Presented By:

Naquibul Hasan Chowdhury

ID:10112101481
BBA Program, 24
th
Intake
Department of Finance
Bangladesh University of Business
&Technology (BUBT)
Analysis of Investment Performance of
IBBL




Area Covered

Objectives of the Report
Methodology of the Report
Limitations of the Study
Concept of Conventional & Islami Banking
Profile of IBBL
Different modes of investment
Analysis of Investment performance of IBBL
Comparative Analysis
Findings
Conclusion
Recommendations



The primary objective of this report is to analyze the investment performance
of Islami Bank Bangladesh Ltd. The following objectives can be listed as the
specific objectives of the study.

To understand the different modes of investment and mode wise investment
procedure of IBBL.
To examine the trend of inevestment and deposit over the years
To examine the mode wise investment and income of IBBL
To analyze classiffied investment of IBBL
To evaluate the investment performance of IBBL within the banking industry


Methodology of the Report
Research design:
The study, Analysis of Investment Performance of Islami Bank Bangladesh
Limited, is descriptive in nature which is based both on primary and
secondary data. The study focuses on mode wise investment mechanism
and mode wise investment performance of IBBL.
Description and Sources of data:
The data required for this study were collected from both primary and
secondary sources; however, majority of the information was collected
from secondary sources.
a) Primary source
Primary data was collected form
Branch Manager & Second Officer
Face to face conversation with employees and staffs
Practical work experience
Face to face conversation with clients





b) Secondary source
The secondary data has been collected from
Annual Report of Islami Bank Bangladesh Limited
Manuals of Investment of IBBL
Website of the Islami Bank Bangladesh Limited
The major portion of the data source used for this report is a secondary one.
Data analysis and reporting:
Trend analysis and comparative analysis are made to analyze the mode wise
investment performance of IBBL. Trend of investmnet, deposit, mode wise
investment, mode wise income are analyzed in the study. A comparative analysis
of non performing loan, investment to deposit ratio of IBBL with industry average
are made. Software like microsoft word, Excel are used for analyzing and
reporting purpose of the report.


I have faced some problems during preparing my report:

Lack of experiences has acted as constraints in the way of meticulous
exploration on the topic.
Lack of current information.
Shortage of time for preparing the report in order.
The study was conducted mostly on secondary data.


Conventional & Islami Bankng

Conventional Bank: Bank is a financial institution that collects deposit from
customer, provides loan to the customers and gives the opportunity of money
withdrawal through check , ATM cards etc.
Islami Banking: An Islamic Bank is a financial institution that operates with the
objective to implement and materialize the economic and financial principles of
Islam in the banking arena.

The Organization of Islamic Conference (OIC) has approved the definition of
Islamic Bank as,

A financial institution whose statutes, rules and procedures expressly states its
commitment to the principles of Islamic Shariah and to the banning of the receipt
and payment of interest on any of its operations.


Conventional Vs Islamic Banking
Profile of IBBL
Islami Bank Bangladesh Limited is a Joint Venture Public Limited Company
engaged in commercial banking business based on Islamic Shari'ah with 63.09%
foreign shareholding having largest branch network ( total 286 Branches) among
the private sector Banks in Bangladesh. It was established on the 13th March 1983
as the first Islamic Bank in the South East Asia. It is listed with Dhaka Stock
Exchange Ltd. and Chittagong Stock Exchange Ltd. Authorized Capital of the
Bank is Tk. 20,000.00 Million and Paid-up Capital is Tk. 14,636.28 Million having
33,686 shareholders as on 31st December 2013.
Mission
To establish Islamic Banking through the introduction of a welfare oriented
banking system and also ensure equity and justice in the field of all economic
activities, achieve balanced growth and equitable development in through
diversified investment operations particularly in the priority sectors and less
developed areas of the country.
To encourage socio-economic up liftmen and financial services to the loss-income
community particularly in the rural areas.

Vision
To always strive to achieve superior financial performance, be
considered a leading Islamic Bank by reputation and performance.
To establish and maintain the modern banking techniques, to ensure
soundness and development of the financial system based on Islamic
principles and to become the strong and efficient organization with highly
motivated professional, working for the benefit of people, based upon
accountability, transparency and integrity in order to ensure stability of
financial systems.
To encourage savings in the form of direct investment.
To encourage investment particularly in projects which are more likely to
lead to higher employment.

Products and Services:
Under products and services Islami Bank Bangladesh Ltd. has below
categories:
1. Deposit Schemes:
Al-Wadeah Current Account (AWCA)
Mudaraba Savings Account (MSA)
Mudaraba Term Deposit Account (MTDR)
Mudaraba Special Notice Account (MSNA)
Mudaraba Hajj Savings Account (MHSA)
Mudaraba Special Savings (Pension) Account (MSSA)
Mudaraba Savings Bond (MSB)
Mudaraba Monthly Profit Deposit Account (MMPDA)
Mudaraba Muhor Savings Account (MMSA)
Mudaraba Waqf Cash Deposit Account (MWCDA)
Mudaraba NRB Savings Bond (MNSB) Account
Mudaraba Foreign Currency Deposit Account (MFCD)
Students Mudaraba Savings Account (SMSA)

Investment Modes
Bai Mechanism,
Share Mechanism
Ijara Machanism
Investment Scheme
Rural Development Scheme
Foreign Exchange
Special Service:
Locker Services
ATM services
M cash
I banking
Online service

Different modes of Investment
Modes of Investment of IBBL
Mudaraba
Musharaka


Hire Purchase
under Shirkatul
Meelk
Bai Murabaha
Bai-Muazzal
Bai-Salam
Bai Istishna
Bai- as- Sarf



Bai
Mechanism
Share
Mechanism
Ijara
Machanism
Bai-Mechanism(Trading Mode)
Bai- Murabaha(contract Sale on profit)
Bai-Murabaha may be defined as a contract between a buyer and a seller under which
the seller sells certain specific goods permissible under Islamic Shariah and the Law of
the land to the buyer at a cost plus an agreed profit payable today or on same date in the
future in lump-sum or by installment. The profit may be either a fixed sum or based on
a percentage of the price of the good.

Procedure of investment under Bai-Murabaha:
First Step: The client submits a proposal regarding his requirements of the bank
Second Step: The client promises to buy the commodity from the bank on a Bai-Murabaha
basis.
Third step: The bank informs the client of its approval of purchasing the commodity. The
bank may pay the price immediately pr as per the agreement.
Fourth step: The two parties (the bank and clients) sign the Bai-Murabaha sale contract
according to the agreement of the promise to purchase.
Fifth Step: The Bank authorizes the client or his nominee to receive the commodity.


Bai- Muajjal (Deferred Sale)
The Bai-Muajjal may be defined as a contract between a buyer and a seller under
which the seller sells certain specific goods, permissible under Shariah and law of
the country, to the buyer at an agreed fixed price payable at a certain fixed future
date in lump sum or in fixed installments.

Procedure of investment under Bai-Muajjal Mode:
First Step: To offer an order by the client to the bank to purchase a specific good .The
client will promise to buy the goods from the bank.
Second Step: The client will an agreed fixed price payable at a certain fixed future date
in lump sum or within a period by fixed installments.
Third Step: The bank will take collateral to guarantee the implementation of promise.
The Bank and Client sign the agreement. Than bank will purchase goods from the
supplier according to the Bai-Muajjal agreement.
Fourth Step: Than Bank will deliver the goods to the client at the time and place
specified in agreement.

Bai Salam (Advanced purchase)
It is a sale in which an advance payment is made by the buyer, but the delivery is delayed
to an agreed date. In the Bai-Salam, a financial transaction happens in advance in cash as
a price of commodity whose delivery will be in a future date. It means deferred is the
commodity sold (debt in kind) and price of the commodity described is to be aid
immediately in advance.

Procedure of investment under Bai-Salam:
1. Cash sale or sale on Credit- the Bank pays the price in the contract meeting so that the
seller makes use of it and covers his financial needs. The seller abides the delivery of the
commodity on the specific due date.
2. Delivery and receipt of the commodity on the specific due Date: The bank there is
several options at the disposal of the bank to choose one of them.
3. The sale Contract: The bank agrees to sell the commodity for cash or a deferred price
higher than the salam purchase price. The buyer agrees to purchase and to pay the price
according to the agreement.





Bai Istisnas
Instisna'a sale is a contracting which the price is paid in advance at the time of
contract and the object of sales manufactured and delivered later a manufacturer, artist
or craftsman may take orders, with or without advance payment, to make articles
himself or hire labor to do so.

Bai- as- Sarf
It means currency trading & is an export financing investment mode. When an export
bills in foreign currency, submitted by the exporter at bank, bank purchase/ negotiate
the bill at a particular rate of exchange & give value in TK to the client exporter by
creating an investment, then it is called Bai as Sarf.




Share Mechanism

Mudaraba
It is a form of partnership where one party provides the funds while the other provides
the expertise and management. The first party is called the Sahib-Al-Maal and the latter
is referred to as the Mudarib. Any profits accrued are shared between the two parties on
a pre-agreed basis, while capital loss is exclusively borne by the partner providing the
capital.
Procedure of investment under Mudaraba
The bank provides the capital as a capital owner. The Mudarib provides the effort and
expertise for the investment of capital in exchange for a share in profit that is agreed
upon by both parties.
The Results of Mudaraba: The two parties calculate the earnings and divide the profits
at the end of Mudaraba. This can be done periodically in accordance with the terms of
the agreement, subject to the legal rules that apply.
Payment of Mudaraba Capital: The bank recovers the Mudaraba capital it contributed
before dividing the profits between the two parties because the profit is considered
collateral for the capital.
Distribution of wealth resulting from Mudaraba: In the event a loss occurs, the
capital owner (the bank) is responsible for the entire loss. In the event of profits, they
are divided between the two parties in accordance with the agreement between them,
subject to the capital being recovered first.

Musharaka (Partnership)
Musharaka meaning a partnership between the Bank and the Client for a particular
business in which both the Bank and the Client provide capital at an agreed upon ratio
and manage the business jointly. Share the profit as per agreed upon ratio and bear the
loss, if any in proportion to their respective equity.

Procedure of investment under Musharaka:

Capital should be specific
Equal share is not a must
Active participation of partners
Ratio of profit prefixed
Variation in share of profit permissible
Participation and sharing profit & loss





Ijara Mechanism (Leasing Mode)

Hire Purchase Sirkarul Meelk (HPSM): HPSM is a combination of three Inv mechanisms:
Sirkatul Meelk (SM)
Leasing (H: Hiring)
Bai(P: purchase)
Investment item or asset to be build/ purchased, must be capable to generate rent. It is
widely practice by the bank in real estate, transport, industrial project finance etc.

SM (Sirkatul Meelk- Partnership): It is a contract of partnership in ownership of an asset
having capability to produce service/ rent through purchasing/ building the inv item/
asset by deploing equal/ unequal capital by the partner.

H (Hiring): One partner (Hirer) hires the part/ share of asset of other partner (Hiree) against
payment of rent there against to the hiree in installment basis.

P (purchase): One partner (Hirer: Inv client) promise to purchase the share of other partner
(Hiree: Bank) against payment of share value of hiree part by part for acquiring ultimate/
100% owner of the subject asset at the end of the contract period.

Analysis
1. Year Wise Deposits of Islami Bank Bangladesh Limited


2009 2010 2011 2012 2013
No. of Deposetors 4591463 4939502 6004731 7031297 8538969
Acc. Increased 229567 348039 1065229 1026566 1507672
Growth % 5% 8% 22% 17% 21%
4591463
4939502
6004731
7031297
8538969
0
1000000
2000000
3000000
4000000
5000000
6000000
7000000
8000000
9000000
No. of Depositors
2. Deposit Collection & Growth rate




Year 2009 2010 2011 2012 2013
Deposit 244292 291935 341854 417844 473141
Growth 42177 47643 49919 75990 55297
Growth % 20.86% 19.50% 17.10% 22.23% 13.23%
20.86%
19.50%
17.10%
22.23%
13.23%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011 2012 2013
Growth Rate %
Growth Rate %
3. Year wise Investment & Growth rate
Year 2009 2010 2011 2012 2013
Investment 214616 263225 305841 372921 406805
Growth Amount 34562 48609 42616 67080 33896
Growth % 19.20% 22.65% 16.19% 21.93% 9.09%
19.20%
22.65%
16.19%
21.93%
9.09%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
2009 2010 2011 2012 2013
Growth Rate of Investment
Growth %
4. Investment to Deposit ratio

year Investment to
Deposit Ratio
2009 87.85%
2010 90.17%
2011 87.29%
2012 85.18%
2013 82.35%
87.85%
90.17%
87.29%
85.18%
82.35%
75.00%
80.00%
85.00%
90.00%
95.00%
2009 2010 2011 2012 2013
Investment to Deposit Ratio
Investment to
Deposit Ratio
5. Sector Wise Investment
Year 2012 2013
Industrial 104975 121531
Commercial 32324 39135
Real Estate 21754 27057
Agriculture 19658 20306
Transport 6449 6687
SME 176107 173660
Other 11654 18429
28%
9%
6%
5%
2%
47%
3%
Sector wise investment in
2012
Industrial
Commercial
Real Estate
Agriculture
Transport
SME
Other
30%
9%
7%
5%
2%
43%
4%
Sector wise investment in
2013

Industrial
Commercial
Real Estate
Agriculture
Transport
SME
Other
6. Scheme Wise Investment

Year 2009 2010 2011 2012 2013
Rural Development Scheme(RDS) 3752 5110 7072 10390 13731
House hold Durable Scheme 686 962 1070 955 1048
Invest Scheme for Doctors 17 15 14 32 37
Transport Investment Scheme 3630 4732 6707 6887 7057
Car Investment Scheme 54 139 152 113 75
Small Business Investment Scheme
(SBIS)
1160 1703 2348 2774 3202
Micro-Industries Investment Scheme 50 47 38 36 29
Agricultural Implements Investment
Scheme
77 127 210 278 337
Housing Investment Scheme 453 419 367 316 261
Real Estate Investment Program
(REIP)
7933 10155 12485 15660 15903
PGHBN 358 903 1483 2059
Sub Total 17812 23767 31366 38924 43739
Total Investment 214616 263225 305841 372921 406805
% of total investment 8.3 9.03 10.26 10.72 10.75
7. Division wise investment
8.Area wise investment

58%
20%
7%
9%
2% 2%
2%
Division Wise Investment in 2013
Dhaka
Chittagong
Khulna
Rajshahi
Rangpur
Sylhet
Barisal
15%
85%
Area Wise Investment in 2013
Rural Area
Urban Ara
9. Mode Wise Investment
Year 2009 2010 2011 2012 2013
Bai-murabaha 117180 146135 177,136 221632 225876
HPSM 73871 80093 89,070 96056 95481
Bai Muajjal 7318 12393 15,912 18295 24053
Bill Purchased & Negotiation 11289 5141 2,744 9531 29686
Quard 2833 2095 5,614 9156 13670
Bai- Salam 2082 3624 3,528 4532 4200
Mudaraba 0 1500 2,266 0 0
Musharaka 43 12244 9,571 13719 13838
Total 214616 263225 305,841 372921 406805
214616
263225
305,841
372921
406805
0
100000
200000
300000
400000
500000
2009 2010 2011 2012 2013
I
n

M
i
l
l
i
o
n

T
K

YEAR
Mode Wise Investment
10. Income from investment

Year 2009 2010 2011 2012 2013
Investment 214616 263225 305,841 372921 406805
Income from investment 21370.53 24766.26 32019.53 43672.23 48145.46
% of income from mode
wise investment
10% 9% 10% 12% 12%
10%
9%
10%
12%
12%
0%
2%
4%
6%
8%
10%
12%
14%
2009 2010 2011 2012 2013
% of income from mode wise investment
% of income
11. Investment under Bai Mechanism
Year 2009 2010 2011 2012 2013
Bai-murabaha 117180 146135 177,136 221632 225876
Bai Muajjal 7318 12393 15,912 18295 24053
Bill Purchased & Negotiation 11289 5141 2,744 9531 29686
Quard 2833 2095 5,614 9156 13670
Bai- Salam 2082 3624 3,528 4532 4200
Sub Total 140702 169388 204,934 263146 297485
Total Investment 214616 263225 305841 372921 406805
Total Investment as a Percentage under Bai
mechanism
65.56% 64.35% 67.01% 70.56% 73.13%
65.56%
64.35%
67.01%
70.56%
73.13%
58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
70.00%
72.00%
74.00%
2009 2010 2011 2012 2013
%

o
f

t
o
t
a
l

i
n
v
e
s
t
m
e
n
t

Total Investment as a % under Bai mechanism
% of total investment
12. Income from Bai Mechanism
Year 2009 2010 2011 2012 2013
Bai Murabaha 11716.35 13436.2 18634.82 25625.83 28494.77
Bai Muajjal 947.2 1170.33 1638.05 2342.46 3235.75
Bai Salam 130.1 204.45 222.31 360.05 306.18
Bai As Sarf 85.25 107.85 181.13 161.41 221.37
Income from Bai Mechanism 12878.90 14918.84 20676.32 28489.74 32258.07
Income from Investment 21370.53 24766.26 32,020 43672.23 48145.46
Income from Bai mechanism as % of total income 60.26% 60.24% 64.57% 65.24% 67.00%
60.26%
60.24%
64.57%
65.24%
67.00%
56.00%
58.00%
60.00%
62.00%
64.00%
66.00%
68.00%
2009 2010 2011 2012 2013
Income from Bai mechanism as % of total investment
income
Income from Bai
mechanism as % of total
income
13. Investment under Share Mechanism

Year 2009 2010 2011 2012 2013
Mudaraba 0 1500 2,266 0 0
Musharaka 43 12244 9,571 13719 13838
Sub Total 43 13744 11,837 13719 13838
Total Investment 214616 263225 305841 372921 406805
Total Investment as a percentage under Share
mechanism
0.02% 5.22% 3.87% 3.68% 3.40%
0.02%
5.22%
3.87%
3.68%
3.40%
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
2009 2010 2011 2012 2013
Total Investment as a percentage under Share
mechanism
Total Investment as a
percentage under Share
mechanism
14. Income from Share Mechanism
Year 2009 2010 2011 2012 2013
Mudaraba 0 7.58 -284.57 18.56 0
Musharaka 551.8 891.41 1608.59 1650.85 2013
Total Income from Share Mechanism 551.80 898.99 1324.02 1669.41 2013.00
Income from Investment 21370.53 24766.26 32,020 43472.23 48145.46
Income from Share mechanism as % of
total income
2.58% 3.63% 4.14% 3.84% 4.18%
2.58%
3.63%
4.14%
3.84%
4.18%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2009 2010 2011 2012 2013
Income from Share mechanism as % of total
investment income
Income from Share
mechanism as % of
total income
15. Investment under HPSM
Year 2009 2010 2011 2012 2013
Total Investment 214616 263225 305841 372921 406805
HPSM 73871 80093 89,070 96056 95481
Total Investment as a Percentage
under HPSM
34.42% 30.43% 29.12% 25.76% 23.47%
34.42%
30.43%
29.12%
25.76%
23.47%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2009 2010 2011 2012 2013
Total Investment as a Percentage under HPSM
16. Income from HPSM

Year 2009 2010 2011 2012 2013
Income from HPSM 7129.47 8032.62 8562.56 11000.36 11621.38
Income from total Investment 21370.53 24766.26 32,020 43672.23 48145.46
Income from HPSM as % of total
income
33.36% 32.43% 26.74% 25.19% 24.14%


33.36% 32.43%
26.74%
25.19%
24.14%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2009 2010 2011 2012 2013
Income from HPSM as % of total investment income
Income from HPSM as % of
total income
17. Classified Investment
Year 2009 2010 2011 2012 2013
Total Investment 214616 263225 305841 372921 406805
Total Classified investment 5063.396 4655.632 8292.324 14212.8 14941.9
% of Classified Investment in total Investment 2.36% 1.77% 2.71% 3.81% 3.67%
2.36%
1.77%
2.71%
3.81%
3.67%
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
2009 2010 2011 2012 2013
% of Classified Investment in total Investment
% of Classified Investment
in total Investment
18. Substandard Investment
Year 2009 2010 2011 2012 2013
Substandard Investment 1576.532 896.419 3,152 2094.313 1707.266
Total Classified investment 5063.396 4655.632 8292.324 14212.8 14941.9
% Substandard of total Classified Investment 31.14% 19.25% 38.01% 14.74% 11.43%
31.14%
19.25%
38.01%
14.74%
11.43%
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
40.00%
2009 2010 2011 2012 2013
% Substandard of total Classified Investment
% Substandard of total
Classified Investment
19. Doubtful Investment
Year 2009 2010 2011 2012 2013
Doubtful 751.159 520.745 802.794 1295.18 653.099
Total Classified investment 5063.396 4655.632 8292.324 14212.8 14941.9
% Doubtful of total Classified Investment 14.84% 11.19% 9.68% 9.11% 4.37%
14.84%
11.19%
9.68%
9.11%
4.37%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
14.00%
16.00%
2009 2010 2011 2012 2013
% Doubtful of total Classified Investment
% Doubtful of total
Classified Investment
20. Bad & Loss
Year 2009 2010 2011 2012 2013
Bad & Loss 2735.705 3238.468 4337.204 10823.31 12581.54
Total Classified investment 5063.396 4655.632 8292.324 14212.8 14941.9
% Bad & Loss of total Classified
Investment
54.03% 69.56% 52.30% 76.15% 84.20%
54.03%
69.56%
52.30%
76.15%
84.20%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
2009 2010 2011 2012 2013
% Bad & Loss of total Classified Investment
% Bad & Loss of total
Classified Investment
Comparative Analysis
1. Deposit of IBBL and Total National Deposit
Year 2009 2010 2011 2012
Total National Deposit 3037800 3721900 4509700 5396000
Total Deposit of IBBL 244292 291935 341854 417844
% of deposit of IBBL in TND 8.04% 7.84% 7.58% 7.74%
8.04%
7.84%
7.58%
7.74%
7.30%
7.40%
7.50%
7.60%
7.70%
7.80%
7.90%
8.00%
8.10%
2009 2010 2011 2012
% of deposit of IBBL in TND
% of deposit of IBBL in
TND
2. Investment of IBBL as a Percentage of Total National Investment
Year 2009 2010 2011 2012
Total investment of IBBL 214616 263225 305841 372921
Total National Investment 2439800 3297500 3842600 4238500
% of IBBL investment in TNI 8.80% 7.98% 7.96% 8.80%
8.80%
7.98%
7.96%
8.80%
7.40%
7.60%
7.80%
8.00%
8.20%
8.40%
8.60%
8.80%
9.00%
2009 2010 2011 2012
% of IBBL investment in TNI
% of IBBL investment in
TNI
3. NPL of national and IBBL
Year 2009 2010 2011 2012
% of national NPL 9.20% 7.30% 6.10% 10.03%
% of IBBL NPL 2.36% 1.77% 2.71% 3.81%
9.20%
7.30%
6.10%
10.03%
2.36%
1.77%
2.71%
3.81%
0.00%
2.00%
4.00%
6.00%
8.00%
10.00%
12.00%
2009 2010 2011 2012
% of national NPL
% of IBBL NPL
Findings
The study, Analysis of investment performance of Islami Bank Bangladesh
Limited, reveals the following majors findings.
The deposit collection of IBBL has increased over the years but the growth
rate has fluctuated over the year. The deposit of IBBL as percentage of total
national deposit has decreased over the last three years of analysis.
The investment of IBBL has increased over the years but the the growth rate
has fluctuated over the year. The investment of IBBL as percentage of total
national investment has decreased over the last three years of analysis.
The investment of IBBL is maximum in the industrial SME sector and
minimum in the transport sector. They invest low amount in other sectors like
commercial, real state, agriculture etc.
IBBLs investment under Bai mechanism was 73.12% of total investment in
2013. And the income is 67.00% from bai mechanism. Income from Share
mechanism is increasing over the year.
IBBL invested low amount in share mechanism.
NPL ratio of IBBL has increased over the last four years. Yet, NPL ratio of
IBBL is lower than industry average.

Conclusion

Islami Bank Bangladesh Limited has made a revolution in the conventional
banking especially in the field of bank investment. IBBL became successful in
proving that bank investment (lending) can be made properly, profitably
following profit & loss sharing concept with abolishing interest, and which is
also beneficial to human being & society. And these all characteristics of bank
investment are absolutely absent in case of conventional bank. Banking
without interest seems feasible as far as it goes. But it still awaits a fair trial
without which it will be dogmatic to pass any judgment on it. Practical
experience is therefore no guide as to its success or failure. The rate of return
can fall to zero as envisaged in Islam only in an ideal society in which future
can be perfectly fore-seen and social security prevails from cradle to grave. In
this case even on single country can unilaterally work out the system because
of closer international ties and inter- dependence. Therefore, such a system
pre-supposes an international community imbibed with a sense of cooperation
and universal brotherhood and sprit of Islam.

Recommendations
The following recommendations can be suggested from the analysis of investment
performance of Islami Bank Bangladesh Limited.

IBBL should introduce new deposit product like Mudaraba Shikkha Deposit of
Shahajalal Islami Bank to maintain and increase its trend of deposit.
In order to maintain and increase the trend of investment, IBBL can open new
branch in the rural area. This will also increase the deposit of IBBL.
IBBL invested in Bai mechanism. IBBL should increase its investment under
Share mode & HPSM.
IBBL usually does not invest in rural areas but they should invest in those areas for
rural development.
IBBL should consider the five Cs regarding borrower before selection of the client
to reduce the classified investment.
IBBL should properly monitor the behavior of borrower to ensure the use of loan
for the specified purpose.