Proposal: Bibliography

·        Annual Report of HIMALAYAN Bank Ltd.

·        Annual Report of NABIL Bank Ltd.

·        http://bfr.nrb.org.np/List_Banks_n_Non_Banks.php

·        http://www.doanepal.gov.np

·        “Banking And Financial Statistics” Mid-January 2003, Nepal Rastra Bank, and       Financial Institution Department, Policy Planning Statistics and Banking promotion Division.

·        Brigham, Eugene F., “Fundamentals Of Financial Management” The Dryden Press, Hinsdate, 2^nd Edition, 1980.

·        Brigham, Eugene F. and Sapenski, Louis C., “Financial Management, Theory & Practice”, The Dryden press, 4 Edition, 1985.

·        Deon William H. (1973), “Finance”, New York: The Dryden Press, Library Of Congress.

·        Deon William H. (1973), “Finance”, New York: The Dryden Press, Library Of Congress.

·        Dr. Michael, V.P. “Research Methodology In Management”, Mumbai: Himalayan Publishing House.

·        Chopra, Sunil, “Role Of Foreign Bank In Nepal”, Nepal Rastra Bank Samachar.

·        Thapa, Govind Bahadur, “ Financial System Of Nepal”, Development Vision, Patan Multiple Campus, lalitpur, Vol 3, 1994.

·        Kothari, C.R. (1992), “Research Methodology And Techniques”, New Delhi: Vikas Publication House Pvt. Ltd.

·        Pant, P.R. And Wolff, M.K., “Social Science Researc And Thesis Writing”, Kathmandu Buddha Academic Enterprises, 1999.

·        Thesis Submitted to TU in related Topic for various banks in Nepal.

Proposal: Scheme Of The Study

The study has been organized into five chapters each devoted to some aspect of the study on “Comparative Study Of Financial Analysis Of HIMALAYAN Bank Ltd. And NABIL Bank Ltd.” The title of these chapters are as follows :

Chapter – 1    : Introduction

Chapter – 2    : Review Of Literature

Chapter – 3    : Research Methodology

Chapter – 4    : Presentation & Analysis Of Data

Chapter – 5    : Summary, conclusion & Recommendations

The rational behind this kind of organization is to follow a simple research methodology approach. The content of each of the chapters of this study are briefly mentioned below.

Chapter – 1              Contains the introductory part of the study. As already mentioned, this chapter describe the major issues to be investigate along with the general background and objective of the study.

Chapter – 2              Confirm the review of literature of related studies in journals (literature) and review of related studies in Nepal with reference to previous thesis and policies of the government.

Chapter – 3              Describe the research methodology employed in the study. It includes research design, nature and sources of data, selection of enterprises, method of analysis, statistical and financial tools used.

Chapter – 4              Deals with the presented and analysis of the data. It consists of analysis of relevant rations to evaluate the financial position of both banks followed by their interpretation. The cash flow analysis, hypothesis testing of different ratios used in the study and trend analysis of different measures are calculated and interpreted. This chapter also presents the major finding of the research.

Chapter – 5                Contains summary & conclusions of the study. It also offers recommendations on the basis of findings.

Proposal: Limitation Of The Study

This research explains and analyzes the subject matter with the help of well known or already established analytical method and techniques, therefore as a conclusion oriented research. It does not much concern with the fundamental and decision oriented research. This research depends upon only five – year annual report of both banks as well as some primary data of the both banks.

Following are the limitation of this study :-

Ø  It only focuses on HIMALAYAN Bank Ltd and NABIL Bank Ltd. Covering the period of five years (i.e. 2010/2011 to 2014/2015)

Ø  The whole study is based on secondary data such as financial statement and financial report of both banks.

Ø  This study is concerned with the financial performance of both banks.

Ø  The data published from various sources differ, they do not tally total in many places is not equal. However in this research, report of HIMALAYAN Bank Ltd and NABIL Bank Ltd Are taken valid source of data.

Ø  Time and resource constraint may limit the area cover by study.

Proposal: Importance Of The Study

Banking sector has been one of the major contributors to national providing variety of disbursement to different sectors, enabling to boost the GDP. Hence, the performance of this sector needs to be above the par to any other field. The financial performance of commercial banking sector should be very much capable in enhancing the capital market as well. This research is a conclusion oriented research. This thesis will help to know the financial performance of HIMALAYAN Bank Ltd and NABIL Bank Ltd. This study will also helpful as a literature for the future study about the relating topics. Apart from this, the institution and firm can allow the suggestion of this study to make their policy and strategy more practical and scientific.

The accounting figure presented in the financial statements do not convey any meaningful understanding, it need to be analyzed and interpreted to know the financial performance of the banks. This study will be beneficial to different parties concerned with two banks as well as other interested parties.

Especially it will be beneficial to,

Ø  Management of two banks.

Ø  Lenders and borrowers of these banks.

Ø  Policy maker of these banks.

Ø  Concerned parties and general interested parties of the banks.

Ø  Customers of these banks.

Proposal: Objective Of The Study

The main objective of the study is to analyze, examine and interpret the financial position of HIMALAYAN Bank Limited and NABIL Bank Limited with the help of ratio analysis and other relevant financial and statistical tools. In addition, the study also tries to evaluate the efficiency and progress of both joint venture banks comparatively.

For above purpose the following points will be considered in the research :-

Ø  To calculate the relevant financial position of HIMALAYAN Bank Ltd and NABIL Bank Ltd.

Ø  To examine the financial performance of the banks.

Ø  To know the investment position of sample banks.

Ø  To provide suggestion for both banks on the basis of findings.

Proposal: Statement Of The Problem

There are various joint venture banks operating their activities in the different part of the country. Banks are not to be considered merely as dealers of money but also the leaders in development. They are not only the store house of country’s wealth but also the reservoirs necessary for economic development. After Government of Nepal adopted the open, liberal and market oriented economic policy. The establishments of private joint venture banks have continued in response to this. Consequently, they are facing tough competition. The financial sector may not be enough from them to meet the growing the resources need to the economy as expected before. Why the financial institution of Nepal is performing well and effectiveness of these institutions should be analyzed. The study will seek the reasonable reasons on the following concentration areas of HIMALAYAN Bank Ltd and NABIL Bank Ltd,

Ø  Identifying the liquidity, profitability and capital structure ratio and market position of joint venture banks.

Ø  Identifying the growth ratio level of joint venture banks in term of net profit and earning.

Ø  Identifying the relationship between debt and return of joint venture banks.

Ø  Identifying the relationship between deposit and investment of the joint venture banks.

Ø  Identifying the relationship between organization and its stakeholders.

Ø  Identifying how efficiently do the banks use their capital?

Ø  Identifying which bank performing better and efficiently?

In conclusion, the study aims to find out the areas of differences between HIMALAYAN BANK Ltd and NABIL Bank Ltd in terms of deposit collection, resources mobilization, liquidity and others. Fact efficient financial performance is helped to measure the weakness and strength of the bank. This study will predict their strength and weakness, fluctuations of ratios, trend and correlation between relevant variables. A strong financial performance of joint venture can contribute to national economy and also attract foreign investor to invest his or her investable fund in the financial sector. This may be exemplary lesson to the newcomer joint venture bank. Therefore financial statement of the bank should be fully examined to find whether the banks are economically and financially strong or not.

Proposal: Focus Of The Study

This study confines comparative analysis of financial performance between two joint venture banks namely, HIMALAYAN Bank Limited and NABIL Bank Limited. Financial analysis covers financial ratio analysis, portfolio trend analysis of two joint venture bank. Both of these banks are working under the same condition and problems, opportunities for the banks and threats to the firm are also similar. Thus, this attempt would be relevant to make a comparative analysis of these two banks. Main focus of this study will be on aspect such as liquidity, profitability activity, income and expenditure patterns. The trend analysis is as indication about the future operation. “Financial analysis is the process of determining the significant operating and financial characteristic of a firm from various accounting data and financial statement. Financial ratio analysis is a widely use tool of financial analysis and its performance. The goal of such analysis is to determine the efficiency and the performance of the firm’s management as reflected in the financial records and report” (John J Hampton, Financial Decision Making, July 1983, p121)

This study focuses on :

Ø  Income and expenditure analysis.

Ø  Correlation analysis.

Ø  Trend analysis.

Financial ratio analysis identifies the financial strength and weakness of both joint venture banks with the help of basic financial statement namely profit and loss account, balance sheet and cash flow statement. It helps to measure the banks liquidity, leverage, activity and profitability ratio in rational way.

Proposal: INTRODUCTION-A Brief Profile Of NABIL Bank Ltd.

Nabil, previously known as “Nepal Arab Bank Ltd” the first foreign joint venture bank of Nepal, started operations in July 7, 1984. Nabil was incorporated with the objective of extending international standard modern banking services to various sectors of the society. Nabil provides a range of commercial banking services through its 52 points of representation across the country and over 170 correspondent banks across the globe. It was earlier known as Nepal Arab Bank Ltd. It has its head office located at Nabil Center, Durbar marg, which is also a premium location of the capital. It has the largest staff among private commercial banks of Nepal.

NABIL Bank ltd has 52 branches and points all around the Nepal. The banks has provided several services through those branch and points to its customer. And the bank has a holding bank named “NABIL INVESTMENT Banking ltd.”

Total share of NABIL Bank Ltd are subscribed as follows:

·        Foreign Holding                               50%

·        Group of Companies                   10.24%

·        General Public                                  30%

·        Others (Listed shares)                     9.76%

                                                                        100%

Share Capital of NABIL Bank Ltd

Authorized Capital

37,000,000 Ordinary Shares @ Rs. 100 each                              3,700,000,000

Issued Capital

36,576,540 Ordinary Shares @ Rs. 100 each                              3,657,654,000

Paid up Capital

36,576,540 Ordinary Shares @ Rs. 100 each                              3,657,654,000

(This year bank has offered 10,972,962

Bonus Share to its shareholders)

Service Offered By NABIL Bank Limited

NABIL Bank Limited offers various types of services to its valuable customers which promotes bank competitiveness, credit worthiness and attraction.

Some services and technologies which are provided by NABIL Bank Limited are as follows :

a)     Accept Deposits :

- Saving, Current Deposit, Fixed Deposit, Call Deposit, Recurring.

b)     Loan Scheme :

- NABIL Bank Limited provides home loan, vehicle loan, educational loan, mortgage loan, mortgage plus loan, doctor plus, teacher plus, overdraft against shares, SME loan for small & medium enterprises.

                                 

c)     Anywhere banking facilities.

d)     Safe deposit locker,

e)     Mobile wallet, Utility bill Payment

f)      24hrs ATM services, Debit card, Credit card, USD Card.

g)     Remittance, Western Union Money Transfer, SWIFT

h)     Other various facilities for corporate.

NABIL Bank Ltd has altogether 52 branches, and a holding bank.

Proposal: INTRODUCTION-A Brief Profile Of HIMALAYAN Bank Ltd.

Himalayan Bank Limited (HBL) is one of the largest private banks of Nepal. The Bank was incorporated in 1992 AD by a few eminent individuals of Nepal in partnership with the Employees Provident Fund and Habib Bank Limited of Pakistan. The bank commenced its operations in January 1993AD. Himalayan Bank is also the first commercial bank of Nepal with most of its shares held by the private sector of Nepal. Besides commercial banking services, the bank also offers industrial and merchant banking service.

With its head and corporate office at Kamaladi, Kathmandu, the bank has 44 branches and 80 ATM Stations. Eighteen of its branches are located inside the Kathmandu Valley while the rest are spread across the nation (Kathmandu Valley comprises Kathmandu, Lalitpur and Bhaktapur Districts). Besides, a branch looking exclusively at electronic cards and related products, is based in Patan, Lalitpur. The bank has following capital structure:

·        A Group Of Companies                   51%

·        Habib Bank Ltd.                               20%

·        Employees Provident Fund                        14%

·        General Public                                  15%

                                                                        100%

Share Capital Of HIMALAYAN Bank Limited

Authorized Capital

50,000,000 Ordinary Shares @ Rs. 100 each                              5,000,000,000

Issued Capital

33,327,000 Ordinary Shares @ Rs. 100 each                              3,332,700,000

Paid up Capital

33,327,000 Ordinary Shares @ Rs. 100 each                              3,332,700,000

(11,664,450 Bonus Share offered this year)

Service Offered By HIMALAYAN Bank Limited

HIMALAYAN Bank Limited has offers various types of services to its customers which are as follows :-

a)     Accepting deposits from its customer in various accounts like current, fixed and saving accounts.

b)     Granting loan & advance against cash pledge, pledge of shares, pledge of saving bonds, security of authorization to deduct own or third party’s account in terms of overdraft, demand loan, time loan, making investment in treasury bills, foreign bills and indigenous bill.

c)     ATM, Debit Card, Credit Card, Utility bill payment facilities.

d)     E-banking, Premier banking.

e)     Safe deposit locker facility.

f)      Discounting bills, Bills purchase.

g)     Opening facility of letter of credit.

h)     Remittance service, ABBS, Clearing / collection service.

With its head and corporate office at Kamaladi, Kathmandu, the bank has 44 branches and 80 ATM Stations. Eighteen of its branches are located inside the Kathmandu Valley while the rest are spread across the nation (Kathmandu Valley comprises Kathmandu, Lalitpur and Bhaktapur Districts). Besides, a branch looking exclusively at electronic cards and related products, is based in Patan, Lalitpur.

Proposal: INTRODUCTION-Back Ground Of Study

Nepal is landlocked country with agro based economy. The country is divided into three parts (i.e. Mountains, Hills, Terai Region) with the geographical nature. Nepal is one of the least developed and very poor country in the world and the natural disaster occurred this year, the economy of the country is worse. More than 81% of the people are still in rural areas and most of them are deprived minimum physical facilities, which is necessary for human being. Nepalese economy is dependent on traditional agriculture. Agriculture sector contributes only 34.70% of the total GDP and is main supplier of raw materials to industries. Development of agriculture sector helps not only to solve the problem of unemployment but also help in the economic development.

Agriculture is still the backbone of Nepalese economy. Economy development is not possible without agriculture development. National planning commission has given more emphasis to this sector, but the real picture of this sector is very poor. This is because Nepal has not been able to provide basic facilities to the farmer like irrigation, electricity and transportation. Despite being second richest in water resources in the world we are compelled to pay dear charge in the world. “Agriculture provides employment opportunities to more than 66% of labour forces however it contributes just 34.70% of GDP.” (DOA of Nepal, Nepal Government website data).

The government of Nepal formulated a policy to develop possible agro based industries for atleast to substitute import of industrial & consumable goods. The basic goal of government policy & self-sufficiency where as other were to generate revenue by operating industrial unit and creation of employment opportunities through this sector.

Financial sector is the lifeblood of the commercial and industrial activities. So commercial bank and other financial institutions are backbone for trade and industry in country. They collect the saving from community and transfer to the require sector of trade and industries, so that banking sector development is necessary to economy development.

In the overall development of the banking system in Nepal, the 'Tejarath Adda' may be regarded as the father of modern banking institution and for a quite a long time. It delivered a good service to government employees as well as to general public. However, the concept of modern financial institutions in Nepal was introduced when late former Prime Minister Shree Judda Samser Jung Bahadur Rana established first commercial bank, Nepal Bank Ltd. in 1994 B.S. Before establishment of Nepal Bank Ltd., People fulfilled their credit needs from unorganized market of private money lenders. Presently, there are thirty-one commercial banks and eighty-seven development banks operating their financial activities in the different part of country. They provide modern banking facilities like ATM card, Debit Card and Credit Card and Master Card to their valuable customers.

The main objective of this study was comparative study of financial performance of two joint venture banks, HIMALAYAN Bank Ltd & NABIL Bank Ltd.

Proposal: Table of Contents

Table of Contents

                                                                                                Page no.

1.         Introduction                                                                                                 1

   1.1   Background of the Study                                                                           1

            1.2.1   Brief Introduction of  HIMALAYAN Bank  Ltd.             2

            1.2.2   Brief Introduction of  NABIL  bank  Ltd.                                     3

   1.3   Focus Of  The Study                                                                                    5

   1.4   Statement Of  The Problem                                                                         5

   1.5   Objectives Of The Study                                                                             6

   1.6   Importance Of The Study                                                                            7

   1.7   Limitation Of The Study                                                                             7

   1.8   Scheme Of The Study                                                                                  8

Bibliography                                                                                                            10