PROFITABILITY ANALYSIS OF NABIL BANK LIMITED

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Table of Content     

                                                                    

                                                Chapter-1    Introduction

                                      1.1 Background of the study

                                      1.2 profile of Nabil Bank limited

                                      1.3 Objective of the study

                                      1.4 Rationale of the study

                                      1.5 Review of literature

                                      1.6 Research methodology

                                      1.6.1 Research Design

                                      1.6.2 Population and sampling

                                      1.6.3 Types of data

                                      1.6.4 Tools used

                                      1.6.5 Limitations   

    Bibliography

                                                                                                                    CHAPTER-1

                                                                                                            NTRODUCTION

1.1 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 the Harward and Upton,
"Profitability is the" the ability of 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.Though, profitability is an important yardstick for measuring    the efficiency.The
extentof profitability cannot be taken as a final proof of eficiency.Sometimes satisfactocry
profits can make 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
value received 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.

The word profitability is composed of two words,profit and ability.The terms profit has been
explained above and the term ability indicates the power of business entity to earn profits.The
ability of a concerns also denotes its earning power or operating performance. The profitability
many be defined as the ability of a given investment to earn a return from its use.

profitability is a relative concept whereas profit is an absolute cannotation. Despite being

closely related to and mutually interdependent,profit and profitability are two different
concepts. In other words, in spite of their generic nature, each one of them has a distinct role in
business.

1.2 Profile of the Nabil Bank LImited

It began as the first Bank in Nepal incepted by multinational (premirily Foreing) investors ( As
Nepal Arab Bank Ltd) on 12 july 1984. The bank was incorporated with the objective of
providing morden, international-standard financial services to business. Its dubai government-
owned majority share was purchased in 1995 by nepal's only billionaire businessman, Binod
Chaudhary.It maintainas its head office at its Nabil center, Durbar marg. Flanking the chief
avenue of the capital leading to its grand palace.Nabil Bank operates through its wide network
of 248    branch offices,271 ATMs numerous pos terminals ,and remittance agents spread across
the nation. The bank also has more than 200 international correspondent banking relationships.
Nabil Bank operates its investment banking arm through its subsidiary Nabil investment Banking
Ltd.

Nabil Bank had acquired Nepal Bangladesh Bank in july 2022. On 22 december 2022 , Nabil
Bank Launched nBank, a neo banking service that works as a virtual branch of the bank.
Gyanendra Dhungana was appointed the chief executive officer on 1 july,2022 after the tenure
of the celebrity banker Anil Keshary Shah was over Nabil bank LImited of chairman is Upendra
Poudyal. There are 2239 employees.

NABIL Provides different services like ATM,Credit Cards, Tele-banking services ,e-banking
services, Safe deposit locker services.

1.3 Objectives

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 Limited.

1.4 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 hepls to increase the practical knowledge.

1.5 Review of Literature

A Literature review is the summary and analysis of current knowledge about a particular topic
or areas of inquiry. Literature review comprehensively studies the researches that have been
conducted in the past.It provides direction for doing something new with    appropriate
variables and methodology. Literature review are secondary sources and do not report new or
original experimental work. Books, journal and periodicals,reports,thesis,abstract,electronic
communication,etc.are some of the sources of literature review.

1.6 Research Methodology

Research Methodology is a way to systematically    solve the research problems. It may be

understood as a science of studying how research is done systematically. In it,we study the
various steps that are generally adopted by a research problem along with the logic behind
them. It is necessary for the researcher to know not only the research method/techniques but
also the methodology researchers not only need to know how to develop certain indices or
tests, how to calculate the mean, the mode ,the median or the standard deviation or chi-square,
how to apply particular research techniques, but they also need to know which of these
method,or techniques, are relevant and which are not, and what would they mean and indicate
and why. Researchers also need to understand the assumptions underlying various techniques
and they need to know the criteria by which they can    decide the certain techniques and
procedures will be applicable to certain problems and others will not. All this means that it is
necessary for the researcher    to design his/her methodology for his/her problems as the same
may differ from problem to problem.

                  The Chapter focuses and deals with the following aspects or methodology.

 Research Design

 Population and sampling

 Types of data

 Tools used

 Limitation

1.6.1 Research Design

A Research design is the arrangement of conditions for collection and analysis of data in a manner that
aims to combine relevance to the research purpose with the economy in procedure. In fact, the research
design is the conceptual structure within which research is conducted. It consitutes the blueprint for the
collection, measurement and analysis data. As such    the design includes an outline of what the
researcher will do from writing the hypothesis and its operational implication to the final analysis of
data. Generally, objective of this research study is to examine and evaluate the profitability position
Nabil Bank Limited in order to achieve the objective; analytical and descripitive research design has been
followed.   

1.6.2    Population and sample                                                         

        The term " population " or universe for research means the members of research study in which the
research is based. Among 28 commercial banks, Nabil Bank Limited has been selected for the present
study. Financial statements of latest 5 years (2074/ 2075 to 2078/2079) 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 bank in Nepal.

Data is one of the most important and vital aspect of any research studies. There are two sources of data
collection; primary sources and secondary sources but in this research of study, we mainly used the data
collection from secondary data.

1.6.3    Types of data

Data is one of the most important and vital aspect of any research studies. There are two
sources of data collection; primary sources and secondary sources but in this research of study,
we mainly use the data collection from secondary data.

 secondary data

Secondary data is the data that has been already collected and readily available from other sources.
When we use statistical method with primary data from another purpose for our purpose we refer to it
as secondary data. Secondary data is a data is being reused. such data are more quickly obtainable than
the primary data.

1.6.4    Tools used

Various statistical tools can be used to analysed the data available to the researcher. However,
for the analysis of data, fiancial and statistical tools are used.

A. Financial tools

Financial tools are those which are used for analysis and interpretation of financial data. These
tools can be used to get the precise knowledge of a business, which in turn, are fruitful in
exploring rthe strengths and weaknesses of the financial policies and strategies. For the sake of
analysis, profitability ratios have been used in order to meet the purposes of the study. To meet
the objective of the study, following ratio are calculated.

i. Return on total assets (ROA)

Return on assets (ROA) is a financial ratio that shows    the percentage of profit of a company earned in
relation to its overall sources. It is commonly defined as net income divided by total assets.

ROA= Net income/ Total assets