Damak Campus Journal 2023, 12 (1): 46-71

ISSN : 2565-4772 (Print)

An Impact of Profitability Indicators of Standard Chartered

Bank Nepal Limited (SCBL)

Prem Prasad Sangraula

Department of Management, Damak Multiple Campus
E-mail: Sangraulaprem63@gmail.com

Abstract
This study has complemented in the field of study of the dissertation research results of
the study indicated the “Impact of Earning Per Share, Return on Assets, Return on Equity, Net Profit Margin
and Price Earnings Ratio on Market Value Per Share of Standard Chartered Bank Nepal Limited (SCBL)” and
Standard Chartered Bank Nepal Limited (SCBL) in overall financial profitability position and its
statement and financial events in the real service life of service provide bank. This dissertation
research report work is different from other research work as this work is on effectiveness
utilization and management of profit in the expansion of bank challenges on a particular sector.
The main objective of this study is to analyze the trend, structure of Earning Per Share, Return on
Assets, Return on Equity, Net Profit Margin and Price Earnings Ratio on Market Value Per Share significance
relation through hypothesis and the study made over the period 2017/18 to 2021/22 taken as a
sample year. The statistical methods of trend analysis and descriptive statistics like mean,
standard deviation, coefficient of variation and hypothesis test were used to analyze the study
outcomes.
Keywords: Earning Per Share (EPS), Return on Assets (ROA), Return on Equity (ROE), Net
Profit Margin NPM), Price Earnings Ratio (P?E ratio) and Market Price Per Share MPPS)

Introduction
Financial statements are reports prepared by company to present the financial
performance and position. They disclose the operating result base on Profit and loss and
financial position of a concern. Financial information provided by financial statement is in the
form of data. To make financial statements more meaningful and useful they need further
analysis and interpretation. The process of reviewing, classifying, evaluating and interpreting
the relationship between different heads of account of financial statements is known as financial
statement analysis. This provides relevant information to the management and other interested
persons and institutions to understand the result of performance and position of the entity.
Financial statements analysis helps to know solvency and profitability position of the
organization for a given period of time. This supports to the management, creditors, lenders, and
shareholders to make decision for future action. Management prepares future action plan on the
basis of financial information obtain from financial statement analysis. Creditors decide whether
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to supply goods on credit or not, lenders decide whether to grant loan or not only analyzing
financial statement of the organization. Shareholders are interested on financial statement
analysis to know profitability position o the organization and safety of their investment.
Financial statement analysis provides information whether sale made is enough for
expected profit, profit earned is adequate to provide return on investment, interest and dept is
payable out of profit or not etc. The main processes of financial statement analysis and
interpretation are: re-arrangement of financial statement, comparison of different elements of
accounts, analysis with reference to financial characteristics and interpretation of financial
information.
Profile of Standard Chartered Bank Nepal Limited
Standard Chartered Bank Nepal Limited has been in operation in Nepal since 1987
when it was initially registered as a joint-venture operation. Today, “the Bank is an integral part
of Standard Chartered Group having an ownership of 70.21% in the company with 29.79%
shares owned by the Nepalese public. The Bank enjoys the status of the only international bank
currently operating in Nepal. We are a leading international banking group with a 160-year
history in some of the world’s most dynamic markets. Our heritage and values are expressed in
our brand promise, here for good. Our operations reflect our Purpose, which is to drive
commerce and prosperity through our unique diversity. With 85,000 employees, we are present
in 59 markets, and serve clients in a further 85. We are listed on the London and Hong Kong
Stock Exchanges. With 14 points of representation, 23 ATMs across the country and more than
504 local staff, Standard Chartered Bank Nepal Limited is serving its clients and customers
through a strategic domestic network. In addition, the global network of Standard Chartered
Group enables the Bank to provide truly international banking services in Nepal. There are three
pillars to the strategy: education, employability and entrepreneurship. It builds on the success of
our earlier community programs while growing our ambition to ensure that we are reaching
more young people across our markets. The Bank is also actively engaged with the communities
in raising awareness around Financial Literacy, Environment, Health and Education including
conducting relief activities for COVID-19 pandemic.”
Objectives of the Study
Commercial banks are established with intention of earning profit so that the wealth
their shareholder is maximized and earning depends upon efficient the mobilization resources.
Therefore, ‘the main objectives of this study are to analyze, examine and interpret the financial
position of Standard Chartered Bank Nepal Limited with the help of ratio analysis and other
portfolios.
The specific objectives of the study can be pointed out as follows:
1. To analyze the comparative profitability position structure of Standard Chartered Bank Nepal
Limited with the help of financial data.
2. To assess the comparative significance relation of profitability variables like, of Earning per
Share, Return on Assets, Return on Equity, Net Profit Margin and Price Earnings Ratio on
Market Value Per Share of Standard Chartered Bank Nepal Limited (SCBL).

47
Statement of the Problem
Commercial Banks play vital role in economic growth of the country. As being a
commercial institution, a commercial bank must make profit out of its operation for its survival
and fulfillment of its responsibilities. The major activities of the commercial banks include
mobilization of resources, which involves cost, and profitable deployment of the resources,
generating income.

In this context, this study will deal with the following issues:
1. What is the profitability position structure of Standard Chartered Bank Nepal Limited?
2. What is the significance relation of Earning Per Share, Return on Assets, Return on Equity, Net
Profit Margin and Price Earnings Ratio on Market Value Per Share of Standard Chartered
Bank Nepal Limited (SCBL)?
3. What is the hypothetical relation among variables of Earning Per Share, Return on Assets,
Return on Equity, Net Profit Margin and Price Earnings Ratio on Market Value Per Share of
Standard Chartered Bank Nepal Limited (SCBL)?

Hypothesis
Statistical analysts test a hypothesis by measuring and examining a random sample of
the population being analyzed. All analysts use a random population sample to test two different
hypotheses: the null hypothesis and the alternative hypothesis. The null hypothesis is the
hypothesis the analyst believes to be true. Analyst believes the alternative hypothesis to be
untrue making it effectively the opposite of a null hypothesis. This makes it so they are
mutually exclusive and only one can be true. However, one of the two hypotheses will always
be true.
Hypothesis: - 1
Ho (Null Hypothesis): That is there is no any relationship between Earning per Share
and Market Value per share of Standard Chartered Bank Nepal Limited.
H1 (Alternative Hypothesis): That is there is relationship between Earning per Share and Market
Value per share of Standard Chartered Bank Nepal Limited.
Hypothesis: - 2
Ho (Null Hypothesis): That is there is no any relationship between Net profit margin
and Market Value per share of Standard Chartered Bank Nepal Limited.
H1 (Alternative Hypothesis): That is there is relationship between Net profit margin Market
Value per share of Standard Chartered Bank Nepal Limited.
Hypothesis: - 3
Ho (Null Hypothesis): That is there is no any relationship between Return on Assets and
Market Value per share of Standard Chartered Bank Nepal Limited.
H1 (Alternative Hypothesis): That is there is relationship between Return on Assets and Market
Value per share of Standard Chartered Bank Nepal Limited.

48
Hypothesis: - 4
Ho (Null Hypothesis): That is there is no any relationship between Return on Equity and
Market Value per share of Standard Chartered Bank Nepal Limited.
H1 (Alternative Hypothesis): That is there is relationship between Return on Equity and Market
Value per share of Standard Chartered Bank Nepal Limited.
Hypothesis: - 5
Ho (Null Hypothesis): That is there is no any relationship between Price Earnings ratio
and Market Value per share of Standard Chartered Bank Nepal Limited.
H1 (Alternative Hypothesis): That is there is relationship between Price Earnings ratio and
Market Value per share of Standard Chartered Bank Nepal Limited.
Review of Literature
Review of literature is the study of previous research or article or book in related field
or topics for finding the past studies conclusion and deficiencies that may be known for further
research. This chapter will help to check the chances of duplication in the present study. Thus
the gap between the previous research and current research can be filled. Review of related
studies is about the studies is about the studies of previous thesis, related books and previous
researches in similar topics. The last is research gap, which will describe the difference between
the previous thesis and current thesis. The purposes of the literature review are as follows:-
Conceptual Review
Therefore, the chapter is categorized under three main heading. Conceptual framework
is concern with fundamental of supportive text that will ensure the interpretation whether it is
under the principles and doctrine of the theories related to the topic.
Concept of Profitability
Profit is essential for every enterprise to survive in the long run as well as to maintain
capital adequacy through retain earning. It is also necessary to accept market for both debts and
equity to provide funds for increased assistance to the productive sector (Robinson, 1951: p 21).
Profit is the reward for entrepreneurship. It is the excess amount of revenue over total expenses
and provisions. Profitability is the capacity to earn profit. Profitability is a very important
element, which influences the overall activities of any kind of business. If there is no profit, it is
impossible to run any organization. In the case of bank, if bank cannot earn profit, no one can
expect that a bank makes their payment of interest on deposits maintain by them. Profit is the
resource left to the firm for future growth and expansion or reward to be distributed to the
entrepreneurs in the form of dividends etc. Banking and Financial Markets have tried to analyze
a bank’s profitability under and economic approach. They state, “To maximize profits bank
should attract the interest rate paid on deposits”, (Michael and Dennies, 1996: p 47).
Profit is the ultimate goal of every business house. They involve in business for making
profit. Profit cannot achieve easily. It should be managed with better managerial skills. So profit
is the planned and controlled output of management. By element, profit is the difference of
revenue and costs, (Goet, et.al. 2010).

49
Profitability of Commercial Banks
The major source of funds of the commercial bank is the public deposit. Commercial
banks invest public deposits on those sectors that drive the maximum income or higher rate of
return in their assets. Banks today are under great pressure to perform to meet the objectives of
their stockholders, employees, depositors, and borrowing customers, while somehow keeping
government regulators satisfied that the bank’s policies, loans investment are sound. As other
type of business entity, commercial banks are inspired by the profit .The main objectives of
commercial banks are to maximize profit. Hence the investment or granting of loan and advance
by them are highly influenced by profit margin. Generally the profit of commercial bank
depends upon the interest rate of the bank, volume of loan provided, time period of loan, and
nature of investment in different securities. However, the bank at the same time has to ensure
that their investment is safe from default.
Although the banks have to invest in order to earn profits. But, at the same time have to
set aside some of its fund in order to maintain their liquidity. As we all know the major source
of bank’s fund is public deposits, the bank has to be able to allow the depositors to withdraw
their deposit in terms of need. Thus, the bank cannot invest all its funds in the profitable sectors.
Thus, a successful bank is one who invests most of its funds in different earning asset standing
safely from the problem of liquidity i.e. keeping cash reserves to meet the daily requirements of
the depositors.
In conclusion, amongst all objectives, profit maximization is the ultimate objectives of
Nepalese commercial banks. Profit earned by the firm is the main financial indicators of a
business enterprise, (Robinson 1952: p 63).
The Financial Statements of Commercial Banks
The financial statement of a commercial bank includes Balance Sheet, Profit and Loss Account,
Cash Flow statement and other relevant disclosures.
Balance Sheet
“Balance sheet may be defined as accounting statement of financial position of a
business presented at specific point of time usually at the end of accounting period. The
balance sheet consists of two parts namely financial outputs (uses of fund or assets) and the
financial inputs (sources of fund or liabilities plus equity capital). The bank’s balance sheet, list
the assets, liabilities and equity capital (owners’ funds) held by or invested in the bank on any
given date. Assets represents uses of incoming funds to generated revenue for the bank;
liabilities and net worth are sources of bank funds,” (Thapa, 2012).
Empirical Review
Review of related studies is about the studies is about the studies of previous thesis,
related books and previous researches in similar topics. The last is research gap, which will
describe the difference between the previous thesis and current thesis. The purposes of the
literature review are as follows:-

50
Bhyshal, (2004). A thesis entitled “Financial performance analysis of commercial banks in
Nepal in the framework of camel” (A comparative study of Kumari Bank Ltd and
Machhapuchhre Bank);
Objectives
1. To analyze capital adequacy of KBL and MBL.
2. To assess the quality of assets of KBL and MBL.
3. To evaluate whether KBL and MBL is managing its expenses with respect to incomes
4. To study the trend of earning performance made by KBL and MBL.
5. To measure the liquidity position of KBL and MBL.
Major Findings
1. Higher average return on equity ratio.
2. Higher average earning per share ratio.
3. Capital adequacy ratios meet the standard.
4. ROE below the benchmark (15%).
5. Net interest margin have met the benchmark (3 to 4%).
6. Earning per employee ratio is in increasing trend.
Recommendations
1. Total capital adequacy ratio is adequate. It should maintain.
2. Assets quality ratio at satisfactory level.
3. Liquidity position is low so it should increase.
4. Total expenses to total income ratio is fluctuating. It should try to constant.
Maharjan, A. (2021). has completed the study “Profitability Analysis of commercial Banks
(A case study of RB Bank And NB Bank)” , an unpublished master level thesis submitted to
Shanker Dev Campus, Faculty of Management, T.U.
The specific objectives of the study are:
1. To analyze the profit and loss trend and growth of the bank over the period.
2. To evaluate the profitability and operating financial efficiency of Nepal Bank Ltd. and
Rastriya Banijya Bank
3. To compare and analyze fund based interest income with fee based income of Nepal
Bank Ltd. and Rastriya Banijya Bank in light of interest earning assets.
The study concludes that
Both the banks showed poor performance. Both the banks have been able to lower their
ratio and improve their performance. But the ratio showed that the NBL has high operating ratio
than RBB which indicates the poor performance of NBL as the ratio of operating expenses was
higher than the operating income.RBB and NBL had very low net interest margin. The net
interest margin of RBB was higher the net interest margin of NBLRBB and NBL had very high
interest payout ratio. The main reason was due to high volume of NPAs and high cost deposits.
The net operating margin of RBB was better than NBL but the ratio of RBB was very

51
inconsistent in comparison to NBL. But the ratio of NBL was very low and needed to be
improved. Both the banks were in loss in foreign exchange income in the recent year. The RBB
has higher interest expenses ratio than NBL, which indicates that RBB has maintained high cost
deposit than NBL. Both the banks had very high staff expense ratio. The staff expense ratio of
NBL was higher than RBB throughout the study period.

Research Methodology
Research methodology is necessary for each research work. Research methodology is
the way to solve the research problems systematically. The research methodology considers the
logic behind the methods used in the context of research study and explains why particular
method or technique is used. It also highlights about how the research problem has been
defined, what data have been collected, what particular method has been adopted.
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 economy in procedure.
Research design is a plan structure and strategy of investigation conceived so as to obtain
answer to research questions and to control variances. To achieve the objective of the study,
descriptive and analytical research designs will be used. Some statistical and accounting tools
will be applied to evaluate financial performance of the Banks.
Population and Sampling Design
It is not possible to study all the data related with all bank of Nepal. There are
altogether 20 listed Commercial Banks in our country and their stocks are traded actively in
stock market. So the financial analysis of listed one bank is being compared with that average of
the same, which are selected from population. From the above listed commercial banks are
considered as population.
The selected samples are as follows:
Standard Charter Bank Limited
Total commercial Bank = 20
Sample size = 1
Sample size in percentage = × 100 = 5%

Natures and Sources of Data

Generally this study is based on secondary data. The data relating to investment,
deposit, loan and advances and profit are directly obtained from the balance sheet and profit and
loss account of the concerned bank’s annual reports published in their respective annual general
meetings and website www.nepalstockexchange.com and relevant bank's website. In addition to
that some of the relevant data will also collect from the non bank financial statistics published
by the non bank regulation department of Nepal Rastra Bank.

52
The secondary data of this research were collected from the following sources:
1. Published and unpublished report
2. Articles and dissertations on the concerned subject
3. Annual report of Standard Charter Bank..
4. Various books written by expert, officers and scholars Publications, Speeches and Newspapers,
such as Kantipur Daily, and so on.
5. Websites
The collected data through secondary sources have been tabulated in different ways according to the
requirements of the study.

Data Collection Procedure

As explain before, the main sources of secondary data are the annual reports of the banks
published in their respective annual general meetings and website www.nepalstockexchange.com and
relevant bank's website. In addition to that some of the relevant data will also collect from the non bank
financial statistics published by the non bank regulation department of Nepal Rastra Bank.

Method of Analysis
To achieve the objectives of the study, various accounting, statistical and financial tools
have been used in this study. The analysis of data is done according to pattern of data available.
With the available tools and resources statistical tools such as Karl Pearson's coefficient of
correlation, simple and multiple regressions analysis as well as corresponding hypothesis etc is
use in the study. Similarly some strong accounting and financial tools such as ratio analysis and
trend line analysis are also apply in this study.
The various calculated results obtained through financial and statistic tools are tabulated
under different headings. Then they are compared with each other to interpret the results.
Financial Tools
Financial tools basically help to identify the financial strengths and weaknesses of the
firm by properly establishing relationships between the items of the balance sheet and the profit
and loss account. In this study financial tool like profitability ratio analysis has been used.
Profitability Ratios
Efficiency of a business is measured by the profitability. This ratio is concerned with
profit .Profit is the difference between total revenues and total expenses. Profit is the ultimate
output of a commercial bank and it will have no future if it fails to make sufficient profits
.Therefore, the financial manager continuously evaluates the efficiency of the banks in terms of
profit. The profitability ratios in this study are calculated to measure the operating efficiency
and performance of two banks comparatively. Here profitability ratios are calculated and
evaluated in terms of the relationship between net profit and assets. Profitability of the firms can
be presented through the following different ways:
1. Net Profit to Total Income ,
2. Price Earnings Ratio (P/E),
3. Return on Assets (ROA)

53
 4. Return on Equity (ROE)
5. Earnings per share
Statistical Tools
In this study, some important statistical tools have been used to present and analyze the
data for achieving the objectives. Such as coefficient of correlation between different variables,
trend analysis of important variables as well as hypothesis test (t-statistic) has been used, which
are presented below:
Arithmetic Mean or Average
The mean is defined as the sum of value is divided by number of items in the sample period. It
is calculated by following formula:

X=
x
N
Where,
X = Arithmetic Mean
x = Summation for Total Values of the Variable / Observation
N = Number of Items
Standard Deviation (S.D)
Karl Pearson first introduced the concept of standard deviation in 1983. Standard
deviation is the positive square root of the arithmetic average of the squares of all the deviation
measured from the arithmetic average of the series. The standard deviation measures the
absolute dispersion of a distribution. Greater the amount of dispersion the greater the standard
derivation i.e. greater will be the magnitude of the deviation of the values from their mean. A
small standard deviation means a high degree of uniformity of the observation as well as
homogeneity of a series. Standard Deviation is denoted by a Greek letter 'σ' (Sigma) and is
calculated as follows.

 (Χ − Χ )
2
Standard Deviation (σ) =
Ν −1
Where,
N = Number of items in the series.
Χ = Mean
X = Variable
Coefficient of Variation (C.V)
The coefficient of variation is the most commonly used measure of relative variation. It
is used in such problems where the researcher wants to compare the variability of more than two
less consistent, less uniform, more years. Greater, the value of Coefficient of Variation the
variable or conversely consistent, more uniform, more stable and homogeneous.
Standard Deviation
CV = × 100
Mean

54
Correlation coefficient (r)
Correlation is a statistical technique which can show whether and how strongly pairs of
variables are related. For example, height and weight are related. An intelligent correlation
analysis can lead to a greater understanding of our data. Correlation analysis only helps in
determining the extent to which the two variables are correlated, but it does not tell us about
cause and effect relationship.
Two variables are said to be ‘correlation’ when they are so related that the change in the
value of one variable is accompanied by the change in the value of the other. The measure of
correlation called the ‘correlation coefficient’ summarizes in one figure. The Karl Pearson’s
correlation coefficient is defined by
∑ ∑ ∑
Correlation coefficient (r) = =+1
∑ (∑ ) ∑ (∑ )

Correlation coefficient lies between -1 and +1 when r=1, there is positive perfect
correlation between the two variables. When r=-1, there is a negative perfect correlation. When
r=0, the variables are uncorrelated and nearer the value or r to +1, closer will be relationship
between two variables and nearer the value of r to 0, lesser will be the relationship.
Coefficient of Determinants (r2)
It is the square of correlation which is denoted by r2. It describes what percentage
change in dependent variable by the change of independent variables.
Testing of Hypothesis
Statistical analysts test a hypothesis by measuring and examining a random sample of
the population being analyzed. All analysts use a random population sample to test two different
hypotheses: the null hypothesis and the alternative hypothesis. The null hypothesis is the
hypothesis the analyst believes to be true. Analyst believes the alternative hypothesis to be
untrue making it effectively the opposite of a null hypothesis. This makes it so they are
mutually exclusive and only one can be true. However, one of the two hypotheses will always
be true.

Under H0, the value of t in t-test is given by,

! √#
Calculated value of ‘t’ Value =
( ! )
Where, r = Coefficient of correlation
n = no. of observation

Research Framework with Definition of Variables

The following are the research framework between EPS, P/E ratio, ROA, ROE, NPAT
and Net profit to gross income with net worth. The net worth is base on EPS, P/E ratio, ROA,
ROE, NPAT and Net profit to gross income with net worth. In general a condition net worth is
depends upon EPS, P/E ratio, ROA, ROE, NPAT of sample bank.

55
Research Framework
1. Earning Per Shares (EPS)
2. Net profit to Total Gross Income Ratio
3. Return on Assets (ROA) Market Value Per Shares
4. Return on Equity (ROE) (MVPS)
5. P/E Ratio

Independent Variables Dependent Variables

Definition of Variables
Market price per share is depends upon EPS, P/E ratio, ROA, ROE, NPM and p/e ratio
of sample bank. EPS, P/E ratio, ROA, ROE, NPM are independent variables its value effect on
MPPS of every organization. The following are a financial term with multiple definitions in
research frame work of sample banks.
Earnings Per Share (EPS)
Earnings per share (EPS) are calculated as a company's profit divided by the outstanding shares
of its common stock. The resulting number serves as an indicator of a company's profitability. It is
common for a company to report EPS that is adjusted for extraordinary items and potential share
dilution. The higher a company's EPS, the more profitable it is considered to be.
Net Profit Margin (NPM)
The net profit margin, or simply net margin, measures how much net income or profit
is generated as a percentage of revenue. It is the ratio of net profits to revenue for a company
or business segment.
Net profit margin is typically expressed as a percentage but can also be represented in
decimal form. The net profit margin illustrates how much of each dollar in revenue collected
by a company translates into profit. Net profit margin measures how much net income is
generated as a percentage of revenues received. Net profit margin helps investors assess if a
company's management is generating enough profit from its sales and whether operating costs
and overhead costs are under control. Net profit margin is one of the most important indicators
of a company's overall financial health.
Return on Assets ROA)
The term return on assets (ROA) refers to a financial ratio that indicates how profitable
a company is in relation to its total assets. Corporate management, analysts, and investors can
use ROA to determine how efficiently a company uses its assets to generate a profit. The metric
is commonly expressed as a percentage by using a company's net income and its average assets.
A higher ROA means a company is more efficient and productive at managing its balance sheet
to generate profits while a lower ROA indicates there is room for improvement.

56
Return on Equity (ROE)
Return on equity (ROE) is a measure of financial performance calculated by dividing net
income by shareholders' equity. Because shareholders' equity is equal to a company’s assets minus its
debt, ROE is considered the return on net assets.
ROE is considered a gauge of a corporation's profitability and how efficient it is in generating
profits. The higher the ROE, the more efficient a company's management is at generating income and
growth from its equity financing. Return on equity (ROE) is the measure of a company's net income
divided by its shareholders' equity. ROE is a gauge of a corporation's profitability and how efficiently it
generates those profits. The higher the ROE, the better a company is at converting its equity financing
into profits. To calculate ROE, divide net income by the value of shareholders' equity. ROEs will vary
based on the industry or sector in which the company operates.
Price-to-Earnings Ratio
The price-to-earnings ratio is the ratio for valuing a company that measures its current
share price relative to its earnings per share (EPS). The price-to-earnings ratio is also sometimes
known as the price multiple or the earnings multiple. P/E ratios are used by investors and
analysts to determine the relative value of a company's shares in an apples-to-apples comparison
to others in the same sector. It can also be used to compare a company against its own historical
record or to compare aggregate markets against one another or over time.
Market Value Per Share (MVPS)
The market price per share of stock, or the "share price," is the most recent price that a
stock has traded for. It's a function of market forces, occurring when the price a buyer is willing
to pay for a stock meets the price a seller is willing to accept for a stock. Market price per share
tells you the latest price for which a single share of a company's stock was sold. Forces of
supply and demand push market prices up and down throughout the trading day. Market price
per share is used to determine a company's market capitalization.

Result and Discussions

This chapter is primarily concerned with presentation and analysis of data. In this study
effort has been made to analyze the collected data by using financial and statistical tools as well
as various graphical presentations. Likewise, comparative balance sheet and comparative profit
and loss account from the year 2017/18 to 2021/22 of Standard Charter Bank Limited Study are
presented in appendices.
Result
The result is related with outcomes of analysis of data which is appears on analogical historical
data.
The Profitability Position Structure of Standard Chartered Bank Nepal Limited with the
Help of Financial Data
Under this chapter various financial ratios related to profitability and fund mobilization
are studied to evaluate and analyze the performance of Standard Charter Bank Limited Study of
all types of ratio is not done .Only those ratios that are important form the point of view of
profitability and the fund mobilization are calculate. The important ratios that are studied for
this purpose are given below: Efficiency of a business is measured by the profitability. This
57
ratio is concerned with the profit. Profit is the difference between total revenues and total
expenses. Profit is the ultimate output of a commercial bank and it will have no future if it fails
to make sufficient profits .Therefore, the financial manager continuously evaluates the
efficiency of the banks in terms of profit. The profitability ratios in this study are calculated to
measure the operating efficiency and performance of two banks comparatively. Here
profitability ratios are calculated and evaluated in terms of the relationship between net profit and
assets. Profitability of the firms can be presented through the following different ways:
Net profit to Total Gross Income Ratio
Net profit to total income ratio evaluate whether management has been capable to
mobilizes and utilize the deposit in income generating sites. It also helps to know the overall
performance and generation of profit of bank. This can be express as follows:
$%& '()*+&
Net profit to Total Gross income =
,-./0 1!-22 3#4-56
× 100

Table: 1
Analysis of Net Profit to Gross Income Ratio
Fiscal Year X (X- 78) (X- 78 )2
2017/18 46.79 4.75 22.56
2018/19 46.72 4.68 21.90
2019/20 39.97 -2.07 4.28
2020/21 34.42 -7.62 58.06
2021/22 42.30 0.26 0.07
Total ΣX = 210.20 :
Σ(X- 9)2= 106.87
8)
Mean (7 42.04
S.D 5.17
C.V 12.30%
(Sources: Appendix-I)
The Table 1shows the ratio of Standard Charter Bank Limited have range in between
46.79 to 42.30 in 2017/18 to 2021/22 respectively with a mean ratio of 5.17. The ratio of
Standard Charter Bank Limited is appeared in irregular Pattern. The highest ratio of Standard
Charter Bank Limited is 46.79 recorded in year 2017/18 and the lowest ratio is 34.42 of
Standard Charter Bank Limited in year 2020/21respectively. So that it has lower net profit to
total Gross income and it is more consistent in terms of consistency level. The table 1 shows
that the standard deviation of net profits to Total Gross Income ratio Standard Charter Bank
Limited is 5.17 which indicate that it is deviated by this figure. The coefficients of variations are
12.30% which indicate the risk of the Standard Charter Bank Limited.
This ratio can be presented by the help of diagram, which is shown below
60
40
20
0
2017/18 2018/19 2019/20 2020/21 2021/22
Figure No: 1 Net Profit to Total Income Ratio

58
Price / Earning (P/E) Ratio
The price-earnings ratio (P/E Ratio) is the ratio for valuing a company that measures its
current share price relative to its per-share earnings. Price-to-earnings ratio, commonly known
as the P/E ratio, is one of the most widely used valuation metrics. Earnings are sometimes
adjusted to exclude extraordinary events, since they are unlikely to repeat. When considering
P/E ratios, it is important to understand if and how earnings have been adjusted and whether
they are actual or projections.
The price-earnings ratio can be calculated as:
;<(=%& ><?@% '%( AB<(%
Price-earnings ratio =
C/!#D#E2 F6! GH/!6
× 100

Table: 2
Analysis of P/E
Fiscal Year X (X- 78) (X- 78 )2
2017/18 27.62 1.86 3.46
2018/19 22.44 -3.32 11.02
2019/20 26 0.24 0.06
2020/21 36.16 10.4 108.16
2021/22 16.56 -9.2 84.64
Total ΣX = 128.78 Nil :
Σ(X- 9)2 = 207. 34
Mean(78) 25.76
S.D 7.20
C.V 27.95%
(Sources: Appendix-I)
The table 2 shows the P/E ratio of Standard Charter Bank Limited is fluctuating Trend.
The ratio of Standard Charter Bank Limited is ranged in between the 27.62 to 16.56 in year
2017/18 to 2021/22 respectively with mean ratio of 7.20, The highest and lowest recorded ratio
of Standard Charter Bank Limited are 36.16 and 16.56 in the year fiscal year 2020/21 and fiscal
year 2021/22 respectively. The highest ratio indicates the stronger position of bank. The above
table shows that the standard deviation of price-earnings ratio of Standard Charter Bank Limited
is 7.20 which indicate that it is deviated by this figure. The coefficient of variation is 27.95%
which indicate the risk of the sample banks.
This ratio can be presented by the help of diagram, which is shown below:
40
30
20
10
0
2017/18 2018/19 2019/20 2020/21 2021/22

Figure No: 2 P/E Ratios

59
Return on equity (ROE)
This ration measures the relationship between net profit and shareholder's equity. It
indicates the firm's ability of generating profit per rupees of shareholders equity. Higher the
ratio shows the more efficient the management and utilization of shareholder's fund and vice
versa. It is calculated as;
6. I!-JD.
ROE = × 100
,-./0 CKLD.M

Table: 3
Analysis of Returns on Equity
Fiscal Year X (X- 78) (X- 7 8 )2
2017/18 18.66 3.27 10.69
2018/19 19.49 4.10 16.81
2019/20 15.17 -0.22 0.05
2020/21 9.44 -5.95 35.40
2021/22 14.21 -1.18 1.39
Total ΣX = 76.97 Σ(X- 9:)2=64.34
Mean(78) 15.39
S.D 4.01
C.V 26.06%
(Sources: Appendix-I)
The table 3 it is shows that ROE of Standard Charter Bank Limited. It is appeared in
irregular in figures. The highest ratio is 19.49 of Standard Charter Bank Limited recorded in
year 2018/19 with 9.44 is the lowest is in year 2021/22. The mean ratio of Standard Charter
Bank Limited is 15.39 which defined that a better achieving on increasing a net profit by
mobilizing on resources of shareholder’s equity. On the other side, lower ratio indicates it less
successful in earning a net profit by utilizing a shareholder’s equity due to its lower ratio. The
above table shows that the standard deviations of ROE of Standard Charter Bank Limited are
4.01 which indicate that it is deviated by this figure. The coefficients of variations are 26.06%
which indicate the risk of the Standard Charter Bank Limited.
This ratio can be presented by the help of diagram, which is shown below:

25
20
15
10
5
0
2017/18 2018/19 2019/20 2020/21 2021/22

Figure No: 3 Return on Equity

60
Return on assets (ROA):
This ratio shows the relationship of net profit to total assets and helps in determining
how efficiently the total assets have been used by the management. This ratio evaluates the
present return on total assets. It acts as a guide for return expected on for future purchase of
assets. Higher the ratio shows the more efficient operating of management and vice-versa. It is
calculated as below:
$NOP
ROA = P)&<? <QQ%&Q
× 100
Table No: 4
Analysis of Return on Assets
Fiscal Year X 8)
(X- 7 (X- 78 )2
2017/18 2.61 0.61 0.37
2018/19 2.61 0.61 0.37
2019/20 1.71 -0.29 0.08
2020/21 1.22 -0.78 0.60
2021/22 1.83 -0.17 0.03
Total ΣX = 9.98 Σ(X- 9:)2=1.45
Mean(78) 1.996
S.D 0.60
C.V 30.06%
(Sources: Appendix-I)
The table 4 the ROA ratio of Standard Charter Bank Limited has irregular in trend of
sample year. The ratio of Standard Charter Bank Limited is ranged in between 2.61 to 1.83 for
the year 2017/18 to fiscal year 2021/22 respectively with a mean ratio of 0..60. From the above
trend it can be concluded that the higher ratio show the profit increasing in order in successful
earning the net profit with efficient utilization of total assets. The above table shows that the
standard deviations of Return on assets ratios of Standard Charter Bank Limited are 0.60 which
indicate that it is deviated by this figure. The coefficient of variations is 30.06% which indicate
the risk of the sample banks.
This ratio can be presented by the help of diagram, which is shown below:
3
2.5
2
1.5
1
0.5
0
2017/18 2018/19 2019/20 2020/21 2021/22

Figure No: 4 Return on Assets

61
Earnings Per Share
The performance and achievement of a bank can be identified with the earning power of
the bank. In general case, higher earning implies the strength if the bank. EPS is the widely
quoted statistics in every investor’s world. Every shareholder is much interested in the return on
the share. A company is ingestible when the capital invested can earn adequate return per share.
The ratio of earning available to the common shareholders to their outstanding share capital is
express as,
$%& O()*+& <R<+?<S?% &) %T@+&U QB<(%B)?V%(
Earnings per share = × 100
$). )X )(V+Y<(U QB<(% )@&Q&<YV+YZ

Table: 5
Analysis of Earnings per Share
Fiscal Year X 8)
(X- 7 (X- 7 8 )2
2017/18 27.33 3.07 9.42
2018/19 30.39 6.13 37.58
2019/20 24.81 0.55 0.30
2020/21 14.83 -9.43 88.92
2021/22 23.92 -0.34 0.12
Total ΣX = 121.28 Σ(X- 9:)2= 136.26
Mean(78) 24.26
S.D 5.84
C.V 24.07%
(Sources: Appendix-I)
The table 5 shows that the earning per share of Standard Charter Bank Limited has
Rs.27.33 and Rs.23.92 in the year 2017/18 in the year 2021/22 with an average of Rs.5.84. The
earnings per share have been irregularly changes. The above table shows that the standard
deviation of EPS ratios of Standard Charter Bank Limited Standard Charter Bank Limited is
5.84 which indicate that it is deviated by this figure. The coefficients of variations are 24.07%
which indicate the risk of the Standard Charter Bank Limited
This ratio can be presented by the help of diagram, which is shown below:
35
30
25
20
15
10
5
0
2017/18 2018/19 2019/20 2020/21 2021/22
Figure No: 5 Earnings per Share

62
Market Value Per Share (MVPS)
Market price per share simply refers to the most recent price of a single share in a
publicly traded stock. This is not a fixed price it fluctuates throughout the trading day as various
market forces push the price in different directions.

Table: 6
Market Value Per Share
Fiscal Year X (Rs) 8)
(X- 7 (X- 78 )2
2017/18 755 141.40 19993.96
2018/19 682 68.40 4678.56
2019/20 645 31.40 985.96
2020/21 590 -23.60 556.96
2021/22 396 -217.60 47349.76
Total ΣX = 3068 Nil Σ(X- 9:)2= 73565.20
Mean(78) 613.60
S.D 135.61
C.V 22.10%
(Sources: Appendix-I)

The table 6 shows that the Market Value Per Share of Standard Charter Bank Limited
has Rs.755 to Rs.396 in the year 2017/18 in the year to 2021/22 with an average of Rs.613.60.
The Market Value per Share has been decreasing order. The highest value is Rs 755 in the fiscal
year 2017/18 and the lowest value is Rs 396 in the fiscal year 2021/22. The highest value shows
the better performance of Standard Charter Bank Limited. It also shows the increase efficient
management of Standard Charter Bank Limited. The above table shows that the standard
deviation of Market Value per Share of Standard Charter Bank Limited Standard Charter Bank
Limited is Rs 135.61 which indicates that it is deviated by this figure. The coefficients of
variations are 22.10% which indicate the risk of the Standard Charter Bank Limited
This ratio can be presented by the help of diagram, which is shown below:

800
700
600
500
400
300
200
100
0
2017/18 2018/19 2019/20 2020/21 2021/22

Figure No: 6 Market Value Per Share

63
 The Significance Relation of Research Variables of Standard Charter Bank Limited
A correlation coefficient is a statistical measure of the degree to which changes to the value
of one variable predict change to the value of another. The correlation coefficient is a statistical
measure of the strength of the relationship between the relative movements of two variables. In
positively correlated variables, the value increases or decreases in tandem. The correlation
coefficient analysis referred to the tool that is used in measuring the closeness of the relationship
between two or more than two variables. The null hypothesis is the hypothesis the analyst believes
to be true. Analyst believes the alternative hypothesis to be untrue making it effectively the opposite
of a null hypothesis. This makes it so they are mutually exclusive and only one can be true.
However, one of the two hypotheses will always be true. H0: defendant is innocent; H1: defendant is
guilty. H0 (innocent) is rejected if H1 (guilty) is supported by evidence beyond “reasonable doubt.”
Failure to reject H0 (prove guilty) does not imply innocence, only that the evidence is insufficient to
reject it.

Table: 7
Correlation and t- test of EPS and MVPS
Particular Result
Correlation Co-efficient (r) 0.37
Calculated ‘t’ Value 0.69
Tabulated ‘t’ Value 3.182
t- value Result ‘t’ Cal. < ‘t’ Tab.
Significance level No significance
(Source: Appendix-II)

The table 7 shows that the relations of EPS and MPPS of Standard Charter Bank Limited
for five years sample period. The coefficient of correlation between EPS and MPPS of Standard
Charter Bank Limited is for the fiscal year 2016/17 to 2021/22 is 0.37. The correlation coefficient is
indicating low degree correlation between EPS and MVPS which Standard Charter Bank Limited.
There are low effects on EPS and MPPS of Standard Charter Bank Limited. The coefficient of
determination is 13.69% which shows that there is low relation between EPS and MPPS which
means EPS depends or explains by MPPS is 13.69% and the remaining 86.31% explained by other
factors like government policy, monetary policy, inflection rate, external environment, WTO policy,
SAFTA policy and Organization policy through management decisions capability.
Result of EPS and MPPS of Standard Charter Bank Limited
The Analysis of EPS and MVPS Significance Test through Hypothesis
1. Null hypothesis: Ho: µ 1 = µ 2; There is no significant difference in EPS and MPPS
2. Alternative hypothesis: H1: µ 1< µ 2; There is significant difference EPS and MPPS
3. Calculated value of t ( ) = 0.69 The degree of freedom = 5 - 2 = 3 at the level of significance is
4. Comparative critical value: 5% (assume as two tail test)
The tabulated value of the test statistic’s’ at 5% level of
significance for 3 degrees of freedom under two tail test is
5. Decision: No significant 3.182.
Calculated value of ’t’ is less than tabulated value of ‘t’.
Therefore, Ho is accepted; i.e.; there is no significant between
EPS and MPPS
(Source: Appendix-III)
64
 Table: 8
Correlation and t- test of ROA and MPPS
Particular Result
Correlation Co-efficient (r) 0.53
Calculated ‘t’ Value 1.08
Tabulated ‘t’ Value 3.182
t- value Result ‘t’ Cal. < ‘t’ Tab.
Significance level No significance
(Source: Appendix-II)
The table 8 shows that the relations of ROA and MPPS of Standard Charter Bank Limited
for five years sample period. The coefficient of correlation between ROA and MPPS of Standard
Charter Bank Limited is for the fiscal year 2017/18 to 2021/22 is 0.53. The correlation coefficient is
indicating average degree positive correlation between ROA and MPPS which Standard Charter
Bank Limited. There are average degrees positive correlation effects on between ROA and MPPS of
Standard Charter Bank Limited. The coefficient of determination is 28.09% which shows that there
is average degrees positive correlation between ROA and MPPS which means ROA depends or
explains by MPPS is 28.09% and the remaining 71.91% explained by other factors like government
policy, monetary policy, inflection rate, external environment, WTO policy, SAFTA policy and
Organization policy through management decisions capability.
Result of ROA and Market Price Per Shares of Standard Charter Bank Limited
The Analysis of ROA and MPPS Significance Test through Hypothesis
1. Null hypothesis: Ho: µ 1 = µ 2; There is no significant difference in ROA and MPPS
2. Alternative hypothesis: H1: µ 1 ≠ µ 2; There is significant difference ROA and MPPS
3. Calculated value of t ( ) = 1.08 The degree of freedom = 5 - 2 = 3 at the level of significance
is 5% (assume as two tail test)
4. Comparative critical value: The tabulated value of the test statistic’s’ at 5% level of
significance for 3 degrees of freedom under two tail test is
3.182.
5. Decision: No significant Calculated value of ’t’ is less than tabulated value of ‘t’.
Therefore, Ho is accepted; i.e.; there is no significant
between ROA and MPPS
(Source: Appendix-III)
Table: 9
Correlation and t- test of ROE and MPPS
Particular Result
Correlation Co-efficient (r) 0.52
Calculated ‘t’ Value 1.05
Tabulated ‘t’ Value 3.182
t- value Result ‘t’ Cal. < ‘t’ Tab.
Significance level No significance
(Source: Appendix-II)

The table 9 shows that the relations of ROE and MPPS of Standard Charter Bank Limited
for five years sample period. The coefficient of correlation between ROE and MPPS of Standard

65
Charter Bank Limited is for the fiscal year 2017/18 to 2021/22 is 0.52. The correlation coefficient is
indicating average degree positive correlation between ROE and MPPS which Standard Charter
Bank Limited. There are average degrees positive correlation effects on between ROE and MPPS of
Standard Charter Bank Limited. The coefficient of determination is 28.09% which shows that there
is average degrees positive correlation between ROE and MPPS which means ROE depends or
explains by MPPS is 27.04% and the remaining 72.96% explained by other factors like government
policy, monetary policy, inflection rate, external environment, WTO policy, SAFTA policy and
Organization policy through management decisions capability.
Result of ROE and Market Price per shares of Standard Charter Bank Limited
The Analysis of ROE and MPPS Significance Test through Hypothesis
1. Null hypothesis: Ho: µ 1 = µ 2; There is no significant difference in ROE and MPPS
2. Alternative hypothesis: H1: µ 1 ≠ µ 2; There is significant difference ROE and MPPS
3. Calculated value of t ( ) = 1.05 The degree of freedom = 5 - 2 = 3 at the level of significance
is 5% (assume as two tail test)
4. Comparative critical value: The tabulated value of the test statistic’s’ at 5% level of
significance for 3 degrees of freedom under two tail test is
3.182.
5. Decision: No significant Calculated value of ’t’ is less than tabulated value of ‘t’.
Therefore, Ho is accepted; i.e.; there is no significant between
ROE and MPPS
(Source: Appendix-III)
Table: 10
Correlation and t- test of NI to Gross Income Ratio and MPPS
Particular Result
Correlation Co-efficient (r) 0.37
Calculated ‘t’ Value 0.69
Tabulated ‘t’ Value 3.182
t- value Result ‘t’ Cal. < ‘t’ Tab.
Significance level No significance
(Source: Appendix-II)
The table 10 shows that the relations of NI to Gross Income Ratio and MPPS of
Standard Charter Bank Limited for five years sample period. The coefficient of correlation
between NI to Gross Income Ratio and MPPS of Standard Charter Bank Limited is for the fiscal
year 2017/18 to 2021/22 is 0.37. The correlation coefficient is indicating average degree
positive correlation between NI to Gross Income Ratio and MPPS which Standard Charter Bank
Limited. There are low degrees positive correlation effects on between NI to Gross Income
Ratio and MPPS of Standard Charter Bank Limited. The coefficient of determination is 13.69%
which shows that there is low degrees positive correlation between NI to Gross Income Ratio
and MPPS which means ROE depends or explains by MPPS is 27.04% and the remaining
72.96% explained by other factors like government policy, monetary policy, inflection rate,
external environment, WTO policy, SAFTA policy and Organization policy through
management decisions capability.

66
 Result of NI to Gross Income Ratio and Market Price per shares of SCBL
The Analysis of NI to Gross Income Ratio and MPPS Significance Test through Hypothesis
1. Null hypothesis: Ho: µ 1 = µ 2; There is no significant difference in NI to Gross Income
Ratio and MPPS
2. Alternative hypothesis: H1: µ 1 ≠ µ 2; There is significant difference NI to Gross Income Ratio
and MPPS
3. Calculated value of t ( ) = 0.69 The degree of freedom = 5 - 2 = 3 at the level of
significance is 5% (assume as two tail test)
4. Comparative critical value: The tabulated value of the test statistic’s’ at 5% level of
significance for 3 degrees of freedom under two tail test
is 3.182.
5. Decision: No significant Calculated value of ’t’ is less than tabulated value of ‘t’.
Therefore, Ho is accepted; i.e.; there is no significant
between NI to Gross Income Ratio and MPPS
(Source: Appendix-III)
Table: 11
Correlation and t- test of Price Earnings Ratio and MPPS
Particular Result
Correlation Co-efficient (r) 0.46
Calculated ‘t’ Value 0.90
Tabulated ‘t’ Value 3.182
t- value Result ‘t’ Cal. < ‘t’ Tab.
Significance level No significance
(Source: Appendix-II)
The table 11 shows that the relations of Price Earnings Ratio and MPPS of Standard
Charter Bank Limited for five years sample period. The coefficient of correlation between Price
Earnings Ratio and MPPS of Standard Charter Bank Limited is for the fiscal year 2017/18 to
2021/22 is 0.46. The correlation coefficient is indicating average degree positive correlation
between Price Earnings Ratio and MPPS which Standard Charter Bank Limited. There are low
degrees positive correlation effects on between Price Earnings Ratio and MPPS of Standard
Charter Bank Limited. The coefficient of determination is 21.16% which shows that there is low
degrees positive correlation between Price Earnings Ratio and MPPS which means Price
Earnings Ratio depends or explains by MPPS is 21.16% and the remaining 78.84% explained
by other factors like government policy, monetary policy, inflection rate, external environment,
WTO policy, SAFTA policy and Organization policy through management decisions capability.
Result of Price Earnings Ratio and Market Price per shares of SCBL
The Analysis of Price Earnings Ratio and MPPS Significance Test through Hypothesis
1. Null hypothesis: Ho: µ 1 = µ 2; There is no significant difference in P/E and MPPS
There is significant difference P/E Ratio and MPPS
2. Alternative hypothesis: H1: µ 1 ≠ µ 2; The degree of freedom 3 at the level of significance is 5%
(assume as two tail test)
3. Calculated value of t ( ) = 0.90 The tabulated value of the test statistic’s’ at 5% level of

67
 significance for 3 degrees of freedom under two tail test
4. Comparative critical value: is 3.182.
Calculated value of ’t’ is less than tabulated value of ‘t’.
5. Decision: No significant Therefore, Ho is accepted; i.e.; there is no significant
between Price Earnings Ratio and MPPS
(Source: Appendix-III)
The main findings of the study are carried out on the basis of the analysis of financial
data of Banks which are as follows:
The Net Profit to Gross Income ratio of Standard Charter Bank Limited has range in
between 46.79 to 42.30 in 2017/18 to 2021/22 respectively with a mean ratio of 5.17. The ratio
of Standard Charter Bank Limited is appeared in irregular Pattern. The P/E ratio of Standard
Charter Bank Limited is fluctuating Trend. The ratio of Standard Charter Bank Limited is
ranged in between the 27.62 to 16.56 in year 2017/18 to 2021/22 respectively with mean ratio of
7.20, The ROE of Standard Charter Bank Limited. It is appeared in irregular in figures. The
highest ratio is 19.49 of Standard Charter Bank Limited recorded in year 2018/19 with 9.44 is
the lowest is in year 2021/22. The ROA ratio of Standard Charter Bank Limited has irregular in
trend of sample year. The ratio of Standard Charter Bank Limited is ranged in between 2.61 to
1.83 for the year 2017/18 to fiscal year 2021/22 respectively with a mean ratio of 0..60. The
earnings per share of Standard Charter Bank Limited has Rs.27.33 and Rs.23.92 in the year
2017/18 in the year 2021/22 with an average of Rs.5.84. The earnings per share have been
irregularly changes. The Market Value Per Share of Standard Charter Bank Limited has Rs.755
to Rs.396 in the year 2017/18 in the year to 2021/22 with an average of Rs.613.60. The Market
Value per Share has been decreasing order. The relations of EPS and MVPS of Standard
Charter Bank Limited for five years sample period. The coefficient of correlation between EPS
and MVPS of Standard Charter Bank Limited is for the fiscal year 2016/17 to 2021/22 is 0.37.
The correlation coefficient is indicating low degree correlation between EPS and MVPS which
Standard Charter Bank Limited. There are low effects on EPS and MVPS of Standard Charter
Bank Limited. The coefficient of determination is 13.69% which shows that there is low
relation between EPS and MVPS which means EPS depends or explains by MVPS is 13.69%
and the remaining 86.31% explained by other factors like government policy, monetary policy,
inflection rate, external environment, WTO policy, SAFTA policy and Organization policy
through management decisions capability.
Summary
Profitability analysis is one of the key tools for financial decision and assist in making
plan before using sophisticated forecasting and budgeting procedure. The value of this approach
is the quantitative relation, which can be used to diagnose strengths and weakness in a bank
performance. Such analysis is considerable things for the bank’s common stock holders,
investors, bondholders and others. In this context, the profitability of Standard Charter Bank
Limited has been analyzed as the bank is private sector modernize commercial bank among 20
commercial banks in Nepal at the present operating.

68
 Profitability analysis of Standard Charter Bank Limited was done on the basis of their
financial statements of various profitability ratios, profitability factors analysis with the help of
tabular and graphic presentation along with their average were used to accomplish the
objectives. This study is mainly based on the secondary data. Those data were first processed
and analyzed. The analytical research design has been used.

Conclusions
As per the objectives of the study and analysis made, following conclusion has been
drawn:
The present study successfully explored the result to meet the stated objectives of the
study and found meaningful. To find out the different profitability ratios related to performance
researcher analyzed many related issues with respect to the latest profitability condition of
Standard Charter Bank Limited.
1. To assess the financial soundness, most of the profitability ratios found satisfactory.
The management teams in of these Standard Charter Bank Limited have introduced a
number of plans, policies and manuals in order to strengthen the internal system.
2. These profitability policies include, among others, credit policy and guidelines in order
to reform the credit management and formulate directive for the asset liability
management. Also human resource plan, skill enhancement plan, portfolio status and
plan, budget plan, strategic plan and anti-money laundering directive and trade and
finance directive have been implemented.
3. To compare the soundness, the study reflects the management of Standard Charter Bank
Limited is efficient and successful because net profit is continuously increasing in a
sustainable manner over the study period.
4. The research result showed that a profitability position of Standard Charter Bank
Limited was satisfactory and found relatively better because the most of the profitability
practices scored the better position.
5. The tabulated value of the test statistic’s’ at 5% level of significance for 3 degrees of
freedom under two tail test is 3.182. Calculated value of ’t’ is less than tabulated value
of ‘t’. Therefore, Ho is accepted; i.e.; there is no significant between EPS, ROA, ROE,
P/E ratio, net income to gross income ratio with MPPS.
From this, it can be concluded that the management of both banks are quite satisfactory.
However it was found better in commercial banks because most of the ratio designed for the
study supported this
Implications
Based on the analysis of data, the following recommendations are made:
To Develop Management Strategy
The profitability analysis helps the cost management strategy would be ideal to reduce
the various costs and increase the profitability. Standard Charter Bank Limited needs to take
necessary to manage its assets for its existence in this competitive market. The Standard Charter

69
Bank Limited has not adopted any cost management strategy to have control over its cost of
funding. The bank have very high potential of earning high profit than they made in the recent
fiscal years so both the banks have to utilize their resources more efficiently for generating
more profit margins. If resources were held idle, then the banks face high cost and cause the low
profit margin.
To Increase Earnings
The research result is recommended that Standard Charter Bank Limited should
enhance its off-balance sheet operation, remittance and other fee-based activities to increase its
earnings as it is very profitable and immediately realizable. The bank should follow the
investment policy strictly to avoid the non-performing assets. It should increase investment in
the government securities to trade off and stabilize the quality investment. The Standard Charter
Bank Limited should seek reliable entrepreneurs and sectors to invest its limited funds of
valuable depositors.
To Provides Safe and Good Returns
The profitability tools help to manage risk inherent in the loans and advances is high.
So, the complete dependence on the interest income is not an appropriate strategy. So, the
Standard Charter Bank Limited should look to increase the fee-based income as it provides safe
and good returns.
To the Help of Advertisement
The profitability policy helps the staff of the Standard Charter Bank Limited must be
empowered by providing training and knowledge about the bank so that customer will go better
services. The Standard Charter Bank Limited has very high staff expense related to total
operating expense. For the better mobilization of deposit and credit, Standard Charter Bank
Limited must take the help of Advertisement.” It means special publicity campaign should be
lunched to provide exposure of its service, which will help to boost up the banking habits and
confidence among the people upon the bank through media house.
The Standard Charter Bank Limited needs to capture all the functional areas of the bank
in restructuring process. The bank have very large network in the country, as the bank has to
fulfill some social obligations to the rural areas and promoting the development of poor and
disadvantage group” The operating expenses of Standard Charter Bank Limited although it
couldn’t make profit as made so; they should analyze other factors which maximize their
profits.
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Kathmandu: An unpublished Master’s level Thesis, submitted to ShankerDev Campus, Faculty
of Management, T.U.
Maharjan, S. (2015).A Comparative Study of Financial Performance of Commercial Banks with
Reference to HBL, NIBL and EBL. Kathmandu: An unpublished Master Level Thesis, Submitted
to ShankerDev Campus, Faculty of Management, T.U.
Shrestha, N. (2005). A Comparative Study of the Financial Performance of Nepal Bank Ltd. and
RastriyaBanijya Bank. Kathmandu: An Unpublished Master Level Thesis,Submitted to
ShankerDev Campus, Faculty of Management, T.U.
Shrestha, P. (2016). A Comparative Study on Profitability Analysis of RBB and NBL. Kathmandu: An Unpublished
Master Level Thesis,Submitted to ShankerDev Campus, Faculty of Management, T.U.

Web Sites
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www.ekantipur.com
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