Financial Management of Private Commercial Bank in Bangladesh : An Empirical Study on Prime Bank Limited
This paper purposes to explore the financial management practices of private commercial bank in Bangladesh based on the information provided in the financial statements. For this, Prime Bank Limited (PBL), a reputed private commercial bank operating in Bangladesh, has been studied for 2010-14. This study finds that major contributor of PBL’s operating revenue is funded income, major areas of fund employment are Secured overdraft / Quard against TDR, Cash credit / Murabaha, and Loans (General) while the major fund source is Term deposits / Mudaraba term deposits. PBL has always maintained higher return from credit than the cost of funds for deposit. However, the amount of unclassified loan is decreasing over the years while classifieds are increasing. The treasury income of PBL is increasing over the years and maximum portion of the income comes from interest income on Government Securities. In case of liquidity gap, overall positive gap is observed. The repricing gaps model for interest risk shows cumulative negative gap of PBL over the years while financing surpluses over the years are observed. Based on the analysis, this study calls for special focus of PBLs’ management in the areas of operating performance, credit risk management, and asset quality management.