An Analysis of Financial Performance Of. NP

AN ANALYSIS OF FINANCIAL PERFORMANCE OF
KUMARI BANK LIMITED
Submitted by
NIKHIL SHRESTHA
T. U. REGISTRATION No:
A project work
Submitted to
PUSHPALAL MEMORIAL COLLAGE
Faculty of Management
Department of Research
Fulfillment of the Requirements for the degree of
BACHELOR OF BUSINESS STUDIES (BBS)
CHABAHIL, Kathmandu
April, 2024
1. Background of the study
The source of finance is the most essential element for the establishment and operation
of any profit and not profit institutions. Profit oriented institutions usually obtain these
sources through ownership capital, public capital through the issues of shares, and
through financial institutions such as banks, in the form of credits, overdrafts etc. It is
during these stages for the establishment and operations of any organization, the role of
banks come into effect in providing these sources, in the form of credit, overdrafts and
other related services.
Nepal is a developing country. Developing countries face lot of problems for it economic
development. Nepal has to make expansion in financial sector. Financial market is very
important for the economic growth of the country (Economic survey, 2004). The pace of
development of the country is largely depends upon the economic activities. Economic
activities are guided by finance. Financial institutions provide capital to develop trade,
industry and business. Bank, finance companies, co-operative societies, insurance
companies, stock exchanges helps in the economic development of the country.
Banks are major institutions in financing. Bank involves in a process of collecting

scattered money and to help its mobilization in different sectors according to the need
of customers. Bank helps to develop saving habit of people, which in-turns help to make
other people to invest for their business. Bank also helps to develop international
business by initiating as a mediator on export & import. This way banks help to
strengthen the national development.
Banking is one of the most heavily regulated businesses in the world. Banks are among
the most important financial institutions in the economy. They are the principle source
of credit (loan-able funds) for millions of individuals and families and for many units of
governments. Moreover, banks often act as a major source of credit to small local
business ranging from grocery stores to automobile dealers for their stock.
KUMARI BANK LIMITED is a commercial bank in Nepal. The bank is an ‘A’ class
commercial bank licensed by NEPAL RASTRA BANK and has branches all across the
nation with its head office in Kathmandu which provides entire commercial banking
services. The bank’s shares and publicly traded as an ‘A’ category company in the Nepal
Stock Exchange.
2. Statement of the Problem
The banks and financial institutions are competing among themselves to advance credit
to limited opportunity sectors. Banks and financial institutions are investing in house
loan, hire purchase loan for safety purpose. Lack of good lending opportunities, banks is
facing problems of over liquidity. Nowadays, banks have increasing number of deposit in
fixed and saving accounts but have decreasing trend in lending behaviors. So, this has
caused major problems in commercial banks. Nowadays, due to competition among
banks, the interest rate charge for loan is in decreasing trend. Therefore, it is necessary
to analyze the financial performance of the bank. As the sample of commercial banks,
KUMARI bank limited have been selected.
3. Objective of the study

The general objective of the study is how to manage credit of Sunrise bank limited. The
following are the specific objectives:
 To ANALYZE FINANCIAL PERFORMANCE OF KUMARI BANK LIMITED.
 To analyze the deposit collection and utilization trend.
 To analyze the Non- performing assets and their impacts.
 To provide suitable and beneficial suggestions based on findings of the study.
4. Significance of the study

At present the joint venture banks are gaining a wide popularity through their efficient
management and professional services and playing an eminent role in the economy.
Lending is one of the main functions of commercial bank where the whole banking
business is rested upon. Study on commercial banks and especially their lending
practices; carry a great significance to shareholders of the bank, to the professionals, to
the students who wants to know about lending practices of commercial banks. This
study may be important for researcher, scholars, banking sector, students, government
and other parties.
So, it will be helpful to those who want to study in further details and widely in this field,
similarly, the study encourages the general public where to invest further or not and
depositors can take decision to deposit on their money.
5. Review of Literature
In course of the study, various books, articles, dissertations and other reference
materials were reviewed, it includes the review of existing empirical literature briefly in
the subject of various developing countries including NEPAL and their findings are easily
found on various books, research papers, seminar papers, and reports of the
international institutions, issues of the journal and article about commercial banks has
been studied in detailed. Here attempt has been made to review them. This chapter
basically concerned with review of literature relevant to the comparatives study of
KUMARI bank limited. Every possible effort has been made to grasp knowledge and
information that is available from libraries, concerned commercial banks, books,
articles, journals national and international publications and other information bureaus.
6. Research Methodology
Research methodology describes the methods and process applied in the entire aspects
of the study. It refers to the various sequential steps to be adopted by a researcher in
studying a problem with certain objectives to review. This research study is based on
secondary sources of data. Secondary data are those collected by the researcher on the
concerned topic, which are not originally in nature or are originally collected for some
other purposes. Financial and statistical tools have been used as the basic analysis.
7. Limitations of the Study

This study is not far from several limitations, which weaken the hearth of the study, e. g.
time period reliability of financial and statistical tools used and other variations.
This study is limited by the following factors:
The research study has some limitations. The main limitations of the study are as
follows:
 Though, there has been in operation of 20 commercial banks in Nepal, only one
commercial banks are taken for the proposed study.
 This study is only a case study: hence the conclusion drawn from the study does
not ensure wide applicability in all types of enterprise running in different
situations
 Major portion of analysis and interpretation have been done on the basis of
available secondary data and information. Thus, reliability of the study is based
on trueness of collected data and information.
 In this study, only selected financial and statistical tools as well as techniques are
used.
8. Organization of the study
The whole study is divided into five different chapters. They are:
Chapter 1 is the introduction chapter. It includes background of the study, statement of

the problems, objective of the study, significance of the study, limitations of the study
and chapter plan of the study.
Chapter 2 deals with review of literatures, which includes conceptual/theoretical review

and review of related studies.
Chapter 3 is research methodology which includes research design, population and

sample, sources of data, data collection techniques and data analysis tools.
Chapter 4 deals with the various analysis and interpretations of data like analysis of
deposits, loan & advances of Himalayan Bank Limited and NABIL Bank Limited, financial
and statistical analysis. It also shows major finding of the study.
Chapter 5 includes summary and conclusions of the study. It also deals with
recommendations suggested.
BIBLIOGRAPHY
American Institute of Banking (1972), Principal of Banking Operation, New York: The
Dryden Press: New York
Aryal, K. (2003), An Evaluation of Credit Investment And Recovery Of Financial Public

Enterprises in Nepal, A case study of ADB, T. U KIRTIPUR: An
unpublished Master Degree thesis submitted to Department of Economics.
BARAL, R.C (2007). A study of deposit collection and investment pattern of

machaapuchchhre bank limited T.U An unpublished master degree thesis submitted to
department of economics.
BASYAL, T. L. (2000), Placing RBB And NBL, Under Management contracts, Rational And
Opposition, Kathmandu: economic Survey
Bhandari, D. P. (2004), RASTRIYA BANIJYA BANK PRATIYOGITA DIGDARSHAN,

KATHMANDU: MAKALU PRAKASHAN HOUSE.

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AN ANALYSIS OF FINANCIAL PERFORMANCE OF

KUMARI BANK LIMITED

PUSHPALAL MEMORIAL COLLAGE

Fulfillment of the Requirements for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)

Banks are major institutions in financing. Bank involves in a process of collecting

3. Objective of the study

4. Significance of the study

7. Limitations of the Study

Chapter 1 is the introduction chapter. It includes background of the study, statement of

Chapter 2 deals with review of literatures, which includes conceptual/theoretical review

Chapter 3 is research methodology which includes research design, population and

Aryal, K. (2003), An Evaluation of Credit Investment And Recovery Of Financial Public

BARAL, R.C (2007). A study of deposit collection and investment pattern of

Bhandari, D. P. (2004), RASTRIYA BANIJYA BANK PRATIYOGITA DIGDARSHAN,

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