PROFIT ANALYSIS OF SUNRISE BANK LIMITED.

(A COMPARATIVE STUDY OF SUNRISE BANK LIMITED)

A FIELDWORK REPORT PROPOSAL
Submitted by:
XXXXXXXXXXX Name
Roll No: 00000000000
T.U. Reg. No.: 0000000000000
Divya Gyan College
Kamladi, Kathmandu

A FINAL REPORT
Submitted to:
Office of Controller of Examination
Faculty of Management
Tribhuvan University
Kathmandu, Nepal

In Partial Fulfillment of the Requirement for the Degree of

BACHELORS OF BUSINESS STUDIES (BBS)
February, 2022
Contents

CHAPTER -1........................................................................................................................ 3
INTRODUCTION..................................................................................................................3
1.1Background Of The Study............................................................................................3
1.2 Profile of organization................................................................................................10
1.3 Statement of Problem................................................................................................15
1.4 Objective of Study......................................................................................................16
1.5 Significance of Study..................................................................................................16
1.6 Literature review........................................................................................................17
1.7 Research Methodology..............................................................................................19
1.8 Limitations of the study............................................................................................. 22
Organization of Study...................................................................................................... 23
CHAPTER -2...................................................................................................................... 24
RESULT AND ANALYSIS.....................................................................................................24
2.1 Data presentation...................................................................................................... 24
2.2 Analysis of result........................................................................................................24
2.3 Major Findings........................................................................................................... 48
CHAPTER - 3..................................................................................................................... 49
SUMMARY AND CONCLUSION.........................................................................................49
3.1 Summary....................................................................................................................49
3.2 Conclusion..................................................................................................................50

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CHAPTER -1

INTRODUCTION

1.1 Background of The Study

Nepal is a landlocked country in south Asia and is bordered by China and India. It is
located in the Himalayas and contains eight of the world’s ten highest peaks. The
government system is a federal democratic republic; the chief of state is the President,
and the head of government is the prime minister. Nepal has a traditional economic
system in which the majority of the population engages in subsistence agriculture, and the
allocation of available resources is made on the basis of primitive methods.

Nepal has ample opportunities for investments. Hydroelectricity, Tourism and services
are three prominent sectors the investors are willing to make their investments in recent
time. Not only these sector, other categories like mega infrastructure development
projects especially, construction of bridges, dams, trolleys, roads, tunnel, highway,
monorails, airport, link road; manufacturing projects like cement, steel and other
production units; extraction and exploration of minerals, mines and natural resources, etc.
are priority sector investments for investors. These mega projects require considerable
amount of capital investment and the gestation period of return on investment is long.

The term ‘Profit’ and ‘profitability’ are used interchangeably. But in real sense, there is a
difference between the two. Profit is an absolute term, whereas, the profitability is a
relative concept. However, they are closely related and mutually interdependent, having
distinct roles in business. Profit refers to the total income earned by the enterprise during
the specified period of time, while profitability refers to the operating efficiency of the
enterprise.

This study is conducted in the banking sector. The Central Bank of Nepal is shrinking the
number of banks and financial institutions (BFIs) and insisting on the BFIs to merge and
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for acquisition. Small development banks and financial institutions either go for mergers
or are being taken over by commercial banks. Currently no new license is being issued to
banks and financial institutions by the central bank.

Money begets money and it is this money or cash, which is lifeblood of any business
organization. It is primary brought into existence, for making profit through decision
making. Money in itself doesn’t earn anything. Bank is a type of institution that sues
money as the primary source of income. So among the various decisions to be taken by
the bank, the most important is to make proper balance between liquidity and profitability
to maintain the smooth operation of the banking transaction. And among various
decisions to be taken, balance between Liquidity and Profitability is one of the most
important decisions, which determine the profit for the organization.

In pace of increasing complexity and horizon of business transaction, the importance of

banks is also increasing hand to hand. Realization of growing significance of the bank in
the modern economy develops an interest within me to analyze and understand the
banking procedure and its profitability. So, as to fulfill the partial requirement of the
academic course of Bachelor of Business Studies (BBS), I have selected to study and
prepare report on “Profitability Analysis Of NIC Asia Bank Limited”. The detail
regarding my field work project are summarized as follow which include meaning of
commercial bank in Nepal, introduction to NIC Asia Bank and profitability review of
NIC Asia Bank.

PROFITABILITY

Profitability analysis measures the amount of profit earned due to the efficiency of any
operation in a business. Profitability analysis in profit earned due to the efficiency of any
operation essentially includes evaluation of market segments or strategic business units.it
helps in the decision making and internal accounting in the field of sales, marketing and

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product management for a company. Increasing profitability is one of the important most
important tasks of the business managers. The bank should be able to earn income from
the medium of investment. The objective of the bank is intensified with the concept of
gaining profit. The bank should invest its money or deposits to gain profit. A great deal of
cash is deposited in bank from different account as deposits and can be invested by banks
in various ways. The bank also provides various banking services and earns profit from it.
We can guess liquidity from the profit of which bank has gained.

Profit can termed as excess of income over expenses. In context of banks profit can be
difference between the income received on loans, advances and interest paid to its
investors.

1.1.1 Introduction to Bank

A Bank is financial intermediary that performs one more of the following functions;
safeguards and transfers funds, lends or facilitates lending, guarantees creditworthiness
and exchange money. These services are provided by such institutions as commercial
banks, central banks, saving banks, trust companies, finance companies, like insurers and
investment banker.

A narrower and more common definition of a bank is a financial intermediary that

accepts transfer and most important, cash deposits. This includes such depository
institutions as central banks, commercial banks, savings and loan associations and mutual
saving banks.

Banks are most frequently organized in corporate from and are owned either by private
individuals, government or a combination of private and government interests. All
countries subject their banks, however owned to government regulation and supervision,
normally implemented by central banking authorities.

“Banking means accepting for the purpose of lending or investment of deposits of money
from the public repayable on demand or otherwise, and withdrawal by cheque, draft or
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otherwise.” Thus, bank’s main task is to mobilize idle resources in general areas of
gathering scattered funds to gain profit. Also it plays important role in Nation’s
economical growth and development.

1.1.2 Banking in Nepal

Banks and banking activities have played a prominent role in the development of our
country. The pace of development of our country grew as banks and its activities
gradually developed. Ever since democracy was restored in 2007 B.S., the government as
well as the people felt the necessary and established in 1955 A.D. It was established as a
regular body for books to be operated in Nepal.

The history of banking has started after the establishment of Nepal Bank Limited (NBL)
by special act on 1937 A.D. The bank was established with 10 million rupees of
authorized capital.

Nepal Rastra bank worked hard to lessen the use of Indian Currency system in Nepal and
to teach tribal to use money instead of barter system. This was done greatly by opening
branches in other districts. It helped a lot in raising awareness of banking. In a decade it
had its branches in 25 places which afterwards turned into branches of commercial banks.

As the monetary transaction got more and more complicated, NRB finally suggested the
movement to establish another commercial bank. As a result of this Rastriya Banijya
Bank (RBB) came into existence in1966 AD.

A part from this establishment of Nepal industrial bank in 1976 ad as well as cooperative
societies also started contributing the economy and banking tradition in Nepal

After reestablishing of democracy on 1990 ad, the movement has taken liberal policy in
banking sector so different private banks are getting permission to establish with the joint
venture of other countries.

1.1.3 Commercial Banks In Nepal

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In general, Bank means commercial bank. Hence definition of bank is also equally
applicable to commercial bank. As per commercial bank Act 2031 B.S, a commercial
bank that deals in exchange currency transaction, accepting deposits providing loan,
credit creation and perform dealing relating to commerce. But currently, commercial
bank operate under bank and financial institution which issue demand liabilities used as
means of payment and at the same time makes loan to business. Banking sector is one of
the fast growing industries in Nepal. After the transaction of democracy in Nepal n 2047
B.S, the government took the liberal economy policy. Thus, a large number of banks
came into existence. At present, 27 banks are operating as commercial banks in Nepal.
The lists of commercial banks in operation are as follow;

1. Siddhartha Bank Limited

2. Nepal Bank Limited

3. Rastriya Banijya Bank Limited

4. Agriculture Development Bank Limited

5. Nabil Bank Limited

6. Nepal Investment Mega Bank ltd

7. Himalayan Bank Limited

8. Nepal SBI Bank Limited

9. Everest Bank Limited

10. Kumari Bank Limited

11.Standard Charted Bank Limited

12. Laxmi Sunrise Bank Limited

13.Global IME Bank Limited

14.Citizens Bank International Limited

15.Prime Commercial Bank Limited

16.NMB Bank Nepal Limited

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 17.NIC Asia Bank Limited

18. Machhapuchchhre Bank Limited

19. Sanima Bank Limited

20. Prabhu Bank Limited

1.1.4 Function of Commercial Bank

Banks are of various types according to nature of work. Commercial bank is established
with a prime objective of profit maximization. To meet the objective bank performs
various functions like accepting deposits, providing loan primarily to business firm
thereby facilitating the transfer of funds in the economy. In the past banks were viewed as
the acceptor of deposit and provider of loan but modern bank have to perform for overall
development of trade, commerce, industry, agriculture, including priority sector and
deprived sector. Since profit maximization is the main objective of commercial bank. To
achieve this objective commercial bank performs various functions under mandatory
rules and regulation and directives of NRB and commercial bank act 2031 (1974).

Primary Function

Acceptance of Deposit

Commercial bank collects money for public through different types of deposit.

i. Saving account

ii. Fixed account

iii. Current account

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Advantage of Loan

Commercial bank provide required loan to the various sectors of economy. it provide
loan from various procedures in different such as ;

i. Overdraft

ii. Cash credit

iii. Direct loan with collateral

iv. Discounting bill of exchange

v. Loan of money at call and short notice

Agency Function

Commercial banks also perform agency function. It plays a role of agent and claims
commission on some facilities such as;

i. Collections of customer’s money from other bank or purchase such cheques, draft.

ii. Transfer of funds from one place to another.

iii. Underwriting of share and government securities on request of customers.

iv. Receipt and payment of dividend and interest, payment of house rent insurance
premium and income tax on behalf of customer.

General utility Function

i. To issue foreign exchange and travelers cheque.

ii. Dealing of foreign exchange and license of central bank.

iii. Keeping valuable things in safe custody.

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iv. Provides financial and economical advice.

v. Collection of important trade information and banking statistics.

1.2 Profile of NIC Asia Bank Limited:

NIC ASIA Bank was established on 21st July 1998. The Bank was rechristened as NIC
ASIA Bank after the merger of NIC Bank with Bank of Asia Nepal on 30th June 2013.
This was a historic merger in the annals of the Nepalese financial landscape as the first of
its kind merger between two successful commercial banks in the country. Today, NIC
ASIA has established itself as one of the most successful commercial banks in Nepal.
NIC Asia bank has been able to maintain a lead in primary banking activities- loan and
deposits. The bank has established a very good networking and communication. It is an A
class commercial bank licensed by Nepal Rastra Bank and has branches all across the
nation with its head office in Kathmandu which provide entire commercial banking
services. The bank’s shares are publicly traded as an ‘A’ category company in Nepal
Stock Exchange.

NIC Asia Bank with an objective of establishing a tradition of best practices in corporate
governance has a policy directed not only toward the frame work of best business
practices transparency and disclosure to the stockholders. The corporate framework in
NIC Asia bank comprises of an effective independent boar, separation of board’s
supervisory role from the executive management and the constitution of board
communities, comprising of independent director to oversee critical areas.

NIC Asia Bank Limited understands the banking is no longer a number game.
“SUCCESS” for us is not just our profit margin. It plays a role as a friend, A friend
evaluate and invest on our dream and be an safeguard of our saving providing the best
value for it. It believes that satisfying and delight in its customer is the key to its success
and it also feels the customer insight can influence the development of new product and
services.

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NIC Asia Bank believes that it is a relationship bank and that customer should be
provided with personalized services through dedication relationship managers. Customer
who get personalized service account transactions will be handle by its exclusive
corporate counter at the main branch, Trade Tower, Thapathali, Kathmandu which is
dedicated to officer customized service to organization and their staff member on a
priority basis. It has been maintaining harmonious correspondent relationship with
various international banks from various countries to facilitate trade, remittance and other
cross border service. Through these correspondents the bank is able to provide service in
any major currencies in the world.

Boards of Directors of NIC Asia Bank Limited:

Mr. Tulsi Ram Agrawal Chairman

Mr. Jagdish Prasad Agrawal Director

Mr. Ram Chandra Sanghai Director

Mr. Aaditya Kumar Agrawal Director

Mr. Rajendra Aryal Director

Mr. Ganesh Man Shrestha Director

(Source: www.nicasia.com.np)

SLOGAN

“Bank Pani Sathi pani, ramro pani hamro pani.”

VISION

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“To become one of the leading investment and merchant Bank in Nepal.”

MISSION

“To provide innovative and best investment solution and excellent growth opportunities
as a corporate citizen.”

1.2.1Objective of NIC Asia Bank Limited

 To continuously expand Bank's operation in systematic manner.

 To become a major innovative Bank and provide top of the line services.
 To build an HR team that continuously supplements the growth of the
organization.
 To be vigilant to the evolving economy and align our operations accordingly.

1.2.2 Capital structure of NIC Asia Bank

According to the data of 2077/78

The Authorized Capital of the Bank is Rs. 6000 Million

Paid-up Capital: Rs. 2075 Million

Promoter Shares: 50% of the Paid up Capital

Public Shares: 50%of the Paid up Capital

1.2.3 Focus of NIC Asia Bank Limited

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We (NIC Asia Bank limited) focus on provide all banking facilities like Branchless
banking (BLB), Locker facilities, fixed deposit, personal loans, mobile banking, payroll
saving, Internet Banking, Suryodaya remit, sunrise smart banking, sunrise visa debit card,
ATMs, Extension counter etc.

Bank focuses on services to be helping hand with policies, regulations of regularities

bodies and Government of Nepal.

The success of our bank has been made possible because of the people who have shared
our vision and allowed us to fulfill our mission by becoming their banking partner. We
look forward to being your partner as you take advantage of all the opportunities that
sunrise bank limited has to offer and see how, through the modern technology, NIC Asia
Bank limited can provide you the types of banking services that will exceed your
expectations. If you are already one of our valued customers and enjoying a banking
relationship with us with creating a value web, I want to say thank you for helping NIC
Asia Bank limited to become the excellent bank as it is today.

Money begets money and it is this money or cash, which is lifeblood of any business
organization. It is primarily brought into existence, for making profit through decision
making. Among various decision to be taken balance between liquidity and profitability
is one of the important decisions which determine the profit for the organization.

Though these two aspects i.e. “Liquidity”-‘cash in hand and “Profitability”-return of

forgoing this cash at disposal have negative correlation yet, they go hand in hand for
attainment of profit seeking objective of the firm. Thus, it is this challenge of trading off
between the two i.e. liquidity and profitability is to be met for continuous progress of any
institute or corporate including banks in the economy.

As economy progressed, barter system of exchange shifted to money as a media for

exchange and progressing money developed as an institution which create various kinds
of money and dealt in it a leading and borrowing institution i.e. A BANK . A Bank is an
“institution for keeping lending and etc for money.”

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“Banking means accepting for the purpose of lending or investment of deposits of money
from the public repayable on demand or otherwise, and withdrawal by cheque, draft or
Thus, bank’s main task is to mobilize idle resources in active areas by gathering scattered
funds to gain profit. All these plays important role in nation’s economic growth and
development.

Money is the most essential part of any organization. It is the lifeblood of any business
organizations. Money in itself doesn’t earn anything. Bank is a type of institutions that
sues money as the primary source of income. So among the various decisions to be taken
by the bank, the most important is to make proper balance between liquidity and
profitability to maintain the smooth operation of the banking transactions.

1.2.4 Organization Structure and Managerial Set up

Any business organization’s success mostly depends upon the effective managerial set up
and solid organizational structures. So, to achieve the objectives mentioned in the
preamble of the NIC Asia Bank limited. In addition, for conducting the bank’s day to day
operations smoothly and efficiently, various departments, divisions, branches and sub-
branches offices have been set up.

NIC Asia Bank Limited has accomplishes a number of objectives consistent with other
national economic objectives. Therefore, while designing the organizational structure,
special attention has been paid to ensure that the bank’s multidimensional and dynamic
role are clearly reflected in it. The organizational structure of the bank has been modified
from time to time as per the exigencies and the bank’s futuristic activities.

Over the years, the bank’s responsibilities have expanded in consonance with the increase
in numbers of branches and activities. Additional regulatory frame work has been
designed and the number of employees has been increased to cater the needs of
monitoring and follow up of the changed financial system.

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1.2.5 Strategies of NIC Asia Bank Limited

NIC Asia Bank Limited’s policy is to extend quality and personalized services to its
customers as promptly as possible. All customers are treading with utmost courtesy as
valid clients. Analyzing the current political, economical and financial scenario of the
country and other banks management of the NIC Asia Bank Limited has designed and
formulated the following strategies to cope up with the environment factors;

 To increase the paid-up capital.

 To expand the branches.
 Strict adherence to the directives (vide circular of NRB dated 2058.01.20 of Nepal
Rastriya Bank.
 Bank and arrangements for necessary follow-ups.
 To accelerate the atomization of banking activities.
 To enhance the new banking technologies in order to remove the draw banks of
traditional forms of banking.
 To boost the customer toward less interest earning deposit by providing other
better facilities and deposit features.
 To promote the service based earning of the bank by providing quality services to
its customer.
 To make necessary provisions for research and development programs.
 To explore the international fund Remittance Services.

1.3 Statement of Problem

The topic entitled “A Case Study on Profitability Analysis of NIC Asia Bank Limited” is
a challenging and emerging issue at present day liberated banking scenario. Striking a
balance between liquidity and profitability is a tough task to be discharged by the
management of every business entity. Inadequate liquidity famishes the image of an
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organization. In today’s liberated and competitive banking scenario the topic “trade of
between liquidity and profitability” is a challenging and emerging issue. To maintain
balance between liquidity and profitability is quite tough for any organization, inadequate
liquidity and profitability in quite tough for any organization where excess liquidity is
determined to the level of profitability. Overall, there are not proper calculation measures
yet discovered to maintain the trade of between profitability and liquidity.

Thus, the investigator only may find the most proper way for technique to maintain
profitability and to enhance the operation of the financial institutions.

1.4 Objective of Study

The main objective or purpose of the present study are to examine the profitability
position of NIC Asia Bank Limited to provide package of suggestion of improve it.

 To analyze current position of NIC Asia Bank limited in terms of financial

achievement.
 To examine what is the annual return to the investor of NIC Asia Bank Limited.
 To analyze the different ratios regarding profitability.

1.5 Significance of Study

This study will be important and valuable for those who are interested to the security
market of Nepal. Basically investors, business organization, security board, brokers,
potential researchers, students and teachers will be benefit from this study. This will also
enable the investors to identify the right time to invest in the right market. Research
hopes that this study will help to government and other institutions to make their policies
and programs. Basically it is important to the student of business to

 Knowledge of financial policy and practices of banks.

 Reason behind profit/loss incurred to banks in various years.

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  Students get an opportunity to implement their knowledge in practice and
measure its relevancy.

Besides the students the study may be useful to

 Customers to make borrowing/lending decisions.

 Shareholder of bank to evaluate the fairness of their return
 Manager/BOD to make necessary financial decisions
 Policy maker of the bank.
 Researcher and
 Also to Nepal government to make monetary policy

1.6 Literature review

1.6.1Conceptual Review

Profitability can be explained as the return to entrepreneur. It can be also said as return to
risk bearing and foregoing the liquidity. Profit can be measured in GP, NP, EPS and
dividend etc. for each institution criteria many are different as for sole proprietor, NP
after tax is adequate, for a company Ltd, Dividend or EPS is most suitable etc. thus profit
is the difference between the income and expenditure of the organization. It indicates the
efficiency or effectiveness with which the operations of the business are carried on.
Profitability analysis is a component of enterprise resource planning (ERP) that allows
administrators to forecast the profitability analysis can anticipate sales and profit
potential specific to aspects of the market such as customer age groups, geographic
regions, or product types. Profitability analysis measures the amount of profit due to the
efficiency of any operation in a business. Profitability analysis in operations essentially
includes evaluation of market segments or strategic business units.

Banks needs sufficient income to meet;

 Interest expense

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  Personal expense
 Operating/non operating expense
 Reserve
 Provision
 Dividend to share holders

If a bank invests mostly in liquid assets, it can’t meet foresaid liabilities because liquidity
in form of cash and balance do not yield as they are like keeping idle money and yield
from placements and short term investment are low. Thus, to maximize its profit, bank
invest large portion of their funds in purchase and discount of bills and disbursement of
loans and advances, which through risky are high earning assets.

For a bank interest given to depositors is the expenses while interest charged by it from
the customers is the income so profit comes from subtracting his operating expense from
GP. Other incomes like return on investment etc are non-operating profits. So in general,
the divergence between the two sets of rate of interest’s can be termed as profit for the
bank.

Public is the real owner of banking the sense that it is their deposits, which provide funds
for all its working including investment. Actually bank raises funds at an interest to
further invest it to earn higher rate of interest. But before investing for long term, it must
be vigilant about the liquidity status of the bank. Liquidity is a vital aspect of each
institution as it is required for transaction, compensating, precautionary and speculative
motives. It needs to pay for its bills payable accounts at maturity etc therefore some
amount must be kept a side so to meet these expenses.

Still bank is a profit making institution, shareholders seeks to earn profit. Thus,
maximizing shareholders funds to meet future contingencies for escalation expansion
profit is necessary. So bank cannot only on the basis of liquidity make all decision
otherwise profitability for the firm will be at stake resulting a decrease in EPS, Dividend
etc. also it increases the risk for the firm.

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1.6.2 Research Gap

The purpose of research the research work is quite different from the studies made by the
above persons (related to commercial bank). This study focuses in effectiveness in
investment. Liquidity and profitability of NIC Asia Bank Ltd banking comprehensive
manner considering the major items. Different financial and statistical tools have been
used in this study. Among them Net profit margin, Net interest margin, Return on equity,
Return on investment etc are the strong financial tools. The study is a little bit different
than previous studies. It may be one of them research study of investment profit in few
research work with reference to NIC Asia Bank. This study tries to indicate effectiveness
of investment profit of concerned banks.

1.7 Research Methodology

Research is a systematic method of finding out solution to a problem whereas Research
Methodology refers to the various sequential steps to adopt by researcher in studying a
problem with certain object in view. In order to achieve the objective of the study
appropriate research methodology has been adopted. It is purely explorative cum
descriptive study. It includes the introduction, research design, nature and sources of data,
data analysis tools, sampling procedures and definition of some key terms. The main
objective of the study is to analyze, examine, highlight and interpret situation of NIC
Asia Bank Limited. Research methodology refers to the various sequential steps to be
followed and adopted by a researcher in studying a problem with certain objectives in
view.

1.7.1 Research Design

Research design is the arrangement of condition, for collection and analysis of data in a
manner that aims to combine relevance to the research purpose with economy in produce.

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In fact, the research design is the conceptual structure with in which the research is
conducted. The main objectives of the study are to analysis the capital and assets
structure of NIC Asia Bank, to accomplishers the necessary data and information relating
to capital and assets structure management. At attempt to disclose all those factor that
have been collected necessary data and information using descriptive analytical tools for
the purpose of study.

1.7.2 Population and Sample

Population refers to the industries of the same nature of its service and product. It is the
collection or the aggregate of objects or the set of results of an operation. On the other
hand sample means the representative parts of population selected from it with the
objectives of investigating its properties. Thus, a sample is just a portion of the
population selected with a view to draw conclusion about the population under study.
Population of the study is the twenty commercial banks operating in the country. But it is
not possible to study all data with these. Ten percent of the total population comes to 32
banks. Hence four banks have been taken as sample from whole of population of thirty
two banks.

1.7.3 Sources of data

The study is mainly based on secondary data. Secondary are connected from their
respective annual reports, especially from profit and loss and balance sheet and from the
official records of Nepal stock exchange of the related banks. For the purpose of the
study, various related books, booklets, magazine, journals, newspaper and thesis made in
this field are also collected.

Primary data

The data which are collected for the first time for a practical purpose by the investigator
himself, is known as primary data. These types of data are obtained in the survey and

20
enquires conducted by government, some individuals, institutions and research bodies.
Primary data generally includes;

 Personal interview
 Face to face interview
 Schedule method
 Questionnaire method

Secondary data

Data which are original conducted but obtained from some published or unpublished
sources are termed as secondary data. These types of data generally obtained from public
or private sources;

a. Books of banks

b. Annual statement

c. Balance statement

d. Income statement

e. Journal published by finance companies\

f. Libraries

g. Internet

1.7.4 Data collection procedure

The investigator has to collect data for the completion of report perfectly. The data helps
the investigator to give any conclusion about the research problem. The investigator
should be careful while selecting data. The data must be in accordance to the research
problem. The investigator also must be conscious about the method.

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The questionnaire of this method doesn’t arise at all when secondary data are used. But
when primary data are used, questionnaire of the methods are needed for enquiry there
are certain method commonly used as under;

a. Direct personal method.

b. Indirect oral interview.

c. Information from local correspondent.

d. Mailed questionnaire method.

e. Schedules to be filled by enumerators.

1.7.5 Tools of Analysis

A. Financial Tools

 Net interest margin (NIM)

 Net profit margin (NPM)
 Return on Total Assets (ROA)
 Return on total equity (ROE)
 Return on investment (ROI)

B. Diagrammatic Presentation of data

 Bar Diagram
 Line Graph

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1.8 Limitations of the study
The field work report has been prepared by analyzing financial statement of the banks
basically for the partial fulfillment of the elective area of ‘banking and insurance’ course
provided under curriculum to Tribhuvan University for Bachelor of Business Studies.

Through the effort has been taken at present a true replica of banking activities in Nepal
however, the study has certain limitation of its own. The basis limitations can be follow;-

 Limitations of time in the study of profitability of the financial institute. The

research has been prepared within a short period of time so it may contain
mistakes.
 The data and facts are also very limited so the accuracy specific conclusion
couldn’t be so accurate.
 The research work occupies only a certain subject, so it is useful only for the
concentrated field not as a single scenario.
 Since there are various method and sources for the collection of data, and this
study is based on secondary data. So, the accuracy may not be reliable.

Organization of Study
The study has been organized into the chapters as presented in the format to cover partial
fulfillment of BBS program.

Chapter 1; Introduction

This chapter describes the background of the study. It has served oriented for readers to
know about the basic information of the research area, various era of modern banking
with customer satisfaction measured as a focal objective while doing business. It contain

23
research methodology, it refers to current assets of the firm, which is good as cash in
hand or can be convened into cash as and when required. It includes cash in hand, cash at
bank, bills receivable, marketable securities. It includes research design, data analysis and
research variables

Chapter 2; Result and Analysis

This chapter analysis the data related with study and presents the findings of the study
and also commend briefly on them. Data processing, data analysis and interpretation are
given in this chapter and there is use of techniques relating to analysis such as ratio,
descriptive expression, diagrams and so forth.

Chapter 3; Discussion and Conclusion

On the basis of the result from data analysis, the researcher concludes about the
performance of the concerned organization in term of credit management. This chapter is
devoted to the summary of the research, conclusion derived on the basis of data analyzed
and the recommendations for improvement to the concerned organization.

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CHAPTER -2

RESULT AND ANALYSIS

2.1 Data presentation

This chapter deals with the presentation, analysis and interpretation of the data.
Presentation analysis and interpretation of data lie at the heart of the research study. In
this the data collected from different sources are first presented in table, graph and charts,
these data are then analyzed by developing various analyzing tools and results are then
interpreted to find out the resource of happening so.

2.2 Analysis of result

2.2.1 Financial analysis

A. Net Profit Margin (NPM)

Net profit is the income of the bank has after deducting interest paid to creditors and
taxes paid to the government. Net Profit Margin is the measure of the bank’s excess of
the net interest and other operating income over all other expenses calculated in terms of
operating income. Higher NPM is preferable,

Mathematically, NPM=Net profit/Operating Profit

25
Table 2.2 Calculation of Net Profit Margin (in millions)

Year Net Income Operating Income Ratio

2072/73 951 2058 46%

2073/74 1113 2884 39%

2074/75 1477 3557 42%

2075/76 1706 4583 37%

2076/77 1359 4198 32%

Source, Annual Report of SBL

This can be shown in following figure

Figure 2.2 Bar Diagram showing Net Profit Margin

OPERATING EARNING
50%

45%

40%

35%

30%

25%

20%

15%

10%

5%

0%
2072/73 2073/74 2074/75 2075/76 2076/77

26
The above table and diagram shows that NPM of SBL is fluctuated during last five years.
It decreases from 46% in the year 2072/73 to 42% in the year 2074/75 and again it
decreases to 32% in the year 2076/77. The bank could maintain its NPM at an average of
39.2%.

The net profit margin is lowest of 32%in year 2076/77. It is because of high provision of
staff bonus and income taxes. Small proportion increases and net profit in comparison to
the operational profit increases the NPM in2072/73.

B. Return on Equity (ROE)

Equity is the ownership capital lent by the equity holders with the expectation of dividend
return. Equity capital is the core capital invested by the shareholders for starting,
expanding and maintaining business. Equity capital includes the equity shares, shares
premium and the retained earning accumulated by the business in different point of time.

Mathematically, Return on Equity= Net Profit / Total Equity

2.3 Calculation of Return on Equity (in millions)

Year Net Income Equity Ratio

2072/73 951 6323 15%

2073/74 1113 9531 12%

2074/75 1477 11652 13%

2075/76 1706 12324 14%

2076/77 1359 13437 10%

Source, Annual Report of SBL

This can be shown in the following figure

27
Figure 2.3 Bar Diagram showing Return on Equity

RETURN ON EQUITY
16%

14%

12%

10%

8%

6%

4%

2%

0%
2072/73 2073/74 2074/75 2075/76 2076/77

The above table and diagram shows the fluctuation of (ROE) of SBL, each year. It is 15%
in 2072/73, decreases to 12% in 2073/74,again increases to 13% in 2074/75, and
increases to 14% in 2075/76and again decreases to 10% in 2076/77.It is clearly
observable from the diagram that SBL has its highest ROE of 15% in year 2072/73 and
the lowest ROE of 10% in year 2076/77. However the bank has manages to increase its
ROE in such great proportion. Higher the volume of equity, lower the value of ROE. The
ROE of SBL increases because of higher percentage increase in the net profit than the
percentage increase in equity. Again it decreases because of increase in the equity due to
stock dividend and larger portion of the total portion of the net profit kept as retained
earnings.

28
 C. Return on Assets (ROA)

Assets are the expenditure made on some tangible (land, building, vehicles etc) or
intangible (copyright, goodwill, trademark etc) property or financial (investment on
shares, debentures etc) or the physical property that is intended to raise the value of
business through their efficient and effective utilization.

Return on Assets shoes the relationship between the Net Income and the total assets. It
measures the profitability of the company in terms of its assets utilization. Higher ROA is
preferable

Mathematically, Return on Assets= Net Income / Total Assets

2.4 Return on Assets (ROA) (in millions)

Year Net Income Assets Ratio

2072/73 951 59067 1.61%

2073/74 1113 71859 1.55%

2074/75 1477 82783 1.78%

2075/76 1706 94610 1.80%

2076/77 1359 116299 1.17%

Source, Annual Report of SBL,

This can be shown in the following figure

29
Figure 2.4 Bar Diagram showing Return on Assets

EARNING ASSETS
2.00%

1.80%

1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
2072/73 2073/74 2074/75 2075/76 2076/77

It could be easily located from the above table and diagram that ROA of SBL is
fluctuating from 1.80 % in 2075/76 to 1.17% in 2076/77.SBL is able to gain highest ROA
of 1.80% in year 2075/76 and the lowest ROA of 1.17% in year 2076/77. It has been to
maintain its average ROA at the level of 1.582%.Higher the volume of assets, lower the
value of ROA. In year 2076/77, SBL has its lowest ROA of 1.17% because of the greater
percentage increases in assets than the percentage increases in the net income.

D. Return on Investment (ROI)

Investment means the sacrifice of the current rupee and resources for the sake of future
rupees and resources. It is the fund employed n some real and / or financial assets so as to
generate some positive return in the future. However it is to be noted that the return in
future is not certain. Real assets includes the tangible assets like vehicles, buildings,
machinery etc. where financial assets are price of paper representing the indirect claim to
real assets held by someone else.

30
Return on investment measures the profitability of the portfolio investment made by
bank. It analyses what portion of the net profit of the SBL is contributed by the return
from the investment in various sectors. Higher ROI is preferable.

Mathematically, Return on Investment= Net income / Total Investment

2.5 Calculation of Return on Investment (ROI) (in millions)

Year Net Income Investment Ratio

2072/73 951 8351 11.39%

2073/74 1113 9554 11.65%

2074/75 1477 9720 15.20%

2075/76 1706 3980 42.86%

2076/77 1359 13112 10.36%

Source, Annual Report of SBL,

This can be shown in the following figure

Figure 2.5 Bar Diagram showing Return on Investment

31
 EARNING ASSETS
2.00%

1.80%

1.60%

1.40%

1.20%

1.00%

0.80%

0.60%

0.40%

0.20%

0.00%
2072/73 2073/74 2074/75 2075/76 2076/77

The above table and diagram shows that the return on investment is fluctuating from the
very beginning of the first year of observation period. It was 11.39% in 2072/73 which
increases to 11.65% in 2073/74, and again increases to 15.20% in 2074/75, and then
increases to 42.86% in 2075/76 and again decreases to 10.36% in 2076/77. However the
return decreases in the last year i.e.10.36% in 2076/77. Nevertheless the bank has been
able to maintain its average return level of 18.292%

2.2.2 Statistical Analysis

Statistics may be defined as collection, presentation, analysis and interpretation of

numerical data-Croxton and Cowden. In this sub chapter, the ratios calculated in financial
analysis have been proceed through various statistical tools to find out the average,
deviation of the actual ratios from average in different time, correlation between different
variables are projection of the future financial performance. Various ratios used for the
purpose are;

 Mean
 Standard Deviation
 Correlation Coefficient

32
  Time series Analysis

Mean

Mean is the average value of any distribution. It is the single value within range of the
data which represent a group of individual values in a simple and concise manner and
concentrates in the middle of the distribution.

Mathematically, mean =
∑x
n

Where, n = number of individuals

Standard Deviation

Standard Deviation is a statistical tool that measures the variation or scatterings of the
data from the mean value. Higher deviation implies higher fluctuation of data from the
mean value and therefore implies higher risk.

Mathematically, Standard Deviation = √∑

2
x
n

Correlation Coefficient

Correlation is a statistical tool that measures the degree of interrelationship between two
variables. It examines whether the value of one variables decreases or increases with the
fall or raise in the value of the other variable. Its value ranges from +1 to -1 representing
perfectly positive correlation degree to negative correlation.

n ∑ UV −∑ U . ∑ V
Correlation coefficient (r) =
√ n ∑ U −¿ ¿ ¿ ¿
2

33
Time Series Analysis

Time series analysis is a statistical tool that observes and examines the movement of two
variables in the past and with reference projects the future movement.

Under least square method of time series analysis, trend values are calculated in
following ways

∑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

Table 2.10 Calculation of Correlation Coefficient

Year OI (X) NI (Y) U = X- V = Y- U² V² U×V

4583 1706

2072/7 2058 951 -2525 -755 6375625 570025 1906375

3

2073/7 2884 1113 -1699 -593 2886601 351649 1007507

4

2074/7 3557 1477 -1026 -229 1052676 52441 234954

5

2075/7 4583 1706 0 0 0 0 0

6

34
 2076/7 4198 1359 -385 -347 148225 120409 133595
7

17280 6606 -5635 -1163 10463127 1094524 3282431

Source, Annual report of SBL

n ∑ UV −∑ U . ∑ V
Correlation coefficient ( r ) =
√ n ∑ U −¿ ¿ ¿ ¿
2

5 ×3282431− (−5635 ) ×(−1163 )

=
√5 ×10463127−(−5635)² √5 ×1094524−(−1163)²
= 0.923124744

Here the correlation coefficient between total interest earning assets and the net income
positive of +0.923124744. This shows almost perfect positive relation between these two
variables. As the volume of the IEA increases the volume of NII also increases by almost
equal percentage.

Table 2.11 Calculation of Time Series Analysis

Year NPM (x) X =x- XY X² Trend value

2074/75

2072/73 46% -2 -92% 4 44.99%

2073/74 39% -1 -39% 1 42.09%

2074/75 42% 0 0% 0 39.18%

2075/76 37% 1 37% 1 36.28%

2076/77 32% 2 65% 4 33.38%

35
 196% -29% 10

Source, Annual report of SBL

Equation of linear straight line,

Y = a + bx

For the sake of the calculation the equation can be written as,

∑y = a + b∑x………..i

∑xy = a∑x + b∑x²……….ii

∑x = 0

∑y
a=
n

196
=
5

= 39.2%

∑ XY
b=
∑X²

−29 %
=
10

=-2.9%

The required equation is Y = 39.2 + 2.9X

This can be shown in the following figure

Figure 2.7 Figure Diagram showing Trend value

36
 Trend value
0.3000

0.2500

0.2000

0.1500

0.1000

0.0500

-
2072/73 2073/74 2074/75 2075/76 2076/77

In the above diagram, the time horizon is measured in x-axis and NPM is measured in Y-
axis. The trend line of the NPM is fluctuating in above diagram.

C. Return on Equity

Table 2.12 Calculation of Mean and Standard deviation

Year ROE ( x) X = (x-x̅ ) X²

2072/73 15% 2.37 5.62

2073/74 12% -0.99 0.98

2074/75 13% 0.01 0.00003354

2075/76 14% 1.17 1.38

37
 2076/77 10% -2.56 6.53

Total ∑x = 63% 14.51

Source, Annual report of SBL ∑x

∑x
Mean =
n

63
=
5

=12.6%

During the five year period observation, the SBL has been able to maintain its NPM at an
average of 12.6%.

Again, Standard deviation = √∑ x 2

=
√ 14.51
5

= 2.902%

Here, the standard deviation of ROE of SBL is just 2.902%. So looking at its variability,
we can conclude that SBL is in risk caused due to fluctuation.

Year Equity(X) NI(Y) U =X – V = Y U² V² U×V

11652 – 1477

38
Table 2.13 Calculation of Correlation coefficient

2072/73 6323 951 -5329 -526 28398241 276676 2803054

2073/74 9531 1113 -2121 -364 4498641 132496 772044

2074/75 11652 1477 0 0 0 0 0

2075/76 12324 1706 672 229 451584 52441 153888

2076/77 13437 1359 1785 -118 3186225 13924 -210630

53267 6606 -4993 -779 36534691 475537 3518356

Source, Annual Report of SBL

n ∑ UV −∑ U . ∑ V
Correlation coefficient ( r ) =
√ n ∑ U −¿ ¿ ¿ ¿
2

5 ×3518356−(−4993 ) ×(−779)
=
√5∗36534691−(−4993) ² √ 5 ×475537−(−779)²
= +0.819833

Here, the correlation coefficient between total interest earning assets and the net interest
income is positive. This shows almost perfect positive correlation between these two
variables. As the volume of IEA increases the volume of the NII will also increases by
almost equal percentage.

39
Table 2.14 Calculation of Time Series Analysis

X = x- Trend
Year ROE(Y) XY X²
2074/75 value

2072/73 15% -2 -30% 4 14.21%

2073/74 12% -1 -12% 1 13.44%

2074/75 13% 0 0% 0 12.67%

2075/76 14% 1 14% 1 11.90%

2076/77 10% 2 20% 4 11.13%

63% -8% 10

Source, Annual report of SBL

Equation of linear straight lne,

Y = a + bx

For the sake of the calculation the equation can be written as,

∑y = a + b∑x………..i

∑xy = a∑x + b∑x²……….ii

∑x = 0

∑x
a=
n

63
=
5

=12.6%

40
 ∑ XY
b=
∑X²

−8
=
10

=-0.8

The required equation is Y = 12.6 – 0.8X

The trend line equation of ROE is Y = 12.6-0.8X

This can be shown in the following figure

Figure : 2.8 Figure Diagram Showing Trend Value

Trend value
0.3000

0.2500

0.2000

0.1500

0.1000

0.0500

-
2072/73 2073/74 2074/75 2075/76 2076/77

In the above diagram, the time horizon is measured in the X-axis and ROE and trend
value in Y axis.

41
D. Return on Assets (ROA)

Table 2.15 Calculation of trend and Standard Deviation

Year ROA (x) X = (x-x̅ ) X²

2072/73 1.610%
0.03 0.00073

2073/74 1.549%
(0.03) 0.00116

2074/75 1.784%
0.20 0.04049

2075/76 1.803%
0.22 0.04850

2076/77 1.169%
(0.41) 0.17175

7.915%
0.26263

Source, Annual report of SBL

∑x
Mean =
n

7.915
=
5

=1.583%

The SBL has able to maintain ROA it’s ROA of 1.583%.

Again, Standard deviation = √∑ x ²

n

42
=
√ 0.2623
5

= 0.05246%

Here, the standard deviation of ROA of SBL is just 0.05246%. It implies that SBL has
been able to maintain its ROA smoothly with a very nominal deviation from its average
ROA. So, it can be concluded that the SBL has sound performance in terms of
ROA.Table 2.16 Calculation of Correlation Coefficient

Year TA (x) NI (Y) U = X – V = Y U² V² U×V

82783 – 1477

2072/73 59067 951 -23716 -526 562448656 276676 12474616

2073/74 71859 1113 -10924 -364 119333776 132496 3976336

2074/75 82783 1477 0 0 0 0 0

2075/76 94610 1706 11827 229 139877929 52441 2708383

2076/77 116299 1359 33516 -118 1123322256 13924 -3954888

424618 6606 10703 -779 1944982617 475537 15204447

Source, Annual report of SBL

n ∑ UV −∑ U . ∑ V
Correlation coefficient ( r ) =
√ n ∑ U −¿ ¿ ¿ ¿
2

515204447 ×−( 10703 )∗(−779)

=
√5∗1944982617−(10703)² √ 5× 475537−(−779)²
= +0.9634

Here, the correlation coefficient between total assets and the net interest income is
positive. This shows almost perfect positive correlation between these two variables. As

43
the volume of TA increases the volume of the NII will also increases by almost equal
percentage.

Table 2.17 Calculation of Time Series Analysis

Year ROA (x) X= x - X ×Y X² Trend

2074/75 value

2072/73 1.61% -2 -3.22% 4.00 0.0171

2073/74 1.55% -1 -1.55% 1.00 0.0165

2074/75 1.78% 0 0.00% - 0.0158

2075/76 1.80% 1 1.80% 1.00 0.0152

2076/77 1.17% 2 2.34% 4.00 0.0146

8% -0.63% 10.00

Source, Annual report of SBL,

Equation of linear straight lne,

Y = a + bx

For the sake of the calculation the equation can be written as,

∑y = a + b∑x………..i

44
∑xy = a∑x + b∑x²……….ii

∑x = 0

a=
∑x
x

8
=
5

1.6

b=
∑ xy
∑ x²

−0.63
=
10

=-0.063

The trend line equation of ROE is Y = 1.6 -0.063X

This can be shown in the following figure

Figure 2.9 figure and diagram showing Trend value

Trend value
0.3000

0.2500

0.2000

0.1500

0.1000

0.0500

-
2072/73 2073/74 2074/75 2075/76 2076/77

45
In the above diagram the time horizon is measured in x-axis and ROA is measured in y-
axis.

E. Return on Total Investment (ROI)

Table 2.18 Calculation of mean and Standard Deviation

Year ROI (x) X = x - x̅ X²

2072/73 11.388%
(6.90) 47.67208

2073/74 11.650%
(6.64) 44.12658

2074/75 15.195%
(3.10) 9.59068

2075/76 42.864%
24.57 603.78154

2076/77 10.365%
(7.93) 62.85007

TOTAL 91.462%
768.02095

46
 ∑x
Mean =
n

91.462
=
5

=18.2924%

The SBL has able to maintain ROI it’s ROI of 10.898%.

Again, Standard deviation = √∑ x ²

x

=
√ 768.02095
5

= 12.3937%

Here, the standard deviation of ROI of SBL is 12.3937 %. It implies that SBL has been
able to maintain its ROI smoothly with a very nominal deviation from its average ROI.
So, it can be concluded that the SBL has sound performance in terms of ROI.

Table 2.19Calculation of Correlation Coefficient

Year I (X) NI (Y) U = X – V = Y U² V² U×V

9720 – 1477

2072/73 8351 951 -1369 -526 1874161 276676 720094

2073/74 9554 1113 -166 -364 27556 132496 60424

2074/75 9720 1477 0 0 0 0 0

2075/76 3980 1706 -5740 229 32947600 52441 -1314460

2076/77 13112 1359 3392 -118 11505664 13924 -400256

TOTAL 44717 6606 -3883 -779 46354981 475537 -934198

47
Source, Annual report of NIC Asia Bank.

n ∑ UV −∑ U . ∑ V
Correlation coefficient ( r ) =
√ n ∑ U −¿ ¿ ¿ ¿
2

= 5∗−¿ ¿

= -0.39286

Here, the correlation coefficient between total interest and the net interest income is
positive. This shows almost perfect positive correlation between these two variables. As
the volume of IEA increases the volume of the NII will also increases by almost equal
percentage.

Table 2.20 Calculation of Time Series Analysis

Year ROI (x) X= x - X ×Y X² Trend

2014/15 value

2072/73 11.39% -2 -22.78% 4.00 0.1246

2073/74 11.65% -1 -11.65% 1.00 0.1538

2074/75 15.20% 0 0.00% - 0.1829

2075/76 42.86% 1 42.86% 1.00 0.2121

2076/77 10.36% 2 20.73%

48
 4.00 0.2413

TOTAL 91% 29.17% 10.00

Source, Annual report of SBL,

Equation of linear straight line,

Y = a + bx

For the sake of the calculation the equation can be written as,

∑y = a + b∑x………..i

∑xy = a∑x + b∑x²……….ii

∑x = 0

a= =
∑ x²
x

91
=
5

=18.2%

∑ xy
b=
x²

29.17
=
10

=-2.917%

The required equation is Y = 18.2 + 2.917X

The trend line equation of ROE is Y = 18.2+2.917X

This can be shown in the following figure

49
Figure 2.10 Line Diagram showing Trend values

Trend value
0.3000

0.2500

0.2000

0.1500

0.1000

0.0500

-
2072/73 2073/74 2074/75 2075/76 2076/77

In the above diagram the time horizon is measured in x-axis and ROI and trend value is
measured in y-axis.

2.3 Major Findings

1. The security problem of the country has hampered the business of Sunrise Bank.

2. The tough competition among the commercial banks exists in Nepal.

3. The poor economy condition of the country as well as of the world has affected the
banking business of Sunrise Bank.

4. There is lack of many sectors in Nepal to invest the collected capital.

50
 CHAPTER - 3

SUMMARY AND CONCLUSION

3.1 Summary
Sunrise bank Ltd is a large scaled organization. Sunrise bank believes that it is a
relationship bank and customers should be provided with “personalized Service” through
dedicated relationship managers. It is also large organization in order to create
employment opportunity. At this point in time, the project has high economic importance.

This fieldwork was basically undertaken for partial fulfillment of requirement for the
degree of bachelor of business studies. The objectives of the field study were explored
upon financial position of project by determining the profitability for this operation year
with the help of five years balance sheet, profit and loss account and income statement.
For the simplicity of the study, only five years of operation was taken under
consideration.

As a fieldwork procedure, topics and organization was chosen and registered in the
department of project management in our college. In return college has provided a
recommendation letter for collection from primary and secondary sources.

The study focus analyzing the profitability of SBL entry it could have generate in the last
five year to measure its efficiency of financial performance by interconnecting profit with
other variables that could affect the profit volume like assets, investments capital
employed etc. the study made through intensified research, the derives the conclusion
why SBL is successful in being the bank of first choice, what is its strength and
weakness, what is its growth potential, what are opportunities and threats the bank is

51
likely to face in near future and what may be the potential remedies to overcome the
threats and grab the opportunities.

3.2 Conclusion
Sunrise Bank Limited as directed with its mission to the bank of the first choice.It has
proved its worth and has been able to stand as one of the leading commercial bank in
Nepal. Its operations are widely dispersed throughout the nation with the establishment of
branches and services entries. The study finds out the following facts about SBL.

1. The bank has fluctuating trend of net interest margin because the percentage
increases in the interest income is less than the percentage increase in the interest
earning assets. Theincreasing trend of NIM reveals the bank’s efficiency in
utilizing the IEA in interest earning generation. So it can be said that the SBL has
good performance in terms of its NIM.

2. The net profit margin of SBL is more fluctuated. The net profit margin is lowest
of 32% in year 2076/77; it is because of high provision of staff bonus and income
taxes. Small proportion increases in net profit in comparison to the operational
profit decreases the NPM. However SBL has been able to maintain it average rat
39.2% which has just a nominal effect in the performance of SBL

3. Higher the volume of equity, lower the value of ROE. The ROE of SBL increases
in 2072/73 to 15% because of higher percentage increase in net profit than the
percentage increase in equity. It had decreased in year 2076/77 to 10% because of
the increase in equity due to stock dividend and larger portion of the total portion
of the net profit kept as retained earnings. The average ROE of SBL accounts to
14.2188% there is almost positive correlation between net income and total
equity.

52
4. Higher the volume of assets, lower the value of ROA. In the year 2076/77, SBL
has its lowest ROA of 1.17% because of the greater percentage increase in assets
than the percentage increase in net income. The average ROA of SBL is 1.582% .
There is almost perfect correlation coefficient between net income and total assets
i.e. +0.9634%.

5. The return on investment of SBL continuously fluctuating for the five years of the
observation period. It increases to 42.86%. It may be because of increase of
SBL’s investment in real estate like land, building, hosing etc the average
ROI,however is 18.292% . The correlation coefficient of -0.39286% .

6. Banks are the financial institutions that operate in a dynamic environment. Time
and again, they confront with challenges and difficulties caused not only due to
external environment but also by the internal environment. So the financial
performance of the banks are not affected by their internal rules, banking
strategies, personnel strength and weakness but also very much influenced with
the external factors like changing monitory and fiscal policy of government,
imposition of the rules by NRB to control liquidity, emergence of well equipped
and highly advanced banks with new technologies, transfer of technology and
managerial know how through joint venture with foreign banks, establishment of
finance companies and cooperatives, mutual funds.

53
54
BIBLOGRAPHY

1. Annual report of Sunrise Bank Limited 2012/13 to 2016/17 A.D.

2. Bank and Financial statistics of Nepal Rastra Bank.

3. Bhandari, Dilli raj (2013), Fundamental of Financial Institution and Market,

Asmita Publication Kathmandu.

4. Dahal Sarita and Dahal Bhuvan (2002) A Hand Book Banking For Bankers,
Others And Students.

5. Pant Prem Raj (2002) Fieldwork Assignment And Report Writing, Kathmandu,
Buddha Academic Enterprises.

6. Some National News Paper.

7. Pant Prem Raj (1998) Field Assignment and Report Writing Kathmandu ; Veena
Academic Enterprises.

8. Chaudhary A.K and Pant, G.D. (2055), Business Statistics And Mathematics.

55