A Study

On
Financial position of Nabil Bank
Ltd.

Project Work Proposal

Submitted By:
Suraj Gurung
Orient College
T.U. Regd. No.:-

Submitted To
The Faculty of Management
Tribhuvan University
Kathmandu

In partial fulfilment of requirements for the degree of Bachelor of Business

Studies (B.B.S)

KATHMANDU, NEPAL
February, 2017

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1.1 Background of the study:
Nabil Bank Ltd. is the nations first private bank, commencing its banking services since July,
1984. Nabil Bank Ltd. was incorporated with the objective of extending international standard
modern banking services to all sectors of the entire nation. Nabil Bank Ltd. is moving forward
with a Mission to be 1st Choice Provider of Complete Financing Solutions for all its
stakeholders; customers; shareholders; regulators; communities and staff. Nabil Bank Ltd.
provides a full range of commercial banking services through its 52 points of representation.
In addition to this, Nabil Bank Ltd. has presence through over 1500 Nabil Remit agents
throughout the nation. This bank is fully equipped with modern technology, which includes
international standard banking software that supports the E-channels and E-transactions.
(www.nabilbank.com)

Financial position is the status of the assets, liabilities and owners equity (and their
interrelationships) of an organization, as reflected in its financial statement. It is also called
financial condition. In other words, financial position is one of the main financial statements
and it reports an entitys assets, liabilities and the difference in their totals. The amounts
reported on the statement of financial position are the amounts as of the final moment of an
accounting period. The structure of statement of financial position is similar to the basic
accounting equation. For instance, a bank will report amounts in the following format;
Assets= Liabilities + Shareholders equity.
A non-profit organizations format will be;
Assets= Liabilities + Net assets.
The statement of financial position must reflect the basic accounting principles and guidelines
such as the cost, matching and full disclosure principle. Accordingly the statement of financial
position is more meaningful when it is prepared under the accrual method of accounting.

To understand and value a company, investors have to look at its financial position. If you
borrow money from a bank, your bank uses this information to assess the strength of the
assets, such as your car and your house, and places a conservative valuation upon them. The
bank also ensures that all liabilities, such as mortgage and credit card debt, are properly
disclosed and fully valued. The total value of all assets less the total value of all liabilities
gives you net worth, or equity. (Investopedia.com)

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Statement of Financial Position, also known as the Balance Sheet, presents the financial
position of an entity at a given date. It is comprised of three main components: Assets,
liabilities and equity. Statement of Financial Position helps users of financial statements to
assess the financial soundness of an entity in terms of liquidity risk, financial risk, credit risk
and business risk. (http://accounting-simplified.com)

1.2 Focus of the study:

The main focus of the study is to analyze and interpret the financial state and policy of
commercial banks in Nepal. This report concentrates on the study of overall financial analysis
of Nabil Bank Ltd. The report also focuses whether it is backward or forward in liquidity
position and its fund efficiency with respect to industry average. This study tries to analyze
and generalize the financial performance of a commercial bank such as; evaluate liquidity,
activity, capital adequacy and profitable position of a commercial bank. This study is based on
ratio analysis to measure the financial position of Nabil Bank Ltd. and it is also based on the
contribution of saving deposits in the total capital of the bank.

1.3 Problem statement:

With the prevailing economic condition of the country, the investment in manufacturing,
industries and agriculture sector has grown satisfactory, but not as mush it has to be due to the
lack of proper professionalism and commercialization in these sectors.

The problem areas to access in the study are;

Does new monetary policy of NRB effect in the performance of the bank?
How far have Nabil Bank Ltd. been able to shift the monetary from savers to users.
What is the position of the bank in terms of leverage, capital adequacy, and
profitability of the banks?

1.4 Objectives of the study:

The main objective of the study is to analyse, measure, highlight and interpret the financial
position and policy of Nabil Bank Ltd. The study focuses whether it is backward or forward in
liquidity position and fund efficiency of Nabil Bank Ltd. and to analyze the financial stability

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of the bank .The prime objectives of the study are to evaluate the financial performance of
Nabil Bank Ltd. The objectives are;

To analyze the financial performance such as: evaluate liquidity, leverage, capital
adequacy, turnover and profitable position of Nabil Bank Ltd.
To evaluate the growth ratio of the cash and bank balance, loan and advances, net worth.
To provide suitable and useful suggestion of the finding of study.
To discuss fund mobilization and strategy of liquidity management of Nabil Bank Ltd.
To find the future trends of total deposit, investment, loan and advances, net worth etc.

1.5 Conceptual Framework:

The report has been prepared in the partial fulfilment of the requirement for the degree of
i. Liquidity Ratio.
ii. Leverage Ratio.
ii. Capital Adequacy
Ratio.
iv. Turnover / Activity
Ratio.
v. Profitability Ratio.
Bachelor of Business Study (B.B.S_4th year). I would like to
thanks all who helped in this project report. I am grateful to
our all lectures of Orient College, who gave me such an
opportunity to study about commercial bank, whose
valuable suggestions and advices guided to the completion
of this study. Consequently, it is not easy to complete this
report without the help of our senior brothers and sisters
reports. We get lots of ideas and knowledge from their
previous research reports.

First of all to prepare report, we should be sure about our research topic on which we are
going to study, it is very important and useful too. Before studying the previous report, we
have no idea about such kind of report. After this study, we learn lots about commercial banks
and their performance. This study helps us to know about various activities of commercial
banks and their transactions.

Independent Variables:

Dependent various:

Ratio Analysis

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1.6 Definition of terminologies:
This study is conducted to analyse and interpret the financial position and performance of
Nabil Bank Ltd. Financial position is one of the main financial statements and it reports an
entitys assets, liabilities and the difference in their totals. To understand and value a company,
investors have to look at its financial position/condition and its financial performance.
Statement of Financial Position helps users of financial statements to assess the financial
soundness of an entity in terms of liquidity risk, financial risk, credit risk and business risk. It
is comprised of three main components: Assets, liabilities and equity.

Assets: Asset is a resource controlled by the entity as a result of past events and from
which future economic benefits are expected to flow to the entity (IASB Framework).

Liabilities: According to IASB Framework liability is defined as follows:

A liability is a present obligation of the enterprise arising from past events, the
settlement of which is expected to result in an outflow from the enterprise of resources
embodying economic benefits (IASB Framework).

Equity: Equity is the residual interest in the assets of the entity after deducting all the
liabilities (IASB Framework).

1.7 Significance of the study:

Significance of this study lies on the objectives of financial position of the bank. Some
importance of the study is as following:

The student can have clear view of establishment and working of the concerned bank
thereby broadening the banking knowledge.
The B.B.S level would remain incomplete without this study.
This report can be a source of secondary data for researching.
It can be used as guidelines while preparing such type of report.
This report might be useful for those who are willing and curie to know about the
financial position of a commercial bank.
To provide some practical knowledge of banking transactions.

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1.8 Limitations of the study:
The limitations of the study are as follows;

The financial successes are highlight with the use of charts, bar-diagram, trend-line
and financial ratios.
It contains the data of only FY (2007/2008-2010/11)
The analysis is based on the secondary data available of the bank.

1.9 Research methodology:

This report has been prepared from 15th report of the Nabil Bank Ltd. The main objectives of
this report are to analyse, measure, highlight and interpret the financial position of Nabil Bank
Ltd. The data has been presented in the tables and chart to ease the study. Only secondary data
are collected and used during the study. The research methodology includes collection of data,
field visit, and observation.

Research Methodology is a way to find out the result of a given problem on a specific matter
or problem that is also referred as research problem. In research methodology, researcher uses
different criteria for solving/searching the given research problem. Different sources use
different type of methods for solving the research problems. (Disserttationhelpservice.com)

I. Research design:

The research design refers to the overall strategy that you choose to integrate the different
components of the study in a coherent and logical way, thereby, ensuring you will effectively
address the research problem; it constitutes the blueprint for the collection, measurement, and
analysis of data. (www.google.com.np)

The field report is a descriptive of one bank i.e. Nabil Bank Ltd. Therefore, the whole study
undertakes for field work report is descriptive nature. Different types of ratios are calculated
in this study to analyse and interpret entire financial position of Nabil Bank Ltd. However,
comprehensive analysis is also being made in the report.

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II. Population and sample:

This report is conducted to analyse, understand and interpret the financial position and
performance of a commercial bank of Nepal. Commercial banks perform all kinds of banking
business. The primary function of commercial banks is accepting deposits from depositors
and lending the deposits to others. Currently, there are 28 commercial licensed banks in
Nepal. Out of total 28 commercial banks of Nepal, Nabil Bank Ltd. is taken as sample for this
report to study its financial position and performance. Nabil Bank Ltd. is commencing its
banking services since July, 1984. Now the bank has 52 branches on the maximum cities with
its head office in Kathmandu.

1.10 References:
www.nabilbank.com
Investopedia.com
accounting-simplified.com
Disserttationhelpservice.com
www.google.com.np
IASB Framework.