loan recovery performance of the uttara bank limited”

“Loan Recovery Performance of the Uttara Bank Limited”

1.1 IntroductionThe internship program is an opportunity for the students and it bears a great significant

for us. It familiarizes the students with the practical business operations. The students of

internship program get the chance to understand the real business world closely and

familiarize themselves with internal and external expects of business. It gives them an

opportunity to develop the analytical skill and scholastic aptitude.

All over the world the dimension of banking has been changing rapidly due to

Deregulation, Technological innovation and Globalization. Commercial banks in

Bangladesh have to keep pace with the change in global business. Now banks have to

compete in market place both with the local institutions as well as with the foreign

institutions.

To survive and thrive in such a competitive banking world, two important requirements

are development of appropriate financial infrastructure by the central bank and

development of “professionalism” in the sense of developing an appropriate manpower

structure and its expertise and experience. To introduce skilled banker, only theoretical

knowledge in the field of banking studies is not sufficient. An academic course of the

study has a great value when it has practical application in real life situation. So, I need

proper application of my knowledge to gate some benefit from my theoretical knowledge

make it more tactful. When I engage myself in such fields to make proper use of my

theoretical knowledge in my practical life situation. Such theoretical knowledge is

obtained from a course of study at only the half way of the subject matter.

1.2 Objective of the Study

There are several types of objectives involve here for this study. The objectives of studies

are

۩ To analyze the bank’s overall performance.

۩To know about the loan strategy of Uttara Bank Ltd.

۩ To know about the services provided by the bank .

۩ To acquire the knowledge of practical operations and the function of the

Bank.

۩ To gain an overall idea and know about the financial position of the bank.

۩ To find out the exiting problems of the bank (Branch).

۩ To recommend solutions to the existing problem.

۩ To show the trend of the key financial indicate faced by the bank branch.

1.3 Methodology For the purpose of my study both the primary and the secondary information will be used

for analyses.

Primary Sources1. Personal observation.

2. Desk work in different section.

3. Discussion with the bank’s officers.

4. Discussion with my bank’s advisor/ supervisor.

Secondary Sources1. Annual report of the bank.

2. Publication’s of Bangladesh Bank.

3. Different types of book related with banking.

4. Newspaper.

5. Website information.

Data Analysis:

For the purpose of my study, it requires analyzing the data on the bank. For these

purposed the following techniques have been used.

1. SWOT Analysis.

2. Common size statement Analysis.

3. Ratio Analysis.

4. Statistical Method (Mean, Variability Measures & Standard Deviation) and

5. Trend Analys

1.4 Limitation of the study To prepare this report, I have faced some limitations, which are mentioned in the

follows:

Time Limitation The main and the first constraints is time that hinder to cover all aspect of the study. In

three month it’s not possible to cover learning about any bank properly and also going to

write a report on this. So limitation of time is the main problem.

Lack of Data If any one can wise than he can gather primary data to the banks employees. But this data

is not proper for writing a report. Secondary data is also very rears. It is just only the

annual report and the web site. But in the web site the information is updated and is

properly given.

Limitation of Scope While collecting data, the authority did not disclose much information due to the

confidentially of the Bank

2.1 Historical background of UBLUttara Bank Ltd. has been a nationalized bank in the name of Uttara Bank under the

Bangladesh Bank (Nationalization) order 1972, formally known as Eastern Banking

Corporation Limited.

» Uttara Bank ltd. started functioning from 28.01.1965

» Consequent upon the amendment of Bangladesh Bank (Nationalization) order

1972

» Uttara Bank ltd. converted into Uttara Bank ltd. as a public limited company in

the year

1983 and obtained business commencement certificate on 21.08.1983.

» Uttara Bank ltd. floated its shares in the year 1984.

» Uttara Bank ltd. has 207 branches all over Bangladesh

» The bank is listed in the Dhaka Stock Exchange Ltd. and also in Chittagong

Dhaka

Stock Exchange Ltd.

» It publicly quoted company for trading of its shears.

» The registered office of the Bank is located in 90, Motijheel Commercial Area,

Dhaka-1000.

Adaptation of modern technology both in terms of equipment and banking

practice ensures efficient service to clients. 207 branches at home and 600

affiliates worldwide create efficient networking and reach capability. Uttara is a

bank that serves both clients and country.

UBL is one of the largest private banks in Bangladesh.

It operates through 207 fully computerized branches ensuring best possible and

fastest services to its valued clients.

2.2 UBL NetworksThe Head Office is located at Bank’s own 18-storied building at Motijheel, the

commercial center of the capital, Dhaka.

Corporate Offices ( Corporate Branch & Local Office ) 2Regional Office 13Worldwide Affiliates 600Total Branches ( Including Corporate Branch & Local Office ) 207Authorized Dealer Branches 38Treasury & Dealing Room 1Training Institute 1Man Power 3562

2.3 Board of Director Chairman- Mr. Azharul Islam

Vice Chairman- Mr. Md. Asaduzzaman

Director- Badrunnessa (Sharmin) Islam, Md. Mahfuzus Subhan, Mr. Abul Barq Alvi,

Mr.

Faruque Alamgir, Col. Engr. M. S. Kamal(Retd.), Prof. Mirza Mazharul Islam, Prof.

Sharif Md. Shahjahan, Mr. Syed A. N. M. Wahed, Mr. Shah Habibul Haque, Mr. Sk.

Amanullah

Managing Director- Shamsuddin Ahmed

Secretary- Md. Fazlur Rahman

2.4 Executive CommitteeLike other bank Uttara bank ltd. has also the Executive Committee. In their Executive

Committee there have Chairman, Vice- Chairman, Directors, MD, and Secretary. Its

shows below-

Chairman- Mr. Azharul Islam

Vice Chairman- Mr. Md. Asaduzzaman

Director- Mr. Md. Mahfuzus Subhan, Shah Habibul Haque, Col. Engineer M.S

Kamal (Retd)


Secretary- Md. Fazlur Rahman

List of the senior Executive


Additional Managing Director- Md. Abdus Sattar

Deputy Managing Director-Md. Abdul Halim, Shaikh Abdul Aziz

Assistant Managing Director- Md. Abdul Matin

Consultant (Credit)- Shaikh Aminuddin Ahmed

General Manager- Md. Abdur Rashid, Abu Ahmed, Muinuddin Al Hussain, Niresh

Chandran Das, Md. Nazmul Haque, Md. Fazlur Rahman, A.K.M. Idris Ali Faquir, Kazi

Md. Monzur Hossain, Md. Abdul Hamid,

Narayan Chandra Basak, Sribash Chandra Sarker, Md.Selim Nazrul Hoque Chowdhury.

Performance of Uttara Bank Ltd.

Uttara Bank Ltd. closed the year 2009 recording significant growth in every sector

despite various types of economic crises.

Head wise position of Bank's invested Fund at the end of the Year 2009 is given

below

Head of Investment (Taka in million)

Treasury Bills and Bonds

Approved Debenture (in purchase price)

Prize Bond

22,182.9

151.0

10.2

Ordinary Shares:

1. Eastern Bank Ltd. 104.0

2. Karmasangsthan Bank 10.0

3. ICB (Approved) 31.8

4. CDBL 01.0

5. Other Companies 4.3 96.4

Total: 22,502.5

2.5 Human Resources and TrainingThe total manpower of the bank in different grades as on 31.12.2009 was under:

1.Executives (Assistant General Manager & Above)

2. Officers

3.Assistant Officers

4. Others

132

1,991

420

748

4.01%

60.50%

12.76%

22.73%

Total: 3,291 100.00%Human Resources Executives

(AssistantGeneral Manager& Above)

2. Officers

3.AssistantOfficers

4. Others

2.6 Branch PositionFinancial Position of the Branch (June-09)

From when I started here as an internship I expired that this branch is always over crowed

with a lot of customers. This has promoted me to find out the financial position of the

branch. Here I was able to extract the following data regarding the branch.

Particulars Taka

Total Deposit 116,663,162

Total Advance 54,344,613

Profit/ Loss 5,708,143

Current account G/L Balance (30.06.08) 90

Cash Credit account G/L Balance (29.06.08) 19,042,085

3.1 LoanIn case of loan the banker advances a lump sum for a certain period at an agreed rate

of interest. The entire amount is paid on an occasion either in cash or by credit in his

current account, which he can draw at any time. The interest is charged for the full

amount sanctioned whether he withdraws the money from his account or not. The loan

may be repaid in installments or at expiry of a certain period. Loan may be demand loan

or a term loan.

3.2 Loan Policy of UBLOne of the most important ways, a bank can make sure that its loan meet

organizational and regularity standards and they profitable is to establish a loan policy.

Such a policy gives loan management a specific guideline in making individual loans

decisions and in shaping the bank’s overall loan portfolio.

3.3 Loan Principles All Loan extension must comply with the requirements of Bank’s Memorandum and

Article of Association, Banking Company’s Act, Bangladesh Bank’s instructions,

other rules and regulation as amended from time to time.

The bank shall provide suitable credit services for the markets in which it

operates.

It should focus on the development and enhancement of customer relationship.

It should go those customers who can make best use of them.

The conduct and administration of the loan portfolio should contribute with in

defined risk limitation for achievement of profitable growth and superior return on bank

capital.

Interest rate of various lending categories will depend on the level of risk and types of

security offered.

3.4 Loan Classification:

Loan classification is a process by which the risk or loss potential associated with

the loan accounts of a bank on a particular date is identified and quantified to

measure accurately the level of reserves to be maintained by the bank to provide

for the probable toss on account those risky loan.

Loan may be classified with reference to elements of time, nature of financing and

provision base.

3.5 Classification on The Basis of Time:

Continuous loans

These are the advances having no fixed repayment schedule but have a date at which

it is renewable on satisfactory performance of the clients. Continuous loan mainly

includes "Cash credit both hypothecation and pledge" and "Overdraft".

Demand loan

Demand loan is used as one of the import finances. In opening letter of credit (L/C),

the clients have to provide the full L/C amount in foreign exchange to the bank. To

purchase this foreign exchange, bank extends demand loan to the clients at stipulated

margin. No specific repayment date is fixed. However, as soon as the L/C documents

arrive, the bank requests the clients to adjust their loan and to retire the L/C documents.

Demand loans mainly include "Loan against imported merchandise (LIM)" and "Later of

Trust Receipt".

Term loans

These are the advances made by the bank with a fixed repayment schedule. Terms

loans mainly include "Consumer credit scheme", "Lease finance"," Hire purchase", and

"Staff loan". The term loans are defined as follows:

• Short-term loan: Up to 12 months.

• Medium term loan: More than 12 months & up to 36 months

• Long-term loan: More than 36 months.

3.6 Classification on The Basis of Characteristics of Financing

Categories of loans offered by the bank UBL:

» Agriculture

» Large and medium scale industries

» Export

» Other commercial lending (Jute and fertilizer)

» Small and cottage industries

» Personal loan

» Consumer loan

» Others

Some other loans are:

a) Housing loans b) Residential c) Commercials d) Transport e) Cold storage f) Brick

field g) Gold loans h) Against work order i) Against work (FDR) loan against

sanchaypatar j) Loan against WEBD, ICB, unit certificate k)Loans against life insurance

policy l) Other special program.

3.7 Sector wise position of loans and Advance as on 31.12.2009

(Taka in million) Public/

Nationalized

Private Total

1. Agriculture :

a)Crops

b)Fisheries

c)others

-

-

-

92.4

30.2

191.7

92.4

30.2

191.7

2. Industrial leading(Term):

a) Large & Medium

b) Small & Cottage

-

-

5167.3

11.3

5167.3

11.3

3. Industrial leading (Working Capital):

a) Large & Medium

b) Small & Cottage

-

-

545.6

25.7

545.6

25.7

4. Commercial Lending:

a)Export

b)Import

c)Internal Trade

-

-

10.5

858.4

3628.8

14439.3

858.4

3628.8

14439.3

5. Special Programmed:

a)Consumer Credit Scheme(Uttaran)

b) Personal loan Scheme

c) Small Business loan Scheme

d) Uttaran House Repairing and

Renovation Scheme

-

-

-

-

87.4

02.6

246.3

4263.6

87.4

02.6

246.3

4263.6

6. Housing:

a)General Housing Building loan

b)Staff Housing Building loan

-

-

32.7

402.6

32.7

402.6

7. Leasing Financing - 391.6 391.6

8. Others - 5861.3 5861.3

9. Bills disconnected and purchased

a) In Bangladesh

b) Outside of Bangladesh

-

-

3027.0

135.1

3027.0

135.1

Total: Loan & Advance 10.5 39440.9 39451.9

Sector wise Loans and Advances 2009

Agri(1%) Hous(1%

Ind. Leading(15%)

Lease Fin(1%)

Coml Lead(48%)

Others(15%)

SpecialProg(11%)

Bills Dis& Purc(8%)

1% 1% 15% 1% 48% 15% 11% 8%

Agriculture(1%)

Housing(1%)

Ind. Leading(15%)

LeaseFinancing(1%)CommercialLeading(48%)Others(15%)

SpecialProgrammeed(11%)Bills Discounectd& Purchase(8%)


Agri(1%) Hou(3%)

Ind. Lea(21%)

Lease Fin(1%)

Coml Lead(42%)

Others(11%)

Spe lProg10%)

Bills Disc & Purc(11%)

1% 3% 21% 1% 42% 11% 10% 11%

Agriculture(1%)

Housing(3%)

Ind. Leading(21%)




Agri(1% Hous(2%)

Ind. Lead(35%

Lease Fin(2%)

Com Lead20%)

Others(13%)

Spe Progr(9%)

Bills Dis & Purc(8%)

1% 2% 35% 2% 20% 13% 9% 8%

Agriculture(1%)

Housing(2%)

Ind.Leading(35%)LeaseFinancing(2%)CommercialLeading(20%)Others(13%)



Agri(1% Hous(1%)

Ind. Lead(30%

Lease Fin2%)

Com Lead(22%)

Others(13%) Spe Prog(9%)

Bills Dis & Purc(8%)

1% 1% 30% 2% 22% 13% 9% 8%

Agriculture(1%)

Housing(1%)

Ind. Leading(30%)


SpecialProgrammeed(9%)Bills Discounectd &Purchase(8%)


Agr(1%) Hou(1%)

Ind. Lead(35%

Lease Fin(2%)

Com Lead25%)

Others(19%)

Spe Progr(13%) Bills Dis& Pur(8%)

1% 1% 35% 2% 25% 19% 13% 8%

The loans and advances of the Bank grew impressively during the year 2009 with a

growth of 6.22% Total loans and advances of Bank stood at Tk 39,451.4 million during

the year as compared to Tk 37141.3 million of the previous year. Average loan per

branch stood at tk 187.0 million. Separation of responsibility among risk management,

1% 1%

35%

2%25%

19%

13%

8%

Agriculture(1%)

Housing(1%)

Ind. Leading(35%)

Lease Financing(2%)

Commercial Leading(25%)

Others(19%)

SpecialPro-grammeed(13%)

Bills Discounectd & Purchase(8%)

leading decision and monitoring function is now being implemented more smoothly by

the bank with a view to improving the quality and soundness of loan portfolio. The bank

has rendered diversified and well structured advance portfolio due to emphasis on

maintaining the quality of assets. Bank has participated in the syndicate business

financing in the year 2009.

3.8 Personal Loan:Personal Loan Scheme for Salaried Officers

۩ Emergency expenses for own marriage of a service- holder or his dependents.

۩ Emergency expenses of urgent surgical operation/ medical treatment.

Special Features

Any permanent salaried employee aged between 20 to 55 years is eligible to get loan.

No collateral security is required.

Maximum Amount of loan Tk. 1, 00,000.

Maximum period of loan upto 3 years.

Five year data of personal loan:Dec-09 Dec-08 Dec-07 Dec-06 Dec-052.6m 2.4m 2.1m 1.9m 1.7m

Personal loan

0

0.5

1

1.52

2.5

3

3.5

2005 2006 2007 2008 2009

Year

T K.

Mi

lli o n

Series1

Required Document

Document related to applicants job to prove himself

Two copies passport size photographs.

Photograph of nominee (if any) dully attested by the account holder.

3.9 Uttaran Consumer-Credit Scheme:Objectives

The objectives of this loan are to provide essential household durable to the fixed income

group (Service Holders) and other eligible borrowers under the scheme. The abbreviated

name of the scheme will be “Consumer”. In CCS, the work involves giving the clients

loans on various schemes, such as car loan, household items, office equipment and

entertainment products.

UBL started uttaran consumers credit scheme from 1996. UBL offers opportunity of

financial assistance for-

Motor cycle/car-New or re-conditioned.

Refrigerator/deep freeze.

Television /VCR/VCP/VCD.

Radio/Two in one.

Air condition/Waters cooler/Water pump.

Washing Machine.

House hold furniture.

Cellular Telephone.

Fax.

Photocopier.

Five year Data of consumer LoanDec-09 Dec-08 Dec-07 Dec-06 Dec-0587.4m 86.2m 80.4m 79.3m 78m

Five year Data

of House

Repairing Loan

Dec-09 Dec-08Dec-07

Dec-06 Dec-05

4,263.00m

3,822.20m

3,694m

3,424m

3,131.50m

Uttaran House repairing Loan

0.00500.00

1,000.001,500.002,000.002,500.003,000.003,500.004,000.004,500.00

2005 2006 2007 2008 2009

Year

Tk in

Mill

ion

2005 2006 2007 2008 200972.0074.0076.0078.0080.0082.0084.0086.0088.0090.00

78.0079.30

80.40

86.2087.40

Uttaran Consumer Loan

Year

Tk. i

n M

illio

n

The Total amount of loans along with the duration in which these loans taken, need to be

repaid is given below:

Type of Product Loan Amount (Tk) Lac Tenure1. Vehicle 6.00 3 years2. Household items 1.00 2 years3. Office Equipments 2.00 2 years4. Entertainment items 1.00 2 years5. Others Special Considerations Special Considerations

3.10 Small business loan (SBL): For the genuine & hand working small

enterprise who run their business with their own capital but for lack o0f capital cannot

expend their business uttara bank limited has a loan scheme named “Uttara small

business loan (USBL)”

Five year Data of Small Business Loan

Dec-09 Dec-08 Dec-07 Dec-06 Dec-051,025.00m

976.00m 920m 910m

899.00m

3.11 Medium

enterprise Loan:The Common balance sheet shows that the outstanding balance in this sector stands at

TK. 7,764.5 million at the end of the year 2009 as against taka 6,975.1million of the

previous year 2008.in 2007 it stood Tk.6,522.3 million, in 2006 it stood taka 6,320.5

million & 2005 it stood tk.6,310 million.

Five year Data of Medium Enterprise Loan:

Dec-09 Dec-08 Dec-07 Dec-06Dec-05

7,764.50m

6,975.10m

6,522.30m

6,320.50m

6,310m

2005 2006 2007 2008 2009800.00

850.00

900.00

950.00

1,000.00

1,050.00 1025

976

920910899

Small Business Loan

Year

Tk. in mil-lion

3.123.12

WomenWomen

enterpriseenterprise

loanloan

scheme “ Nari Swanirbor Rin Prakalpo “scheme “ Nari Swanirbor Rin Prakalpo “Economic development is closely related to the empowerment of women . In BangladeshEconomic development is closely related to the empowerment of women . In Bangladesh

the number of women – companies\ farms continue to grow. For smooth credit flow forthe number of women – companies\ farms continue to grow. For smooth credit flow for

SE Women enterprise Uttara Bank Limited is dedicated in helping the genuine WomenSE Women enterprise Uttara Bank Limited is dedicated in helping the genuine Women

entrepreneur having sincerity, honest & strong Deliberation to improve the banking habitentrepreneur having sincerity, honest & strong Deliberation to improve the banking habit

of self employed women entrepreneurs to run any legitimate business smoothly with theof self employed women entrepreneurs to run any legitimate business smoothly with the

help of bank finance by ofdfering a special business loan product named “ Narihelp of bank finance by ofdfering a special business loan product named “ Nari

Swanirbor Rin Prakalpo “Swanirbor Rin Prakalpo “

2005 2006 2007 2008 20090

1

2

3

4

5

6

76.8

5.35.9

4.95

Nari swaniror loan

Year

TK. Million

2005 2006 2007 2008 20090.00

1,000.002,000.003,000.004,000.005,000.006,000.007,000.008,000.009,000.00

7,764.506,975.106,522.306,320.506,310.00

Medium Enterprise Loan

Year

Tk. i

n M

illio

n

3.13 Agricultural Loan:The Common balance sheet shows that the outstanding balance in this sector stands at

TK. 314.3 million at the end of the year 2009 as against taka89.0 million of the previous

year 2008.in 2007 it stood Tk.107 million, in 2006 it stood taka 75 million & 2005 it

stood tk.60 million.

Five year Data of Agricultural Loan

2005 2006 2007 2008 20090

50

100

150

200

250

300

350

Agricultural Loan

Year

Tk. I

n M

illio

n

Dec-09 Dec-08 Dec-07 Dec-06 Dec-05314.3m 89m 107m 75m 60m

3.14 Proverty Alleviation Loan:The Common balance sheet shows that the outstanding balance in this sector stands at

TK. 3.5 million at the end of the year 2009 as against taka 2.1million of the previous year

2008.in 2007 it stood Tk.3.1 million, in 2006 it stood taka 1.9 million & 2005 it stood

tk.2.00 million.

Five year Data of Agricultural Loan:Dec-09 Dec-08 Dec-07 Dec-06 Dec-053.5m 2.1m 3.1m 1.9m 2m

Proverty Alleviation Loan

0 1 2 3 4

2005

2006

2007

2008

2009

Year

Tk. in Million

Series1

3.15 Provision For Loan & Advance:The Common balance sheet shows that the outstanding balance in this sector stands at

TK. 91.01 million at the end of the year 2009 as against taka 81.01million of the previous

year 2008.in 2007 it stood Tk.75.02 million, in 2006 it stood taka 70.21 million & 2005 it

stood tk.73.12 million.

Five year Data of Provision For Loan & AdvanceDec-09 Dec-08 Dec-07 Dec-06 Dec-0591.01m 81.01m 75.02m 70.21m 73.12m

Provision For Loan & Advance

Dec-09

Dec-08

Dec-07

Dec-06

Dec-05

3.16 Interest Income: The Common balance sheet shows that the outstanding

balance in Interest income stands at TK. 4,492.4 million at the end of the year 2009 as

against taka 4,084.3 million of the previous year 2008.in 2007 it stood Tk.3,550.2

million, in 2006 it stood taka 3,990.4 million & 2005 it stood tk.3,550.2 million.

Five year Data of Interest IncomeDec-09

Dec-08

Dec-07

Dec-06

Dec-05

4,492.40M

4,084.30M

3,550.20M

2,990.30M

2,100.40M

3.17 Interest Expenses: The Common balance sheet shows that the

outstanding balance in Interest Expenses stands at TK. 2,790.4 million at the end of the

year 2009 as against taka 2,200.5 million of the previous year 2008.in 2007 it stood

Tk.2,000.2 million, in 2006 it stood taka 1,790.4 million & 2005 it stood tk.1,250.2

million.

Five year Data of Interest ExpensesDec-09 Dec-08 Dec-07 Dec-06 Dec-052,790.40m

2,200.50m

2,000.30m

1,590.40m

1,220.40m

4,492.40

4,084.303,550.20

2,990.30

2,100.40

Interest Income

12/01/200912/01/200812/01/2007

3.18 Net Interest Income : The Common balance sheet shows that the

outstanding balance in Net Interest income stands at TK. 2,790.4 million at the end of the

year 2009 as against taka 2,200.5 million of the previous year 2008.in 2007 it stood

Tk.2,000.2 million, in 2006 it stood taka 1,790.4 million & 2005 it stood tk.1,250.2

million.

Five year Data of Net Interest IncomeDec-09 Dec-08 Dec-07 Dec-06 Dec-051,702.00

1,883.80

1,622.30

1,590.30

1,003.50

2,790.40

2,200.50

2,000.30

1,590.30

1,220.40

Interest Expenses

12/01/200912/01/200812/01/200712/01/2006

10.00

200.00400.00600.00800.00

1,000.001,200.001,400.001,600.001,800.002,000.00 1,702.00

1,883.801,622.301,590.30

1,003.50

Net interest income

Dec-09

Dec-08

Dec-07

Dec-06

Dec-05

Year

Tk. in million

3.19 Syndicate Loan: The Common balance sheet shows that the outstanding

balance in this sector stands at TK. 240.18 million at the end of the year 2009 as against

taka 238.31 million of the previous year 2008.in 2007 it stood Tk238.12 million, in 2006

it stood taka 222.06 million & 2005 it stood tk.220.38 million

Five year Data of Syndicate LoanDec-09 Dec-08 Dec-07 Dec-06 Dec-05

240.18m 208.31m 198.12m 172.06m 120.38m

3.20 Bad Loan: The Common balance sheet shows that the outstanding balance

in this sector stands at TK. 2,842.0 million at the end of the year 2009 as against taka

2,633.8 million of the previous year 2008.in 2007 it stood Tk1,980.0 million, in 2006 it

stood taka 2,703.2 million & 2005 it stood tk.2,583.5 million

Five year Data of Bad LoanDec-09 Dec-08 Dec-07 Dec-06 Dec-052,842.00m

2,633.80m

1,980.00m

2,703.20m

2,583.50m

10

50

100

150

200

250240.18

208.31198.12172.06

120.38

Syndicate Loan

Dec-09Dec-08Dec-07Dec-06Dec-05

Year

Tk. in mil-lion

0.00

1,000.00

2,000.00

3,000.00

Tk. in Million

2005 2006 2007 2008 2009S1

Year

Bad Loan

3.21 Credit Rating of the BankAs per the BRPD Instruction circular No. 06 dated July 5, 2006 the Bank has done its

credit rating by credit Rating Information and Service Limited (CRSL) based on 31.12.06

and the following rating was awarded.

Credit Rating Report (Entry Rating) on Uttara Bank

Particular Long Term Short Term

Current Rating BBB+(Moderate Safety) ST-3(Good grade)

Date of Rating 18.06.07 18.06.07

Validity of Rating 01(one) year 06 (six) month

3.22 Credit Evaluation PrinciplesIn order to get the optimum returns from the deployed funds in different kinds of

lending, more emphasis shall be given on refund of loans and advances out of fund

generated by the borrower from their business activities instead of realization of money

by disposing of the securities held against the advance which is very much uncertain and

time consuming . Some principles or standards of lending are maintained loans in order

to keep the risk to a minimum level and for successful banking business. The main

principles of lending are:

Liquidity

Liquidity means the availability of bank funds on short notice. The liquidity of an

advance means it repayment on demand on due date or after a short notice. Therefore,

the banks must have to maintain sufficient liquidity to repay its depositors and trade off

between the liquidity and profitability is must.

Safety

Safety means the assurance of repayment of distributed loans. Bank is in business to

make money but safety should never be sacrificed for profitability, to ensure the safety of

loan. The borrower should be chosen carefully. He should be a person of good character

& capacity as well as bank must have to maintain eligible number of security from

borrower,

Profitability

Banking is a business aims at earning a good profit. The difference between the

interest received on advances and the interest paid on deposit constitute a major portion

of the bank income, besides, foreign exchange business is also highly remunerative. The

bank will not enter into a transaction unless a fair return assured.

Security

The security offered for an advance is an insurance to fall bank upon incases of need.

Security serves as a safety value for an unexpected emergency. Since risk factors are

involved, security coverage has to be taken before a lending.

National interest

Banking industry has significant roll to play in the economic development of a

country. The bank would lend if the purpose of the advances can contribute more to the

overall economic development of the country.

Loan Administration

The functions of Loan Administration start after the sanction of a credit. UBL Loan

Administration covers mainly maintenance of credit files and charge documents. Broadly

Loan Administration of UBL engulfs the work of documentation and monitoring. Loan

Administration of UBL follows some principles to deal with documentation, supervision,

follow-up and monitoring.

Security against Advances : The different types of securities that may be offered to a banker are as follows:

(a) Immovable property

(b) Movable property

Pratiraksha Sanchaya Patra, Bangladesh Sanchaya Patra, ICB unit certificate,

wage earner development bond.

Pledge of goods

Hypothecation of goods, produce and machinery

Fixed assets of manufacturing unit.

Shipping documents.

Five year Data of Deposit & AdvanceDec-09 Dec-08 Dec-07 Dec-06 Dec-0559,387.30 50817 48312.2 52316.6 48512.9

Deposit & Advance (TK. in Million)

12/01/2009

12/01/2008

12/01/2007

The client’s management capability, equity strength, nature of scheduled work and

feasibility study should be judiciously made to arrive at logical decision. If there is a

provision for running bills for the work, appropriate amount to be deducted from each bill

to ensure complete adjustment of the liability within the payment period of the final bill.

3.23 Credit Monitoring and ReviewIt is the last step in credit policy and procedure framework of UBL. Credit

monitoring and review is very important, because it ensures proper utilities and

repayment of bank fund. Credit monitoring and review feature of UBL is concerned was

assessing the quality of different type of loan. Periodic review and follow up should,

inter-aria aims at ensuring:

That conduct (Turnover, regularity of repayment etc) of the borrowing account

is during the period under review has been satisfactory or as expected.

The account is not having excess over limit

The terms and condition of the sanctioned letter are strictly followed.

The value of the collateral security is adequate.

There is not any unfavorable situation in market, economy and political

conditions, which may endanger the reliability of the borrower account.

The analysis of the borrower’s business performance and comparison of the

projected and actual to find any deviations.

Apparent profitability from the loans

4.1 Findings Of the studyIn the middle of twenty first century here we are facing a heavy competition with each other. Here everyone is competing with each and every single point. So today’s business institution are moving forward to remember this concept. If any one has a week point than the rival party will take the opportunity and make a problem for the week intuition.After complete my internship in The Uttara Bank, I realized that there are many problems and this may be a cause of huge loss or create a barrier for the future prospect. So the bank should taken care it very seriously.

The Problems for The Uttara Bank’s are:

(A) Security ProblemNow a days Uttara bank ltd. is one of the top performer bank in our country. But the security system is very weak. Because they have no security camera in the bank and of course the branch also which is very weak sector of Uttara bank limited

(B) Employment Problem In current situation it would be the major problem of Uttara bank limited. The situation of

too many heads but few heads must be eliminated for the future of the bank. In order to

enhance the productivity of the work force at Uttara bank limited, the management must

have to consider the appropriate amount of work force required and must assess the

productivity of each employee. The employees who do not have many things to be done

should be relocated or provision should be given to them for voluntarily retirement.

(C) Enhancement of Remuneration The most important lacking of UBL that have to be improving immediately is

Enhancement of remuneration. The current remuneration of Uttara bank limited in very

poor, unimpressive and not capable to attract quality personnel to fill up its position. It

have to be said that the foreign banks pay double that of Uttara bank limited and other

private banks also pay a higher scale of remuneration than Uttara bank limited. It is the

time the management should consider revising the remuneration package in order to

attract the high quality human resource and of course to retain them in Uttara bank

limited.

In course of my brief Bank's career in UBL I found that a good number of employees are

not working hour. This work force should be brought under utilization. The skill and

experience of this section of employers should be utilized properly in the development of

the Bank.

(D) Absence of Online Banking:

Today’s world is modern world, so here every one wants that they will do banking from

their own house. The Uttara Bank does not have this kind of facilities. So if they

implement online banking than they will gain huge popularity.

(E) Limited Number Of Branches : The Uttara Bank has limited branches allover the Bangladesh. So if they want to do a vast

business then they have to increase the number of branches.

(F) Limited ATM Booths of the Bank:Uttara Bank has only five ATM Booths overall the Bangladesh. It is not enough, if any

bank need to higher position in this competitive market.

4.2 SWOT Analysis for Uttara bank LimitedStrength Weakness

1.Uttara Bank is one of the largest and

oldest private-sector commercial bank in

Bangladesh,

2. They have over two hundred (207)

branch for customer service.

3. The bank has more than 600 foreign

correspondents world wide.

4. They have over 3000 employees’ for

ensure best possible and fastest services to

its valued clients.

5. Uttara is a bank that serves both clients

and country.

6. They have an 18-storied building at

Motijheel of there own.

1. There banking system is not fully

automation system.

2. There security (Security Camera)

system has to improve.

3. There MIS is not so strong.

4. The absence of certain strengths

may be viewed as a weakness.

5. They working system is know also

manual system.

Opportunities Threats

1. The external environmental analysis may

reveal certain new opportunities for

profit and growth.

2. They have a great opportunity of leading

banking institution and to play a pivotal role

in the development of the country though they

have 207 branch’s.

1. Compete with the huge

number of competitors in the

market.

2. Changes in the external

environmental also may

present threats to the firm.

3. Going with new strategy

would be risky.

5.1 RecommendationBefore drawing the end I would like to offer the following suggestions for bringing

improvements of UBL.

In general banking department they follow traditional system. The entire general

banking system is not fully computerized so an implementation of fully automated

system is required.

They are not using data base networking in information technology (IT) department.

So they have to transfer data from branch to branch and branch to head office by

using transferable disk. Such as –floppy which are risky?

The Accounts opening procedure is not easier to the customers, so every branch have

to need a separate desk for account opening.

6.1 ConclusionBanking sector is the chief financial intermediaries in a country. It’s also true for

Bangladesh. Uttara bank limited is a very challenging institution. In the age of

globalization and free trade, the process and the system of running a bank is changing.

UBL (Uttara Bank Ltd.) is continuously managing itself with this changing environment.

The company strategies are clean and concise. The return is pretty good. If the company

performs this way, we can expect that in near future Uttara bank limited may become one

of the top performer in banking sector of our country. They are also able to contribute to

our economy in better way. The working environment of the bank is impressive. It was

also found that the bank (Branch) is doing better in most of the sectors and their

performance is better than average. However during the year 2008 their investment is not

sufficient. The investment during 2008 went down in comparison to that of the previous

years. Finally it can be said that the bank is doing very good in the competitive market

and if it can continue to perform this way it can become a leading banking institution

which can play a pivotal role in the development of the country.

loan recovery performance of the uttara bank limited”

Documents

bank branch

central bank

theoretical knowledge

uttara bank limited

loan strategy of uttara

course of study

practical business operations

practical application