Effect of Promotional Expenditure of Commercial Bank on Profit of Bank
Introduction
A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits. After the Great Depression, the U.S. Congress required that banks engage only in banking activities, whereas investment banks were limited to capital market activities. As the two no longer have to be under separate ownership under U.S. law, some use the term “commercial bank” to refer to a bank or a division of a bank primarily dealing with deposits and loans from corporations or large businesses. In some other jurisdictions, the strict separation of investment and commercial banking never applied. Commercial banking may also be seen as distinct from retail banking, which involves the provision of financial services direct to consumers. Many banks offer both commercial and retail banking services.
Possible meanings
Commercial bank has two possible meanings:
Commercial bank is the term used for a normal bank to distinguish it from an investment bank.
This is what people normally call a “bank”. The term “commercial” was used to distinguish it from an investment bank. Since the two types of banks no longer have to be separate companies, some have used the term “commercial bank” to refer to banks that focus mainly on companies. In some English-speaking countries outside North America, the term “trading bank” was and is used to denote a commercial bank. During the great depression and after the stock market crash of 1929, the U.S. Congress passed the Glass-Steagall Act 1933-35 (Khambata 1996) requiring that commercial banks engage only in banking activities (accepting deposits and making loans, as well as other fee based services), whereas investment banks were limited to capital markets activities. This separation is no longer mandatory.
It raises funds by collecting deposits from businesses and consumers via checkable deposits, savings deposits, and time (or term) deposits. It makes loans to businesses and consumers. It also buys corporate bonds and government bonds. Its primary liabilities are deposits and primary assets are loans and bonds.
Commercial banking can also refer to a bank or a division of a bank that mostly deals with deposits and loans from corporations or large businesses, as opposed to normal individual members of the public (retail banking).
Origin of the word
The name bank derives from the Italian word banco “desk/bench”, used during the Renaissance by Florentine bankers, who used to make their transactions above a desk covered by a green tablecloth. However, traces of banking activity can found even in ancient times.
In fact, the word traces its origins back to the Ancient Roman Empire, where moneylenders would set up their stalls in the middle of enclosed courtyards called macella on a long bench called a bancu, from which the words banco and bank are derived. As a moneychanger, the merchant at the bancu did not so much invest money as merely convert the foreign currency into the only legal tender in Rome- that of the Imperial Mint.
A commercial bank is a type of financial intermediary and a type of bank. Commercial banking is also known as business banking. It is a bank that provides checking accounts, savings accounts, and money market accounts and that accepts time deposits.
According to the establishment of the commercial bank it’s categorized into three parts which are first generation, second generation and third generation.
First generation
Ø AB Bank Limited.
Ø Islamic Bank Limited.
Second generation
Ø Eastern Bank limited.
Ø Prime Bank Limited.
Third generation
Ø The Trust Bank Limited.
Ø BRAC Bank Limited.
Objective
To analyze the effect of promotional expenditure of commercial bank on the profitability.
Scopes:
Ø Internet and computer problem of our lab.
Ø Compile up the graph.
Sources & Methods of Collecting Information
The required information for the analysis mainly came from primary sources. We also use secondary sources like websites, news paper articles, economic and statistical journals and other reports. That secondary and primary information was first analyzed and then took under consideration which might be used for the analysis.
Litareture Review
Promotional mix
The promotional mix consist of the blend of advertising , sales promotion ,public relations, personal selling, and direct marketing tools that the company uses to pursue its advertising and marketing objective.
Advertising
Any paid form of non personal presentation and promotion of ideas, goods, or services by an identified sponsor. Advertising can reach masses of geographically dispersed buyers at allow cost per exposure, and it enables the sellers to repeat a message many times.
For example television advertising can reach huge audiences.
Personal selling
Personal presentation by the firm’s sales force for the purpose of making sales and building customer relationships. Personal selling is more effective tools at certain stage of buying process, particularly in building up buyer’s preference, conviction, and action. It involves personal interaction between two or more people, so each person can observe other’s needs and characteristic s and make quick adjustments.
Sales promotion
Sales promotion is short term incentives to encourage the purchase or sales of product or service.
Sales promotion include wide assortment of tools like coupons, contests, cent of deals, premium and others all of which have unique qualities.
Public relation
Public relations (PR) are the practice of managing the flow of information between an organization and its publics. Public relations gain an organization or individual exposure to their audiences using topics of public interest and news items that do not require direct payment. Because public relations place exposure in credible third-party outlets, it offers a third-party legitimacy that advertising does not have. Common activities include speaking at conferences, working with the press, and employee communication.
Public Relation can be used to build rapport with employees, customers, investors, voters, or the general public. Almost any organization that has a stake in how it is portrayed in the public arena employs some level of public relations. A number of specialties exist within the field of public relations, such as Analyst Relations, Media Relations, Investor Relations or Labor Relations.
AB Bank Limited
AB Bank Limited, the first private sector bank under Joint Venture with Dubai Bank Limited, UAE incorporated in Bangladesh on 31st December 1981 and started its operation with effect from April 12, 1982.
Dubai Bank Limited (name subsequently changed to Union Bank of the Middle East Limited) decided to off-load their investment in AB Bank Limited with a view to concentrate their activities in the UAE in early part of 1987 and in terms of Articles 23A and 23B of the Articles of Association of the Company and with the necessary approval of the relevant authorities, the shares held by them in the Bank were sold and transferred to Group “A” Shareholders, i.e. Bangladeshi Sponsor Shareholders.
As of December 31, 2007; the Authorized Capital and the Equity (Paid up Capital and Reserve) of the Bank are BDT 2000 million and BDT 4511.59 million respectively. Authorized Capital of the Bank has been increased to BDT 3000 million in the Extra Ordinary General Meeting held on July 16, 2008.
Since beginning, the bank acquired confidence and trust of the public and business houses by rendering high quality services in different areas of banking operations, professional competence and employment of the state of art technology.
During the last 27 years, AB Bank Limited has opened 73 Branches in different Business Centers of the country, one foreign Branch in Mumbai, India and also established a wholly owned Subsidiary Finance Company in Hong Kong in the name of AB International Finance Limited. To facilitate cross border trade and payment related services, the Bank has correspondent relationship with over 220 international banks of repute across 58 countries of the World.
AB Bank Limited, the premier sector bank of the country is making headway with a mark of sustainable growth. The overall performance indicates mark of improvement with Deposit reaching BDT 53375.35 million, which is precisely 26.85% higher than the preceding year. On the Advance side, the Bank has been able to achieve 30.76% increase, thereby raising a total portfolio to BDT 40915.35 million, which places the Bank in the top tier of private sector commercial banks of the country.
Product and service of AB bank
Personal Loan
Target Customer
Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants), Businessmen.
Purpose
Purpose Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture.
Ø Loan Amount Minimum Tk. 25,000.00.
Ø Maximum Tk. 5,00,000.00
Ø Charges Application fee: Tk. 500.00
Rate of Interest: 14.50% p.a. – 17.50% p.a.
Auto Loan
Target Customer
Employees of reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies, Government Employees, Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants), Businessmen
Purpose
To purchase Brand new vehicle, non-registered reconditioned vehicle
Loan Amount
Ø 70% for the brand new car
Ø 60% for the reconditioned car but must not exceed BDT 10,00,000.00
Rate of Interest
14.50% p.a. – 17.50% p.a.
Easy Loan (For Executives)
Target Customer
The loan is specially designed for salaried people who are employed in different reputed companies
Purpose
Marriages in the family, Purchase of office equipment / accessories, Purchase of miscellaneous household appliances, Purchase of Personal Computers, Purchase of audio-video equipment, Purchase of furniture, Advance rental payment, Trips abroad, Admission/Education fee of Children etc.
Loan Amount
Ø Minimum Tk. 50,000.00
Ø Maximum Tk. 3,00,000.00
Rate of Interest
16.00% p.a.
Gold Grace – Jewellery Loan
Target Customer
Both female & male employees may apply viz. employees of reputed Banks & Leasing companies, reputed Local Corporate, MNCs, NGOs, Airlines, Private Universities, Schools and Colleges, International Aid Agencies and UN bodies. Government Employees. Self-employed Professionals (Doctors, Engineers, Chartered Accountants, Architects, Consultants). Businessmen with a reliable regular source of income.
Purpose
To purchase ornaments/Jewellery for personal use
Loan Amount
Ø Minimum Tk. 50,000.00
Ø Maximum Tk. 3,00,000.00
Ø Processing fee: 1% on the approved loan amount or Tk. 1000.00 whichever is higher
Rate of Interest: 16.00% p.a.
Corporate Banking
At AB Bank we provide complete range of solutions to meet Corporate Customers’ requirement. Our Corporate Banking solutions include a broad spectrum of products and services backed by proven, modern technologies.
Corporate Lending
Our specialist teams offer a comprehensive service providing finance to large and medium-sized businesses based in Bangladesh. For more information as to how we might best meet your corporate debt needs, please contact us at our Corporate Head Office.
Structured Finance
We have a specialist Structured Finance Team who arrange and underwrite finance solutions including Debt and Equity Syndication for financial sponsors, management teams and corporates. Also we provide corporate advisory services.
We aim to provide tailored financing solutions with a dedicated team who can rapidly respond to client needs.
Following are some of the products and financial tools of Corporate Banking:
Ø Project Finance
Ø Working Capital Finance
Ø Trade Finance
Ø Cash Management
Ø Syndicated Finance, both onshore & off-shore
Ø Equity Finance, both onshore & off-shore
Ø Corporate Advisory Services
SME Banking
Considering the volume, role and contribution of the SMEs, in the last two decades AB Bank has been patronizing this sector by extending credit facilities of different types and tenor. As of now 54% of the bank’s total loan portfolio is segmented to the SMEs which deserve all out attention in our plans, projections and forecasting.
As such the bank has emphasized on the following issues:
Ø To provide the best services to the SME sector
Ø To increase the SME portfolio of ABBL significantly
Ø To improve the quality of ABBL’s portfolio
SME Sectors in which AB Bank has participated so far:
Ø Agro machinery
Ø Poultry
Ø Animal Feed
Ø Dairy Product
Ø Fruit Preservation
Ø Hotel & Restaurants
Ø Garments Accessories
Ø Leather products
Ø Plastic product
Ø Furniture : Wooden & Metal
Ø Ink
Ø Paint
Ø Printing & Packaging
Ø Wire & Cable
Ø Aluminum
Ø Cement and Lime Plaster
Table: 1.Bank’s promotional expenditure and profitability of AB bank
| Year | promotional expenditure(x) in Tk | profit(y) in Tk |
| 2004 | 19637226 | 90066599 |
| 2005 | 23404603 | 162453608 |
| 2006 | 27218559 | 532186349 |
| 2007 | 44720259 | 1903493845 |
| 2008 | 64989223 | 2300621640 |
| Total | 179969870 | 4988822041 |
Fig: 1. promotional expenditure and profitability of AB bank from 2004-2008
Promotional expenditure and profitability of AB bank from 2004-2008: According to the figure 1 we have reached to find out that the trend of the promotional expenditure and profitability of the AB bank is increasing on the basis of year. Hear profit has increased massively in compared to the promotional expenditure that’s mean profit of the bank not only influenced by promotional expenditure but it is influenced by another activity but we just consider the promotional expenditure as an influential factor. In this diagram, in 2008 expenditure and profit both has maximized which amount were Tk179969870 and Tk4988822041.
Table: 2.Growth rate of promotional expenditure
| Year | promotional expenditure(x) | growth rate of P.E |
| 2004 | 19637226 | |
| 2005 | 23404603 | 19.18487367 |
| 2006 | 27218559 | 16.29575174 |
| 2007 | 44720259 | 64.30061195 |
| 2008 | 64989223 | 45.32389672 |
| Total | 179969870 | 145.1051341 |
Fig: 2. Growth rate of promotional expenditure from 2004-2008
Growth rate of promotional expenditure from 2004-2008: According to the above diagram growth rate of promotional activity of AB bank was more or less fluctuation. Some time growth rate increase drastically and some time has declined little amount. In 2007, growth rate increased at the maximum level that amount was 64.30 percent and the minimum growth rate was 16.29 percent that was the minimum amount.
Table: 3. Growth rate of profitability from 2004-2008
| Year | Profit | Growth rate of p |
| 2004 | 90066599 | |
| 2005 | 162453608 | 80.3705367 |
| 2006 | 532186349 | 227.5928159 |
| 2007 | 1903493845 | 257.6743087 |
| 2008 | 2300621640 | 20.86309846 |
| Total | 4988822041 | 586.5007598 |
Fig: 3. Growth rate of profitability from 2004-2008
Growth rate of profitability from 2004-2008: From the above demonstration, for the influencing promotional expenditure, the growth rate of profit has increased in each year except 2008. In 2007 growth rate of the profit has maximized and the amount was near about 257.67 percent but the growth rate was minimum in 2008 that was approximately 20.86 percent.
Table: 4.Effect of promotional expenditure in profits from 2004-2008
| Year | growth rate of P.E | growth rate of profit |
| 2004 | ||
| 2005 | 19.18487367 | 80.3705367 |
| 2006 | 16.29575174 | 227.5928159 |
| 2007 | 64.30061195 | 257.6743087 |
| 2008 | 45.32389672 | 20.86309846 |
| Total | 145.1051341 | 586.5007598 |
Fig: 4. Effect of promotional expenditure in profits from 2004-2008
Effect of promotional expenditure in profits from 2004-2008: According to the above diagram the promotional expenditure has inspired the profitability of AB bank. In this diagram in compared to the promotional expenditure, growth of profitability increase more.
Regression of AB bank
Variables Entered/Removed (b)
| Model | Variables Entered | Variables Removed | Method |
| 1 | expenditure(a) | . | Enter |
a All requested variables entered.
b Dependent Variable: profit
Model Summary
| Model | R | R Square | Adjusted R Square | Std. Error of the Estimate |
| 1 | .966(a) | .934 | .912 | 306085573.04944 |
a Predictors: (Constant), expenditure
ANOVA (b)
| Model | Sum of Squares | df | Mean Square | F | Sig. | |
| 1 | Regression | 3975140020018268000.000 | 1 | 3975140020018268000.000 | 42.429 | .007(a) |
| Residual | 281065134087019000.000 | 3 | 93688378029006300.000 | |||
| Total | 4256205154105287000.000 | 4 |
a Predictors: (Constant), expenditure
b Dependent Variable: profit
Coefficients (a)
| Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||
| B | Std. Error | Beta | ||||
| 1 | ||||||
| (Constant) | -906708084.634 | 322833168.805 | -2.809 | .067 | ||
| expenditure | 52.911 | 8.123 | .966 | 6.514 | .007 | |
a Dependent Variable: profit
Islami Bank
Table: 5. promotional expenditure and profitability of Islami Bank from 2004-2008.
| Year | Promotional expenditure | Profitability |
| 2004 | 40581790 | 1013647225 |
| 2005 | 48497317 | 1125821683 |
| 2006 | 77559915 | 1400591591 |
| 2007 | 78757200 | 2049053457 |
| 2008 | 101722324 | 2674796768 |
| Total | 347118546 | 8263910724 |
Fig: 5. promotional expenditure and profitability of Islami Bank from 2004-2008.
Promotional expenditure and profitability of Islami Bank from 2004-2008: According to the figure 5 we have reached to find out that the trend of the promotional expenditure and profitability of the Islimi bank increased on the basis of year. Here profit has increased massively in compared to the promotional expenditure that’s mean profit of the bank not only influenced by promotional expenditure but it is influenced by another activity but we just consider the promotional expenditure as an influential factor. In this diagram, in 2008 expenditure and profit both have maximized which amount were Tk101722324and Tk2674796768.
Table: 6. Growth rate of promotional expenditure of Islami Bank from 2004-2008
| Year | Promotional expenditure | Growth rate of P.E |
| 2004 | 40581790 | |
| 2005 | 48497317 | 19.5051204 |
| 2006 | 77559915 | 59.92619757 |
| 2007 | 78757200 | 1.543690449 |
| 2008 | 101722324 | 29.15939622 |
| 347118546 | 110.1344046 |
Fig: 6.Growth rate of promotional expenditure of Islami Bank from 2004-2008
Growth rate of promotional expenditure from 2004-2008: According to the above diagram growth rate of promotional expenditure of Islami bank was more or less fluctuation. Some time growth rate increase drastically and some time has declined little amount. In 2006, growth rate increased at the maximum level that amount was 59.92 percent and the minimum growth rate was 1.54 percent that was the minimum amount.
Table: 7. Growth rate of profitability of Islami Bank from 2004-2008
| Year | Profitability | Growth rate of profit |
| 2004 | 1013647225 | |
| 2005 | 1125821683 | 11.06641988 |
| 2006 | 1400591591 | 24.40616593 |
| 2007 | 2049053457 | 46.29914032 |
| 2008 | 2674796768 | 30.53816429 |
| 8263910724 | 112.3098904 |
Fig: 7. Growth rate of profitability of Islami Bank from 2004-2008
Growth rate of profitability from 2004-2008: From the above demonstration, for the influencing promotional expenditure, the growth rate of profit has increased in each year except 2008. In 2007 growth rate of the profit has maximized and the amount was near about 46.29percent but the growth rate was minimum in 2008 that was approximately 11.066 percent.
Table: 8.Effect of promotional expenditure in profits from 2004-2008
| Year | Growth rate of P.E | Growth rate of profit |
| 2004 | ||
| 2005 | 19.5051204 | 11.06641988 |
| 2006 | 59.92619757 | 24.40616593 |
| 2007 | 1.543690449 | 46.29914032 |
| 2008 | 29.15939622 | 30.53816429 |
| 110.1344046 | 112.3098904 |
Fig: 8. Effect of promotional expenditure in profits from 2004-2008
Effect of promotional expenditure in profits from 2004-2008: According to the above diagram the promotional expenditure has inspired the profitability of Islami bank. In this diagram in compared to the promotional expenditure, growth of profitability increase more. Maximum growth rate of promotional expenditure was in 2006 and the amount was about 59.92 percent and maximum growth rate of profit was in 2007 and the amount was 46.29.
Regression Islami Bank
Variables Entered/Removed (b)
| Model | Variables Entered | Variables Removed | Method |
| 1 | expenditure(a) | . | Enter |
a All requested variables entered.
b Dependent Variable: profit
Model Summary
| Model | R | R Square | Adjusted R Square | Std. Error of the Estimate |
| 1 | .924(a) | .854 | .806 | 307904556.08757 |
a Predictors: (Constant), expenditure
ANOVA(b)
| Model | Sum of Squares | df | Mean Square | F | Sig. | |
| 1 | Regression | 1666910045363068000.000 | 1 | 1666910045363068000.000 | 17.582 | .025(a) |
| Residual | 284415646978451800.000 | 3 | 94805215659483900.000 | |||
| Total | 1951325692341520000.000 | 4 |
a Predictors: (Constant), expenditure
b Dependent Variable: profit
Coefficients(a)
| Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||
| B | Std. Error | Beta | ||||
| 1 | ||||||
| (Constant) | -152073514.050 | 451919248.681 | -.337 | .759 | ||
| expenditure | 25.998 | 6.200 | .924 | 4.193 | .025 | |
a Dependent Variable: profit
Eastern Bank Limited
Eastern Bank Limited (EBL) is one of the modern, fully online and technologically superior private commercial Banks in Bangladesh. Eastern Bank markets a wide range of depository, loan & card products. These products include different types of Savings & Current Accounts, Personal Loans, Auto Loan, Debit Card, Pre-paid Cards, Internet Banking, Treasury, Syndication, Corporate Banking and SME Banking services through a network of branches & centers countrywide. Eastern Bank has its presence in major cities/towns of the country including Dhaka, Chittagong, Sylhet, Khulna and Rajshahi. Tracing its origin back to 1992, EBL is serving the individual and corporate clientele alike with remarkable success offering innovative banking services since then.
Vision
To become the bank of choice by transforming the way we do business and developing a truly unique financial institution that delivers superior growth and financial performance and are the most recognizable brand in the financial services in Bangladesh.
Mission
Ø We will deliver service excellence to all our customers, both internal and external.
Ø We will constantly challenge our systems, procedures and training to maintain a cohesive and professional team in order to achieve service excellence.
Ø We will create an enabling environment and embrace a team based culture where people will excel. We will ensure to maximize shareholder’s value.
Product and service of Eastern Bank
Loan product
Jibon dhara loan
Feature
Ø Loan Amount ranges from BDT 50,000 to BDT 1,000,000 (or 12 times of gross salary, whichever is lower).
Ø Repayment tenure of 12, 24, 36, 48 or 60 months.
Ø Payment option available starting after minimum 6 months of disbursement of loan.
Ø Early full and final settlement allowed.
Ø No security required.
Ø No hidden charges.
Home Loan
EBL introduces the most convenient & practical Home Loan that suits your all home financing needs. Let it be for apartment purchase, home construction, extension or renovation – EBL is here with the ultimate solution for you. With so many attractive features in it – the home you wanted to buy, or to extend the existing one or renovate the same is no longer a distant dream.
Feature
Ø Loan amount BDT 500,000 – 75,00,000 or 50 times of applicant’s Gross Monthly Income, whichever is lower
Ø Repayment tenure 3 years to 20 years
Ø Attractive Interest rates based on loan amount:
| Loan Amount | Interest Rate |
| BDT 5 Lac to 15lac | 14% |
| BDT 15 Lac+ to 25 Lac | 14.25% |
| BDT 25 Lac+ to 40 Lac | 14.5% |
| BDT 40 Lac+ to 75 Lac | 15.00% |
Deposit product
Interesting Account
Ø Interest calculated on daily balance
Ø Interest is credited to your account every month
Ø Competitive interest rate
Ø Unlimited cash withdrawal
Ø Available in all EBL Branches
Ø No extra terms and conditions
EBL Campus – first time in Bangladesh a tailor made banking pack for students.
Campus Account: Under “EBL Campus”, yet another wonderful product that directly takes you into the rewarding world of general banking. It’s your very own, very special savings account with no hidden charges or restrictions, while giving you very attractive interest on daily balance, Plus a super-smart plastic in your wallet!
Feature
Ø Interest bearing deposit account
Ø Interest calculated on the basis of daily balance
Ø No hidden charges or restrictions apply with regard to interest payment
Ø No standing in bank branch queues for withdrawal of money
Ø Leads you into the smart … modern world of electronic banking- ATMs, POS terminals, Kiosks etc.
Card Products
Lifestyle Card – Under “EBL Campus” it’s another brilliant offering- a solid, internationally branded prepaid card that suits the lifestyle of students. The best way to not only make a fashion statement, but also to control your spending all in style. Reload and use only when you need to.
And rest assured about the safety & security that the VISA logo vouches for!
Ø A global branded VISA prepaid card
Ø Reloadable
Ø Round the clock access to large ATM network (over 85 Q-cash & VISA ATMs within Bangladesh) and a large network of POS terminals at different shops
Ø Discount on purchases available from many retail shops/outlets
Ø Having a bank account with EBL is not required
Simple credit card
Introducing EBL SIMPLE Credit Cards.The first of its kind, a complete Credit Card with every benefit possible, and still offering you something extra. At work or leisure, experience the convenience of a Card that does everything with style and honesty.
When you become a member of EBL SIMPLE Card Services family, you become a part of an exclusive club – entitled to first class financial advice, priority treatment and a growing range of courtesy services.
We understand the value of your money. That is why we aim to give you the highest benefit at a minimum cost. Choose the card type that matches your requirement and experience the difference.
Experience EBL Credit Cards. Experience SIMPLE
Table: 9. promotional expenditure and profitability of Eastern Bank from 2004-2008.
| Year | Promotional Expenditure | Profitability |
| 2004 | 25032969 | 483365228 |
| 2005 | 42266189 | 546496236 |
| 2006 | 61935652 | 513197847 |
| 2007 | 99194921 | 419142202 |
| 2008 | 139733665 | 798353197 |
| Total | 368163396 | 2760554710 |
Table: 9. promotional expenditure and profitability of Eastern Bank from 2004-2008.
Promotional expenditure and profitability of Eastern Bank from 2004-2008: According to the above figure we have reached to find out that the trend of the promotional expenditure and profitability of the Eastern bank increased on the basis of year. Here profit has increased massively in compared to the promotional expenditure that’s mean profit of the bank not only influenced by promotional expenditure but it is influenced by another activity but we just consider the promotional expenditure as an influential factor. In this diagram, in 2008 the profit increased massively which is around Tk798353197 but promotional expenditure has increased slightly which was near about Tk139733665.
Table: 10. Growth rate of promotional expenditure from 2004-2008
| Year | Promotional Expenditure | Growth rate of P.E |
| 2004 | 25032969 | |
| 2005 | 42266189 | 68.8420938 |
| 2006 | 61935652 | 46.53711031 |
| 2007 | 99194921 | 60.15803144 |
| 2008 | 139733665 | 40.86776177 |
| Total | 368163396 | 216.4049973 |
Fig: 10. Growth rate of promotional expenditure from 2004-2008
Growth rate of promotional expenditure from 2004-2008: According to the above diagram growth rate of promotional expenditure of Eastern bank was more or less fluctuation. Some time growth rate increase drastically and some time has declined little amount. In 2005, growth rate increased at the maximum level that amount was 68.84 percent and the minimum growth rate was in 2008 and that amount was 1.54 percent.
Table: 11. Growth rate of profit from 2004-2008
| Year | Profitability | Growth rate of profit |
| 2004 | 483365228 | |
| 2005 | 546496236 | 13.060726 |
| 2006 | 513197847 | -6.093068315 |
| 2007 | 419142202 | -18.32736547 |
| 2008 | 798353197 | 90.47311227 |
| Total | 2760554710 | 79.11340449 |
Fig: 11. Growth rate of profit from 2004-2008
Growth rate of profit from 2004-2008: From the above demonstration, for the influencing promotional expenditure, the growth rate of profit has increased in each year except 2008 that amount was 90.48 percent but Eastern bank is first one in which we have found negative growth rate in 2007 and 2008. maximum growth rate decrease in2007 and the amount was -18.32 percent.
Table: 12.Effect of promotional expenditure on growth rate of profits from 2004-2008
| Year | Growth rate of P.E | Growth rate of profit |
| 2004 | ||
| 2005 | 68.8420938 | 13.060726 |
| 2006 | 46.53711031 | -6.093068315 |
| 2007 | 60.15803144 | -18.32736547 |
| 2008 | 40.86776177 | 90.47311227 |
| 216.4049973 | 79.11340449 |
Fig: 12. Effect of promotional expenditure in profits from 2004-2008.
Effect of promotional expenditure in profits from 2004-2008: According to the above diagram the promotional expenditure has inspired the profitability but it is not always. Some time it does not influence the growth rate of profit. In above diagram we see that growth rate of the promotional expenditure increase but it is not influencing profit that is why profit has gone in negative segment in 2006 and 2007.
Regression of Easstern Bank
Variables Entered/Removed (b)
| Model | Variables Entered | Variables Removed | Method |
| 1 | expenditure(a) | . | Enter |
a All requested variables entered.
b Dependent Variable: profit
Model Summary
| Model | R | R Square | Adjusted R Square | Std. Error of the Estimate |
| 1 | .628(a) | .395 | .193 | 130646368.70283 |
a Predictors: (Constant), expenditure
ANOVA(b)
| Model | Sum of Squares | df | Mean Square | F | Sig. | |
| 1 | Regression | 33382240078276790.000 | 1 | 33382240078276790.000 | 1.956 | .256(a) |
| Residual | 51205420965711100.000 | 3 | 17068473655237030.000 | |||
| Total | 84587661043987900.000 | 4 |
a Predictors: (Constant), expenditure
b Dependent Variable: profit
Coefficients(a)
| Model | Unstandardized Coefficients | Standardized Coefficients | t | Sig. | ||
| B | Std. Error | Beta | ||||
| 1 | ||||||
| (Constant) | 406235715.373 | 119557645.044 | 3.398 | .043 | ||
| expenditure | 1.981 | 1.417 | .628 | 1.398 | .256 | |
a Dependent Variable: profit
Prime bank
In the backdrop of economic liberalization and financial sector reforms, a group of highly successful local entrepreneurs conceived an idea of floating a commercial bank with different outlook. For them, it was competence, excellence and consistent delivery of reliable service with superior value products. Accordingly, Prime Bank Ltd. was created and commencement of business started on 17th April 1995. The sponsors are reputed personalities in the field of trade and commerce and their stake ranges from shipping to textile and finance to energy etc.
As a fully licensed commercial bank, Prime Bank Ltd. is being managed by a highly professional and dedicated team with long experience in banking. They constantly focus on understanding and anticipating customer needs. As the banking scenario undergoes changes so is the bank and it repositions itself in the changed market condition.
Prime Bank Ltd. has already made significant progress within a very short period of its existence. The bank has been graded as a top class bank in the country through internationally accepted CAMEL rating. The bank has already occupied an enviable position among its competitors after achieving success in all areas of business operation.
Prime Bank Ltd. offers all kinds of Commercial Corporate and Personal Banking services covering all segments of society within the framework of Banking Company Act and rules and regulations laid down by our central bank. Diversification of products and services include Corporate Banking, Retail Banking and Consumer Banking right from industry to agriculture, and real state to software.
The bank has consistently turned over good returns on Assets and Capital. During the year 2005, the bank has posted an operating profit of Tk.1520.34 million and its capital funds stood at Tk.3177.32 million. Out of this, Tk.1400 million consists of paid up capital by shareholders and Tk.1777.32 million represents reserves and retained earnings. The bank’s current capital adequacy ratio of 9.96% is in the market. In spite of complex business environment and default culture, quantum of classified loan in the bank is very insignificant and stood at less than 0.96%.
Prime Bank Ltd., since its beginning has attached more importance in technology integration. In order to retain competitive edge, investment in technology is always a top agenda and under constant focus. Keeping the network within a reasonable limit, our strategy is to serve the customers through capacity building across multi delivery channels. Our past performance gives an indication of our strength. We are better placed and poised to take our customers through fast changing times and enable them compete more effectively in the market they operate.
Public Relations Division
It has to perform certain functions related to all types of communication. The broad routine functions can be enumerated as follows:
i. Receiving and Sanctioning of all advertisement application
ii. Keeping good relation with different newspaper offices.
iii. Inviting concerned ones for any occasion.
iv. Keeping good relation with different officers of electronic media.
Marketing Division
Marketing Division is involved in two types of Marketing.
Asset marketing: Marketing of assets refers to marketing of various kinds of loans and advances. In-order to perform these jobs, they often visits dome large organizations and attract then to borrow from the Bank to finance profitable ventures.
Liability Marketing: The process of Liability marketing is more of less same as Asset marketing. In this case different organizations having excess funds are solicited to deposit their excess fund to the Bank. If the amount of money to be deposited is large, the Banks sometimes offer a bit higher price than the prevailing market rate.
Islamic bank
Bangladesh is one of the largest Muslim countries in the world. The people of this country are deeply committed to Islamic way of life as enshrined in the Holy Qur’an and the Sunnah. Naturally, it remains a deep cry in their hearts to fashion and design their economic lives in accordance with the precepts of Islam. The establishment of Islami Bank Bangladesh Limited on March 13, 1983, is the true reflection of this inner urge of its people, which started functioning with effect from March 30, 1983. This Bank is the first of its kind in Southeast Asia. It is committed to conduct all banking and investment activities on the basis of interest-free profit-loss sharing system. In doing so, it has unveiled a new horizon and ushered in a new silver lining of hope towards materializing a long cherished dream of the people of Bangladesh for doing their banking transactions in line with what is prescribed by Islam. With the active co-operation and participation of Islamic Development Bank (IDB) and some other Islamic banks, financial institutions, government bodies and eminent personalities of the Middle East and the Gulf countries, Islami Bank Bangladesh Limited has by now earned the unique position of a leading private commercial bank in Bangladesh.
Aims and Objectives
Ø To conduct interest-free banking.
Ø To establish participatory banking instead of banking on debtor-creditor relationship.
Ø To invest on profit and risk sharing basis.
Ø To accept deposits on Mudaraba & Al-Wadeah basis.
Ø To establish a welfare-oriented banking system.
Ø To extend co-operation to the poor, the helpless and the low-income group for their economic upliftment.
Ø To play a vital role in human development an