profitability ratio analysis of nabil bank...

PROFITABILITY RATIO ANALYSIS OF NABIL

BANK LIMITED

A Project Work Report

By

Suraj Kumar Tamang

TU Regd. No: 7-2-0927-0201-2013

Symbol No: 9270115

Shwoyambhu International College

Submitted to

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirements for the

DEGREE OF BACHELOR OF BUSINESS STUDIES (BBS)

Naya Baneshwor, Kathmandu

May 2017

ii

DECLARATION

I hereby declare that the project work entitled PROFITABILITY RATIO ANALYSIS OF NABIL

BANK LIMITED submitted to the Faculty of Management, Tribhuvan University, Kathmandu is

an original piece of work under the supervision of BISHNUHARI SILWAL, faculty member,

SHWOYAMBHU INTERNATIONAL COLLEGE, Kathmandu, and is submitted in partial

fulfillment of the requirements for the degree of BACHELOR OF BUSINESS STUDIES (BBS).

This project work report has not been submitted to any other university or institution for the award

of any degree or diploma.

…………………

SURAJ KUMAR TAMANG

May, 2017

iii

SUPERVISOR’S RECOMMENDATION

The project work report entitled PROFITABILITY RATIO ANALYSIS OF NABIL BANK

LIMITED submitted by SURAJ KUMAR TAMANG of SHWOYAMBHU INTERNATIONAL

COLLEGE, Kathmandu, is prepared under my supervision as per the procedure and format

requirements laid by the Faculty of Management, Tribhuvan University, as partial fulfillment of

the requirements for the degree of BACHELOR OF BUSINESS STUDIES (BBS). I, therefore,

recommend the project work report for evaluation.

………………..

BISHNUHARI SILWAL

May, 2017

iv

ENDORSEMENT

We hereby endorse the project work report entitled PROFITABILITY RATIO ANALYSIS OF

NABIL BANK LIMITED submitted by SURAJ KUMAR TAMANG of SHWOYAMBHU

INTERNATIONAL COLLEGE, Kathmandu, in partial fulfillment of the requirements for the

degree of the BACHELOR OF BUSINESS STUDIES (BBS) for external evaluation.

……………………. ……………………….

(NAME) (NAME)

Chairman, Research Committee Campus Chief

(College) (College)

May, 2017 May, 2017

v

ACKNOWLEDGEMENT

This study attempts to examine the Profitability Ratio of NABIL Bank limited with available data

and information. It also deals with problem identification besides this field study to acquire the

reality of banking operation of NABIL Bank. For easier study, the data has been presented by

tables, graphs and have been interpreted using various statistical methods. This report tries to focus

on the study of NABIL Bank only.

I express my heartiest gratitude to BISHNUHARI SILWAL for guiding and inspiring me to do

this fieldwork. I would also like to thank Suman Prasad Chaudhary (Campus Chef), Hari Sharan

Chakhun (Head of Research Department) and the entire staff members for their kind co-operation

and supports providing valuable information required for the completion of the report.

Finally, I want to thank my colleagues for their continued moral support.

Suraj Kumar Tamang

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TABLE OF CONTENTS

Title Page … … … …… … … … … … … … … … … … … … … … … … … … . … … .i

Declaration …. … … … … … … … … … … … … … … … … … … … … … … … … …ii

Supervisor’s Recommendation … … … … … … … … … … … … … … … … … … … …iii

Endorsement … … … … … … … … … … … … … … … … … … … … … … … … … .iv

Acknowledgements … … … … … … … … … … … … … … … … … … … … … … … v

Table of Contents… … … … … … … … … … … … … … … … … … … … … … … ….vi

List of Tables … … … … … … … … … … … … … … … … … … … … … … … …. ..vii

List of Figures … … … … … … … … … … … … … … … … … … … … … … … … viii

Abbreviations … … … … … … … … … … … … … … … … … … … … … … … … ix

CHAPTER I: INTRODUCTION … … … … .. … … … … … … … … … … … … … .1

Background of the Study … … … … … … … … … … … … … … .. … …1

Brief Introduction to NABIL Bank Ltd. … … … … … … … … … … … …4

Objectives of the Study … … … … … … … … … … … … … … … … ….6

Rationale/Significance of the Study … … … … … … … … … … … … … .6

Literature Review … … … … … … … … … … … … … … … … … … …6

Methods of Study … … … … … … … … … … … … ... ... . …. .. … … ...12

Limitations of Study… … … … … … … … … … … … … … … … … ...13

CHAPTER II: RESULTS AND ANALYSIS … … … … ….. … … …… … … … … ..14

Data Presentation … … … … … … … … … … … … … … … … … … ..14

Findings .. … … … … … … … … … … … .. … … … … … … … … … 26

CHAPTER III: SUMMARY AND CONCLUSION… … … … … … … … … … … …28

Summary… … … … ... … …. … … … … ... … … … … … … … … … ..28

Conclusion… … … … … … … … … … … … … … … … … … … … ...29

BIBLIOGRAPHY

APPENDICES

vii

LIST OF TABLES

Table 1: Profit margin ratio of NABIL … …. … … … … … … … … … … … … …. 15

Table 2: Exchange Gain to Total Income ratio of NABIL … … … … … … … … … .. 16

Table 3: Return on Assets ratio of NABIL … … … … … … … … … … … … … … .. 18

Table 4: Return on Equity of NABIL … … … … … … … … … … … … … … … … 19

Table 5: Overhead to Total Income ratio of NABIL … … … … … … … … … … … .. 20

Table 6: Staff expenses to Income ratio of NABIL … … … … … … … … … … … … 22

Table 7: Earnings per Share of NABIL … … … … … … … … … … … … … … … …23

Table 8: Dividend payout ratio of NABIL … … … … … … … … … … … … … … .. 25

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LIST OF FIGURES

Figure 1: Profit margin ratio of NABIL … … … … … … … … … … … … … … … 15

Figure 2: Exchange Gain to Total Income ratio of NABIL … … … … … … … … … 17

Figure 3: Return on Assets ratio of NABIL … … … … … … … … … … … … … ... 18

Figure 4: Return on Equity of NABIL … … … … … … … … … … … … … … … 20

Figure 5: Overhead to Total Income ratio of NABIL … … … … … … … … … … .. 21

Figure 6: Staff expenses to Income ratio of NABIL … … … … … … … … … … … 22

Figure 7: Earnings per Share of NABIL … … … … … … … … … … … … … … ... 24

Figure 8: Dividend payout ratio of NABIL … … … … … … … … … … … … … ... 25

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ABBREVIATIONS

ABBS - Any Branch Banking System

ASBA - Application Supported by Blocked Amount

ATM - Automated Teller Machine

BFI - Banks and Financial Institutions

BS - Bikram Sambat

EPS - Earning per Share

Etc. - Etcetera

FD - Fixed Deposit

F Y - Financial Year

FOM - Faculty of Management

i.e. - That is

Ltd. - Limited

NPAT - Net Profit after Tax

NRB - Nepal Rastra Bank

NRs. - Nepalese Rupees

ROA - Return on Asset

ROE - Return on Equity

SWIFT - Society for Worldwide Interbank Financial Telecommunication

1

CHAPTER I

INTRODUCTION

Background of the Study

Profitability means ability to make profit from all the business activities of an Organization,

company, firm, or an enterprise. It shows how efficiently the Management can make profit by

using all the resources available in the market. According to Harward & Upton, “profitability is

the ‘the ability of a given investment to earn a return from its use.” However, the term

‘Profitability’ is not synonymous to the term ‘Efficiency’. Profitability is an index of efficiency;

and is regarded as a measure of efficiency and management guide to greater efficiency. However,

profitability is an important yardstick for measuring the efficiency, the extent of profitability

cannot be taken as a final proof of efficiency. Sometimes satisfactory profits can mark inefficiency

and conversely, a proper degree of efficiency can be accompanied by an absence of profit. The net

profit figure simply reveals a satisfactory balance between the values receive and value given. The

change in operational efficiency is merely one of the factors on which profitability of an enterprise

largely depends. Moreover, there are many other factors besides efficiency, which affect the

profitability. (wikipedia.org)

Sometimes, the terms ‘Profit’ and ‘Profitability’ are used interchangeably. But in real sense, there

is a difference between the two. Profit is an absolute term, whereas, the profitability is a relative

concept. However, they are closely related and mutually interdependent, having distinct roles in

business. Profit refers to the total income earned by the enterprise during the specified period of

time, while profitability refers to the operating efficiency of the enterprise. It is the ability of the

enterprise to make profit on sales. It is the ability of enterprise to get sufficient return on the capital

and employees used in the business operation. As Weston and Brigham rightly notes “to the

financial management profit is the test of efficiency and a measure of control, to the owners a

measure of the worth of their investment, to the creditors the margin of safety, to the government

a measure of taxable capacity and a basis of legislative action and to the country profit is an index

of economic progress, national income generated and the rise in the standard of living” while

profitability is an outcome of profit. In other words, no profit drives towards profitability.

(wikipedia.org)

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Firms having same amount of profit may vary in terms of profitability. That is why R. S. Kul

Shrestha has rightly stated, “Profit in two separate business concern may be identical, yet, many a

times, and it usually happens that their profitability varies when measured in terms of size of

investment”. (wikipedia.org)

A bank is financial institution that accepts deposit from the public and creates credit. Leading

activities can be performed either directly or indirectly through capital markets. Due to their

impotence in the financial stability of a country, banks are highly regulated in most countries. Most

nation have institutionalized a system known as fractional reserve banking under which bank hold

liquid assets equal to only a portion of their current liabilities. In additional to their regulation

intended to ensure liquidity banks are generally subject to minimum capital requirement based on

an international of set capital standard known as the Basel accords. (wikipedia.org)

The term 'bank' is derived from the Latin word 'bancus', Italian word 'banca' and French word 'banque' all

of which mean 'a bench'. At ancient times there used to be some moneylenders who sat in the bench for

keeping, lending and exchanging of money in the market place.

Bank is a financial intermediary accepting deposit and granting loans. In fact, a modern bank performs

variety of function that is difficult to precise and general definition of a bank

According to Prof. Kinly, "A bank is an establishment which makes to individuals such advance of money

as may be required and safely made, and to which individuals entrust money when not required by them

for use."

According to C.R. Crowther, "A bank collects money from those who have it to spare or who are saving it

out of their incomes, and it lends this money to those who require it". (wikipedia.org)

History of Banking Sector

Banking began with the first prototype banks of merchants of the ancient world, which made grain loans to

farmers and traders who carried goods between cities. This began around 2000 BC in Assyria and

Babylonia. Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans

and added two important innovations: they accepted deposits and changed money. Archaeology from this

period in ancient China and India also shows evidence of money lending activity.

The origins of modern banking can be traced to medieval and early Renaissance Italy, to the rich cities in

the center and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families

dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. One of

3

the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397. The

earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was founded in 1407 at

Genoa, Italy.

Modern banking practices, including fractional reserve banking and the issue of banknotes, emerged in the

17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London, who possessed

private vaults, and charged a fee for that service. In exchange for each deposit of precious metal, the

goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee; these receipts

could not be assigned; only the original depositor could collect the stored goods.

Gradually the goldsmiths began to lend the money out on behalf of the depositor, which led to the

development of modern banking practices; promissory notes (which evolved into banknotes) were issued

for money deposited as a loan to the goldsmith. The goldsmith paid interest on these deposits. Since the

promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were

repayable over a longer time period, this was an early form of fractional reserve banking. The promissory

notes developed into an assignable instrument which could circulate as a safe and convenient form of money

backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of default.

Thus, the goldsmiths of London became the forerunners of banking by creating new money based on credit.

The Bank of England was the first to begin the permanent issue of banknotes, in 1695. The Royal Bank of

Scotland established the first overdraft facility in 1728. By the beginning of the 19th century a bankers'

clearing house was established in London to allow multiple banks to clear transactions. The Rothschilds

pioneered international finance on a large scale, financing the purchase of the Suez canal for the British

government. (wikipedia.org)

History of Banking Sector in Nepal

According to the history, it is found that people of our country have been involved in business and trade

since long time ago. Though the production of copper utensils had been started during the 7th century,

business relationship could not be established with India since India was involved in the production of

copper utensil. However, the craft concerned with copper, wood and metal in our country did attract the

Chinese and the Tibetan a lot, thus resulting in the establishment of business relationship with China and

Tibet.

In 12th century there was silver coin called 'Dam'. Later on in 14th century 'TANKADHARI' one is that dealt

with the lending money to the public. Its remain objective was to earn profit, so they used to change high

interest rate. To control interest rate 'TEJARATH ADDA' was established in 19th century. It provides loans

to the people working in government offices on the basis of the security and to public on the basis of

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collateral they deposit. It charges only 5% interest rate per annum. It only provides loans but does not accept

deposit.

Nepal bank Ltd. is the first modern bank of Nepal. It is taken as the milestone of modern banking of the

country. Nepal bank marks the beginning of a new era in the history of the modern banking in Nepal. This

was established in 1937 A.D. Nepal Bank Ltd. remained the only financial institution of the country until

the foundation of Nepal Rastra Bank is 1956 A.D.

In 1957 A.D. Industrial Development Bank was established to promote the industrialization in Nepal, which

was later converted into Nepal Industrial Development Corporation (NIDC) in 1959 A.D. Rastriya Banijya

Bank, was established in 1965 A.D. as the second commercial bank of Nepal. As the agriculture is the basic

occupation of major Nepalese, the development of this sector plays in the prime role in the economy. So,

separate Agricultural Development Bank was established in 1968 A.D. This is the first institution in

agricultural financing. (wikipedia.org)

There are various types of bank working in modern banking system in Nepal. It includes central,

development; commercial, financial, co-operative and Micro Credit (Grameen) banks. The NRB will

classify the institutions into “A”, “B”, “C”, “D” groups on the basis of the minimum paid-up capital and

provide the suitable license to the bank or financial institution. Group ‘A’ is for commercial bank, ‘B’ for

the development bank, ‘C’ for the financial institution and ‘D’ for the Micro Finance Development Banks.

There are 28 commercial banks, 57 development banks, 36 financial companies, 48 micro credit (Grameen)

development banks and 15 saving and credit co-operation (licensed by Nepal Rastra Bank) are established

so far in Nepal. (http://nrb.org.np/)

A Brief Introduction to NABIL Bank Ltd.

NABIL Bank Ltd. is the Nepal’s first ever joint venture bank that initiated its operation on 12th

July 1984. Nepal bank (international) limited Ireland was its joint venture partner at that time. It

also received management support from national bank of Bangladesh, Dhaka at the time of

inauguration. Its authorized capital used to have only rs.100 million at the starting time. Now it

has ascended its capital to Rs.500 million. With advancement it has 14 branches on a national scale

which is the utmost number of any joint venture bank in Nepal. NABIL bank is distinguished for

providing latest technology with vastly personalized service. Most of its banking activities and

services are done through computers. NABIL provides different services like ATM, credit cards,

tele-banking services, e-banking services, safe deposit locker services. Besides these services

5

NABIL is the only bank to maneuver inside the international airport of arrival and departure of

cargoes. NABIL has drawing arrangement with 75 banks in 40 countries of the world and with the

exchange companies and bank as well. The policies of His Majesty’s Government and Nepal

Rastra Bank rule and regulation preside over NABIL. (http://www.nabilbank.com.np)

Among different commercial bank, Nabil bank is the commercial bank which collects money from

general public and invests that amount to different productive sector. It not accepts deposit and

provides loan but also transfer money from one place to another place or person has an agent.

Nabil bank is the main agent of Western Union Money Transfer. Nabil bank is the expanding its

branch according to need, want and market of people or public. (http://www.nabilbank.com.np)

Banking Services Rendered by NABIL

Nabil has been obtaining its objectives and targets through various kinds of banking services with

a large number of facilities. The services rendered by Nabil Bank are as follows:

• Nabil Bank provides loan, advance and overdraft to the needy person and customers against

pledge and securities

• Nabil Bank performs the agency services like, payment of subscription, rent collection,

dividend collection, interest collection etc. on behalf of the customers

• Nabil is a member of clearing house; it accepts cheque of any bank of its customers only

• It also exchanges the foreign currency i.e. sale and purchase of currency.

Beside these, various instrumental and modern technological services are provided by Nabil Bank

which are discussed below:-

• Deposits

• Guarantees

• Credit Cards

• Tele Banking

• Western Union Money Transfer

• SWIFT (Society for Worldwide Inter Bank Financial Tele- communication)

• Safe Deposit Locker

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• Automated Teller Machines (ATM)

• Other facilities

(http://www.nabilbank.com.np)

Objectives of the Study

The main objective of the study is to analyze financial performance of and solvency position of

this bank through use of different ratios. Other objective of this study are as following:-

• To find out the profitability of the NABIL Bank Limited.

• To analyze the profitability

• To determine factors of profitability

• To evaluate profitability ratio of NABIL Bank Ltd.

Rationale/Significance of the study

Generally, the study gives emphasis on the welfare of students while preparing fieldwork report;

they gain knowledge through their own experience enabling them to deal with problems relating

to their studies. The study also intends to let students know about required information by them.

The following are the few points that highlights of the significance of field work report:

• The fieldwork report may be useful for the library purpose so that any students want to

prepare a report can have some idea about it.

• It helps to increase the practical knowledge.

• The fieldwork report can be used as guideline while preparing a small project report.

• By analyzing the problem, it provides chances to improve

• It makes the student more creative.

Literature Review

Determinants of bank profitability can be split between those that are internal and external. Internal

determinants of bank profitability can be defined as those factors that are influenced by the bank’s

management decisions and policy objectives. Management effects are the results of differences in

7

bank management objectives, policies, decisions, and actions reflected in differences in bank

including profitability. Management decisions, especially regarding loan portfolio concentration,

were an important contributing factor in bank performance. Researchers frequently attribute good

bank performance to quality management. Management quality is assessed in terms of senior

officers’ awareness and control of the bank’s polices and performance.

Most of the ratios were significantly related to profitability, particularly capital ratios, interest paid

and received, salaries and wages.

A number of studies have included that expense control is the primary determinant of bank

profitability. Expense management offers a major and consistent opportunity for profitability

improvement. With the large size and the large differences in salaries and wages, the efficient use

of labour is a key determinant of relative profitability. Staff expenses, as conventional wisdom

proposes, is expected to be inversely related to profitability because these cost reduce the ‘bottom

line’ or the total operations of the bank. The level of staff expenses appears to have a negative

impact on banks’ ROA in the study. There is a positive relationship between staffs and total profits.

External determinants of bank profitability are concerned with those factors which are not

influenced by specific bank’s decisions and policies, but by events outside the influence of the

bank. The steps of analysis are as follows

i) Selection of the information relevant to the decision.

ii) Arrangement or the selected information to highlight the significant relationship of the

financial yardsticks.

iii) Interpretation and drawing of inferences and conclusions.

To evaluate the profitability ratio of a firm, the analyst needs a certain parameters of the company

by which the quantitative relationship and its position come out. The most widely and effective

used tool of the profitability ratio is the ratio analysis. The profitability ratio is the measurement

of relationship between two accounting figures, expressed in mathematical way or the numerical

relationship between two variables expressed as (i) percentage or, (ii) fraction or (iii) in proportion

of numbers.

8

Conceptual Framework

The modern financial evaluation has greatly affected the Profitability ratio of banks’. Nowadays,

finance is best characterized as ever changing with new ideas and techniques. Only efficient

manager of the company can achieve the set up goals. If a bank does not maintain adequate equity

capital, it makes the bank more risky. If a bank has inadequate equity capital, it must be used more

debt that has high fixed cost. So any firm must have adequate equity capital in their capital

structure. The main objectives of the bank are to collect deposits as much as possible from the

customers and to mobilize into the most profitable sector. If a bank fails to utilize its collected

resources than it cannot generate revenue. Resource mobilization management of bank includes

resource collection, investment portfolio, loans and advances, working capital, fixed assets

management etc. It measures the extent to which bank is successful to utilize its resources. To

measure the bank profitability in many aspects, we should analyze its indicator with the help of

financial statements. Profitability ratio is the process of identifying the financial strength and

weakness of the concerned bank. It is the process of finding strength and weakness of the

concerned bank.

Financial Analysis

Financial statement analysis generally begins with the calculation of set of financial ratios designed

to reveal the relative strength and weaknesses of a company as compared to other companies in

the same industry and to show weather the firm's position has been improving or deteriorating over

time.

Ratio Analysis

Ratio analysis is the systematic use of profitability ratio information of the firm’s strength and

weakness as its historical performance, and current condition can be determined.

After calculating various ratios, we need to compare with the certain standard and draw out the

conclusion of the result. The comparison classified by Weston and Brigham into six types viz; (i)

Liquidity ratios, (ii) leverage ratios, (iii) Activity ratios, (iv) Profitability ratios, (v) Growth ratios

and (vi) Valuation ratios.

9

Profitability Ratio

Profitability ratios are related to profit. These ratios are designed to highlight the end result of

business activities. The operating efficiency of a firm and its ability to ensure adequate return to

its shareholders depends ultimately on the profits earned by it. In this regards, profitability ratios

are the measure of efficiency and the search for. These ratios measure the overall effectiveness of

management. It provides an incentive to achieve efficiency. In this report, the following

profitability ratios are used:

A. Profit Margin Ratio

The profit margin ratio, also called the return on sales ratio or gross profit ratio, is a profitability

ratio that measures the amount of net income earned with each rupees of sales generated by

comparing the net income and net sales of a company. This ratio measures how effectively a

company can convert sales into net income.

B. Exchange Gain to Total Income Ratio

An exchange gain/loss is caused by a change in the exchange rate of two currencies, such as when

an invoice denominated in one currency is paid in another. The exchange gain to total income ratio

measures total income and exchange gain ratio.

C. Return on Assets

Return on assets, is also called return on investment, which is a ratio between net profit and total

assets. This ratio measures the rate of return earned by the firm as a whole for all its investors.

Higher ratio indicates the higher return on assets or on amount contributed by investors on account

of efficient management of assets or capital.

D. Return on Equity

This ratio is also known as return on shareholders' fund and return on net worth. It measures the

relationship between net profit after tax and shareholders' equity. The main objective of this ratio

is to find out how efficiently the funds supplied by the shareholders are utilized. Higher ratio

10

reflects the more profitability enjoyed by the shareholders, where as poor or lower ratio reflects

the reverse situation.

E. Overhead to Total Income Ratio

Overhead ratio is the comparison of operating expenses and the total income which is not related

to the production of goods and service. By definition, the ratio of operating expenses to the sum

of taxable equivalent net interest income and other operating income. The overhead ratio shows

the proportion of expenses to total income which cannot be used for production of goods and

services. A company would try as much as it can to lower these expenses without it affecting the

production of goods and services so as to maintain the competition in the industry.

F. Staff Expenses to Total Income Ratio

It is the ratio of Staff Expenses to Net Income. This ratio is computed to compare the efficiency of

company's staffs with the staffs of peer companies, competitors and own historical records in term

of total income. The lower of this ratio indicate more efficiency of the staffs of the company.

G. Earnings per Share

Earnings per share (EPS), also called net income per share, is a market prospect ratio that measures

the amount of net income earned per share of stock outstanding. In other words, this is the amount

of money each share of stock would receive if all of the profits were distributed to the outstanding

shares at the end of the year. Earnings per share is one of the most quoted statistics for publicly

traded companies. It is the ratio of net profit after tax between numbers of common share.

H. Dividend Payout Ratio

The dividend payout ratio measures the percentage of net income that is distributed to shareholders

in the form of dividends during the year. In other words, this ratio shows the portion of profits the

company decides to keep to fund operations and the portion of profits that is given to its

shareholders. (http://www.myaccountingcourse.com/)

11

Review of Books and Journals

Further R.S. Sayers in his book Modern Banking Writers, “Ordinary banking business consist of

changing cash for bank deposits and bank deposits from one person to corporation (one depositor

to another) giving bank deposits in exchange for bill of exchange, government banks, recurred and

unsecured promises businessmen to repay. “Erich A. H. in his book has described profitability

ratio as “Profitability ratio is both an analytic and judgmental process that helps to answer the

questions that have been properly posed to and therefore, it is a mean to an end. We can stress

enough that financial analysis is an aid that allows those responsible for results to make sound

decisions. “Liquidity is other financial indicator of the business enterprises. I.M. Pandey says, "A

firm should ensure that it does not suffer from lack of liquid. And also that it is not too much highly

liquid. The failure of a company to meet its obligations, due to lack of sufficient liquidity will

result in bad credit image. Loss of creditor’s confidence, or even in low suits resulting in the

closure of the company. A very high degree of liquidity is also bad; idle assets earn nothing. The

firm’s funds will be unnecessarily tied up in current assets. Therefore, it is necessary to strike a

proper balance between liquidity and lack of liquid. “Liquidity is measured by the speed with

which a bank’s assets can be converted into cash and other current obligations. It is also important

in view of survival and growth of a bank.

Review of Some Acts Relating to Banking in Nepal

Commercial Bank Act 2031 was formulated to facilitate the smooth run of commercial banks. All

the commercial banks are functioning under this act. This act defines the bank as, "A commercial

bank is one which exchange money, deposits money, accepts deposits, grants loans and performs

commercial banking function and which is not a bank meant for co-operative, agriculture, industry

or for specific purpose."

The preamble of Nepal Bank Act 1994 clearly states the need of commercial bank in the country.

In absence of any bank in Nepal, the economic progress of the country was being hampered and

causing inconvenience to the people and therefore with the objective of fulfilling that need by

providing services the people and for the betterment of the country, this law is hereby promulgated

for the establishment of the bank and its operation. A bank shall be established under the Company

Act with the recommendation of the Rastra Bank. The bank may determine the location of its head

office with the approval of the Rastra Bank. The bank shall be an autonomous corporate body with

12

the perpetual succession. It may sue or be sued in its own name. Subject to this Act and other

current Nepal law, the bank may acquire, use and sell movable and immovable property. Any bank

may open or shift the location of, or close branches depots or other offices with the approval of

the NRB. In case any foreign commercial bank desires to open a branch, representative office or

liaison such branch under the company Act with the approval of NRB, and provisions of the act

shall apply to such foreign bank The NRB shall obtain the consent of His Majesty’s Government

before granting approval. While granting approval, NRB may prescribe condition according to the

need, and the foreign bank shall company with the conditions thus prescribed by the NRB.

(http://nrb.org.np/)

Methods of Study

Evaluating the profitability ratio of NABIL BANK in a micro level and to highlight the efforts of

the profitability ratio of these banks in the economy at the macro level forms the basic objective

of this research.

Research Design

Keeping in mind the objective of the study, descriptive cum analytical research design has

been followed. The study is based on the wide range of variables and factors influencing

profitability ratio of the bank. Comparative data banks are presented in such a way to make

the report informative to the reader.

Population and Sample

Among 28 commercial banks, NABIL Bank Limited have been selected for the present

study. Financial statements of latest 5 years (2012/13 to 2016/17) have been taken as

sample for the comparative analysis of Profitability ratio. The recommendation and

suggestions, which are derived from the study, by taking the above commercial banks as

samples, will be equally useful for the other commercial banks in Nepal.

Sources of Data

This study is based on secondary data. Secondary data can defined as the data collected

earlier for a purpose other than one currently being pursued. As a researcher I have scanned

lot of sources to get an access to secondary data which have formed a reference base to

13

compare the research findings. Secondary data in this study has provided an insight and

forms an outline for the core objectives established. The various sources of secondary data

used for this study are newspapers, magazines, text books, marketing reports of the

company, internet, etc.

Techniques of Analysis

In the course of analysis, data gathered from the various sources will be inserted in the

tabular from according to their homogeneous nature. They are table, graph, mean, standard

deviation ratio and percentage.

Limitation of the Study

This study is conducted in partial fulfillment of the requirement for the BBS 4th year. So, it

possesses some limitation of its own. One of the limitations of the study is; with regard to tempera

coverage of the study to arrive any meaningful conclusions regarding the trend in the pattern and

structure of financing a time service of fairly a long period are needed. But this study has covered

only last five financial year. Other limitations are as follows:

• Though there are 28 commercial banks, this study covers only one NABIL Bank Ltd.

• Being a student time and resources consentient

• Limited variable has been selected.

• Simple techniques has been used in analysis

• The qualitative factors such as growth and expansions policy of the bank quality and

general economic conditions have not been studied.

14

CHAPTER II

RESULTS AND ANALYSIS

Data Presentation

Presentation and data analysis of data is the main body of the study. Introduction, review of

literature and research methodology is presented in the previous chapter that provide the basic

inputs to analyze and interpret the data. In this chapter, data are presented and analyzed.

Financial Analysis

Financial statement analysis generally begins with the calculation of set of financial ratios designed

to reveal the relative strength and weaknesses of a company as compared to other companies in

the same industry and to show weather the firm's position has been improving or deteriorating over

time. It helps the concerned parties to spot out the financial strength and weakness of the firm.

Ratio Analysis

Ratio analysis is the systematic use of profitability ratio information of the firm’s strength and

weakness as its historical performance, and current condition can be determined. It provides the

trends of organization's financial performance. Ratios are very useful, essential and powerful tools

to interpret the financial performance of the company. In this report, following ratios are used:

A. Profit Margin Ratio

It is the ratio of net profit to net sales. It is measured by this formula:

Profit margin ratio = Net profit

Net sales× 100

15

Table 1: Profit margin ratio of NABIL (in Millions)

F/Y NPAT Total Income Ratio in%(x) Index (%) x2

2012/13 271.6 1639.1 16.57 100 274.57

2013/14 416.2 1427.4 29.16 175.97 850.18

2014/15 455.3 1426.4 31.92 192.63 1018.86

2015/16 520.1 1510.7 34.43 207.77 1185.27

2016/17 635.3 1743.5 36.44 219.90 1327.74

∑x2=4656.62

∑x=148.51

π= 29.7

σ=7.02

CV=23.64

Source: “Banking and Financial Statistics” NABIL mid July 2017

Figure 1: Profit margin ratio of NABIL

The profit margin ratio of NABIL shows the different year ratios viz. 16.57 in 2012/13, 29.16 in

2013/14, 31.92 in 2014/15, 34.43 in 2015/16, and 36.44 in 2016/17 and the mean, standard

deviation and coefficient of variance are 29.70, 7.02% and 23.64% receptively.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Profit Margin Ratio in %

16

B. Exchange Gain to Total Income Ratio

The exchange gain to total income ratio measures total income and exchange gain ratio, it is

measure by this formula:

Exchange gain to total income Ratio = Exchange Gain

Total Income× 100

Table 2: Exchange Gain to Total Income ratio of NABIL (in Millions)


F/Y Exchange gain Total Income Ratio in%(x) Index (%) x2

2012/13 154.2 1639.1 9.41 100 85.55

2013/14 144.1 1427.4 10.09 107.23 101.81

2014/15 157.3 1426.4 11.03 117.22 121.66

2015/16 184.9 1510.7 12.24 130.07 149.82

2016/17 185.5 1743.5 10.64 113.07 113.21

∑x2=575.04

∑x=53.41

�̅�=10.68

σ =0.95

CV=9

17

Figure 2: Exchange Gain to Total Income ratio of NABIL

The exchange gain to income ratio of NABIL shows the different year ratios viz. 9.41 in 2012/13,

10.09 in 2013/14, 11.03 in 2014/15, 12.24 in 2015/16, and 10.64 in 2016/17 and the mean, standard

deviation and coefficient of variance are 10.68, 0.95% and 9% receptively.

C. Return on Assets

It is the ratio of net income to total assets measures the return on total assets (ROA) after interest

and taxes. It is measured by this formula

Return on Assets = NPAT

Total Assets× 100

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Exchange gain to income ratio (%)

18

Table 3: Return on Assets ratio of NABIL (amount in Millions)


Figure 3: Return on Assets ratio of NABIL

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio in %

F/Y NPAT Total Assets Ratio in%(x) Index (%) x2

2012/13 271.6 17629.2 1.54 100 2.37

2013/14 416.2 16562.5 2.51 163 6.3

2014/15 455.3 16745.5 2.72 176.62 7.4

2015/16 520.1 17064.1 3.05 198.05 9.3

2016/17 635.3 22330 2.85 185.07 8.12

∑x2=33.49

∑x=12.67

�̅�=2.53

σ =0.53

CV=21

19

The return on assets ratio show the different year ratios viz. 1.54 in 2012/13, 2.51 in 2013/14, 2.72

in 2014/15, 3.05 in 2015/16, and 2.85 in 2016/17 and the mean, standard deviation and coefficient

of variance are 2.53, 0.53% and 21% receptively.

D. Return on Equity

It is the ratio of Net Income after Tax to common equity measures the return on equity (ROE) or

Rate of return on the stockholder investment.

Return on equity (ROE) = NPAT

Equity× 100

Table 4: Return on Equity of NABIL (amount in Millions)


F/Y NPAT Equity Ratio in%(x) Index (%) x2

2012/13 271.6 1146.4 23.69 100 561.22

2013/14 416.2 1314.2 31.67 133.70 1003

2014/15 455.3 11481.7 30.73 129.72 944.33

2015/16 520.1 1657.6 31.38 134.57 984.70

2016/17 635.3 1875 33.88 143.01 1147.85

∑x2=4641.10

∑x=151.35

�̅�=30.27

σ =3.46

CV=11.42

20

Figure 4: Return on Equity of NABIL

The return on Equity ratio show the different year ratios viz. 23.69 in 2012/13, 31.67 in 2013/14,

30.73 in 2014/15, 31.38 in 2015/16, and 33.88 in 2016/17 and the mean, standard deviation and

coefficient of variance are 30.27, 3.46% and 11.42% receptively.

E. Overhead to Total Income Ratio

It is the ratio of Overhead to Net Income, measured by the following formula.

Overhead to total Income Ratio = Overhead

Total Income× 100

Table 5: Overhead to Total Income ratio of NABIL (amount in Millions)


0

1

2

3

4

5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio in %

F/Y NPAT Total Income Ratio in%(x) Index (%) x2

2012/13 134.3 1639.1 8.19 100 67.08

2013/14 166.2 1427.4 11.64 142.12 135.49

2014/15 153.4 1426.4 10.75 131.26 115.56

2015/16 190.3 1510.7 12.60 153.85 158.76

2016/17 182.7 1743.5 10.48 127.96 109.83

∑x2=586.72

∑x=53.66

�̅�=10.73

σ =1.47

CV=13.72

21

Figure 5: Overhead to Total Income ratio of NABIL

The Overhead to Total Income ratio shows the different year ratios viz. 8.19 in 2012/13, 11.64 in


deviation and coefficient of variance are 10.73%, 1.47% and 13.72% receptively.

F. Staff Expenses to Total Income Ratio

It is the ratio of Staff Expenses to Net Income. This ratio compare the efficiency of company's

staffs with the staffs of peer companies, competitors and own historical records in term of total

income. The lower of this ratio indicate more efficiency of the staffs of the company. It is measured

by the formula

Staff expenses to total income ratio = Staff Expenses

Total Income× 100

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio in %

22

Table 6: Staff expenses to Income ratio of NABIL (amount in Millions)


Figure 6: Staff expenses to Income ratio of NABIL

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio in %

F/Y Staff Expenses Total Income Ratio in%(x) Index (%) x2

2012/13 144.9 1639.1 8.84 100 78.15

2013/14 210.6 1427.4 14.75 166.85 217.56

2014/15 180.8 1426.4 12.67 143.33 160.53

2015/16 199.5 1510.7 13.21 149.43 174.50

2016/17 219.8 1743.5 12.61 142.65 159.01

∑x2=789.75

∑x=62.08

�̅�=12.42

σ =1.95

CV=15.69

23

The staff expenses to total income ratio show the different year ratios viz. 8.84 in 2012/13, 14.75

in 2013/14, 12.67 in 2014/15, 13.21 in 2015/16, and 12.61 in 2016/17 and the mean, standard


G. Earnings per Share:

It is the ratio of Net Profit after Tax to No. of Common Share. It is calculated by this formula,

Earnings per Share (EPS) = NPAT

No.of Common Share × 100

Table 7: Earning Per Share of NABIL


F/Y NPAT No. of Common

Shares

Ratio in%(x) Index (%) x2

2012/13 271638612 4916544 55.25 100 3052.56

2013/14 416235811 4916544 84.66 153.23 7167.32

2014/15 455311222 4916544 92.61 167.62 8576.61

2015/16 520114085 4916544 105.49 190.93 11128.14

2016/17 635262349 4916544 129.21 233.86 16695.22

∑x2=46619.85

∑x=467.22

�̅�=93.44

σ =24.33

CV=26.04

24

Figure 7: Earnings per Share of NABIL

Earnings per Share show the different year earnings per share viz. 55.25 in 2012/13, 84.66 in



H. Dividend Payout Ratio

It is the ratio of dividend to net income. It is calculated by the following formula:

Dividend payout ratio = 𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒× 100

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio (%)

25

Table 8: Dividend payout ratio of NABIL

F/Y Dividend NPAT Ratio in%(x) Index (%) x2

2012/13 5.25 271.6 1.93 100.00 3.74

2013/14 10.50 416.2 2.52 130.51 6.36

2014/15 15.75 455.3 3.46 178.96 11.97

2015/16 21.00 520.1 4.04 208.88 16.30

2016/17 21.00 635.3 3.31 171.01 10.93

∑x2=49.30

∑x=15.26

π= 3.05

σ=0.75

CV=24.59


Figure 8: Dividend payout ratio of NABIL

Dividend payout ratio show the different year ratio viz. 1.93 in 2012/13, 2.52 in 2013/14, 3.46 in

2014/15, 4.04 in 2015/16, and 3.31 in 2016/17 and the mean, standard deviation and coefficient of

variance are 3.05, 0.75% and 24.59% receptively.

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

2012/13 2013/14 2014/15 2015/16 2016/17

F/Y

Ratio (%)

26

Findings

In this fieldwork report, we study about NABIL profitability position and we found the financial

position of NABIL is better. In compliance with analysis, the following finding as made:

• The gross margin ratio shows an increasing trend as compared to the base year, which is

beneficial to the bank. The min. index value is 175.97 as that of 2013/14 and the max index

value is 219.90 as that of 2016/17.

• The exchange gain to total income ratio shows an increasing trend as compared to the base

year, which is beneficial to the bank. The min. index value is 107.23 as that of 2013/14 and

the max index value is 130.07 as that of 2015/16.

• The return on assets of NABIL shows an increasing trend and has max. Index value of

198.05 in the year 2015/16 as compared to base year 2012/13 i.e. 100. It shows that, NABIL

is successful in deriving benefit from the assets it has used.

• The trend of return on equity (ROE) is increasing. It shows that the bank is able to satisfy

its shareholder’s to the fullest. The max return index is 143.01 which is 43.01% more than

that of the base year 2012/13. Thus, it is able to achieve the goal of wealth maximization

too.

• The Overhead to Total Income ratio shows a fluctuating trend. The max. Index value is

153.85 as that of 2015/16 and the min. increased index value is 127.96 as in 2016/17. This

shows the operational efficiency of NABIL is satisfactory.

• The Staff Expenses to Total Income ratio of NABIL has increased by 66.85% in the year

2013/14. The minimum increased level of Staff Expenses compared to Total Income is

42.65%, during the recent year 2016/17. It shows that NABIL is successful in cutting down

extra unnecessary expenses related to staffs.

• The earning per share of NABIL increase continuously during the year 2012/13 to 2016/17

and maximum earning per share is 129.21 and the least price is 55.25. This shows the return

of each equity shareholder is in satisfactory condition.

• Dividend payout ratio shows increasing trends as compared to base year. The min. index

value is 130.51 as that of 2013/14 and the max index value is 208.88 as that of 2015/16.

• The position of profit over different years i.e. (2012/13 to 2016/17) shows the profit of

NABIL decreased continually for the first three years and then it is rising rapidly. During

27

2014/15, the level of profit decreased to 1426.4 million. At 2016/17, the peak level of profit

is 1743.5 million.

• The position of income of NABIL over different year i.e. (2012/13 to 2016/17) shows that

income composition of NABIL is no more difference.

• The position of expenses of NABIL over different year i.e. (2012/13 to 2016/17) shows

that expenses of NABIL is no more difference.

28

CHAPTER III

SUMMARY AND CONCLUSION

Summary

Nepal is one of the least developed countries of the world. For most of the developing process, it

is financially depending upon the foreign countries. It is economically too weak. Thus, the

economic condition of the people is weak. In Nepal 85% of the people are depended upon

agricultural sector which is unable to provide full employment to the people. Nepal government

has to activate people in the nation’s development through overall industrialization of nation. For

this purpose, development of sound banking system is essential.

The commercial banks are of foremost importance to a country because of their roles as a strong

pillar for the economic development of a nation. With the wave of the globalization and

advancement in technologies, without the strong base of commercial banking platform, the

economic development of a nation is bound to be paralyzed. Thus, it would be very legitimate to

say that the commercial banks are of a more importance to a developing country like Nepal and

NABIL Bank Ltd. being the pioneer financial institutions of Nepal, has undouble filled such gap

to a great extent.

In Nepalese banking sector, commercial banks including ventures banks are operating at present.

In the absences of modern banking any country cannot develop the economic activity. Therefore,

it is essential to find out whether or not the banks are serving an important contribution to develop

sectors of economy. Profitability ratio is said to be general business of fund, which shows the bank

ability to meet cash requirement. In this record, this study has been based upon the objective to

evaluate the profitability ratio of NABIL Bank Ltd.

Basically, banks are proliferating, cutthroat competition is prevailing plus there is an unhealthy

competition. So, in this competitive banking scenario, NABIL Bank Ltd. is retaining and

maintaining its strengths and proving itself as a benchmark in the Nepalese banking industry.

29

The financial performance of NABIL Bank Ltd. reveals that it is in sound financial position.

NABIL Bank Ltd. earns the profit every year in increasing trend. The bank is very much in line

with its desire objective and goals. The bank has been able to successfully overcome all the

economic and competitive barriers to establish it as financially feasible unit. The investors of

NABIL Bank Ltd, are receiving sufficient rate of return on their investment and the creditors are

also satisfied. NABIL Bank Ltd. has been playing an important role in financial economic sector

of the country. It has fulfilled its objectives for which it has made at the time of the establishment.

Conclusion

With some commercial banks and development banks operating in Nepal, the market seems over

crowed and the banks are now finding a tough competition among themselves. Since the entry

barriers are not so high due to the government’s liberal policy, this competition is expected to be

more intense in the near future, as there is always the possibility of a new player entering this

sector. NABIL Bank has not maintained a balanced ratio among its deposit liabilities.

Consequently, the bank does not seem to be able to utilize its high cost resources in high yielding

investment portfolio. The investment portfolio of the bank has not been managed so efficiently as

to maximize the returns there from. The operational efficiency of the bank is found unsatisfactory

because of the series of operational loss over the period. Lower market value is a reflection of a

weaker profitability ratio of the bank.

On the basis of this study, the following conclusion can be made:

• The overall results are satisfactory. But in some case the NABIL Bank Ltd should take

certain steps to improve the bank current financial condition. Therefore, some

recommendations are being put forward for its improvement along with its development of

the country.

• The proportion of the saving deposit account is high in total deposit liability. So, it is

recommended that the bank should utilize the amount collected from the saving deposit

account carefully. It should be invested in the higher yielding areas.

• The cash and bank balance in the NABIL Bank Ltd is satisfactory. It is higher a bit though.

Bank should analyze the opportunities for short term investment.

30

• Bank should not spend too much in the fixed assets because it yields only a nominal

portion, almost no yield.

• The profitability ratio shows the profitability position of NABIL is satisfactory. It should

give continuity to this growth trend in future.

• These ratios show that NABIL is more efficient in mobilizing the resources of owners and

its operational efficiency is also satisfactory.

• The bank has been successful in winning the trust of the customer, as volume of expenses

is no more difference and it's growing slowly than previous years. There is general rise and

fall in expenses level during different years. It should give basic priority to the customers

and personnel first and then the organizational objectives, which will help to develop

effective value chain in the organization.

• Branches existing in some limited areas will not enable a bank to boost up its campaign of

deposit mobilization and credit disbursement as desired. Therefore, NABIL is

recommended to open new branches at certain places every year after making feasibility

of studies. And also, it has launched various ideas as NABIL PREPAID card, extended

banking hours, etc. so as to collect maximum amount of funds from general public.

• Besides these, all the other functions of the company are satisfactory, no comments upon

it.

31

BIBLIOGRAPHY

Adhikari, Devraj, Pandey, Dhrubalal.(2017). Business Research Methods. Kathmandu: Asmita

Publication.

Bhandari, D. R. (2012). Principal & Practice of Banking & Insurance. Kathmandu: Asia

Publication

Joshi, S. (2009). Banking and Insurance Management. Kathamandu: Taleju Prakashan

Gup, B. E., Kolari, J. W.(2016). Commercial Banking. New Delhi: Wiley India.

Paudel, Rajan, B., Baral, Keshar, J., Joshi, Padam, R., Gautam, Rishi, R., Rana, Surya, B.(2016).

Fundamentals of Corporate Finance. Kathmandu: Asmita Publications.

Paudel, Rajan, B., Baral, Keshar, J., Joshi, Padam, R., Gautam, Rishi, R., Rana, Surya, B.(2016).

Fundamentals of Financial Markets and Institutions. Kathmandu: Asmita

Publications.

Paudel, Rajan, B., Kehar J. Baral, Rishi Raj Gautam, Gyan B. Dahal. Surya B. R.(2008).

Fundamental of Financial Management. Kathmandu: Asmita Publications.

Website accessed

http://en.wikipedia.org/wiki/Bank

http://nrb.org.np/

http://www.myaccountingcourse.com/financial-ratios

http://www.nabilbank.com.np

Journal

“Banking and Financial Statistics” NABIL mid July 2017

Report

Annual report of NABIL Bank Ltd., 2013 to 2017

32

ANNEX-I

List of Commercial Banks in Nepal

(NRs. in Core)

S.

No.

Name of Bank Operation

Date (A.D.)

Head Office Paid up

Capital

1 Nepal Bank Ltd. 1937/11/15 Dharmapath,Kathmandu 649.95

2 Rastriya Banijya Bank Ltd. 1966/01/23 Singhadurbarplaza,Kathmandu 858.90

3 Agriculture Development Bank Ltd. 1968/01/21 Ramshahpath, Kathmandu 1037.44

4 Nabil Bank Ltd. 1984/07/12 Beena Marg, Kathmandu 618.35

5 Nepal Investment Bank Ltd. 1986/03/09 Durbarmarg, Kathmandu 870.66

6 Standard Chartered Bank Nepal Ltd. 1987/02/28 Nayabaneshwor, Kathmandu 374.99

7 Himalayan Bank Ltd. 1993/01/18 Kamaladi, Kathmandu 449.91

8 Nepal SBI Bank Ltd. 1993/07/07 Kesharmahal, Kathmandu 388.37

9 Nepal Bangaladesh Bank Ltd. 1994/06/06 Kamaladi, Kathmandu 401.18

10 Everest Bank Ltd. 1994/10/18 Lazimpat , Kathmandu 274.26

11 Kumari Bank Ltd. 2001/04/03 Durbarmarg, Kathmandu 269.92

12 Laxmi Bank Ltd. 2002/04/03 Hattisar, Kathmandu 303.92

13 Citizens Bank International Ltd. 2007/04/20 Kamaladi, Kathmandu 553.74

14 Prime Commercial Bank Ltd. 2007/09/24 Newroad, Kathmandu 489.19

15 Sunrise Bank Ltd. 2007/10/12 Gairidhara, Kathmandu 530.14

16 Janata Bank Nepal Ltd. 2010/04/05 Naya Baneshwor, Kathmandu 206.00

17 Mega Bank Nepal Ltd. 2010/07/23 Kantipath, Kathmandu 401.20

18 Century Commercial Bank Ltd. 2011/03/10 Putalisadak , Kathmandu 368.90

19 Sanima Bank Ltd. 2012/02/15 Nagpokhari, Kathmandu 530.59

20 Machhapuchhre Bank Ltd. 2012/7/9* New Road, Pokhara, Kaski 386.45

21 NIC Asia Bank Ltd. 2013/6/30* Thapathali, Kathmandu 581.96

22 Global IME Bank Ltd. 2014/4/9* Panipokhari, Kathmandu 616.43

23 NMB Bank Ltd. 2015/10/18* Babarmahal, Kathmandu 543.01

24 Prabhu Bank Ltd. 2016/2/12* Babarmahal, Kathmandu 588.14

25 Siddhartha Bank Ltd. 2016/7/21* Hattisar, Kathmandu 302.21

26 Bank of Kathmandu Lumbini Ltd. 2016/7/14* Kamaladi, Kathmandu 457.69

27 Civil Bank Ltd. 2016/10/17* Kamaladi, Kathmandu 458.38

28 Nepal Credit and Commerce Bank Ltd. 2017/01/01* Siddharthanagar, Rupandehi 467.91

*Joint operation date after merger

Source: NRB Banking and Financial Statistics

profitability ratio analysis of nabil bank...

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