Financial performance analysis of Nepal Investment Bank.
By
Bishal Chalise
TU Registration no:-7-2-39-792-2016
Shanker Dev Campus
Roll no:-1416/073
Finance group
A proposal submitted to
Faculty of management
Tribhuvan University Kathmandu.
In a partial fulfillment of requirement for the Degree of
Bachelor of Business Studies(B.B.S)
Kathmandu Nepal
JAN 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.
According to Professor Kinsley, “ Bank is an establishment, which awakes to individual such as
advances of money as may be required and safety made to and to which individual withdrew
money when and required by them for use.”.
According to U.S. Law, Any institution offering deposits subject to withdraw on demand and making
loan of a commercial or business nature is a bank. Bank can, therefore, be definition which
renders a lot of financial services besides taking deposits and giving loans. Bank provides other
much more important services to its clients and also the Operation of bank, today, is not confined
within the boundary of a nation.
Statement of Problem
Liquidity management on bank is also difficult as that of manufacturing and non manufacturing business
organization. Commercial banks are great monetary institutions which are playing an important
role to the general welfare of the economy. The responsibilities of commercial banks are more
than any other financial institutions. They must be ready to pay on demand a good share of their
liabilities without warning or notice. Bank collects funds from different types of deposits for
providing loans and advances to different sectors. To get higher returns, banks must try to
increase funds from deposits as well as their investment. The first motive of banking is to borrow
public saving and lend to needy people. But commercial banks always face the problems for
utilizing more deposit as investment fully and productivity. The gap between collection of
deposits and disbursement of loans increase the cash balance on the bank which its large amount
of liabilities on its depositors demand without notice. But large amount of idle cash balance also
decrease profitability of banks.
Objectives of the Study
Generally, working capital is known as the amount of funds necessary to cover the cost of daily
operation of the enterprise. And the study of working capital of Himalayan Bank Limited is to
focus on ascertainment of the current assets and current liabilities. Besides following are the
objectives of the study:
● To check the liquidity of Himalayan Bank Limited.
● To evaluate the financial strength and weakness of Himalayan Bank Limited.
● To suggest optimum liquidity position for the bank.
Significance and Relevance of the Study
Ratio Analysis throws light on many problems of firm and also highlights some positives. Ratios
are essentially whistle blowers; they draw the management’s attention towards issues needing
attention.
● Ratio analysis compares line-item data from a company's financial statements to reveal
insights regarding profitability, liquidity, operational efficiency, and solvency.
● Ratio analysis can be used to look at trends over time for one company or to compare
companies within an industry or sector.
● While ratios offer several types of insight, other types of information and analysis are
usually needed to form a complete picture of a company's financial position
Research Methodology
Research design is the set of methods and procedures used in collecting and analyzing measures
of the variable specified in the research problem. The design of a study defines the study
type(descriptive, correlation, semi-experimental, experimental, review, meta-analytic) and sub-
type (e.g. descriptive-longitudinal, case study), research problem, hypotheses, independent and
dependent variables, experimental design, and if applicable, data collection methods and a
statistical analysis plan. A research design is a framework that has been created to find answers
to research questions.
A research design is the specification of method and procedure for accruing the information
needed. It is overall pattern of framework of project that stipulates what information is to be
collected from various sources.
Descriptive Research Design is appropriate for this study;
A research design that is developed with the aim of studying of research in detail and explains
the facts and characteristics related to research problem is descriptive research design. It collects
and presents the facts and figures in a certain situation. The goal of descriptive study is to
describe relevant aspects of the factors of interest to the researcher from an individual,
organization or other perspective. Even though it is descriptive method, it uses the scientific
method of collecting, classifying and analysis related data, facts and figures.
Limitations
● Data and information are limited. It only covers annual report of the bank from the fiscal
year 2013/14 to 2018/19 due to limited period.
● For effective forecast, daily and monthly data is required. Only annual data is used.
Reference
Books
● Joshi K.R, Sharma D.R, (2072) Fundamentals of Financial Management: Kathmandu:
Asmita Books Publishers and Distributors Ltd.
● Business Research Methods: Dev Raj Adhikari & Dhruba Lal Pandey: Asmita Books
Publishers & Distributors Ltd
Reports and Articles
● Annual report of Himalayan Bank Limited from 2013/14 to 2017/18
Websites
● https://himalayanbank.com/
