FINANCIAL PERFOMANCE ANALYSIS

OF NEPAL INVESTMENT BANK LIMITED.

By

Bishal Chalise

Shanker Dev Campus

Campus Roll no:-1416/073

TU Registration no:-7-2-39-792-2016

Group: Finance

Submitted To:

Research Management Committee

Shanker Dev Campus

Tribhuvan University

In a partial fulfillment of requirement for the degree of

Bachelor of Business Studies (B.B.S)
 Putalisadak , Kathmandu

January, 2020

Background of the Study

. Nepal Investment Bank Limited is one of the leading commercial

banks of Nepal.Previously known as Nepal Indosuez Bank Ltd., the bank was
established in 1986 as a joint venture between Nepalese and Credit Agricole
Indosuez.The Nepalese investors bought all the shares of French company i.e. 50% in
2001. From then the Nepalese investors have raised this bank to one of the most
trusted and popular bank in the country. Later, in 2002 a group of Nepalese
companies comprising of bankers, professionals, industrialists and businessmen
acquired the 50% shareholding of Credit Agricole Indosuez in Nepal Indosuez Bank
Ltd., and accordingly the name of the Bank also changed to Nepal Investment Bank
Ltd.Till date it has 66 branches, 4 Extension Counters (98 ATM outlets) scattered
throughout the country giving modern banking services of international class from
9:30am to 7pm evening.
The branches have been strategically expanded to meet our existing customer value
chain requirements and to penetrate into new customer segments. Similarly, the bank
has been established a dedicated payment solutions department to look into
 alternative delivery channels such as card service, Internet Banking, ATMs and
Mobile Banking with this set-up, the bank has been able to deliver technologically
driven products and services to its customers.
According to Nepal Commercial Bank Act 2031 B.S. “A commercial bank
refers to such type of bank which deals in money exchange accepting deposits,
advancing loans and commercial transactions except specific banking related
to co-operatives, agriculture & industry and other objectives.

Imperial Dictionary says “A bank is an establishment which trades

in money, an establishment for deposit, custody and issue of money and also
for granting loans and discounting bills and facilitating transmission of
remittances from one place to another.”-

According to Crowther “A banker is a dealer in debts. The bankers business is

then to take the debts of other to people, to offer his own in exchange and
thereby to create money.”

According to World Bank, “Banks are the financial institutions that accept funds in the
form of deposit repayable on demand or short notice.”

Statement of problem

In recent years, banking business has grown dramatically. Now sharp

competition in banking sector has forced them to turn to the money and
capital markets to raise funds by selling stock, bonds etc. Competition for
banks traditional loan and deposits customers has increased dramatically.
Credit union, money market, mutual funds, insurance companies, brokerage
firms and even chain stores are fighting for the slice of nearly every credit and
deposit market traditionally served by banks. In this way banks are forced to
get entry into open market to raise funds. It means that their financial
statements are increasingly being examined by the investors and by the
public. All these trends have placed management under great pressure to
perform to meet the objectives of their stockholders, employees, depositors
and borrowing customers. At the same bank should also keep government
regulators satisfied that the banks policies, loans and investment are sound
and effective.

Objectives of the Study

Liquidity refers to a company's ability to pay its current bills and expenses. In
other words, liquidity relates to the availability of cash and other assets to
cover accounts payable, short-term debt, and other liabilities. And the study
of liquidity of NIBL focus on maintaining a certain ratio of current assets to
current liabilities in order to ensure adequate liquidity. Besides following are
the objectives of the study.

●To check the liquidity position of Nepal Investment Bank.

●To study financial performance of the NIBL.

●To study strength, weakness, opportunity, and the threat to the

organization.
Significance and Relevance of the Study

Financial analysis is the process of evaluating businesses, projects, budgets,

and other finance-related transactions to determine their performance and
suitability. Typically, financial analysis is used to analyze whether an entity is
stable, solvent, liquid, or profitable enough to warrant a monetary investment.

 Assessing the operational efficiency and managerial effectiveness of

the company.
 Analyzing the financial strengths and weaknesses and
creditworthiness of the company.
 Analyzing the current position of financial analysis,
 Assessing the types of assets owned by a business enterprise and the
liabilities which are due to the enterprise.
 Providing information about the cash position company is holding
and how much debt the company has in relation to equity.

Research Methodology

Research design is the framework of research methods and techniques

chosen by a researcher. The design allows researchers to hone in on
research methods that are suitable for the subject matter and set up their
studies up for success.
The design of a research topic explains the type of research
(experimental, survey, correlational, semi-experimental, review) and also its
sub-type (experimental design, research problem, descriptive case-study). 

There are three main types of research design: Data collection,

measurement, and analysis.

According to Kerlinger

Research design is the plan, structure and strategy of investigation conceived

so as to obtain answers to research questions and to control variance.

According to Green and Tull

A research is the specification of methods and procedures for acquiring the

information needed. It is the overall operational pattern or framework of the
project that stipulates what information is to be collected from which sources
by what procedures.

The function of a research design is to ensure that requisite data in

accordance with the problem at hand is collected accurately and
economically. Simply stated, it is the framework, a blueprint for the research
study which guides the collection and analysis of data. The research design,
depending upon the needs of the researcher may be a very detailed
statement or only furnish the minimum information required for planning the
research project.

Limitation
1. 1. Focus on only ratio’s of Nepal Investment bank.
2. It cannot be compared with the ratios of other banks.
 3. Only Nepal Investment bank is taken.
4. Data and information are limited.

Organization of the study.

These studies are divided into three chapters.
Chapter I Introduction
Chapter II Data presentation and analysis
Chapter III Summary, Conclusion and Recommendation

Reference

Books

● Business research method: Dhurba Kumar Gautam & PArkash Kumar

Gautam : KEC publication and distribution pltd.

● Fundamentals of Business Research Methods. Author: Prof. DR. Prem

Raj Pantha.

● Shekhar and Shekhar “Banking Theory & Practice”, Eighteenth Revised

Edition, 1996.

● Nepal Rastra Bank, Banking and Financial Statistics,

Reports and Articles

● Annual report of Nepal Investment Bank Limited from 2070/71 to 2018/19.

Websites

● https://www.nibl.com.np/