Performance Analysis of National Bank Limited

Abstract

Following the country's independence, Bangladesh's banking sector has played a very large role in stabilizing our economic system. However, the most recent situation in our banking sector isn't very noteworthy. Due to COVID-19's eruption at the beginning of 2020, our banking enterprise has reached a standstill. The spectrum of non-appearing loans was already too vast before the global pandemic, but it increased even further. The financial sector will again suffer as a result of this year's second wave of corona outbreak. NPL, however, isn't the basic explanation for poor performance. Additionally, other factors that may have an impact include poor governance, money laundering, and ineffective policies. Bank regulatory authorities utilize the internationally known CAMELS rating system to assign financial organizations a score based on the six criteria that make up the acronym. Authorities in charge of supervision rate each bank on a scale. For each factor, a score of one indicates the best and a score of five indicates the worst. In the first quarter of 2020, the banking sector of Bangladesh reportedly saw around 9% of non-performing loans (NPLs) and 18.2 billion in defaulted loans, according to the article (AT Capital Banking Sector Report, 2020). The loan was extended due to poor governance and a property's inability to function. People had a shortage of financial resources as a result of the epidemic, thus there was a significant demand for loans for both business purposes and for personal expenses. The banking sector is maintaining a rigid liquidity timetable as a result. The capital to risk-rated asset ratio increased to 11.9% in 2019. Due to the second national lockdown, this ratio increased significantly over the entirety of 2020 and is expected to increase significantly this year. However, BRAC Bank has so far outperformed all other banks in terms of overall performance, high capitalization, high funding, and strong asset friendliness in online banking. The effectiveness and productivity of the financial institution may be impacted by these components.