Performance Analysis of Bank Asia Limited

Abstract

Financial sector in Bangladesh comprises of mainly banking sector, insurance companies, stock market, non-bank financial institutions and micro financing institutions. Out of these, banking sector dominates the financial system, accounting for more than 95% of its total assets. Banking system of Bangladesh has gone through three phases of development --Nationalization, Privatization and Financial Sector Reform. Like in many other emerging market economies, commercial banks in the Bangladesh economy are to face an increasing competition for their business in the coming days. Their business will no longer remain easy as they had earlier. In the beginning of 1990' s, seven more private commercial banks were permitted, of which of course, two were reconstituted in new names after their collapse. These banks have become known in our economy as the second-generation banks. In a third wave, a dozen more banks are permitted by the Bangladesh Bank and a number of new foreign banks entered into our economy. These banks have become known in our economy as the third-generation banks. Now, we can say, our commercial banking business, which is an important segment of the financial sector, consists of two dozen private commercial banks, fourteen foreign banks, four NCBs. The other segment of the financial sector is represented by about two dozen insurance companies, six non-banking financial institutions, few leasing companies and twenty newly permitted merchant banks. Bank Asia Limited is one of the few banks permitted by the Bangladesh bank in the late 90s; the other banks permitted earlier are Mercantile Bank Limited, Standard Bank Limited, One Bank Limited, Exim Bank Limited, Premier Bank Limited, Mutual Trust Bank Limited, First Security Bank Limited, The Trust Bank Limited, Jamuna Bank Limited, BRAC Bank Limited and Shahjalal Islami Bank Limited. These banks are known as the third generation banks and fortunate to remain immune from the bad loan culture. However, the performance of' the banks are not the same, the Bank Asia Limited remained as one of the top performers among them.