A Project Work Proposal on

FINANCIAL PERFORMANCE ANALYSIS

OF
NABIL BANK LIMITED

Submitted by: Saurav Shrestha

T.U. Reg. No. 7-2-0424-0070-2019
Amity College

Submitted to
The Faculty of Management
Tribhuvan University
Kathmandu, Nepal

In Partial Fulfillment of the Requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Birtamode, Jhapa
January, 2024
 1. Introduction

Financial performance analysis is the process of analyzing a company’s financial

statements for decision making and to understand the overall health of an organization. It is a
comprehensive and indispensable process for evaluating the fiscal health and operational
efficiency of a company. In simple terms, this analysis method means carefully looking at a
company’s papers like income statement, balance sheets, and cash flow statement. These papers
give a quick look at how the company is doing financially. Financial performance analysis is
required to evaluate the financial data recorded in the financial statements so that the investors,
shareholders, managers, and other interested parties can understand the information. It is the
method of evaluating the past, present, and future performance of a company. Financial
performance analysis techniques such as vertical, horizontal, and ratio analysis are used by
analysts to monitor performance metrics across financial statements. It helps to analyze whether
a company is stable, solvent, liquid or profitable enough to warrant a monetary investment.

A key way to analyze how a company is doing financially is by using ratios. These are
calculations that help us to understand different aspects of the company’s performance. There are
various types of ratios like ones that show how easily the company can pay its bills (liquidity
ratio), how much profit its making (profitability ratio), how much debt it has compared to
liquidity (leverage ratio), and how efficiently it is managing its resources (efficiency ratio).
These ratios are like signals that helps us to get a detailed picture of the company’s financial
performance.

Nabil Bank Limited is the prominent commercial bank of Nepal. It was established in
July 12, 1984 as the first private sector bank in the country. Previously, it was known as ‘Nepal
Arab Bank’. In 1995, Nepalese billionaire, Binod Chaudhary bought the majority share of Nabil
Bank, which was previously owned by the Dubai government. The bank’s main office is at Nabil
Center, Durbar Marg, Kathmandu. Nabil Bank has a big network with 248 branch offices, 271
ATMs, many point-of-sale terminals, and agents for the money transfers all around the country.
 2. Scope of Study

Nabil Bank Limited was founded with the objective of providing modern,
international-standard financial services to businesses and win over the trust of its
depositors, investors, shareholders, and other stakeholders. To achieve this goal, it is
crucial to analyze the financial performance of the bank. This examination covers
important aspects such as stability, profitability, solvency, and liquidity to understand the
overall financial position of the organization. The information gathered from these
examination not only serves the needs of the users, but it also helps the bank itself to
determine its areas of weaknesses and strength. It helps banks to identify its weaknesses
and assists the bank in creating strategies and guidelines for the future operations that will
be more efficient. In simple words, it help banks to eliminate any shortfalls and
weaknesses of the bank and strengthens the foundation of the bank. Hence, this report
focuses on presenting a detailed analysis of financial statement of Nabil Bank Limited.

Financial analyst have multiple approaches to conduct financial performance

analysis which may include vertical, horizontal, and ratio analysis. This research focuses
on the analysis of financial statements using various tools of ratio analysis. Data analysis
procedures will involve the utilization of statistical and financial ratios, encompassing
liquidity ratios, profitability ratios, leverage ratios, activity ratios, and other pertinent
financial metrics.

3. Statement of the Problem

A problem statement is a short explanation of something that needs fixing or

getting better. It aims in identifying and explaining the problem.

In Nepal’s current environment, commercial bank are performing well. On the

basis
 of the profitability and productivity of commercial banks, the public has confidence in
their performance. Nonetheless, a number of internal element, government regulations,
taxation policies, the status of the economy, capital and money market structure, and
environmental factors have all had an impact on the financial performance and standing
of commercial banks. In these circumstances, it is highly useful to make the study on the
financial statement of Nabil Bank Limited.

When evaluating financial performance of Nabil Bank, general elements such as

stock prices and profitability position are taken into consideration. However, one can
raise the question, “are these the only factors to reflects the performance of the bank?”

So, the primary focus of the study is to investigate the financial performance of
Nabil Bank Limited.

The purpose of this study is to find out the answers of the following questions:

i. How is the financial performance of Nabil Bank Limited?

ii. Does the overall financial statement depict the financial position indicating any
special strengths and weaknesses of the Bank?

iii. Is Nabil Bank Limited utilizing its assets efficiently?

iv. It is believed that Nabil Bank Limited operates with efficiency. However, to what
extent is it effective?

In this context, the main purpose of the study is to analyze the financial
performance of the Nabil Bank Limited in term of turnover, profitability,
liquidity, and efficiency in operation.

4. Objective of the study

It defines the purpose of this study. In short, it is helpful to find out the answers to the
questions stated above. The main objective of this study is to analyze the financial
statements of Nabil Bank Limited regarding the financial performance and position.

Other specific objectives are as follows:

i. To evaluate the financial position of Nabil Bank Limited.

 ii. To analyze the financial performances through the use of appropriate financial
and analytical tools.

iii. To identify the profitability position i.e. Earning per share (EPS), Dividend per
share (DPS), and Return on Asset (ROA).

iv. To measure liquidity, solvency, and efficiency.

v. To determine the past, present, and projected performance of the company

5. Research Methodology

The procedure for gathering data and information is known as the research
methodology. The methodology may include interviews, surveys, publications, research,
and other research techniques.

6. Sources of Data Collection

Data can be collected from primary sources and secondary sources. Primary data
are first-hand data collected through the direct involvement of the researcher while
secondary data is the information collected by someone else and utilized by the
researcher for their study. The majority of the data used in this project work are collected
through secondary sources.

Secondary data are those data, that have previously been gathered and can be
accessed by researchers. Data in this project are collected from published as well as
unpublished sources. Secondary data used in this project are listed below:

 Annual financial reports of Nabil Bank Limited.

 Official website of Nabil Bank Limited.
 Newspapers
 Books and articles

7. Data Presentation And Analysis Tool

 To thoroughly examine the data collected during the research, a variety of
statistical and financial ratios are employed. This involves organizing, presenting in
tables, and illustrating through graphs, all aimed at carefully analyzing and
accomplishing the objectives of the study. The financial ratios we use for analyzing data
include different number comparisons. They help us get a complete understanding of
what we found in the research. The financial ratios used for data analysis are:
 Profitability ratios
 Liquidity ratios
 Assets management ratio

Further, the following tools have been used for data presentation:
 Tabulation
 Bar diagrams
 Pie-chart

8. Chapter Plan

i. Chapter one - Introduction

This section focuses on the beginning of the study. It includes information about the
study's background, the banking situation in Nepal, details about the organization, an
explanation of the problem being addressed, the study's goals, a review of existing
literature, how data is collected, any limitations to the study, and clear definitions of
important terms used

ii. Chapter two – Result and Analysis

Chapter two deals with data presentation and analysis of results and findings. In this
section, we showcase a step-by-step and organized presentation of how we collected
information for our project. Additionally, we thoroughly examine and discuss the results
and findings that emerged from the analysis of the collected data
iii. Chapter three – Discussion and Conclusion
The third chapter, which serves as the concluding part of this study, is dedicated to
carefully evaluating and explaining the results we've achieved. Additionally, it explores
the current significance of these results and the conclusions we've drawn, offering
valuable insights for future studies.
9. Limitation of the study
Limitations have the effect of narrowing down the scope of the study, and they arise from
various unavoidable circumstances. These circumstances are responsible for restricting or
constraining certain aspects of the research. The major limitations of this study are
mentioned below:
 The Research is based on records of fiscal years’ analysis only i.e. from FY
2079/2080.
 The researcher has used only some statistical tools for the presentation and
analysis of data.
 Most of the data used in this study are based on secondary sources mainly the
official website of Nabil Bank Limited.
 The main focus is given to the quantitative aspect rather than the qualitative
aspect.
 The study is based on Nabil Bank Limited only.
 It is only for partial fulfillment of Bachelor of Business Studies (BBS).
 Declaration

I hereby declare that the project work entitled “FINANCIAL PERFORMANCE ANALYSIS OF
NABIL BANK” submitted to the faculty of management, Tribhuvan University, Kathmandu is
an original piece of work under the supervision of Mr. Pramod Sitaula, faculty member, AMITY
COLLEGE, BIRTAMODE, JHAPA, and is submitted in partial fulfillment of the requirement
for the award of the degree of Bachelor of Business Studies (BBS). This work report has not
been submitted to any other University or institution for the award of any degree or diploma.

……………………
Saurav Shrestha
January, 2024