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Financial Performance Analysis Of

Rastriya Banijya Bank Ltd.

Submitted by
SABU UPRETI
Campus roll number:-524
Batch: 2076
TU Regd. No:- 7-2-0003-0839-2019
Group: Finance
BBS 4th Year
Mobile No: 9817389771

A Project Work Proposal

Submitted To

Management Research Committee

Mahendra Morang Aadarsh Multiple Campus, Biratnagar

Faculty of Management
Tribhuvan University

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDY (BBS)

Biratnagar Nepal
Chaitra, 2080
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INTRODUCTION

1. Background of the study

Rastriya Banijya Bank Limited (RBBL) is an “A” class autonomous

organization largely owned by Government of Nepal. The bank has been
working as a premier business credit institution since last three decades,
contributing the more than 50 % of institutional business credit supply in the
country. Hence, business finance is the principal operational area of RBBL.
Furthermore, the bank has also involved in commercial & rural credit
banking operations.

Financial performance is the achievement of the companies financial

performance for a certain period covering the collection and allocation of
finance measured by capital adequacy, liquidity, solvency, efficiency,
leverage and profitability. Finance performance is the companies ability to
manage and control its own resources. It is decision making process to incur
strength or weakness of the organization and knowledge of its revenue
generation status. It is a mirror to look into development activities to be
undertaken by the organization. It should also measure or evaluate internal
and external information of past activities, current position and future
prospects of organization. Cash flow, balance sheet, profit-loss, capital
change can be the basis of information. It is also help to evaluate and decision
making for business operation.

Profile of the Organizations :

Rastriya Banijya Bank Limited (RBBL) has its antecedents in RBBL which
was established on 23rd January 1966. The Bank was rechristened as
Rastriya Banijya Bank Limited after the merger of RBBL with N.I.D.C
Development Bank on 3rd May 2018. This was a historic merger in the
annals of the Nepalese financial landscape as its kind merger between two
successful commercial banks in the country. Today, RBBL has established
itself as one of the most successful commercial banks in Nepal. Currently,
RBBL has 270 branches all over Nepal. The head office of the bank is located
at Singhadurbar Plaza, Kathmandu. The main them of focus on providing
innovative financial service, increase in capital base of the bank by meeting
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the minimum capital requirement business growth and increase in market

share.

2. Statement of the problem

 What is the financial position of the RBB Ltd?

 What is the relationship between EPS, DPS, P/E ratio, Payout ratio, MPS of
RBB Ltd?
 How is the financial performance of the Bank over a given period of time?

3. Objective of the study

 To analysis the financial position of the RBB Ltd.

 To analysis the relationship between EPS, DPS, P/E ratio, Payout ratio, MPS
of RBB Ltd.
 To analysis the financial performance of the Bank over a given period of
time?

4. Rational / Significance of the study

The study of RBB Ltd. May be very useful for the financial managers of the
banking sector informing policies for managing the firm’s profitability. The
study is also very important to various parties which are mentioned below:

 To help investor buying and selling decision

 To know the earning per share of RBB Ltd stock
 To know the current satiation of the market
 To help the information of NRB
 To the government
 To the manager
 To the creditor
 Tax authorities
 The stakeholder
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 To involve study’s the past and present market data and creating a
methodology to choose appropriate stock for trading
 To know the dividend per share of the bank

5. Literature review

Review of literature is very important for the research or the investigator in

the area of concern problem. This is related to the present study with a view
to find out what had already been explained and how the present research
adds new dimension to the study. A literature review is a type of receive
article. In this sub chapter the researcher reviews the books related theories
and conceptual framework, journals, latest previous studies on profitability
analysis. In recent years, a number of studies have been conducted to know
the profitability and performance of bank in financial system. There exists
rich literature pertaining to developed countries, on assessing bank
performance using various methodologies and productivity literature related
to banking. The researcher and economists have recognized that the
measurement of profitability in banking system is necessary to give
management an idea of what a firm's investors think of its performance and
future prospects. It deals with the review of related literature about
profitability and presents a conceptual framework on profitability. The
researcher has presented these conceptual framework and facts dividing into
following two segments: ie, conceptual review and past study.

This chapter deals with review of books and other sources for gathering
information about selected topic to develop theoretical concept. Literature
review means reviewing research study or other relevant proposition in the
related area of the study so that all the past studies.

6. Research methods

Research method is a way to systematically solve the research problems. It

refers to the varieties sequential steps to adopt by a researcher in studying
the problem with certain objectives. It describes the method and process
applied in the research design, data collection procedure and procedures
concerning analysis of data are described thoroughly.
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6.1 Research design

The research design is the path way or blueprint for the research which deals
with at least four problems:

What questions to study?

What data are relevant?

What data to collect?

How to analysis the result?

6.2Population and Sample Size

It is not possible to study the entire bank due to the lack of time and
resources so, the sample has been taken for analyzing financial statement of
Rastriya Banijya Bank. The study is based on secondary source of data
collection. So we have to explain of research design. Selection of appropriate
research design is necessary to meet the study objectives of any research.

6.3 Sources of data

There are two types of source of data i.e. primary and secondary data.
Primary data is that which is collected originally and first time for statistical
inquiry by the researches and secondary data means data collected by
someone else earlier. Surveys, observations, experiments, questionnaire,
personal interview, etc. Government publications, websites, books, journal
articles, internal records etc. This study is mainly focused on secondary data.

6.4Method of data analysis

Data analysis is the process gathering and measuring information on

variables of interest in an establishment systematic fashion that enables one
to answer started research question, test hypothesis and evaluate outloans.

6.5 Tools/ Techniques for Analysis of Data

Financial tools and statistical tools are to be used in the collection of data and
are interpretation.

Financial tools
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Financial tools are going to be analyzed under common stock position of the
selected RBB Ltd.

a. Earnings per share – EPS

When there is no preference share:
net income after tax
EPS=
no . of equity share outstanding
When there is preference share:
net income after taxes− preference dividend
EPS ¿
No. of equity share oustanding
b. Price Earning Ratio – P/E Ratio
market price per share
P/E Ratio ¿
earning per share
c. Market rr to book ratio
Market price per share
Market to book ratio = Book value per share
d. Dividend per share- DPS
¿
DPS = Dividend paid ¿ common stockholder No . of common stock
e. Payout ratio
DPS
Payout ratio =
EPS
f. Book value per share – BVPS
Common shareholder equity
BVPS =
No . of common shares
g. Price to book value ratio
MPS
Price to book value ratio =
BVPS
h. Return on Equity –ROE
net income
ROE ¿
Total equity
i. Equity Multiply –EM
Total assets
EM=
total equity

Statistical tools

Statistical tools are going to be analyzed under common stock position of the
selected RBB Ltd.
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Table
 Chart
 Graph
 Mean

Mean =
∑x
n
Where, n = number of individuals

 Standard Deviation

S.D = √∑ x 2

 Correlation coefficient (r)

n ∑ UV −∑ U . ∑ V
r=
√ n ∑ U 2−¿ ¿ ¿ ¿

 Coefficient of variance(C.V)
S. D
C.V =
Mean

 Time Series Analysis

∑Y= a+b∑X…………i
∑XY= a∑X + b∑ x 2………..ii
Where,
Y = the value of dependent variable
X = time variable
a = Y intercept
b = slope of trend time

7. Scope/ Limitation of the study

The study mainly focused on the participations of degree of Bachelor of

Business study (BBS) in research method for the batch 2076. There are
impotent limitations are as follows:
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(i)This study is based on secondary data.

(ii)The study use only three year data of RBB Ltd from the year 2077/78 to
2079/80 B.S.

(iii)The evaluation is made through the analysis of financial statement

(audited are published and presented by commercial bank.

8. Organization/ Structure of the Study

The present study will be organized into some chapter.

CHAPTER- Ⅰ

It consists background of the study, profile of the organization, statement of

problem, objective of the study, rational of the study, method of the study,
review of literature, limitations of the study and organization of the study.

CHAPTER- Ⅱ

It consists results and analysis: presentation of results and findings of project

work.

CHAPTER -Ⅲ

Summary and conclusion – a brief summary of the report, and conclusion

based on the findings of the report.
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References

Adhikari, D.R. and Bhandari, D.R. (2023), Entrepreneurship. Kathmandu:

Ashmita Book Publishers and distributor (p) ltd.

Cooper, DR. and Schindler, P.M. (2006). Business Research Methods (9th ed).
New Delhi: Tata McGraw Hill publishing company.

Paudel, R.B; Baral, K.J.; Joshi, P.R.; Gautam, R.R.;and Rana, S.B. (2023),
Fundamentals of Investment. Kathmandu: Asmita Books Publisher and
Distributors Private Limited

Haywa, S.L., and Meerschaum, D.M. (1991), Managing Financial Institution.

New Delhi: Tata McGraw – Hills Publishing Company Ltd.

Ross, S.A., Westerfield, R.W. and Jordan, B.D. (20040 Fundamental of

Corporate Finance. New York: McGraw-Hills Irwin.
www.rbb.com.np
www.rbb.com.np
Annual report of Rastriya Banijaya bank ltd.
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