements of Trust Bank Limited's annual reports from 2018 to 2022
in order to analyse the bank's yearly performance. To arrive at the ultimate result, the numerous
camel ratio analysis data are calculated in a methodical manner. The information gathered from
the annual reports is compiled in a way that makes it simple for readers to understand the various
camel ratio analysis ratios, which will facilitate easier and more efficient decision-making for
investors.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
22
4.5 Variables Covered
CAMEL ratio analysis is a method used to assess the financial stability and performance of
financial institutions, particularly banks and credit unions. The acronym CAMEL represents six key
components or ratios that are analyzed to evaluate the overall health of a financial institution.
Here are the variables covered in CAMEL ratio analysis:
C - Capital Adequacy: This ratio measures the capital strength of the financial institution. It
assesses whether the institution has enough capital to absorb potential losses. Common
measures include the Tier 1 Capital Ratio and Total Capital Ratio.
A - Asset Quality: NPLs are loans that are not generating income because the borrower has
stopped making payments. The ratio of NPLs to total loans is examined.
M - Management Quality: This variable covers an assessment of the governance, management
quality, and decision-making processes within the institution.
E - Earnings Performance: This is a profitability ratio that measures how efficiently the institution
is generating earnings from its assets.
L - Liquidity: This ratio assesses the availability of liquid assets to meet short-term liabilities,
ensuring that the institution can meet its obligations without relying too heavily on external
funding sources.
4.6 Methods of data collection and instruments used in data collection
The Trust Bank's financial results from 2018 to 2022 served as the study's foundation. The
following factors are used to analyse the CAMEL ratios: liquidity (deposit to asset ratio and loan
to deposit ratio inverse), capital adequacy (car ratio and equity to asset ratio), earning quality
(return on equity and asset growth), asset quality (NPL ratio and equity to asset ratio), and
management quality (asset growth and loan growth inverse). The author's internship at Trust
Bank, observations made during the internship, and personal experience are all incorporated into
this study. Furthermore, the computation of the CAMEL ratio is totally dependent on the bank's
yearly reports spanning from 2018 to 2022.
In order to analyse the bank's yearly performance, the data are gathered from the study of Trust
Bank's annual reports as well as the experience of an internship at the bank. Next, the data are
gathered and scrutinised from the balance sheets, income statements, and cash flow statements
of Trust Bank Limited's annual reports from 2018 to 2022.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
23
4.7 Data processing and analysis
Following the generation of the necessary data, the CAMEL ratio is examined using a variety of
ratio-related criteria. The CAMEL acronym stands for Capital adequacy, Asset quality,
Management quality, Earnings quality, Liquidity. The Data processing and analysis methods that
are used in the report are mentioned as follows:
Capital adequacy:
There are two ratios for capital adequacy:
CAR Ratio:
Equity to asset:
Asset quality:
Asset quality also consists of two ratios:
𝑁𝑃𝐿
NPL ratio:
NPL to equity;
Management quality:
It also consists of two ratios:
Asset growth:
Loan Growth:
Earnings quality:
It also consists of two ratios:
ROA:
ROE:
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
24
Liquidity:
It also consists of two ratios:
Deposit to asset:
Loan to deposits:
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
25
Chapter 5:
Study Results and
Findings
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
26
Study Results and Findings:
This section examines the Trust Banks Ltd.'s financial performance using the CAMEL analysis to
ascertain whether the bank is operating profitably or not from 2018 to 2022. Unlike other
regulatory ratios or ratings, the CAMEL rating is private. It is only used by upper management
to understand and manage possible risks. Financial institutions are given a score by bank
regulatory agencies using the globally recognised CAMELS rating system, which is based on five
factors. Supervisory authorities provide a numerical value to each bank. A score of one denotes
the best result for each factor, while a score of five denotes the worst.
Following Table-1 shows the CAMEL ratio of Trust Bank:
CAR
ETA
NPL
ratio
NPL to
equity
Asset
growth
Loan
Growth
ROA
ROE
DTA
LTD
2018
14.04%
5.06%
7.90%
117.80%
8.18%
6.38%
0.74%
15.14%
81.40%
93.72%
2019
14.34%
5.65%
5.49%
77.49%
13.57%
6.91%
0.73%
14.60%
82.07%
87.08%
2020
15.25%
4.94%
4.51%
57.30%
20.24%
4.88%
0.50%
11.18%
80.47%
77.79%
2021
14.14%
4.99%
3.65%
50.01%
3.65%
16.09%
0.75%
15.55%
77.05%
91.02%
2022
13.57%
4.79%
4.76%
70.88%
14.19%
15.62%
0.72%
15.70%
77.23%
91.94%
Average
14.27%
5.09%
5.26%
74.70%
11.97%
9.98%
0.69%
14.43%
79.64%
88.31%
Maximum
15.25%
5.65%
7.90%
117.80%
20.24%
16.09%
0.75%
15.70%
82.07%
93.72%
Minimum
13.57%
4.79%
3.65%
50.01%
3.65%
4.88%
0.50%
11.18%
77.05%
77.79%
Std
0.62%
0.33%
1.61%
26.42%
6.31%
5.42%
0.11%
1.87%
2.36%
6.36%
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
27
Capital adequacy: the graphs below shows the capital adequacy with CAR ratio and equity to
total asset of Trust bank:
Graph-1:
CAR Ratio
15.50%
15.25%
15.00%
14.34%
14.50%
14.14%
14.04%
14.00%
13.57%
13.50%
13.00%
12.50%
2018
2019
2020
2021
2022
CAR
According to the Graph-1, the CAR ratio for Trust Bank was 14.4% in 2018 and 14.34%, 15.25%,
14.14%, and 13.57% in 2019, 2020, 2021, and 2022, respectively. It shows that the CAR ratio is
increasing yearly till 2020, which is excellent news for the bank; however, the ratio has been
declining for the last two years following COVID-19, indicating that the bank will need to
improve in the years to come.



In 2018, the CAR was 14.4%, which is a positive sign.
The subsequent years (2019 and 2020) show an increasing trend in the CAR, which is
indeed good news for the bank. It indicates that Trust Bank was strengthening its capital
position during this period.
However, starting from 2021, the CAR began to decline, and this trend continued into
2022. The statement attributes this decline to the impact of COVID-19.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
28
Graph-2:
Equity to Total Asset (ETA) Ratio
5.80%
5.65%
5.60%
5.40%
5.20%
5.06%
4.94%
5.00%
4.99%
4.79%
4.80%
4.60%
4.40%
4.20%
2018
2019
2020
2021
2022
ETA
Trust Bank's equity to total asset (ETA) ratio was 5.06 percent in 2018 and 5.65 percent, 4.94%
percent, 4.99% percent, and 4.79% percent in 2019, 2020, 2021, and 2022, according to Graph2. The ETA ratio is rising annually through 2019 and is expected to remain above 5%, which is
great news for the bank. Nevertheless, since COVID-19, the ratio has been falling and has been
below 5% for the last three years, meaning that the bank will need to make improvements in
the years ahead.



In 2018, the ETA ratio was 5.06%, which suggests that 5.06% of the total assets were
financed by equity.
The subsequent years (2019 and 2020) show an increasing trend in the ETA ratio,
reaching 5.65% in 2019. This is considered good news, as it indicates an improvement
in the bank's equity position relative to its total assets.
However, starting from 2021, the ETA ratio began to decline, and this trend continued
into 2022. The statement attributes this decline to the impact of COVID-19.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
29
Asset Quality: The graphs below show the Asset Quality ratio with NPL ratio and NPL to equity
of Trust Bank:
Graph-3:
NPL ratio
9.00%
7.90%
8.00%
7.00%
5.49%
6.00%
4.76%
4.51%
5.00%
3.65%
4.00%
3.00%
2.00%
1.00%
0.00%
2018
2019
2020
2021
2022
NPL ratio
Graph-3 shows that Trust Bank's non-performing loan (NPL) ratio was 7.90 percent in 2018 and
5.49, 4.51, 3.65, and 4.76 percent in 2019, 2020, 2021, and 2022. It's excellent news for the bank
because the NPL ratio is declining yearly over time. NPL ratio statistics show that, despite a little
increase in non-performing loans (NPLs) in 2022, Trust Bank's overall outlook is excellent.



In 2018, the NPL ratio was 7.90%, which may indicate a relatively higher level of nonperforming loans.
The subsequent years (2019 to 2021) show a decreasing trend in the NPL ratio, reaching
3.65% in 2021. This is indeed positive news, as it suggests an improvement in the quality
of the bank's loan portfolio and a better ability to manage credit risk.
In 2022, there is a slight increase in the NPL ratio to 4.76%. While there's a small uptick,
the overall trend remains favorable, and the statement indicates that Trust Bank's overall
outlook is excellent.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
30
Graph-4:
NPL to equity
140.00%
117.80%
120.00%
100.00%
77.49%
70.88%
80.00%
57.30%
60.00%
50.01%
40.00%
20.00%
0.00%
2018
2019
2020
2021
2022
NPL to equity
The NPL to equity ratio of Trust Bank was 117.80 percent in 2018 and 77.49, 57.30, 50.01, and
70.88 percent in 2019, 2020, 2021, and 2022, according to Graph 4. The NPL to equity ratio is
decreasing annually, which is great news for the bank. NPL to equity ratio data indicates that
Trust Bank's overall outlook is solid, even with a slight increase in 2022.



In 2018, the NPL to equity ratio was 117.80%, which is relatively high and could be a
cause for concern as it suggests a significant portion of non-performing loans compared
to the equity base.
However, the subsequent years (2019 to 2021) show a decreasing trend in the NPL to
equity ratio, reaching 50.01% in 2021. This is excellent news, as it indicates an
improvement in the bank's ability to cover potential losses with its equity.
In 2022, there is a slight increase in the NPL to equity ratio to 70.88%. While there's a
modest uptick, the overall trend remains positive, and the statement suggests that Trust
Bank's overall outlook is solid.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
31
Management Quality: the graphs below show the Management Quality ratio with asset growth
and loan growth of Trust bank.
Graph-5:
Asset growth
25.00%
20.24%
20.00%
10.00%
14.19%
13.57%
15.00%
8.18%
3.65%
5.00%
0.00%
2018
2019
2020
2021
2022
Asset growth
Trust Bank's asset growth was 8.18 percent in 2018, and in 2019, 2020, 2021, and 2022, it was
13.57, 20.24, 3.65, and 14.19 percent, according to Graph 5. The bank's asset growth is
increasing annually, which is great news. There was a decline in 2021, which was obviously
caused by COVID-19, but the bank has improved its position in 2022. Despite a decline in 2021,
asset growth figures indicate that Trust Bank's future is still very positive.




In 2018, Trust Bank's asset growth was 8.18%, indicating a positive expansion of its total
assets.
The subsequent years (2019 and 2020) show a significant increase in asset growth,
reaching 13.57% and 20.24%, respectively. This suggests robust growth and expansion
for the bank during these years.
In 2021, there is a decline in asset growth to 3.65%. The statement attributes this decline
to the impact of COVID-19, which is a common phenomenon as the pandemic has
affected various industries and economic activities globally.
However, in 2022, there is a rebound in asset growth to 14.19%, indicating a recovery
and improvement in the bank's position.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
32
Graph-6:
Loan Growth
18.00%
16.09%
15.62%
2021
2022
16.00%
14.00%
12.00%
10.00%
8.00%
6.38%
6.91%
4.88%
6.00%
4.00%
2.00%
0.00%
2018
2019
2020
Loan Growth
Graph 6 shows that Trust Bank's loan growth was 6.38 percent in 2018, and 6.91, 4.88, 16.09,
and 15.62 percent in 2019, 2020, 2021, and 2022. It's excellent news that the bank's loan
growth is increasing yearly. Although there was a drop in 2020 clearly brought on by COVID19—the bank's standing has significantly rebounded in 2021 and 2022. Loan growth statistics
show that Trust Bank's future is still quite bright, even with a drop in 2020.



In 2018, Trust Bank's loan growth was 6.38%, indicating positive expansion in its loan
portfolio.
In 2019 and 2020, the loan growth figures are 6.91% and 4.88%, respectively. The
statement notes a drop in 2020, attributing it to the impact of COVID-19. This decline is
a common trend observed in many financial institutions worldwide during the
pandemic, as economic uncertainties led to a cautious approach to lending.
However, in 2021, there is a significant rebound in loan growth to 16.09%, and this
positive trend continues in 2022 with a growth of 15.62%. This indicates a robust
recovery and expansion in Trust Bank's lending activities in the post-COVID period.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
33
Earning Quality: the graphs below show the Earning Quality ratio with ROA and ROE of Trust
bank:
Graph 7:
ROA
0.80%
0.74%
0.75%
0.73%
0.72%
0.70%
0.60%
0.50%
0.50%
0.40%
0.30%
0.20%
0.10%
0.00%
2018
2019
2020
2021
2022
ROA
Graph 7 shows that Trust Bank's return on asset (ROA) was 0.74 percent in 2018 and 0.73, 0.50,
0.75, and 0.72 percent in 2019, 2020, 2021, and 2022. It's excellent to hear that the bank's
return on asset (ROA) has been consistent over time. The bank saw a drop in 2020, which was
undoubtedly brought on by COVID-19, but it recovered in 2021 and 2022 and kept its ROA
stable. Return on asset (ROA) statistics show that Trust Bank has a bright future, even with a
fall in 2020.



In 2018, Trust Bank's ROA was 0.74%, indicating that it generated a profit of 0.74 cents
for every dollar of assets.
In 2019 and 2020, the ROA figures are 0.73% and 0.50%, respectively. The statement
notes a drop in 2020, attributing it to the impact of COVID-19. This decline is consistent
with the challenges faced by many financial institutions during the pandemic, where
economic uncertainties affected profitability.
However, in 2021, there is a recovery in ROA to 0.75%, and in 2022, it remains stable at
0.72%. This indicates that Trust Bank not only recovered from the impact of COVID-19
but also maintained a consistent level of profitability in the subsequent years.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
34
Graph 8:
ROE
18.00%
16.00%
15.14%
14.60%
15.55%
15.70%
2021
2022
14.00%
11.18%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2018
2019
2020
ROE
Graph 8 shows that Trust Bank's return on equity (ROE) was 15.14 percent in 2018, and 14.60,
11.18, 15.55, and 15.70 percent in 2019, 2020, 2021, and 2022. It's excellent to hear that the
bank's return on equity (ROE) has been consistent over time. Although there was a drop in
2020—clearly brought on by COVID-19—the bank recovered in 2021 and 2022 and kept its ROE
stable. Return on equity (ROE) data show that Trust Bank has a bright future even with a fall in
2020.



In 2018, Trust Bank's ROE was 15.14%, indicating that it generated a profit of 15.14 cents
for every dollar of shareholders' equity.
In 2019 and 2020, the ROE figures are 14.60% and 11.18%, respectively. The statement
notes a drop in 2020, attributing it to the impact of COVID-19. This decline aligns with
the challenges faced by many financial institutions during the pandemic, affecting their
ability to generate returns for shareholders.
However, in 2021, there is a recovery in ROE to 15.55%, and in 2022, it remains stable
at 15.70%. This indicates that Trust Bank not only recovered from the impact of COVID19 but also maintained a consistent level of profitability in the subsequent years,
providing a satisfactory return to its shareholders.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
35
Liquidity: the graphs below shows the Liquidity ratio with deposit to asset ratio and loan to
deposit ratio of Trust bank:
Graph 9:
Deposit to Asset (DTA) Ratio
83.00%
82.00%
82.07%
81.40%
80.47%
81.00%
80.00%
79.00%
78.00%
77.05%
77.23%
2021
2022
77.00%
76.00%
75.00%
74.00%
2018
2019
2020
DTA
Trust Bank’s Deposit to Asset (DTA) for 2018 is 81.40%, as shown in Graph-9, with the
corresponding values for 2019 being 82.07%, 2020 being 80.47%, 2021 being 2021, and 2022
being 77.23% as well. While it is evident that DTA experiences fluctuations over time, the
statistics are ultimately declining, a negative sign for the bank that was brought on by COVID19. While the bank still has to address the situation, the fact that the DTA was on a stable site
prior to COVID is positive.




In 2018, Trust Bank's DTA ratio was 81.40%, indicating that 81.40% of its assets were
funded by customer deposits.
In the subsequent years (2019 and 2020), the DTA ratios are 82.07% and 80.47%,
respectively, showing some fluctuations but remaining relatively close to the 2018 level.
In 2021, there seems to be a discrepancy in the provided information ("2021 being
2021"), and the DTA ratio is not specified.
In 2022, the DTA ratio is 77.23%.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
36
Graph 10:
Loan to Deposit (LTD)
100.00%
93.72%
87.08%
90.00%
91.02%
91.94%
2021
2022
77.79%
80.00%
70.00%
60.00%
50.00%
40.00%
30.00%
20.00%
10.00%
0.00%
2018
2019
2020
LTD
Trust Bank's Loan to Deposit (LTD) percentages are displayed in Graph 10 as follows: 93.72
percent in 2018; 87.08, 77.79, 91.02, and 91.94 percent in 2019, 2020, 2021, and 2022. The
news that the bank's Loan to Deposit (LTD) has remained stable over time is quite encouraging.
Undoubtedly due to COVID-19, the bank saw a decline in 2020; nevertheless, it rebounded in
2021 and 2022 and maintained a stable LTD. Despite a decline in 2020, Loan to Deposit (LTD)
figures indicate that Trust Bank has a promising future.



In 2018, Trust Bank's LTD ratio was 93.72%, indicating that loans constituted 93.72% of
the bank's deposits.
In the subsequent years (2019 and 2020), the LTD ratios are 87.08% and 77.79%,
respectively, showing a decline. The statement attributes this decline to the impact of
COVID-19, which is consistent with the challenges faced by many banks during the
pandemic as lending activities were affected.
In 2021, there is a rebound in the LTD ratio to 91.02%, and in 2022, it remains stable at
91.94%. This indicates that Trust Bank not only recovered from the impact of COVID-19
but also maintained a stable relationship between loans and deposits in the subsequent
years.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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The CAMEL ratio of Trust bank on an average is shown below:
CAMEL Ratio
120.00%
100.00%
80.00%
60.00%
40.00%
20.00%
0.00%
Average
CAR
ETA
14.27% 5.09%
NPL
ratio
NPL to Asset
Loan
equity growth Growt
h
5.26% 74.70% 11.97% 9.98%
ROA
ROE
DTA
LTD
0.69% 14.43% 79.64% 88.31%
Maximum 15.25% 5.65%
7.90% 117.80% 20.24% 16.09% 0.75% 15.70% 82.07% 93.72%
Minimun
13.57% 4.79%
3.65% 50.01% 3.65%
4.88%
0.50% 11.18% 77.05% 77.79%
Std
0.62%
1.61% 26.42% 6.31%
5.42%
0.11%
0.33%
Average
Maximum
Minimun
1.87%
2.36%
6.36%
Std
Trust Bank has fared exceptionally well overall, scoring highly in all categories even if there have
been some negative indicators.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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Chapter 6:
Conclusion and
Recommendations
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
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6.1 Conclusion:
The report was written based on the internship experience at Trust Bank and an analysis of
Trust Bank's annual reports. The report's main focus is on Trust Bank Limited's financial services
and camel ratio analysis. The paper illustrates how Trust Bank Limited's financial services relate
to several facets of Bangladesh's financial industry. According to the analysis, the Trust Bank
has been examined using the total areas of the CAMEL ratio. According to the data, the banking
system at Trust Bank is working hard to realize its full potential. To determine the state of the
bank's performance from 2018 to 2022, use the CAMEL ratio.
Despite some warning signs, Trust Bank has performed remarkably well overall, receiving high
scores in every category. The CAR ratio is rising annually until 2020, which is great news for the
bank, but it has been falling for the last two years after COVID-19, meaning the bank will need
to make improvements in the years ahead. This is excellent news for the bank because the ETA
ratio is predicted to stay over 5% and will continue to rise annually until 2019. However, the
ratio has been declining since COVID-19 and has been below 5% for the past three years,
indicating that the bank will need to improve in the next years. The NPL ratio is decreasing
annually, which is great news for the bank. NPL ratio data indicate that Trust Bank has a very
good prognosis overall, even with a slight increase in non-performing loans (NPLs) in 2022.The
good news for the bank is that the ratio of non-performing loans to equity is declining annually.
NPL to equity ratio data shows that, despite a minor uptick in 2022, Trust Bank's overall outlook
remains positive. It's excellent news that the bank's asset growth is increasing yearly. The bank
had a drop in 2021, which was undoubtedly brought on by COVID-19, but by 2022, things had
improved. Asset growth statistics show that Trust Bank has a very bright future, even with its
2021 decrease. The fact that the bank's loan growth is increasing annually is fantastic news.
Despite a noticeable decline in 2020, which was undoubtedly caused by COVID-19, the bank's
reputation has considerably improved in 2021 and 2022. Even with a decline in 2020, loan
growth data indicate that Trust Bank's future is still quite promising. The bank's return on asset
(ROA) has been steady over time, which is great to hear. Undoubtedly due to COVID-19, the
bank had a decline in 2020; nevertheless, it rebounded in 2021 and 2022 and maintained a
consistent return on assets. Despite a decline in 2020, return on asset (ROA) data indicates that
Trust Bank has a promising future. The bank's return on equity (ROE) has been steady over time,
which is great to hear. Despite a decline in 2020, which was evidently caused by COVID-19, the
bank rebounded in 2021 and 2022 and maintained a constant ROE. Despite a decline in 2020,
return on equity (ROE) statistics indicates that Trust Bank has a promising future. Even though
it is clear that DTA fluctuates over time, the data are ultimately falling, which is a bad indicator
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
40
for the bank according to COVID-19. The fact that the DTA was on a stable site before COVID is
encouraging, even though the bank still needs to resolve the matter. The news that the bank's
Loan to Deposit (LTD) has remained stable over time is quite encouraging. Undoubtedly due to
COVID-19, the bank saw a decline in 2020; nevertheless, it rebounded in 2021 and 2022 and
maintained a stable LTD. Despite a decline in 2020, Loan to Deposit (LTD) figures indicate that
Trust Bank has a promising future.
In conclusion, Trust Bank's entire success between 2018 and 2022 was quite remarkable. Being
one of the top banks in Bangladesh's banking sector, Trust Bank offers some of the greatest
financial services available. The bank has performed admirably in the majority of the
components, according to the CAMEL ratio analysis, and the analysis also clearly demonstrated
the impact of COVID 19 on the bank. However, the bank has made a really remarkable recovery
from the situation. Thus, it is safe to state that trust banks have a very bright future.
FINANCIAL SERVICES AND CAMEL RATIO ANALYSIS OF TRUST BANK LIMITED
41
6.2 Recommendations:
The report's findings highlight Trust Bank Limited's very strong financial performance between
2018 and 2022. Trust Bank offers some of the greatest financial services available in the
Bangladeshi banking sector. Nevertheless, the bank may still make improvements in a few
areas, which are listed in this piece of advice:




The bank will need to make improvements in the upcoming years as some of the ratios
have been dropping in the years after COVID-19 or some of the consequences of COVID19 are still noticeable.
Being one of Trust Bank's oldest locations, the Dilkusha branch needs major upgrades
to draw in additional business in addition to enhancing the clients' banking experience.
There is room for improvement in the Trust Bank Dilkusha branch's waiting area and
seating arrangements.
With a specialised desk that complies with several Financial Services directives, the bank
can demonstrate its Financial Services to its clients.
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References
1. Website of Trust Bank Limited- https://www.tblbd.com/
2. Annual reports of Trust Bank Limited from 2018 to 2022https://www.tblbd.com/about-us/annual-reports-and-statements
3. CFI Team (2020) CAMELS Rating Systemhttps://corporatefinanceinstitute.com/resources/wealth-management/camels-ratingsystem/
4. JULIA KAGAN (2021) CAMELS Rating Systemhttps://www.investopedia.com/terms/c/camelrating.asp
5. Maryam Binti, Badrul Munir, Ummi Salwa Ahmad Bustamam Faculty Economics and
Muamalat, Universiti Sains Islam Malaysia, Malaysia (2017) CAMEL RATIO ON
PROFITABILITY BANKING PERFORMANCE
6. Becerra, M. (2009), “Theory of the Firm for Strategic Management: Economic Value
Analysis,” (First Publ). New York: Cambridge University Press,
https://doi.org/10.1017/cbo9780511626524
7. Bonaccorsi di Patti, E., and Kashyap, A. K. (2009), “Which Banks Recover from a
Banking Crisis?,” 1–44.
8. Kothari, C. (2004), “Research Methodology: Methods and Techniques,” New Age
International Publishers.
9. Worrell, D. (2004), “Quantitative Assessment of the Financial Sector : An Integrated
Approach,” International Monetary
10. Fund Working Paper: Monetary Financial Systems Department. 1–26.
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