DEPOSIT ANALYSIS OF NABIL

BANK LIMITED

A Project Work Report

By

Abhishek shah

TU Regd. No: 7-2-444-63-2016

Symbol No: 4440001

Modern Nepal 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 ,2020
 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 Mr. Maheswor Khanal, faculty
member, MODERN NEPAL COLLEGE , Shorakhutte, 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.

…………………

Abhishek shah

May, 2020
 SUPERVISOR’S RECOMMENDATION

The project work report entitled PROFITABILITY RATIO ANALYSIS OF NABIL BANK
LIMITED submitted by ABHISHEK SHAH of MODERN NEPAL COLLEGE, Shorakhutte,
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.

………………..
Mr. Maheswor Khanal,
Modern Nepal College

May, 2020
 ENDORSEMENT

We hereby endorse the project work report entitled PROFITABILITY RATIO ANALYSIS OF
NABIL BANK LIMITED submitted by ABHISHEK SHAH of MODERN NEPAL 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
 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 ……………….. for guiding and inspiring me to do this
fieldwork. I would also like to thank …………………………….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.

Abhishek shah

v
 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

CHAPTERI:INTRODUCTION…………..………………………..……………………….1
Background of the Study … … … … … … … … … … … … … … .. … …1
Brief Introduction to NABIL Bank Ltd. … … … … … … … … … … … …4
Objectives of the Study … … … … … … … … … … … … … … … … ….6
Rationale of the Study … … ………………. … … … … … … … … … … .6
Literature Review … … … … … … … … … … … … … … … … … … …6
Methods of Study … … … … … … … … … … … … ... ... . …. .. … … ...12
Limitations of Study… … … … … … … … … … … … … … … … … ...13

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

Data Presentation … … … … … …… … … … … … … … … … … … ..14
Analysis of result
Findings .. … … … … … … … … … … … .. … … … … … … … … … 26

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

…28 Summary… … … … ... … …. … … … … ... … … … … … … … … … ..28
Conclusion… … … … … … … … … … … … … … … … … … … … ...29
BIBLIOGRAPHY
APPENDICES
List of Tables

Page 6 of 43
Table No. Headings Page No.
2.1 Total Deposit Position of NABIL 20
2.2 Current Deposit Position of NABIL 21
2.3 Saving Deposit Position of NABIL 22
2.4 Fixed Deposit Position of NABIL 23
2.5 Interest Bearing Deposit Trend of NABIL 24
2.6 Non-interest Bearing Deposit Trend of NABIL 25
2.7 Interest Expense on Deposit 26
2.8 Cost Position of NABIL 27
2.9 Deposit Lending Ratio 28
2.10 Ratio of Interest Bearing Deposit to Total Deposit 29
2.11 Ratio of Non-interest Bearing Deposit to Total 30
Deposit
2.12 Ratio of Current Deposit to Total Deposit 32
2.13 Ratio of Saving Deposit to Total Deposit 33
2.14 Ratio of Fixed Deposit to Total Deposit 34

IV

Page 7 of 43
 List of Figures

Figure No. Heading of Figures Page No.

1 Equity Ownership Structure 4
2 Product and Services 5
2.1 Total Deposit Position of NABIL 20
2.2 Current Deposit Position of NABIL 21
2.3 Saving Deposit Position of NABIL 22
2.4 Fixed Deposit Position of NABIL 23
2.5 Interest Bearing Deposit Trend of NABIL 24
2.6 Non-interest Bearing Deposit Trend of NABIL 25
2.7 Interest Expense on Deposit 26
2.8 Cost Position of NABIL 27
2.9 Deposit Lending Ratio 28
2.10 Ratio of Interest Bearing Deposit to Total Deposit 29
2.11 Ratio of Non-interest Bearing Deposit to Total 31
Deposit
2.12 Ratio of Current Deposit to Total Deposit 32
2.13 Ratio of Saving Deposit to Total Deposit 33
2.14 Ratio of Fixed Deposit to Total Deposit 34

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 ABBREVIATION

C.A. = Current Assets

C.L. = Current Liabilities

M.S. = Marketable Securities

LTD = Limited.

NIDC = Nepal Industrial Development Corporation

NRB = Nepal Rastra Bank

Page 9 of 43
 CHAPTER 1
INTRODUCTION
1.1General Background
Nepal is very small and poor country. It occupies 0.03% on the world and 0.3%on
the Asia. Bank is very important in the country like Nepal. Bank and financial institution is
the main factor for developing the economical industrial and commercial sector of country. In
a simple meaning we can say that Bank is a financial intuition whose main function is to
collect all the spread money as the deposit and to provide loan to needy person Bank raise the
fund through deposit and credit in creation in wrien it pay certain Interest to deposit holder
and it provide the raising fund to others for certain time in certain Interest charges. It also
aware people to save there money.

1.1.1 Concept of banking

A bank is a financial institution, which deals with money and credit. It accepts
deposits from the public and mobilizes the fund to productive sectors. It also provides
remittance facility to transfer money from one place to another .Generally, bank accepts
deposit from business institutions & individuals which is mobilized into productive sectors,
mainly business and consumer lending. Bank, is therefore, known as a dealer of money. At
present context bank is not confined to accepting deposits and disbursing loans. In addition to
this, a bank may be engaged in different types of functions such us remittance, exchange
currencies, Joint venture, underwriting, bank guarantee, discounting bill etc. In short, the
modern bank refers to an institution having the following features:
1. It deals with money; it accepts deposit and advances loans.
2. it also deal with credit; it has the ability to create credit by expanding its liabilities.
3. It is commercial institution; it aims at earning profit.
Banks are the principal source of credit for millions of individuals and families and
for many units of government. They are among the most important financial institution in the
economy. Moreover, for small local business ranging from grocery stores to automobile

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dealer, banks are often the major sources of credit to stock the shelves with merchandise.
Banks grant more installment loans to consumers then any other financial institutions.
Bank is a financial intermediary accepting deposits and granting loans. It offers
thewidest menu of services of financial institutions.
Banks also are among the most important source of short term working capital for
business. They have become increasingly active in recent years in making long term business
loan for new plant and equipment. When business and consumers must make payment for
purchase of goods and services, more often they use banks provided cheques, credit or debit
cards or electronic accounts connected to a computer networks. It is banker to whom they
turn most frequently for advice and council, when they need financial information's and
financial planning.

1.1.2 Historical development of banking system in Nepal

The history of banking dates backs to sixteenth century, However, in Nepal
formal banking system was introduce only in November 1937 with the establishment of
Nepal Bank Ltd. (NBL). Which is regarded as pioneer institution of modern banking system
and served as a sole financial institution of country for nearly two decades? Prior to
establishment of this bank, the banking needs of people were fulfilled to certain extent only
by organized financial institution the “Tejartha Adda” However, the services tit offered of
high committee board “Udyog Parishad” was indeed a landmark in opening new avenue in
field of banking, industry and commerce. Accordingly, NBL was established in November
1937 under Nepal Bank act as joint venture between government and Private sector and
replaced the “Tejartha Adda” by taking over its operation and overcoming it limitations. To
regulate issue of currency, securing countrywide circulation Nepalese currency, achieving
stale exchange rate and mobilize capital for economic development and for stimulation of
trade, industry and banking sector Nepal Rastra Bank (NRB) came into existence in April 26,
1956 as country’s central bank. After this, NRB diverted its attention towards development of
banking system by formulating relevant polices and procedure.
In this connection commercial bank, act 1963 was formulated. Hence, further
shouldering the banking services, the Rastriya Banijya Bank (RBB) was established in 1966
under RBB act 1964 with fully government owned commercial bank.
The process of the development of banking system in Nepal was not
satisfactory up to 1983. No bank was opened from during this period except

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extending the branches and sub branches of the banks, which were established
in this period. Nepal was observing the events that were taking places in the
world also. Nepal was deeply studying and searching what sorts of programs,
policies, law, and regulation should be brought into practice. The country can’t
change its status by using only its own capital in the country without importing
the new technology from foreign country and accordingly, law and policy have
been enacted by the state to encourage the foreign investment on banking
sector. From this the real form to the development of the banking system started
in Nepal. The competition began to grow. The banks began to offer their
valuable services to the people through new technologies. This was the great
significant event. Thus, some banks are opened on the joint investment basis.

1.1.3 Meaning and definition of Commercial Bank

“A commercial bank is business organization that receives and holds deposits of funds
from others, makes loans or extends and transfer funds by written order of depositors”
“A commercial banker is a dealer in money and substitute for money such as cheques or
bill of exchange. It also provides a variety of financial services”
Commercial banks are those institutions which are established for purpose of promoting
the trade and business in the country by providing them the short term and midterm loan. For
the promotion of trade and business the commercial banks also provides the information
about the goods or product, technology, market and the customers attitude towards the
product which help the business by earning desired profit.

1.1.4 Commercial Bank in Nepal

In the Nepalese context, banking sector is rather more slow evolution. In Nepalese history, a
merchant namely “SANKHDHAR”, who alone paid all the debt of the people in the country
at that time? This proves the existence of money lending function at that time. During the end
of 14th century the term “TANKADHARI” i.e. moneylender were found in the course of
development of borrowing. The “TEJARATH” office established in 19th century used to give
loans to government employees. But the banking in Nepal ha started in real sense with the
establishment of Nepal Bank Ltd. in 1937. RBB was established as a fully government
owned commercial bank in 1966.Anyhow, Nepal Bank Limited is the first commercial bank
of Nepal and was established in 1994 B.S. Then several legislation was made and other

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different types of banks were developed in the country. After declaring free economy and the
privatization policy, Nepal Arab Bank (NABIL) was established in 1984 A.D. This the first
modern bank with latest banking technology. Then lot commercial bank opened in the
country.

At present there are all together 32 Commercial Bank operating in the country. They are as
follows:-
Table no 1: Commercial Banks in Nepal
S.N. Commercial Banks Established Head Office
(B.S.)
1. Nepal Bank limited 1994/07/30 Kathmandu
2. Rastriya Banijya Bank 2022/10/10 Kathmandu
3. Agriculture Development Bank Ltd. 2024/10/07 Kathmandu
4. Nabil Bank Limited 2041/03/29 Kathmandu
5. Nepal Investment Bank Limited 2042/11/16 Kathmandu
6. Standard Chartered Bank Nepal Limited 2043/10/16 Kathmandu
7. Himalayan Bank Limited 2049/10/15 Kathmandu
8. Nepal SBI Bank Limited 2050/03/23 Kathmandu
9. Nepal Bangladesh Bank Limited 2050/02/23 Kathmandu
10. Everest Bank Limited 2051/07/01 Kathmandu
11. Bank of Kathmandu Limited 2051/11/28 Kathmandu
12. Nepal Credit and Commerce Bank Limited 2053/06/28 Siddartha Nagar
13. Lumbini Bank Limited 2055/04/01 Narayanghat
14. Nepal Industrial & Commercial Bank Limited 2055/04/05 Biratnagar
15. Machhapuchhre Bank Limited 2057/06/17 Pokhara
16. Kumari Bank Limited 2056/08/24 Kathmandu
17. Laxmi Bank Limited 2058/06/11 Birgunj
18. Siddhartha Bank Limited 2058/06/12 Kathmandu
19. Global IME Bank Limited 2063/09/18 Kathmandu
20. Citizen Bank International Limited 2064/01/07 Kathmandu
21. Prime Commercial Bank 2064/06/07 Kathmandu
22. Sunrise Bank Limited 2064/06/25 Kathmandu
23. Bank of Asia Nepal Limited 2064/06/25 Kathmandu
24. DCBL Bank Nepal Limited 2065/02/12 Kathmandu
25. NMB Bank Limited 2065/02/20 Kathmandu
26. Kist Bank Limited 2066/01/24 Kathmandu
27. Janata Bank Nepal Limited 2066/12/23 Kathmandu
28. Mega Bank Nepal Limited 2067/04/07 Kathmandu
29. Commerz & Trust Bank Nepal Limited 2067/06/04 Kathmandu
30. Civil Bank Limited 2067/08/10 Kathmandu
31. Century Commercial Bank Limited 2067/11/26 Kathmandu
32. Sanima Bank Limited 2068/11/01 Kathmandu

Page 13 of 43
 1.1.5 Functions of Commercial Bank

The commercial bank plays an important role in the modern economy. The accepting
of deposits from individuals and institutions and providing loans to the needy persons
and businesses are its two important functions. Besides, it performs many other
functions. On the one hand, it helps in capital formation by mobilizing savings. On the
other hand it promotes trade and industries by providing loans.

Major functions of commercial bank:

1. Accepting Deposits

The commercial banks accept deposits in different accounts. This is the first most
important and oldest function of the commercial bank. The main forms of deposit
accepted by banks are as follows:-

a. Current or Demand Deposit

The men and the institutions needing cash frequently deposit their money in current
account. The amount deposited in this account can be withdrawn by drawing cheque
without prior information. Since the bank should keep all money in reserve and cannot
make investment, no interest is offered in this account. The bank may instead, take
incidental or bank charge for the management of money. The minimum amount to be
deposited and maintained in this account is stipulated. The amount varies from bank to
bank. If the minimum amount is not maintained, the bank charges some amount of
fees. The pass book containing account and cheque book to withdraw money are
issued to depositors.

b. Saving Deposit

The low income people and those not needing to draw money frequently deposit their
money in the saving account. The money deposited in this account can be withdrawn
only once or twice in a week or only in stipulated amount. In this account as well, the
minimum amount to be deposited and maintained are stipulated. The amount varies
from bank to bank. The pass book and cheque book’ are issued to depositors.
However, at present, the joint venture banks issue financial statement on quarterly
basis instead of issuing passbook in both the current and saving account.

If the customers draw more than stipulated amount without prior notice, the bank
charges interest on the excess amount. The bank provides interest in this account since
the bank can use money. A variant of saving account is ‘Home Saving Account’. The
purpose of this account is to encourage children and illiterate persons to save. These
persons drop money in a box supplied by the bank. The bank occasionally opens the
box and the amount is deposited in the person’s account. The interest is offered in this
deposit as in saving account.

c. Fixed or Time Deposit

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The amount deposited for a fixed period is called fixed or time deposit. As the name
implies, the amount deposited cannot be withdraw before the fixed period. However,
the depositor can take loan from the bank against the security of fixed deposit receipt.
The interest rate is higher than offered by bank. Since the bank can utilize the money
for a fixed period, high interest is offered in this account. The fixed deposit in Nepal is
of 3 months, 6 months, 1 year and 2 years and above. No cheque book and passbook is
issued in this account. Only fixed deposit receipt is given as an evidence of deposit.

Beside the above mentioned deposits, the banks have introduced many other types of
deposits, like marriage account, education account, and cumulative account and so on.

2. Providing Loans

The second important function of the bank is to provide different types of loans. The
bank earns profit by giving the amounts deposited with it in the form of loans. Since
the bank creates credit, with its deposits, it is called manufacturer of credit. Likewise,
since the bank earns profit by utilizing the deposits it is said “It is banker’s brain and
other people’s money”.

Traditionally, a commercial bank can grant only short-term credit. But in present time,
it also provides loan of medium and long-term nature to some extent to even industry
and agriculture. The bank charges interest on loans which are usually higher than
those offered on the deposits. Since the banks in Nepal are how free to fix interest
rates, the rate of interest on both deposits and loans varies from bank to bank.

The main forms of loan provided by the bank are as follows:-

a. Loans and Advances

The loans and advances are provided by the bank to individuals and institutions for
various purposes. The bank provides loans only against the securities like gold, silver,
government and non-government securities which are easily marketable, stable in
value and liquid. Some banks offer the personal loans without security on the basis of
honesty and prestige of the customers. The bank charges interest on full amount of the
loan. The loans provided against the export bills are called advances.

b. Overdraft

The banks grant overdraft facilities to the honest customers. In this provision, the
customer can withdraw the amount more than deposited in his account. But the limit
and period of overdraft is stipulated earlier. The borrowers need to pay interest only
on the amount actually drawn. Generally, the bank charges more interest on it than in
ordinary loans. The bank may demand security in it as in ordinary loan

c. Cash Credit

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The practice of cash credit was originated in Scotland. The importance of cash credit
to Scotland was shown by H.D. Macleod in these words “Cash credit is to Scotland
what the river Nile is to Egypt, a fertilizer”.

The cash credit is not based on personal security. It is provided against the collateral
of shares, debentures, cotton, Jute, rice etc. There is only one difference between cash
credit and overdraft. In overdraft, more amount can be withdrawn from current
account for a temporary period, whereas, a new account is opened in case of cash
credit.

d. Discounting of Bills

The bank provides loans by discounting bills such as the bill of exchange. In modern
days, transactions are made with the help of credit. The sellers draw bill of exchange
making borrower to pay after some fixed time. When the seller needs money he
submits the bills in the bank. The bank discounts the rate of interest from the face
value of the bill and allows drawing the remaining amount by cheque. This is called
discounting of bills. After the maturity of the bills, the bank receives full payment of
the bill. The commercial bank can make the bills rediscounted by the central bank in
case of the need of money. The bill has the guarantee of both drawer and drawee.
Hence, the loans against bills are regarded as safe as well as liquid.

3. Investments

Banks also invest in shares and debentures of companies. Nepalese banks have
invested on shares and debentures of Nepal Insurance and Transport Company,
National Insurance Company, Nepal Oil Corporation, Credit Guarantee Corporation,
Agricultural Projects Services Centre, Rural Development banks and so on. Similarly,
banks have invested on government securities and NRB bonds. The banks also have
entered into consortium financing. Banks earn interest by investing government and
non-government securities.

1.2 Introduction of Nabil Bank Limited

Nabil Bank Limited is the nation’s first private sector bank, commencing its business since
July 1984. Nabil was incorporated with the objective of extending international standard
modern banking services to various sectors of the society. Pursuing its objective, Nabil
provides a full range of commercial banking services through its 93 points of representation.
In addition to this, Nabil has presence through over 1500 Nabil Remit agents throughout the
nation.

Nabil, as a pioneer in introducing many innovative products and marketing concepts in the
domestic banking sector, represents a milestone in the banking history of Nepal as it started

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an era of modern banking with customer satisfaction measured as a focal objective while
doing business. Operations of the bank including day-to-day operations and risk management
are managed by highly qualified and experienced management team. Bank is fully equipped
with modern technology which includes international standard banking software that supports
the E-channels and E-transactions.

Nabil is moving forward with a Mission to be “1st Choice Provider of Complete Financial
Solutions” for all its stakeholders; Customers, Shareholders, Regulators, Communities and
Staff. Nabil is determined in delivering excellence to its stakeholders in an array of avenues,
not just one parameter like profitability or market share. It is reflected in its Brand Promise
“Together Ahead”. The entire Nabil Team embraces a set of Values “C.R.I.S.P”,
representing the fact that Nabil consistently strives to be Customer Focused, Result Oriented,
Innovative, Synergistic and Professional.
The share holding of NABIL Bank Ltd. is as following:

Subscription Percent Holding

N.B. (International), Ltd., Ireland 50%
Nepalese Public 30%
NIDC 10%
Rastriya Beema Sansthan 9.67%
Nepal Stock Exchange Ltd. 0.33%
Total 100%
Figure 1
Equity Ownership Structure
N.B. (International), Ltd.,
Ireland
Nepalese Public
9.67% 0.33%
10%
NIDC
50%
Rastriya Beema Sansthan
30%

Nepal Stock Exchange Ltd.

Nabil cordially invites you to visit its branches/counters to have the taste of
fledge banking services
NABIL BANK LIMITED
HEAD OFFICE
Nabil House, Kamaladi,
Katmandu.

1.2.1. Branches Nabil Bank Ltd.

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1. Kantipath Branch, Kantipath 9. Itahari Branch, Main Road, Itahari
2. Nabil House Corporate Banking, 10. Butwal Branch, Main road, Butwal
Nabil House, Kamaladi, Ktm.
3. New Road Branch, New Road 11. Bhalwadi Branch, Bhalwadi, Rupandehi
4. Jorpati Branch, Jorpati 12. Pokhara Branch, Chipledhunga, Pokhara
5. Lalitpur Branch, Kupondole 13. Bhairahawa Branch, Narayanpath
6. Airport Exchange Counter, TIA 14. Credit Card Counter, Lakeside, Pokhara
7. Credit Card Counter, Thamel, 15.Birgunj Branch, Adarshanagar, Birgunj
Ktm
8. Biratnagar Branch, Goswara 16. Alau Branch, Alau, Parsa
Raod

The Board of Directors of Nabil consists of:-

Chairman Shambhu Prasad Poudyal

Director Mr. Supriya Gupta , NB(International) Limited
Director Mr. Mukunda Nath Dhungel, Nepal Stock Exchange Limited
Director Mr. Mohiuddin Ahemd, NB(International) Limited
Alternate Director Mr. Manish Gupta, NB(International) Limited

Figure 2

  Deposits
Following types of accounts can he opened at any NABIL branches upon
completion of simple documentary requirement. All the accounts can he opened
in various currencies (against which rate are provided) subject to ruled of
opening and fulfilling the required documents.
 Savings
 Current

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 Fixed
 Call
 Guarantees

NABIL Bank issues guarantees and Bonds on behalf of customers to the

beneficiaries in Nepal. Upon fulfillment of requirement, NABIL also arranges
issuance of guarantees in the name of foreign beneficiaries through reputed
international banks.
 Credit Cards

NABIL is the first bank in Nepal to issue Rupee (valid in Nepal and India) and
international valid worldwide) Master card, cards in Nepal, a global prestigious
service to its esteemed clients NABIL is also expanding credit and facilities
issuing visa credit card very soon.

 Tele-banking

Telephone banking is another product provided by NABIL bank to its

customers. Under this arrangement customer can know the balance of his
account through telephone with out human assistance.

 Western Union Money Transfer

NABIL bank has established unique money remittance system with western
union financial service whereby money can be remitted anywhere in the world
within minutes, through online computer system funds can be transferred
instantly to about 55000 locations in 165 countries of the world. Nepali wage
earners abroad can send money to their near and dear ones in Nepal within a
very short time. By using the above services, you can now send and receive
money within minutes in 165 countries in the world.

 SWIFT (Society for Worldwide Inter Bank Financial Telecommunication)

NABIL has started worldwide transfer of fund by this fast and efficient funds
transfer and messaging system. Messaging and fund transfers are carried
through SWIFT with minimum time and cost.
 Safe Deposit Locker

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NABIL provides safe deposit lockers to keep valuables safety at a minimum
cost. Presently, this facility is available at Kantipath and Kamaladi offices.

 Automated Teller Machines (ATM)

NABIL has launched the ATM facility to its account holders to enable fast
withdrawal of funds in account holder need not wait long hours for withdrawing
money and sign cheques anymore. A simple card with a unique PIN number
known only to the account holder will suffice.
 Other facilities

The bank provides the facilities for the customer like deposit services, loans and
advances, consumer finance, cash management and remittance services etc.

1.3 Objective of the study

The main objective of this study is to analyze the financial performance and
solvency position of MBL by using different financial ratios. This study is to analyze,
examine and interpret the policies adopted by MBL. The main objectives of this study are
given below:
a. To evaluate liquidity, leverage, capital adequacy, turnover and profitability
position of MBL
b. . To evaluate the trend in the growth of loans and investment and total deposit of
MBL

c. To discuss fund mobilization and strategy of liquidity management of NABIL.

d. To provide information of NABIL in banking sector

e. To suggest and recommend some measure on the basis of the study of financial
performance evaluation for the improvement of financial performance of MBL in
the future.

1.4 Rationale of the study:

Generally, these types of study give emphasis on the welfare of students. Such type
of study makes students active and independent and it also allows students to get practical
knowledge of what they studied theoretically. So, while preparing the field work report, they

Page 20 of 43
gain knowledge through their own experience enabling them to deal with problem relating to
their studies. This study also intends to let students know about required information by
themselves. The others importance of this study are as follow
1) The BBS level would remain incomplete without this study.
2) This report can be a source of secondary data for researchers.
3) This study will be helpful to the management in order to analyze their own success
and failure while leading the firm in planned direction.

4) It will be useful for concerned company as the study has provided suggestions.

5) This field report can be used as guideline for the future students while preparing such
type of field report.
1.6 Method
The research methodology is the process of arriving to the solution of the problem
through planned and systematic dealing with the collection analysis and interpretation of facts
and figures. As this research entirely consider about the operation the performances of MBL
those research methodology has been used which proves helpful to tit.
For the purpose of achieving the objective the following methodology has been to
follow which included research design, nature of data, data gathering, procedure, presentation
and analysis technique.

1.6.1 Research Design

The research methodology is the process of arriving to the solution of the

problems through planned and systematic dealing with the collection, analysis
and interpretation of facts and figures. As the research entirely considers about
the about “Deposit Analysis of NABIL Bank” The main purpose of this study is
to show deposits and its utilization in NABIL with its financial positions,
collection and uses of funds, its prospects and its position in context of Nepal as
well as to recommended suggestions for its improvement. Those research
methodologies have been used which proves helpful to deposit analysis. For the
purpose of achieving the objective, the following methodology is used. The data
has been collected by acquiring various kinds or reposts, bulletins and journals
from the organization. Similarly data has been acquired from NRB also.

The study report is based mostly on secondary information of NABIL. In

addition to this, reference has been made in library consult, class lectures,
Related books of banking, financial management and accounting during the
preparation of this study.

Page 21 of 43
1.8.1. Sources of Data

For the preparation of this report different kinds of books are followed. In this
report, all the data collected is secondary in nature. Almost all the data has been
collected form published annual reports, brochures etc. Mostly all the data are
collected from the concerned bank.

 Primary Data Source:

Primary source of data is questionnaires, observation, interviewing personally in

the site. The data regarding the organization, its feature and structures were
received primary through the officer of NABIL.

 Secondary Data Source:

In this study, the main source of data is secondary which are collected from pre-
published data sources. The secondary data sources used in this study are:

Internal source
 Annual reports of NABIL
 Interim performance report
External source
 Book publications
 Journals
 Articles from newspapers
 Annual reports of NRB

1.8.2. Data Processing Techniques

The data collected from the above stated sources has been classified tabulated
and interpreted for easier study.

Page 22 of 43
Classification and Tabulation of Data

The data collected are classified, tabulated and arranged in manner to make it
easily understandable with the use of tables in chronological order. After
classification the data is tabulated.

Diagrammatic Representation of Data

Various diagrams are used to present the data more clearly. The diagrams used
are follows:
 Bar Diagram
 Pie Chart
 Line Graph
 Bar Graph

Tools for Analysis of Data

Various Financial Accounting and statistical tools have been used of analyses
the collected data and interpret the result obtained. The various tools used are:
Deposit Trend Deposit Lending Ratio
Deposit Mix Ratio of Interest Bearing Deposit to Total Deposit
Deposit Categorization Ration of Non interest Bearing Deposit to Total
Deposit
Interest Expenses Ration of Fixed Deposit to Total Deposit
Cost of Deposit Ratio of Current Deposit to Total Deposit
Correlation Coefficient Ration Saving Deposit to Total Deposit
Trend Analysis

1.7 Limitation of the study:

Although a great effort has been employed in order to prepare grand design of the report,
it has some limitation. The limitation of the study is as below.

1. The major factor contributing to the limitation of the study is the time factors. Since, this
report had to be submitted within a limited span of time.
2. The study period covers only five fiscal years from 2070/2071 to 20752076.
3. The study is based on secondary data and as per information provides by MBL bank.
4. This study does not take up the financial performance of other commercial banks.

Page 23 of 43
5. The reliability and accuracy of data is based on the published annual
reports of the concerned bank.

Page 24 of 43
 Chapter 2
Data Presentation and Analysis

Table 2.1
Total Deposit position of NABIL (Rs. in million)
Year Fixed Current Saving Others Call & Total Growth
Short %
Deposit
2001/2002 3719 2851 4917 403 3948 15839 -0.006
2002/2003 2446 2704 4972 439 4945 15506 -2
2003/2004 2252 3034 5230 390 2541 13448 -13
2004/2005 2310 2688 5994 326 2801 14119 5
2005/2006 2079 2799 7026 342 2341 14587 3
2006/2007 3449 2910 8771 365 3851 19347 33
Source: NABIL Bank Ltd., Annual Financial Statement

Figure 2.1

This table shows the total deposit mix of NABIL during the period of six years.
During the last years the current, margin or other deposits have a fluctuating
collection in the deposit mix of NABIL. Here, total deposit on NABIL in
2001/2002 was 15839 million which were 0.006% less than that of year 2000,
in

Page 25 of 43
2002/2003 by 2%. In the year 2003/2004 the deposit decreased by 13%. But in
the year 2004/2005 the total deposit increased by 5% to Rs.14119 million. In
the year 2005/2006 the deposit increased by 3% which reached to Rs.14587
million .In the year 2006/2007, the deposit increased by 33% which reached to
Rs.19347 million.

From above analysis, we have found the increasing trend of total deposit. But,
the various accounts have a fluctuating collection of deposit. So, such trend
should be managed by implementing proper policies.

Table 2.2
Current Deposit Position of NABIL ( Rs. In Million)
Year Current Deposit Growth (Rs.) Growth %
2001/2002 2851 -30 -1
2002/2003 2704 -148 -5
2003/2004 3034 331 11
2004/2005 2688 -346 -13
2005/2006 2799 111 4
2006/2007 2911 112 4
Source: NABIL Bank Ltd., Annual Financial Statement

Figure 2.2

Above table shows that the current deposit of NABIL. In the year 2001/2002
was Rs.2851 million, which was decreased by 1% than the previous year. There
had been great decreased in current deposit during the year 2001/2002 by 1%
corresponding to Rs. 30 million. But there was a decrease in the year 2002/2003
by 5% and the current deposit reached Rs. 2704 million during year 2002/2003.

Page 26 of 43
In the year 2003/2004 current deposit was Rs. 3034 million n which is Rs. 331
million more than that of year 2003/2004.But in the year 2004/2005 current
deposit collection decreased by 15% corresponding to Rs.346 million increases.
In the year 2005/2006 current deposit collection increased by 4% corresponding
to Rs.111 million increased. Now, in the recent year 2006/2007, the current
deposit is increased by 4% i.e.Rs.112 million and has reached to Rs.2911
million.

From the above table it is seen that current deposit has an increasing trend but
the increment is not consistent. Sometimes it increases largely while it increases
with a low rate.

Table 2.3
Saving Deposit Position of NABIL (Rs. in million)
Year Saving Deposit Growth Rs. Growth %
2001/2002 4917 767 18
2002/2003 4972 55 1
2003/2004 5230 257 5
2004/2005 5994 765 13
2005/2006 7026 1032 15
2006/2007 8771 1745 25
Source: NABIL Bank Ltd., Annual financial Statement

Figure 2.3

Here is the figure of saving deposit of NABIL. In the year 2001/2002 was Rs.
4917 million, which was increased by 18% than in the year 2000/2001
corresponding to Rs.767 million. In 2002/2003 it was increased by 1% and in
the year 2003/2004 it was increased by 5%. In the year 2003/2004 saving
deposit was Rs.5230 million which is Rs.257 million less than of year

Page 27 of 43
2002/2003. In the year 2004/2005 it again increased by 13% and reached Rs.
5994 million. In the year 2005/2006 it again increases by 15% and reached Rs.
7026 million. In the year 2006/2007, it continues to increase and reaches to
Rs.8771 million which is the increase by 25% i.e. Rs.1745 million.

From the above table, saving deposit trend is seemed to be increasing. Most of
the people deposit their fund in saving deposit account. So, NABIL should
attract people towards saving deposit and manage its incremental trend.

Table 2.4
Fixed Deposit Position of NABIL (Rs. in million)
Year Fixed Deposit Growth (Rs.) Growth (%)
2001/2002 3719 -3949 -106
2002/2003 2446 -1273 -2
2003/2004 2252 -195 -9
2004/2005 2310 58 3
2005/2006 2079 -231 -11
2006/2007 3449 1370 67
Source: NABIL Bank Ltd., Annual Financial Statement

Figure 2.4

Here
fixed

deposit of NABIL. In the year 2001/2002, 1999 it was increased by 31% to

Rs.3719 million. Similarly, in the year 2002/2003it again decreased by 2% to
Rs.2446. But there was decrease in fixed deposit during the year 2003/2004. It
decreased by 9% to Rs.2252. In the year 2004/2005 it was increased by 3% and
reached Rs.2310 million. In the year 2005/2006 it was increased by 11% and
reached to Rs.2079.In the year 2006/2007, it has again decreased by 67% and
reached to Rs. 3449 million.

Page 28 of 43
Above table shows that the growth in fixed deposits it is rather fluctuating.
Since the fund of fixed deposit can be utilized for long-term investment, it
should be made consistent. So, such increase and drastic decrease affects the
profitability of the company.

Table 2.5
Interest Bearing Deposit Trend of NABIL (Rs. in million)
Year Interest Bearing Growth (Rs.) Growth (%)
Deposit
2001/2002 12585 3337 25
2002/2003 12363 -222 -2
2003/2004 10022 -2341 -23
2004/2005 11106 1084 10
2005/2006 11446 340 3
2006/2007 16071 4625 29
Source: NABIL Bank Ltd., Annual Financial Statements

Figure 2.5

Here Interest bearing deposit of NABIL .In the year 2001/2002 it was increased
by 25% to Rs.12585. Similarly, in the year 2002/2003 it again decreased by 2%
to Rs. 12363. But there was decrease in interest bearing deposit during the year
2003/2004 it decreased by 23% to Rs.10022. In the year 2004/2005 it was
increased by 10% and reached to Rs.11106 million. But there was increase in
interest bearing deposit by 3% in year 2005/2006 and reached to Rs. 11446.In
the year 2006/2007, it has increased to 29% and has reached to Rs.16071
million.

Page 29 of 43
The interest bearing deposit sometimes increases hugely and while sometimes
decreases in low rate. But with an increase trend of interest bearing Deposit
Company can collect fund regularly and increasingly but in decreasing Time
Company cannot fulfill their target fund.
Table 2.6
Non Interest Bearing Deposit Trend of NABIL (Rs. in million)
Year Non Interest Growth (Rs.) Growth (%)
bearing deposit
2001/2002 3254 -97 -2
2002/2003 3142 -112 -3
2003/2004 3424 282 8
2004/2005 3012 -412 -14
2005/2006 3140 128 4
2006/2007 3276 136 4
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.6

In above figure, the non-interest bearing deposit of NABIL In the year

2001/2002 was Rs. 3254 corresponding to 2% decreased in comparison to in the
year 2001. Similarly during the year 2002/2003 it was decreased by 3% and
reached to Rs.3142. In the year 2003/2004 it increased by 8% Rs. reached
Rs.3424 million. In the year 2004/2005 the non-interest bearing deposit
decreased by 14% million which is corresponding to Rs.3012. And in the year
2006 the interest bearing deposit increased by 4% and reached Rs.3140. Now,
in the recent year 20066/2007, the non interest bearing deposit has increased by
4% and reached to Rs.3276 million.

The non-interest bearing deposit is in increasing and decreasing trend.

Page 30 of 43
 Table 2.7
Interest Expenses on Deposit (Rs. in million)
Year Interest on Total Deposit Rs. Ratio %
Deposit
2001/2002 565 15839 3.57
2002/2003 457 15506 2.94
2003/2004 307 13448 2.28
2004/2005 265 14119 1.88
2005/2006 244 14587 1.67
2006/2007 359 19347 1.86
Average 14.2
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.7

Here, the interest expenses on deposit are presented. In the year 2001/2003 and
Rs. 565 which was 3.5% of total deposit collected in the years. In the year
2002/2003 the total collection of deposit was Rs.15506 while interest on deposit
was Rs. 457 of the total deposit, which is 2.29% ratio. In the year 2003/2004
total deposit and interest of rate on deposit are Rs. 12448 and Rs. 307, which is
2.28% of total deposit. In the year 2004/2005 the total collection of deposit was
14119 while interest on deposit was 265, which is only 1.88% of total deposit.
In current year 2005/2006 the collection of deposit was 14587 while interest on
deposit was 244 which is 1.67%. In the year 2006/2007 the collection of deposit
was 19347 and interest on deposit was 359 which is 1.86. This shows that
NABIL has average 14.2% of interest expenses in total deposit.

Page 31 of 43
So with similar policies adopted NABIL should manage to reduce the interest
expenses in the future. Reduction in interest expenses increases the company's
profitability.

Table 2.8
Cost of Deposit of NABIL (Rs. in million)
Year Total Total Interest Cost of
Deposit Deposit bearing Deposit %
Expenses Deposit
2001/2002 15839 565 12585 4.5
2002/2003 15506 457 12363 3.7
2003/2004 13448 307 10022 3.06
2004/2005 14119 265 11106 2.4
2005/2006 14587 244 11446 2.13
2006/2007 19347 359 16071 2.23
Average 3
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.8

Formula:
Cost of Deposit =

Here, cost of NABIL in the year 2001/2002 was 4.5% corresponding to Rs.401.
During the year 2002/2003 the cost of deposit was Rs.457, which is 3.7% of
total interest bearing deposit of Rs. 12363. In the year 2003/2004 the cost of
deposit decrease slightly with decrease in deposit was 3.06% i.e. Rs.307 million
when the total interest bearing deposit is Rs.10022 million. In the year
2004/2005 the cost of deposit decreased in deposit and it was 2.4% i.e. Rs.265
million when the total interest bearing deposit is Rs.14119 million. In current

Page 32 of 43
year 2005/2006 total deposit is 14587 while a total deposit expense is 244 and
interesting bearing deposit is 11446. In the year 2006/2007 total deposit is
19347 while a total deposit expense is359 and interest bearing deposit is 16071
and the ratio is 2.23% Therefore, cost of deposit reached at 3%.

The above analysis shows the cost of deposit if 100% of the deposits are
utilized. Of the cost of deposit is reduced, he company can earn more profit. So
by implementing good plans, company should reduce the cost of deposit.

Table 2.9
Deposit Lending Ratio (Rs. million)
Year Total Deposit Total Loans And Deposit Lending
(Rs.) Advance (Rs.) %
2001/2002 15839 8324 52.55
2002/2003 15506 7438 47.96
2003/2004 13448 7756 57.67
2004/2005 14119 8189 57.99
2005/2006 14587 10586 72.57
2006/2007 19347 12922 66.79
Average 59.26
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.9

Formula:
Deposit Lending Ratio =
The above analysis shows the ratio of total loans and advances to total deposits
if 100% deposits are being utilized. Here, deposit-lending ratio of NABIL in the
year 2001 was 57.39%. Similarly during the year 2002 the deposit-lending ratio

Page 33 of 43
was 52.55% of total deposit. The ratio decreased by 47.96% of total deposit in
the year 2003 and reached Rs. 7438.In the year 2004 the total deposit decreased
but the loans and advances could be increased. Total loans and advances in the
year 2005 were 57.99% of total deposit corresponding to Rs.8189.In the year
2006, both total deposit and loan and advances has been increased .Therefore,
the deposit-lending ratio has reached to 72.57% of total deposit.
The above analysis shows that the deposit-lending ratio of NABIL is average of
57.69%. The deposit lending ratio should be maintained properly so that it
would not affect organization's performance.

Table 2.10
Ratio of Interest Bearing Deposit to Total Deposits (Rs. in
million)
Year Interest bearing Total deposit Ratio %
deposit
2001/2002 12585 15839 79.45
2002/2003 12363 15506 79.73
2003/2004 10022 13448 74.52
2004/2005 11106 14119 78.65
2005/2006 11446 14587 78.47
2006/2007 16071 19347 83.07
Average 79.98
Source: NABIL Bank Ltd, Annual Financial Statement.

Figure 2.10

Formula:

Page 34 of 43
Ratio of Interest Bearing Deposit to total deposit = Interest Bearing Deposit
Total Deposit
In the above table, ratio of interest bearing deposit to total deposits of NABIL,
in the year 2001/2002 was 79.45% of total deposits. But in the year 2002/2003
it was 79.73% corresponding to Rs.15506. In the year 2003/2004 both the
interest bearing deposit and total deposit decreased and the interest bearing
deposit shared 74.52% of total deposit of Rs. 10022. It again decreased in year
2004/2005 and the ratio was 78.65% of total deposit. In the year 2005/2006
interest-bearing deposit is Rs.11446 corresponding to Rs. 14587 by
78.47%.Now, in the year 2006/2007, both the interest bearing deposit and total
deposit has increased. But the ratio reached to 83.07% of total deposit.
The above table shows that the interest bearing deposit of NABIL, contributes
by an average of 79.98% of total deposit.
Table 2.11
Ratio of non-interest bearing deposit to total deposit (Rs. in million)
Year Non Interest Total Deposit Ratio%
bearing deposit
2001/2002 3254 15839 20.54
2002/2003 3142 15506 20.26
2003/2004 3424 13448 25.46
2004/2005 3012 14119 21.33
2005/2006 3140 14587 21.53
2006/2007 3276 19347 16.93
Average 21
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.11

Formula:

Page 35 of 43
 Ratio of non-interest bearing deposit = Non-Interest Bearing Deposit
Total Deposit

In the above table, ratio of non-interest bearing deposit to total deposits of

NABIL, in the year 2001/2002 the ratio is 20.54 % of total deposits
corresponding to non-interest bearing deposit Rs.3254.But in the year
2002/2003 it was 20.26% corresponding to Rs.3142. Similarly in the year
2003/2004 non-interest bearing deposit shared 25.46% of total deposit Rs.
13448. In year 2004/2005 non-interest bearing deposit shared only 21.33% of
total deposit as only Rs.3012 million was collected. In the year 2005/2006 non-
interest-bearing deposit is shared only 21.53% of total deposit corresponding to
Rs.3140.Now, in the current year 2006/2007, it shared to 16.93% of total
deposit where non-interest bearing deposit and total deposit are Rs.3276 and
Rs.19347 million respectively.

The above table show that the non-interest bearing deposit of NABIL,
contributes by an average of 21 % of total deposit.

Table 2.12
Ratio of current deposit to total deposit (Rs. in million)
Year Current deposit Total Deposit Ratio%
2001/2002 2851 15839 18
2002/2003 2704 15506 17.44
2003/2004 3034 13448 22.56
2004/2005 2688 14119 19.04
2005/2006 2799 14587 19.19
2006/2007 2911 19347 15.04
Average 18.54
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.12

Formula: Ratio of Current deposit =

Page 36 of 43
From the above table, in the year 2001/2002 current deposit contributed total
deposit by 22.5%. In the year 2002/2003 current deposit was Rs.2851, which is
17.43%. The current deposit collection was Rs.2704 million in 2003/2004. In
the year 2004/2005 current deposit increased and shared total deposit by
22.56%. The current deposit collection was Rs.3034 million this year. In the
year 2005/2006 current deposit decreased to 19.19% the amount of
Rs.2688.Now, in the year 2006/2007 current deposit increased to 15.04% where
current deposit and total deposit are Rs. 2799 and Rs. 19587 million
respectively.
Therefore it is seen that current deposit shares an average of 18.54% of total
deposit collected in NABIL.
Table 2.13
Ratio of saving deposit to total deposit (Rs. in million)
Year Saving deposit Total Deposit Ratio%
2001/2002 4917 15839 31.04
2002/2003 4972 15506 32.07
2003/2004 5230 13448 38.89
2004/2005 5994 14119 42.45
2005/2006 7026 14587 48.17
2006/2007 8771 19347 61.13
Average 42.3
Source: NABIL Bank Ltd, Annual Financial Statement

Figure 2.13

Formula:
Ratio of Saving Deposit = saving deposit
Total deposit

Page 37 of 43
From the above table, in the year 2001 saving deposit contributed total deposit
by 31.04%. The saving deposit collection was Rs.4917 when total deposit
collection was Rs.15839. In 2002, saving deposit Rs.4972 million which was
32.07% of total deposit of Rs.15506 million. In the year 2003 saving deposit
Rs.5230 million which was 38.89% of total deposit of Rs.13448 million. In the
year 2004 the saving deposit Rs.5994 million which was 42.45% of total
deposit of Rs.14119 million .Similarly, in the year 2005 saving deposit Rs.7026
million which was 48.17% of total deposit of Rs.14587 million. And in the year
2006, saving deposit has increased to 61.13% of total deposit. Here, saving
deposit and total deposit amounted to Rs.8771 and Rs.14347 million
respectively.
Therefore it is seen that saving deposit shares an average of 42.3% of total
deposit collected in NABIL.
Table 2.14
Ratio of Fixed deposit to total deposit (Rs. in million)
Year Fixed deposit Total Deposit Ratio%
2001/2002 3719 15839 23.48
2002/2003 2446 15506 15.77
2003/2004 2252 13448 16.75
2004/2005 2310 14119 16.36
2005/2006 2079 14587 14.25
2006/2007 3449 19347 17.82
Average 21.56
Source: NABIL Bank Ltd, Annual Financial Statement
Figure 2.14

Formula:-
Ratio of fixed deposit = Fixed Deposit
Total Deposit
From the above table, in the year 2001/2002 fixed deposit contributed total
deposit by 48.41% where fixed deposit was Rs.7668. It had reached to15.77 %

Page 38 of 43
in the year 2002/2003. In the year 2003/2004, the fixed deposit collection was
Rs.2252 when total deposit collection was Rs.13448 and its ratio was
16.75%.Similarly, in 2004/2005 fixed deposit contributed total deposit of
Rs.14119 million by Rs.2310 million which is 16.36% of total deposit. In the
year 2005/2006 fixed deposit contributed total deposit of Rs.14587 million by
Rs.2079 which is 14.25% of total deposit .Now, in the current year 2006/2007;
fixed deposit contributed total deposit by 17.82%. Here, the fixed deposit and
total deposit amounted to Rs.3449 and Rs.19347 million respectively.
Therefore it is seen that fixed deposit shares an average 21.56% of total deposit
collected in NABIL.
Therefore from the above calculation we can say that the total deposit collection
of NABIL is in increasing trend. It is gradually increasing year by year. From
the calculation we can say that in the year 2007 the collection of deposit would
increase more than that of 2006.
SWOT Analysis
None of the organizations is perfect in each and every way. I here are some
weaknesses and threats, which affect the organization’s performance. It may
have lots of strength to be proud of but besides with some weakness and threats
as well. And the organization does not remain same forever there will be lots of
opportunities in order to expand the transactions. So NABIL has also its
strength to be proud, some weakness to be recovered and threats to be faced
patiently.
Strength
a. NABIL has 250 correspondent relationships besides
numerous drawing arrangements with 75 banks in 40 countries of the world.
Nabil has also drawing arrangement with the exchange companies and bank
besides many others like Habib Qatar International Exchange Limited, Doha,
Qatar.
b. To add its strength NABIL has vast network system in
the nation thus helping customer to transact through bank from place to place. It
has 17 branches nationwide which is the highest number of any joint venture
bank in Nepal. It is the only bank to operate inside international airport of
arrival and departure lounges.
c. Nabil is well known for providing highly personalized
services to its customers. It provides different services like ATM, credit cards,
Tele banking service, safe deposit locker etc. It has also introduced a number of
attractive deposit skills.
d. Human resources in NABIL are well trained and they
are dedicated to the bank too. NABIL is providing high remuneration and other
benefits as well to its staff.

Page 39 of 43
e. NABIL is well supplied with latest technology.
Computer does most of banking services. Thus the services of the bank are
prompt and accurate. The bank is capable to maintain the standard.
Weaknesses
a. The Increase in the number of branches increases the cost operation.
Administration expenses for personnel etc. are increased.
b. The political instability in the country can he considered another
weakness of the bank.
c. Too much dependency in computers is not considered to be reliable.
d. NABIL pays high interest rates on deposits. For this reason the bank also
charges high interest rates on credit, which has bad impact in investment
situation in nation.
e. Staff is unwilling to give even required information. It seems that they
don’t want to cooperate with once who are not really its customers.
Opportunities
a. A lot of people deposit their fund in this bank due to its skill
in attracting people by adopting attractive policies like high interest rate, prompt
services, credit card service, ATM etc.
b. Staff can perform their work more efficiently with the help of
computers. The environment of the bank is sound which helps to enhance its
stall bar its better profitability.
c. People in various sectors get employed through this bank,
which has highest number of branches among joint venture banks in the nation.
d. Citizens of underdeveloped country like Nepal get the
favorable chance to show their inner skills and talent.
e. The policies of the HMG and NRB rules and regulation
always give confidence to the banking sector to uplift the economy of the
nation.
Threats
a) Banks must land and invest its fund to parties having good reputation.
Otherwise the bank will have to regret later on.
b) Excess government pressure may create irregular banking transaction,
which leads to bad reputation of the bank.
c) The economic condition of country is deteriorating.
d) There is increasing number of competitions. Now there are 13
commercial banks, which include 9 joint venture and 45 finance companies.
e) The bank should be discouraged to open account for the individuals or
firms having bad reputation. It may be a threat, which can ruin the bank.

Page 40 of 43
 Chapter 3
Summary, Conclusion and Recommendation

3.1. Summary

A bank is an institution, which deals in money. A bank is like a reservoir. It

draws surplus money from the people who save and lend them to the people
who want to use it for productive purpose. In this process the bank earns
commission. The rate of interest paid to the depositors is generally lower than
the rate charged to the borrowers. The difference between these two rates of
interest is the profit of the bank. Deposit collection is the main function of
commercial bank.

The present study has been undertaken to examine and evaluate the financial
performance of NABIL. The financial statements of five years that is from
2000/01 to 2004/05 have been examined for the purpose the study. The study
has resorted mainly to secondary data that has been first processed and analyzed
comparatively. Individual interview with the management personnel has been
taken whenever necessary. This study is exploratory as well as analytical
sometimes.

NABIL was established in 12th July 1984, which was the first joint venture bank
in Nepal. Among many joint venture banks, it is a leading one, which is always
running in profit due to its proper management and good policies. Data that I
have presented is all from the secondary sources, which are in the annual reports
or other printed matters.

A customer can be account holder when he opens account. There are the
numbers of rules and procedures regarding opening different types of accounts.
The interest rates on different accounts are different.

3.2. Conclusion (Major Findings)

a) The deposit of NABIL is in increasing trend. The share of fixed deposit is

more than that of savings, current, margin and other deposits in the deposit mix
of NABIL.
b) The trend of interest bearing deposit has been gradually increasing but
there has been more fluctuation in non-interest bearing deposits, similarly, there
is also more fluctuation in interest expenses on total deposits.

Page 41 of 43
c) The trend analysis shows that the deposit of NABIL is in increasing
trend. In addition to this, the bank is being able to satisfy its customers and in
providing higher quality and newer services to them.
d) Interest expenses on deposit of NABIL during the year 2000 are also
quite high but there has been a decreasing trend of interest expenses till the year
2005.
e) Similarly, the cost of deposit during the year 2000 is also quite high but
there has been decreasing trend in the later year. So, it helps to increase the
efficiency to bank.
f) By the analysis of deposit landing we can conclude that the bank is able
to utilize its deposits a greater extent.
g) Thus, the bank’s performance is effective in profitability and towards the
customers and may attract more customers.

3.3. Recommendations

1. Although NABIL has a strong financial base and capital structure as well
as good market status and reputation in order to attract new customers and
increase deposit collection NABIL should introduce new schemes.
2. Customer services should be diversified and should further be
accommodated.
3. Interest rate on deposit should be competitive with other commercial
banks.
4. The bank should aim towards increasing its customers but it must also
provide the quality services to the present customers. For this the bank must
make plans and policies keeping customers in mind.
5. Bank should also pay attention towards the priority sector and industrial
sector for lending loans to develop the economic condition of the country.
6. Bank should provide more facilities to the staff, it has to provide job
satisfaction, training and should encourage its staff.

Page 42 of 43
 BIBLIOGRAPHY

 Banking Information and Data, Annual Report of Nabil Bank Ltd.

 Weston, J. Fred Copeland Thomas, “Managerial Finance”: Dryden Press,

1986.

 Brigham, Eugene F., ‘Fundamental of Financial Management”, Holt

Rincht and Winston: The Dryden Press, 1998.

 Khan, M. Y. and P.K., “Financial Management Policy: New Delhi:

McGraw Hill Publishing Co. Ltd., 1978.

 Khan, M.Y. and Jain P.K., “Management Accounting”, New Delhi:

McGraw Hill Publishing Co. Ltd.

 S.P. Gupta,”Statistical Method”.

 Van Horn James C.,”Financial Management band Policy”: New Delhi

Prentice Hall of India Pvt. Ltd., 1986.

 Van Horn James C.,”Fundamental Financial Management”: U.S.A.

Prentice Hall Inc. Engle Wood Cliff, 1983.

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