PROFITABILITY ANALYSIS OF
STANDARD CHARTERED BANK NEPAL LTD.
Presented By
Prabin Chhetri
Nepal Tourism & Hotel Management College
PU Regd. No.: 2019-2-03-0553
Introduction
• 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 largest international bank currently operating in Nepal. The bank is
leading international banking group, with more than 85,000 employees and a 150-year history in some
of the world’s most dynamic markets.
Objectives of The Study
The primary objective of the study is to analyze the profitability of Standard Chartered Bank Nepal Ltd.
The specific objectives of this study are listed as below:
To analyze the return on Total Assets, Return on Capital Employed and Return on Equity of Standard
Chartered Bank Nepal Ltd.
To analyze performance on the basis of Earning per share.
To analyze performance on the basis of Dividend per share.
Conceptual Framework
Profitability analysis is the process of identifying strength and weakness of the firm by properly establishing relationship
between the items of balance sheet and profit and loss account. The nature of analysis will differ depending on the purpose
of the analyst. The major sources are use of fund; its profitability over time and projections of future profitability. Investors
are concerned principally with present and future expected earning about a trend. Management of the firm would be
interested in every aspect of financial analysis such as return on total assets, return on capital employed and return on
equity. Financial analysis stands for the process of determining and presenting the relationship of items in the financial
statement such as earnings per share and dividend per share. Ratio analysis is an important technique of financial analysis.
It is a way by which financial stability and health of concern is judged. The following are the main points of ratio analysis.
Useful in financial position analysis.
Use in simplifying accounting figures.
Use in assessing the operational efficiency.
Useful in forecasting the weak spots of the business.
Useful in comparison of performance.
Major Findings of the Study
From the various data presentation and analysis some conclusion can be made about the main financial position of
SCBNL. They can be pointed as below:
Return on total assets ratio of SCBNL is assets ratio has been decreased from 2.79% to 2.44 % in 5 year's period.
It can also be observed that the return on capital employed ratio is irregularly increasing and decreasing during the
five years period.
Return on shareholder's fund is also irregularly increasing and decreasing reflecting the ratios as maximum of 17.18%
and minimum of 12.52%.
In F/Y 2074/75, Earnings Per Share is Rs. 45.96 and it is gradually decreasing up to FY 76/77 as Net Profit is in
decreasing trend.
It can be seen that the per share cash dividend amount is gradually increasing year by year. There is steep fall in
dividend per share in F/Y 2075/76 as no dividend was distributed during that year. However, is increasing from the
year 2076/77. The dividend per share in F/Y 2078/79 is Rs. 22.50 implying highest dividend per share among five
years.
Conclusion
From the above data presentation and analysis some conclusion can be made about the main financial position of SCBNL.
They can be pointed as below:
Total assets of the bank have been used efficiently by the management as the Return on Total Assets is increasing up
to FY 2077/78 every year however it has declined in FY 2078/79 which has been impacted by Global Economic
Crisis.
Return on Capital Employed ratio is following decreasing trend. It implies, the profit per rupee of Capital Employed
is decreasing every year as compared to previous year.
Shareholders receive lower return on the fund supplied by them as the Return on Equity is decreasing gradually.
Amount of dividend each shareholder is entitled to receive is increasing due to increasing trend of Dividend per
Share. The EPS for SCBNL is also decreasing in every year.
Thank you!!
