IMPACT OF CREDIT PERFORMANCE ON THE PROFITABILITY

OF

NABIL BANK LTD

A Project Work Proposal

By

Surendra Thapa Magar

TU. Regd. No : 7-2-148-184-2019

Viswa Deep Multiple Campus

Group: Finance

Submitted to

The faculty of Management

Tribhuvan University

Kathmandu

In the partial of the Requirement of Degree of

BACHELOR OF BUSINESS STUDIED (BBS)

Kathmandu, Nepal

November, 2023
 TABLE OF CONTENTS

Title page i

Table of contents ii

Abbreviations iii

1. Introduction

2. Background of the study

3. Statement of problems

4. Scope of study

5. Objective of the study

6. Literature review

7.
1. Introduction

Financial performance analysis is the process of analyzing a company's financial statements for
decision-making purposes and to understand the overall health of an organization. Financial
statements record financial data, which must be evaluated through financial performance analysis
to become more useful to investors, shareholders, managers, and other interested parties. It is the
method of evaluating past, present, and projected performance of a company. Analysts track
performance measures across financial statements using several different methods for financial
performance analysis, including vertical, horizontal, and ratio analysis. It helps to analyze
whether an entity is stable, solvent, liquid or profitable enough to warrant a monetary investment.
It is therefore essential to analyze the financial statement to know the actual financial
performance and financial position of the organization.

2. Background of the study

A bank is a financial institution that serves as a custodian for individuals and organizations to
safely store and manage their money. It offers a wide range of financial services, including
deposit accounts, loans, and payment processing. Banks facilitate the flow of funds in the
economy by accepting deposits from customers and providing them with interest on savings
or checking accounts while also lending these funds to borrowers in the form of loans.
Additionally, banks play a crucial role in the monetary system by participating in the creation
of money through the process of fractional reserve banking. They are typically regulated by
government authorities to ensure stability and safeguard the interests of depositors.

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. It is also the only Bank in Nepal accredited
with ICRANP-IR AAA rating by ICRA Nepal as the safest bank regarding timely servicing
of financial obligations.

Globally, 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 are listed on the London and Hong Kong Stock Exchanges. There are 124
nationalities, and 100 ethnicities present in our workforce and 174 languages / dialects
spoken by our colleagues across the Bank.
 3.Statement of Problem

A statement of problem is a brief description of an issue to be addressed or a condition to be

improved upon. It aims in identifying and explaining the problem. In present context of
Nepal, commercial banks have good performance. On the basis of profitability and
productivity of commercial banks, public have confidence in their performance. However,
various environmental factors, state of economy, structure ofcapital and money market
government policies, taxation policies and various internal factors have influence upon
financial performance and position of commercial banks. In these circumstances, it is highly
useful to make the study on financial statement of Citizen Bank International Limited.
Profitability position and stock prices are the general factors considered for evaluating the
financial performance of Citizen Bank International Limited. However, one can raise a
question, “Are these the only factors to reflect the performance of the bank?” Thus, the main
problem of the study, is to inquire into the financial performance of Citizen Bank
International Limited. This study is targeted to find out answers to the following questions: a)
What is the financial performance of Citizen Bank International Limited? b) Does the overall
financial statement depict the financial position indicating any special strength and weakness
of the Bank? c) Is Citizen Bank International Limited utilizing its assets efficiently? d)
Citizen Bank International Limited is considered to be operationally efficient. But how far it
is efficient? In this context, the main purpose of the study is analyzing the financial
performance of the Citizen Bank International Limited in terms of turnover, profitability,
liquidity and efficiency in operation.

4.Scope of Study

Analyze financial ratios to assess profitability, solvency, working capital management, liquidity,
and operating effectiveness. Compare current performance with historical conditions using trend
analysis. Compare with peer companies or industry averages to find out how well companies are
performing.

Evaluating a company’s financial performance requires you to:

1. Analyze financial ratios to assess profitability, solvency, working capital management,

liquidity, and operating effectiveness.

2. Compare current performance with historical conditions using trend analysis.

3. Compare with peer companies or industry averages to find out how well companies are
performing.

5.Objective Of the Study

It defines the purpose of this study. Simply, it helps to find out the answer to the questions
stated above. The general objective of this study is to analyze the financial statements of
Citizen Bank International Limited regarding the financial performance and position. Other
specific objectives are as follows:

a)To evaluate the financial position of Standard Chartered Bank Nepal Limited.

b) To analyze the financial performances through the use of appropriate financial and analytical tools.

c) To identify the profitability position i.e. Earning per share (EPS), Dividend per share (DPS) and Return
on Asset (ROA).

6.Literature review
A financial statement is written reports which quantitatively describe the financial health
of a company. This includes an income statement and balance sheet, and often also
includes a cash flow statement. Financial statement are usually compiled on a quarterly
and annual basis. Financial analysis is the process of determining the operating and
financial characteristics of a firm from accounting data and financial statement. The goal
of such is to determine the efficiency and performance of the firm's management as
reflected in the financial reports and records. The analyst attempting to measure the firms
liquidity, profitability and other indications that the business conducted in a rational and
orderly way. If a firm does not achieve financial norms for its industry or relationships
among data that seen reasonable, the analyst note the deviations. The burned of explaining
the apparent problems may than is placed upon management.(Sangmi, & Nazir, 2010).
Financial statement analysis include the study of relationship within a set of financial at a
point in time and with trends in these relationships over the time .Financial analysis is the
process of identifying the financial strengths and weakness of the firm by properly
establishing relationship between the items of the balance sheet and profit and loss
account (Pradhan, 2004) 7. Research Methodology Research methodology in financial
performance analysis refers to the systematic approach used to investigate, measure, and
evaluate the financial health and efficiency of an organization. It involves a structured
framework of procedures, techniques, and tools employed to collect, analyze, and interpret
financial data. This methodology typically includes the following components:  Research
Design A research design is purely and simply the framework or plan for a study that
guides the collection and analysis of data. Research design is the plan, structure and
strategy of investigations conceived as so to obtain answers to research questions and to
control variances. A true research design is basically concerned with various steps to
collect the data for analysis and draw a relevant conclusion. It is the arrangement of
conditions for collection and analysis of data that aims to combine relevance t the research
purpose with economy in procedure. To achieve the objective of this study, descriptive
and analytical research design has been used. Some financial and statistical tools have
been applied to examine facts and descriptive techniques have been adopted to evaluated
financial position of Citizen Bank International Limited.