TREND ANALYSIS OF FINANCIAL PERFORMANCE OF THE BANK OF CEYLON, SRI LANKA

Abstract

Trend analysis is important in banking to analyze and predict their financial statements. The aim of this study is to analyze the trend of key financial performance indicators; profit, advances and deposits of the Bank of Ceylon, Sri Lanka. Non-parametric loess analysis, Sen’s slope, linear/quadratic trend modeling, growth curve fitting and change point analysis were implemented to understand the trend pattern of the data. Results revealed that quadratic trend model was suited for advances and growth curves for both deposits and profits. The loess analysis detected upward trends for both advances and deposits but it was nearly horizontal for profit. The estimated slopes of the trends were significant in the Sen’s slope of three financial indicators. Potential significant changing points were detected in all