HORIZONTAL ANALYSIS:

BALANCE SHEET:
2005 to 2006 2006 to 2007 2007 to 2008 2008 to 2009
%AGE %AGE %AGE %AGE
Assets CHANGE CHANGE CHANGE CHANGE
Cash and balance with treasury
banks 10.43 120.66 12.25 -31.48
Balance with other banks 31.02 92.20 2.32 -30.81
Lending to financial institution 41.33 93.27 -20.20 -70.23
Investment -10.85 150.61 -18.95 40.80
Advances 17.58 107.77 21.22 5.45
Operating fixed Assets 2.4 267.74 -6.57 2.72
Deferred tax Assets 0 0 -5.70
Other Assets 13.25 114.31 43.73 27.07
TOTAL ASSETS 9.93 120.00 7.290 5.79

COMMENTS:
CASH AND BALANCE WITH TREASURY BANKS
Liquidity position of the bank was strong in previous years but there is 31.48% decrease
in cash in 2009. It is still at sufficient level but more decrease in liquidity main lead bank
to critical situation, management should conceder appropriate level of cash in hand to
fulfill demands of depositors and to meet expenses.
INVESTMENT:
Investments are having fluctuating trend because there is decrease in investments in 2005
to 2006 but on the other hand in next year there is 150% increase in investments and
again in 2008 it is decreased by 18% and than again increased by 40% in 2009. This
fluctuating trend may be due to the political changes in economy or it may be the result
of fluctuating investment opportunities in the economy.
OPERATING FIX ASSETS & OTHER ASSETS:
There is a sudden increase in O.F.A in 2006 because investment in these assets has been
increased by 267% but in later years there is a decreasing trend of investment in
operating assets
TOTAL ASSETS
Management shown good performance from 2006 to 2009 because total assets in 2006
increased by 120% increase and more increase in later year that are shown in table given
above.
 2005 to 2006 2006 to 2007 2007 to 2008 2008 to 2009
LIABILITIES %AGE %AGE %AGE %AGE
Borrowings 93.01 271.65 25.03
Deposits and other accounts 8.29 117.93 5.58 4.57
sub-ordinated loans 0 0 0
Liabilities against assets subject to
finance lease -20.41 253.52 -24.61 -2.42
Deferred Tax liabilities – net -46.51 213.55 -100 0
Other liabilities 6.49 116.065 28.46 -4.3

TOTAL LIABILITIES 9.89 116.75 10.75 4.77

COMMENTS:
• Bill payables of the bank are showing and sudden increase in 2006, 2007, and
2008 and decreasing trend in 2009
• Bank has increased its borrowing ratio from 2007 and increasing every year more
increase in borrowing increases the interest expense which may affect the profit of
the bank. Management should reduce its borrowing ratio to earn more profit.
DEFFERED TAX:
Tax payable has decreased in 2006 and increased in later years. Managements should
reduce tax payable burden because it reduces net assets and share holder’s equity.
TOTAL LIABILITIES:
Total liabilities are also increasing with the increase in total assets but increase in total
liabilities is less than the increase in total assets which is good for the financial health of
bank.

2005 to 2006 to 2007 to 2008 to

2006 2007 2008 2009
SHARE HOLDER`S EQUITY %AGE %AGE %AGE %AGE
Share capital 19.99 115 10 19.99
Reserves 2.53 113.63 26.43 8.68
Unappropriated profit 91.9 141.37 15.68 2.88

TOTAL S.H.E 46.7 130.58 17.46 6.19

COMMENTS:
There is a surprising change in S.H.E; it is increased by 130% in 2007 and more increase
in later year. This increasing trend is showing good performance of management and it
may help in attracting more investors.
Reserves are increasing every year great change is shown 2007 that is 113% more than
the previous year. These reserves can be used in investing activities than can increase
share holder’s equity in long run.

HORIZONTAL ANALYSIS:
INCOME STATEMNT:
2005 to 2006 to 2007 to 2008 to
2006 2007 2008 2009
INETEREST INCOME %AGE %AGE %AGE %AGE
Mark-up / return / Interest earned 31.12 14.66 20.51 27.66
Mark-up / return / Interest expensed 35.12 21.45 40.99 65.33
Net mark-up / interest income 29.34 11.52 10.19 3.77

COMMENTS:
There is 1179% increase in interest income of 2009.that is a sign of good performance of
bank but with the increase in income, interest expense also increased by 65% in 2009
which reduced the net interest income. This may be due to the increase in interest rates.

2006 to 2007 to 2008 to

2005 to 2006 2007 2008 2009
NON MARK-UP/INTEREST INCOME %AGE %AGE %AGE %AGE
Fee, commission and brokerage
income 24.723 10.36 16.86 12.68
Dividend income 68.27 12.84 -11.77 -33.29
Income from dealing in foreign
currencies 10.63 -21.81 280.6 -23.7
Gain on sale of investments 100.22 -83.11 106.24
Unrealized gain/loss on revaluation
investment 616.03 -105.34 37.96
Other income -60.12 -76.52 745.1 -55.65
Total non-markup / interest income 29.05 11.36 21.19 15.89

COMMENTS:
 • Non mark up income is increased every year, fee commission are increased 24%,
10%, 16% and 12% in 2005 to 2009 respectively.
• Dividend income is decreased in 2008 and 2009 by 11% and 33% respectively.
That is reducing net non interest income in respective years.
• There is significant increase in income from dealing in foreign currencies in 2008
but it is reduced by 23% in 2009.
• There is significant gain on sale of investment in 2009 that is 106% more as
compared to the previous years.
2006 to 2007 to 2008 to
NON MARK-UP/ INTEREST 2005 to 2006 2007 2008 2009
EXPENSES %AGE %AGE %AGE %AGE
Administrative expenses 20.08 5.67 27.91 24.21
Other provisions / write offs -108.71 -1072.2 344.88 -16.95
Other charges 229.6 -91.77 3303.3 -44.86
Total non-markup / interest
expenses 19 5.549 35.51 20.57
NET NON MARK-UP INCOME 38.06 6.65 -18.03 -3.04

COMMENTS:
• Admin expenses of bank are increasing every year that is not favorable for the
bank management should reduce ratio of admin expenses.
• Other charges are increasing critically. In 2008 these expenses are 3303% greater
than expenses made in 2007.

2006 to 2007 to 2008 to

PROFIT BEFORE& AFTER 2005 to 2006 2007 2008 2009
TAXATION %AGE %AGE %AGE %AGE

PROFIT BEFORE TAXATION 38.06 6.65 -18.03 -3.04

Taxation - current 21.54 -4.41 41.52 -21.6
Prior years -148.29 -26.22 -100 0
Deferred -78.72 422.3 -403.62 -76.3
46.35 -2.81 -16.44 -45.79
PROFIT AFTER TAXATION 33.93 11.81 -18.78 17.81

COMMENTS:
Profit before tax is decreased by 18% and 3% in 2008 and 2009 respectively. This may
be due to the huge increase in other charges and increase in admin expenses.
Management should control and check the expenses made to perform operations.

Tax expense in 2008 is increased by 40% and burden of deferred tax cost is 1403% as
compared to the 2007. And tax expense in 2009 is decreased by 21% and the burden of
deferred tax cost is decreased by 76%. Tax is reducing profit of the bank.

Profit after tax has been decreased by 18% in 2008 but later in 2009 it is increased by
17% still the profit in 2009 is less than the profit in 2007. The reason behind decreasing
profit ratio is the excess burden of other charges and admin expenses in 2008 and 2009.

VERTICAL ANALYSIS:
BALANCE SHEET

2005 2006 2007 2008 2009

Assets %AGE %AGE %AGE %AGE %AGE
Cash and balance with
treasury banks 12.32 12.37 12.44 13.02 8.43
Balance with other banks 5.36 6.39 4.91 4.68 3.066
Lending to financial institution 2.81 3.62 2.81 2.09 0.58
Investment 27.17 22.03 27.65 20.88 27.8
Advances 46.53 49.77 44.69 50.5 50.33
Operating fixed Assets 1.63 1.524 3.4 2.96 2.87
Deferred tax Assets 0 0 0 0.39 0.34
Other Assets 4.14 4.26 4.06 5.44 6.54

TOTAL ASSETS 100 100 100 100 100

COMMENTS:
CASH AND BALANCES WITH TREASURY BANKS:
Cash and balances ratios from 2005 to 2009 are 12.32%, 12.37%, 12.44%, 13.02%, and
8.43 respectively. In year 2008 ratio is increased by 13% and decreased in 2009 by
8.43%. That is showing the decrease in liquidity of bank. It should be maintained at
sufficient level to fulfill the cash demands of depositors.
LENDING TO FINANCIAL INSTITUTIONS:
Lending to financial institution has decreased in 2009. It was 2.09% in 2008. The mark
up rates are not so better and that is why lending to financial institutions is not showing a
better position In balance sheet.
INVESTMENTS AND ADVANCES:
Investments and advances are approximately at same level every year. Bank has
maintained a certain percentage of investments and advances. Ups and down in
investment depends on the opportunity available in the economy secondly it depends on
the management policy that how much investment of total assets should be made every
year.

2005 2006 2007 2008 2009

LIABILITIES %AGE %AGE %AGE %AGE %AGE
Borrowings 1.51 1.84 1.42 4.94 5.84
Deposits and other
accounts 80.21 79.01 77.65 76.42 75.53
sub-ordinated loans
Liabilities against assets
subject to finance lease 0 0.002 0.004 0.003 0
Deferred Tax liabilities -
net 0.77 0.37 0.66 0 0
Other liabilities 4.32 4.18 4.05 4.84 4.38

TOTAL LIABILITIES 87.13 87.09 84.73 87.47 86.63

COMMENTS:
CURRENT LIABILITIES:
• Bank is focusing to maintain bill payables at minimum possible level that is why
bill payables are less than 2.0% of total assets from 2005 to 2009.increase in
current liabilities may decrease the liquidity of bank .so it is good decision of
management to maintain it at possible minimum level.
• Borrowings are increased rate is increased by 4.94% in 2008 and more increase is
shown by 5.84% in 2009.while borrowings in 2007 are 1.42% of total assets.
DEPOSITES AND OTHER ACCOUNTS:
 IT Show a mix trend these are highest in the year 2005 and then decrease it means that
bank’s management is trying to compete with their competitors well by offering the new
attractions to the general public customers and corporate sector customers, so the deposits
are increasing every year and it is helpful for business volume of the bank.

2005 2006 2007 2008 2009

SHARE HOLDER`S
EQUITY %AGE %AGE %AGE %AGE %AGE
Share capital 1.02 1.11 1.06 1.09 1.24
Reserves 2.34 2.18 2.06 2.43 2.5

TOTAL S.H.E 6.25 8.35 9.08 9.95 9.98

COMMENTS:
SHARE CAPITAL:
IT shows both increase and decrease but it is showing an overall increase in it. It is most
high in 2005 where the percentage part of share capital is 1.24% in the year 2009.
RESERVES:
Reserves are also maintained approximately at constant level in all the years but reserves
are at highest level in 2009 at 2.50%. Reserves are used to invest further. Investments can
increase share holders equity in long run.
VERTICAL ANALYSIS:
INCOME STATEMENT

2005 2006 2007 2008 2009

MARK-UP INCOME %AGE %AGE %AGE %AGE %AGE
Mark-up / return / Interest earned 100 100 100 100 100
Mark-up / return / Interest
expensed 30.68 31.62 33.49 39.19 50.64
Net mark-up / interest income 69.31 68.37 66.5 60.8 49.35

COMMENTS:
Interest expense has been gradually increasing form 30.68% in 2005 to 33.49% in 2007
and than jumped to 39% in 2008 and 50% in 2009 .interest expense is showing increasing
trend which reduces the profit margin of bank and directly effecting net interest income
 because net inertest income is decreasing every year. This increasing trend of interest
expense is not suitable for the performance of bank and share holders’ equity.

2005 2006 2007 2008 2009

NON MARK-UP/INTEREST
INCOME %AGE %AGE %AGE %AGE %AGE
Fee, commission and brokerage
income 14.64 13.93 13.41 13 11.45
Dividend income 5.1 6.55 6.45 4.72 2.46
Income from dealing in foreign
currencies 3.58 3.02 2.06 6.51 3.88
Gain on sale of investments 0 2.65 4.63 0.64 5.88
Unrealized gain/loss on
revaluation investment 0 -0.01 -0.06 0.002 0.003
Other income 4.67 1.42 0.29 2.043 0.7
Total non-markup / interest
income 90.72 90.57 83.94 69.74 58.75

COMMENTS:
Fee commission and brokerage income is generated through providing different services
on commission. This ratio is showing inefficiency of bank every year. Because it is
decreasing every year gradually and minimum decrease of 11% is seen in 2009 that is
unfavorable for the performance of bank.

2005 2006 2007 2008 2009

NON MARK-UP/INTEREST
EXPENSES %AGE %AGE %AGE %AGE %AGE
Administrative expenses 33.28 30.48 28.09 29.81 28.94
Other provisions / write offs 0.58 -0.039 0.332 1.22 0.79
Other charges 0.18 0.47 0.033 0.95 0.41
Total non-markup / interest
expenses 34.06 30.91 28.45 32 30.15

COMMENTS:
• Admin expenses are showing favorable position in the income statement because
these are decreasing every year that is favorable for the performance for bank.
 • Total non mark up expenses are also showing decreasing trend that is favorable
for the bank.

2005 2006 2007 2008 2009

PROFIT BEFORE & AFTER
TAXATION %AGE %AGE %AGE %AGE %AGE
PROFIT BEFORE TAXATION 56.65 59.65 55.48 37.74 28.59
Taxation - current 21.27 19.71 16.43 19.3 11.82
Prior years -3.26 1.2 0.77 0 -5.3
Deferred 0.86 0.14 0.64 -6.92 -1.28
18.86 21.06 17.85 12.37 5.243
PROFIT AFTER TAXATION 37.78 38.59 37.63 25.36 23.35

COMMENTS:
Profit before tax is decreasing critically. It was highest in 2006 at 59% and than start
decreasing gradually this decreasing trend is due to increasing direct and indirect
expenses. Management of bank should control and check all the expenses made to
generate revenue.
Tax expense is decreasing every year that is favorable for the profitability of bank.
Decrease in deferred tax cost is also shown.
Profit after tax is moving toward the critical situation because above given chart is
clearly indicating that the profit of the bank is decreasing every year. It was highest in
2008 at 38% and lowest in 2009 at 25%.