A STUDY ON FINANCIAL ANALYSIS

OF STANDARD CHARTERED BANK LTD

A Project work proposal

BY

Biraj Khanal

Class Roll no : 903/070

T.U. Regd no.: 7-2-0025-0207-2013

Nepal Commerce Campus

Minbhawan, Kathmandu

Submitted to

Research Department

Nepal Commerce Campus

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Kathmandu, Nepal

January, 2017
 Chapter – 1

INTRODUCTION

1.1 Background

At present , Large no. of commercial banks are operating in Nepal. Naturally, they are
rendering a wide range of services. They are keeping up with the changes taking place in the
world. Nepal is one of the least developed countries in the world, 50% of people are below
poverty line.
Bank in early 1980’s in conjuction with Nepalese promoters, it was established in 1987 as
joint venture of plc and Nepal Rastra Bank. On 2058 Ashad29, the Green Lays Bank was
converted to Standard Chartered Bank.

Commercial banks are those banks which perform all kind of banking business. They avoid
long term leading. They accept public deposit and grant loans in the form of cash credit,
overdraft. Among them Standard Chartered Bank is also one. Standard Chartered Bank has
been operating in Nepal since 1987. Standard Chartered Bank is world largest landing,
emerging market bank with 500 offices across 50 countries in Asia, the sub continent, the
middle east of Europe.

The field of study is basically focused on the financial performance of Standard Chartered
Bank to make clear that ratios are calculated and the financial position are measured on
the basic meeting of the objectives and functions.

1.2 Statement of problem

➢ What is the profitability Ratio of Standard Chartered Bank with relation to return
on assets, return on total deposit, return on equity and return on total assets?
➢ What is the position of liquidity ratio with reference to current ratio and quick ratio?
➢ What is the position of loan loss with reference to what loss coverage ratio?
➢ What is the performance of organization in relation with dividend payout ratio
and earnings per share?

1.3 Objectives of the Study

The objectives of the study is to analyze the financial performance of Standard Chartered
Bank and to fulfill partial requirement of BBS fourth year T.U.
 ➢ To evaluate the profitability position on Standard Chartered Bank.
➢ To study of short term and long term solvency position of Standard Chartered Bank.
➢ To evaluate leverage and liquidity position of Standard Chartered Bank.

1.4 Significance of the study

In the analysis of the Standard Chartered Bank , limited statement and degree of liquidity and
after the examination of financial position of the bank it will be valuable to other parties related
to this field such as ;

➢ To the investors
➢ To the creditors
➢ To the depositors

And finally the students who will be working on this research on same field can take
reference from this project.

1.5 Limitations of the study

For the completion of this study, the following facts are the basic limitations which are listed
below:

➢ This Study is conducted only of five years data 2009/10 to 2013/14

➢ Cash flow statement only doesnot help to study on financial performance of bank
➢ Study fulfilled only partial requirements of BBS fourth year T.U.

CHAPTER -2
 REVIEW OF LITERATURE

2.1 Brief Review of Literature

The research on the financial analysis of Standard Chartered Bank has been done over the past
years by the different researchers. Though there is a lot of time gap between those research
done in past and research by mine. As change in the time and development coming from the
past few years the conclusion they found may be different than mine due to the time gap.

2.2 Theoritical Review

The financial data’s involved in the research about the bank will be represented in different
representing styles like bar diagram, pie- chart, charts, tabular form . which makes easy to
understand that what the figures represent about the position of bank and is effective way of
representing the bank overall performance.

CHAPTER-3

RESEARCH METHODOLOGY
3.1 Research Methodology

Research methodology refers to the various sequential steps to be adopted by a researcher in

studying a problem with certain objectives in view. This topic explains the method used for this
research in the following order.

3.2 Research Design

Financial tools are used to ensure the relationship between variables in terms of ratio,
percentage, and times. Here for this research work both analytical and descriptive research
design is applied.

3.3 Sources of data

There are different sources of data while in research such as primary data and secondary data.
Primary data are collected through accurate findings and answer that is obtained from the
questionnaire. Secondary data are collected through annual reports of the bank, broachers,
balance sheet and internet. This research is based on secondary data only.

3.4 Method of data analysis

Analysis may be categorized as descriptive analysis and inferential analysis. To achieve the
predetermined objective of the research, certain tools are used. The tools are categorized as ;

1.Financial tools
2.Statistical tools.

In this study following financial and statistical tools are used to analyze the financial
performance of bank:

a.) Profitability ratio: Profitability is ultimately in terms of rate of return earned by the liquidity
by the equity investors who are the owner of the business. Profitability is the final result of the
bank. There are five measures of profitability, called profit margin, net interest, the spread, the
return on assets, and the return on equity. This ratio tools helps to analyzed income relations to
resources committed is to measure profitability from the financial statements.

b). Liquidity ratio: It means the ability to meet cash obligation as they come due. Liquidity is
the probably most difficult aspect of the financial performances of the institutions to
measures. This report gives out the correct comparison of the maturities of assets and
liabilities.
 c). Leverage ratio: It is used to know the long term financial positions of the financial
institutions. These ratios are also called capital structure ratios. These ratios indicate
the proportions of debt and equity in the capital structure of a bank.

And the statistical tools are as follows:

1 .Mean: The statistical mean refers to the mean or average that is used to derive the central
tendency of the data in question. It is determined by adding all the data points in a population
and then dividing the total by the number of points. The resulting number is known as the
mean or the average.

2 .Standard deviation: Standard deviation is a statistic used as a measure of the dispersion or

variation in a distribution, equal to the square root of the arithmetic mean of the squares of
the deviations from the arithmetic mean.

3 .Coefficient of variance: The coefficient of variation (CV) , also known as relative

standard deviation (RSD), is a standardized measure of dispersion of a probability
distribution or frequency distribution. It is often expressed as a percentage, and is defined as
the ratio of the standard deviation to the mean (or its absolute value).