Banks

Review of earning capacity of the Branch in terms of resource availability/ utilization, business strategy being followed, product availability, etc.

Brach profitability depends on its proper utilization of available financial resources. Branch collects those financial resources through deposit. Existing customers as well as potential customers will be interested to make deposit at AB Bank if interest rate of deposit is high. At Lohagora branch deposited amount is increasing with a satisfactory rate due to high interest rate of deposit. And the optimal utilization of these financial resources of Lohagora branch will be occurred through providing loan and advances into profitable sectors. Trends of available financial resources and loan & advances of Lohagora branch from 2007 to 2010 are given below:

(Amount in Lac)

Particulars Years

2010 2009 2008 2007

Deposits & Other A/Cs 5,648 5,437.02 4,512.12 3,823.67

Loans and Advances 578.86 549.70 256.50 282.77

Loan to Deposit percentage 10.25% 10.11% 5.68% 7.40%

Growth Rate of Deposit 2.57% 20.50% 18.00% -

Growth Rate of Loans 5.33% 114.31% (9.29)% -

From the above scenario we found that available financial resources of branch from the year 2007 to 2010 were increasing. Specially in the year 2008 to 2009 increasing rate of deposit was significant. Growth rate of deposit from the year 2008 to 2009 was 20.50%. In the opposite scenario, loans and advances from year 2007 to 2010 were increasing except the year 2008. Growth rate of the year 2009 was 114.31% which was significantly positive. But growth rate of loans & advances was not consistent with the growth rate of deposit and other account.

During the period of our special review at Lohagora branch we observed that maximum earning of the branch is covered by the interest income of general account. Maximum portion of deposited amount has been left due to not converting those amounts into loans and advances. Amount and percentage of loan &...