A STUDY ON INVESTMENT ANALYSIS OF

MUKTINATH BIKAS BANK LTD

A Project Work Report

By:
Name
T.U. Regd. No:
Symbol No.:-
College Name

Submitted to:
The Faculty of Management
Tribhuwan University

In Partial Fulfillment of the Requirements for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS).

College Address
2024
 DECLARATION

I hereby declare that the project work entitled A STUDY ON INVESTMENT ANALYSIS OF
MUKTINATH BIKAS BANK LTD. submitted to the faculty of Management, Tribhuvan
University, Kathmandu is an original Project work under the supervision of SUPERVISOR
NAME, faculty of member, COLLEGE NAME, ADDRESS and is submitted in partial
fulfillment of the requirement for the degree of Bachelor of Business Studies (BBS).

..............................
Signature
STUDENT'Spp NAME
Date:

ii
 SUPERVISOR’S RECOMMENDATION

The project work report entitled A STUDY ON DEPOSIT ANALYSIS OF NATIONAL

COOPERATIVE BANK LIMITED submitted by STUDENT'S NAME of COLLEGE NAME,
COLLEGE ADDRESS is prepared under my supervision as per the procedure and format
requirement laid by the Faculty of Management, Tribhuvan University, as partial fulfillment of
the requirements for the degree of Bachelor of Business Studies (BBS). I, therefore, recommend
the project work for evaluation.

Signature:
STUDENT'S NAME
COLLEGE ADDRESS

Date:-

iii
 ENDORSEMENT

We hereby endorse the project work report entitled A STUDY ON INVESTMENT

ANALYSIS OF MUKTINATH BIKAS BANK LTD. submitted by STUDENT NAME of
COLLEGE NAME, ADDRESS, in partial fulfillment of the requirements for award of the
Bachelor of Business Studies (BBS) for external evaluation.

……………………… ………………………
Signature: Signature:
RESEARCH HEAD NAME PRINCIPAL NAME
Head, Research Committee Campus Chief
Date: College Name
Date:

iv
 ACKNOWLEDGEMENT

This Project work report is concerned with the field work report of A STUDY ON
INVESTMENT ANALYSIS OF MUKTINATH BIKAS BANK LTD. It is the partial fulfillment
for the degree of BBS 4th Years. It took quite a long period of time to develop the concept of this
project work. During this period I have suggestions and guidance of all my beloved friends,
family and teachers, who has helped a lot to improve the quality of this project.

First of all, I would like to thanks the Managing Director of this Company for providing
necessary information for my project. As well as, I extend my heartfelt thanks to the members of
the agency, who had helped me in preparing this report.

I would also like to express my warm appreciation to my teacher SUPERVISOR NAME for his
keen supervision over me during this work whose help, stimulating suggestions and
encouragement helped me in all the time.

STUDENT'S NAME
COLLEGE NAME
Date:-

v
 TABLE OF CONTENTS
Title Page………………………………………………………………………………………… i
Declaration ……………………………………………………………………………………… ii
Supervisor’s recommendation ………………………………………………………………. iii
Endorsement……………………………………………………………………………………. iv
Acknowledgement……………………………………………………………………………… v
Table of Contents ……………………………………………………………………………… vi
List of Tables…………………………………………………………………………………… vii
List of Figures…………………………………………………………………………………. viii
Abbreviations …………………………………………………………………………………… ix
CHAPTER I: INTRODUCTION
1.1 Background……………………………………………………………………… 01
1.2 Statement of the Problem…………………………………………………..……. 02
1.3 Objectives of the Study …………………………………………………………. 03
1.4 Rationale of the Study…………………………………………………………….. 03
1.5 Literature Review…………………………………………………………………..04
1.6 Research Methodology………………………………………………………………
05
1.7 Limitations……………………………………………………………………….. 08
CHAPTER II: RESULTS AND ANALYSIS………………………………………………..
10
2.1 Financial Statement Analysis…………………………………………………… 10
2.2 Major Findings of the Study………………………………………………………18
CHAPTER III: SUMMARY AND CONCLUSION…………………………………………..
21
3.1 Summary……………………………………………………………………….. 21
3.2 Conclusion………………………………………………………………………..22
BIBLIOGRAPHY…………………………………………………………………………….. 24

vi
 LIST OF TABLES
S.N Title Page No.

Table No. 1 Liquid Assets to Total Assets Ratio …………………………..………11

Table No. 2 Liquid Assets to Total Deposit Ratio ….………………………. …….12

Table No. 3 Credit to Deposit Ratio …………………………. …………………...13

Table No. 4 Return on Equity …….…………………... …………………………..15

Table No. 5 Return on Assets ………………………………………….………….16

Table No. 6 Net Profit Margin …………………………. ……………..…………..17

Table No. 7 SWOT Analysis …………………………. …………………………...19

viii
 LIST OF FIGURES
S.N Title Page No.

Figure No. 1 Liquid Assets to Total Assets Ratio ……………………………………12

Figure No. 2 Liquid Assets to Total Deposit Ratio …………………………....…….13

Figure No. 3 Credit to Deposit Ratio ………………………….. ……………….…...14

Figure No. 4 Return on Equity …………………………. ……………………….…..15

Figure No. 5 Return on Assets …………………………... ………………………….16

Figure No. 6 Net Profit Margin ……………………………. ………………………..17

viii
viii
 ABBREVIATIONS

B.S.- Bikram Sambhat

BBS: Bachelor of Business Studies
Fig: Figure
NCBL: National Cooperative Bank Limited
NRB: Nepal Rastra Bank
No. : Number
%: Percentage
REGD: Registration
RS: Rupees
S.N: Serial Number
T.U: Tribhuvan University
SDGs: Sustainable Development Goals
ILO: International Labor Organizations
BDC: Business Development Center
LCC: Loan Officer’s Competency Course
IDT: Institutional Development Training
CSR: Corporate Social Responsibility
NEDAC: Network for the Development of Agricultural Cooperatives in Asia and the
Pacific
APRACA: Asia-Pacific Rural and Agricultural Credit Association
ACCU: Association of Asian Confederation of Credit Unions
CICTAB: Centre for International Cooperation and Training in Agricultural Banking
ICA: International Cooperative Alliance

ii
 1

CHAPTER-I
INTRODUCTION

1.1 Background of the study

Deposit refers to the ability of a business or investment to generate deposit from

specific period of time from customers , usually measured as a percentage of revenue
or investment. It is a measure of the financial success of a business or investment, and
is calculated by comparing the revenue earned to the expenses incurred in generating
that revenue. A profitable business or investment is one that generates more revenue
than it spends, resulting in a positive net income or profit. High profitability is
generally seen as a desirable outcome, as it allows the business or investment to
reinvest profits, pay dividends to shareholders, and grow over time.

National Cooperative Bank Limited (NCBL), since its establishment in 2003, has
been committing to support cooperative sector in Nepal. It has also been working
towards maintaining the highest standards of excellence in Nepalese financial services
based on sustainable growth and development providing timely, quick and best
banking services to its members Cooperatives. Currently, NCBL has been providing
different services to its members with the help of modern technology and dedicated
human resource with deep sense of responsibility. It has been playing vital roles to
transform Nepalese economy to prosperity through its significant services. With
NCBL’s membership in International Cooperative Alliance (ICA), Network for the
Development of Agricultural Cooperative in Asia and the Pacific (NEDAC),
Association of Asian Confederation of Credit Unions (ACCU), Asia-Pacific Rural &
Agricultural Credit Association (APRACA) and Center for International Cooperation
and Training in Agricultural Banking (CICTAB), it has been bringing international
cooperative best practices and technologies in Nepal Finally, I consider the role,
guidance and suggestions of the founding members, the Board of Directors of
different times and the Account Supervision Committee as well as the Member
Cooperatives to be very valuable to the Bank’s progress and improvement. The trust
of our members is the foundation of the Bank’s stability. I would like to express my
gratitude and thanks to all those who have been providing their continuous support,
 2

directly or indirectly, from their different sectors to enable bank to reach its present
position, I would like to convey my humble appreciation to the energetic efforts of
our hardworking staffs and efficient management team, all members’ cooperatives
and the entire NCBL family, as well as all our well-wishers hoping for similar co-
operation and co-ordination in days to come. The Board of Directors is confident that
your unwavering faith, goodwill, cooperation, and role will continue to lead this bank
in a bright direction in the days to come.

With the objective of providing financial services to the cooperatives and uplifting the
economic and social status of the member cooperatives, established in the year 2003
A.D, National Cooperative Bank Limited (NCBL) is the only institution in the
cooperative sector licensed by Nepal Rastra Bank and registered at Department of
Cooperatives. It has been providing limited banking facilities to member cooperatives
since 2004 AD after initiating the operations formally. With many challenges and ups
and down sit has successfully completed its 18 years long journey along with
achieving sustainable development of cooperatives. The Bank has moved towards
continuous progress by expanding its branch network as per the needs of its members
and identifying new areas of service. In addition to providing banking services to the
cooperatives, the bank has been working to strengthen cooperative sector through
education, training, counseling, and technical assistance for enhancing operational
efficiency and internal control along with standardization for uplifting the quality of
cooperatives. Being one of the leader organizations in cooperative sector, a proper
advocacy and lobbying for cooperative has been undertaken by NCBL time to time.
From policy reform to coordination with the government of different levels (federal,
provincial and local government) NCBL has been a strong pillar for cooperative
movement showing its presence in government entities from time to time. With
member from all 77 districts, there are about 14,000 members in NCBL. With its
branch network at all seven provinces of Nepal it has been able to deliver its services.
Financially There has been significant growth of NCBL in 2020/21. At the end of the
FY 20/21 the Share Capital of Bank is 2.870 billion (NPR). With 46 % growth in
reserve, the reserve amounts 1.52 billion. Likewise, the profit has increased up to
48 % slightly above 1 billion. This is the remarkable amount of profit given the
coverage area of NCBL. This growth was almost equal and higher than A class
commercial Banks whose market Coverage is highest in financial sector. NCBL never
 3

compromises on the quality-of-service delivery which explains the growth of NCBL

‘s profit.

1.1.1 History of NCBL

In 1968, young people of African descent in America were growing impatient with
the slow pace of social change. Despite modest advances brought on by two decades
of non-violent resistance, from one end of the country to the other, the cry for Black
Power was raised in the midst of a sea of clenched fists. At the same time, this new
militant spirit had moved many to don black berets and carry rifles. On street corners
in practically every Black community, passers-by heard demands for Nation Time and
Power to the People! Inevitably, the powers-that-be responded to this activist
renaissance with police brutality, frame-ups and a vicious counter-intelligence
program that targeted scores of militants for harassment, prosecution or assassination.
A small group of Black lawyers refused to sit idly by while the iron fist of
government came down hard on the bravest and most intelligent of the Black
community's younger generation. This period forced the birth of the National
Conference of Black Lawyers (NCBL) which, as an organization, began to stand
shoulder-to-shoulder with rifle-toting revolutionaries. NCBL walked into courtrooms
around the country armed only with guts and the law. Inserting themselves between
the State and Black activists, NCBL began to compile a list of impressive victories.
The organization's first clients included: The Attica Brothers, Angela Davis, Assata
Shakur, and numerous other committed freedom fighters. As the era of militancy
began to fade, NCBL broadened its horizons and began to wage legal struggles on
other fronts. Defense of affirmative action became a priority when it came under
attack by Allan Bakke in California. The acceleration of the liberation struggle in
Southern Africa prompted NCBL to become among the first organizations in America
to consistently demand an end to apartheid. The arrest and prosecution of Rev. Ben
Chavis and the Wilmington 10 caused NCBL to champion their cause, along with
those of an ever-growing list of political prisoners. They included: Geronimo Pratt,
Mumia Abu Jamal and Ahmed Rahman.
In the face of criticism (even within the Black community), NCBL began pioneering
work on the international front. Concrete, solidarity work began on behalf of
progressive forces in Northern Ireland, Palestine, Cuba, Nicaragua, Guyana, Grenada,
and throughout Southern Africa. For its outspoken support for self-determination for
 4

Palestinians, NCBL received bomb threats, death threats and drastically reduced
funding. After withstanding countless blows, NCBL remains more committed than
ever to the fulfillment of its mission, to serve as the legal arm of the movement for
Black Liberation, to protect human rights, to achieve self-determination of Africa and
African Communities in the Diaspora and to work in coalition to assist in ending
oppression of all peoples.
NCBL offers a wide range of banking products and services such as savings accounts,
current accounts, fixed deposits, loans, remittance services, and other services related
to banking and finance. The bank primarily serves the rural and agricultural sectors of
Nepal, which are the backbone of the country's economy, but also caters to the needs
of urban customers.

NCBL is owned and controlled by its members, who are also its customers. This
means that the bank operates on a not-for-profit basis, with any profits being
reinvested in the business to benefit its members. As a cooperative bank, NCBL aims
to promote the welfare of its members by providing them with access to affordable
financial services, thereby promoting financial inclusion and socio-economic
development in Nepal.

The bank has a network of branches and ATMs across various regions of Nepal,
providing access to banking services to a larger population. The bank's operations are
regulated by the Nepal Rastra Bank, the central bank of Nepal, which ensures that the
bank adheres to the highest standards of financial governance and management.

1.2 Profile of National Cooperative Bank Ltd.

NCBL offers a range of banking products and services such as savings accounts,
current accounts, fixed deposits, loans, remittance services, and various other services
related to banking and finance. The bank operates on the cooperative principle of
mutual assistance and is owned and controlled by its members, who are also its
customers.

NCBL primarily serves the rural and agricultural sectors in Nepal, but also caters to
the needs of urban customers. The bank has a network of branches and ATMs across
various regions of Nepal, providing access to banking services to a larger population.
 5

The bank's mission is to become a leading provider of cooperative banking services in

Nepal by focusing on innovation, customer service, and sustainable growth. The bank
is committed to promoting financial inclusion and socio-economic development in
Nepal through the provision of affordable and accessible financial services to its
members.

NCBL's operations are regulated by the Nepal Rastra Bank, the central bank of Nepal,
which ensures that the bank adheres to the highest standards of financial governance
and management.

The bank's core values include integrity, transparency, professionalism, and social
responsibility. These values guide the bank's operations and ensure that it remains
committed to promoting the welfare of its members and contributing to the overall
development of Nepal.

Fig No. 1 Cooperative movement structure in Nepal

Source: Annual report of NCBL

 6

Nepal's cooperative banking sector has played a significant role in promoting

financial inclusion and economic development, particularly in rural areas. The sector
has been instrumental in providing access to financial services to individuals and
small businesses who would otherwise be excluded from the formal financial sector.
According to a report by the Nepal Rastra Bank, the central bank of Nepal, as of mid-
July 2020, there were 5,934 registered cooperatives in the country, including 4,984
savings and credit cooperatives.

NCBL, as a cooperative bank, has played an important role in promoting financial

inclusion and economic development in Nepal. The bank primarily serves the rural
and agricultural sectors of Nepal, which are crucial to the country's economy. By
providing access to affordable financial services, NCBL has helped to improve the
livelihoods of its members, many of whom are small farmers or small business
owners.

NCBL has also contributed to the overall development of Nepal's financial sector. The
bank has been at the forefront of introducing innovative financial products and
services, such as mobile banking and remittance services, that have helped to expand
financial access and deepen financial inclusion in the country. Additionally, NCBL
has been committed to promoting good governance and sound financial management
practices, which have helped to improve the overall stability and sustainability of the
cooperative banking sector in Nepal.

In conclusion, NCBL has played a significant role in promoting financial inclusion

and economic development in Nepal, particularly in rural areas. The bank's
commitment to innovation, customer service, and sustainable growth has helped to
improve access to affordable financial services and promote socio-economic
development in the country.

NCBL is a member-based bank so it has a unique identity and responsibility towards

its members. It plays a key role in cooperative development, promoting capacity
building, training and education. NCBL setup separate training department and
conducted an extensive training program. Based on the resolution passed by AGM,
NCBL board has established a training department along with a training
subcommittee for conducting regular training programs for its members.
 7

NCBL obtaining the membership of different international organizations. The main

objectives of becoming member of these organizations are to bring the best practices
and technologies in Nepal and motivate the member cooperative to follow such
practices & technologies to achieve sustainable developments. The aim of expanding
international affiliation and enhancing relation are as follows:

 To develop business relationships and partnerships with international

organizations.
 To access to the network.
 To focus on sustainable development and innovation among cooperatives and
rural communities, on education, young leaders and gender empowerment.
 To connection to the global development network.
 To gain access to ICA as a resource for cooperative expertise, in particular co-
operative statistics, information and intelligence.
 To participate in capacity building/training program.
 To exchange of information and technical documents.
 To encourage and defend the values and principles of the co-operative
movement.
 To stimulate mutually beneficial relations between its member organizations.
 To receive and access information on cooperatives including regular
publication.

Fig. No: -2 :- Flow Chart: Products and Services:

Source: Annual report of NCBL

 8

A. Deposit: -

Following types of accounts can be opened at any NCBL’s branches upon

completion of simple documentary requirement. All the accounts can be opened in
various currencies (against which rate are provided) subject to rule of opening and
fulfilling the required documents.
 Saving
 Current
 Fixed
 Call
B. Loan Facility and Products: -

While a loan provides all the money requested in one go at the time it is issued, in
the case of a credit, the bank provides the customer with an amount of money,
which can be used as required, using the entire amount borrowed, part of it or
none at all. Followings are the types of loan can be provided at any NCBL’s
branches: -

 Agriculture & Agriculture Project Loan

 Other Project Loan (Monthly Installment)
 Monthly Installment Loan (Term Loan)
 Hire Purchase Loan
 Microfinance Loan
 Cooperative Standardization
 Cooperative Management Loan
 Self-Reliance & Self Employment Loan
 Sustainable Cooperative Loan
 Project Loans-Hydro
 Project Financing Loan
 SME Loan
 Agriculture Project Finance Loan
 Housing/Real Estate Loan
 Liquidity Management Loan
 Working Capital Loan
 9

 Loan Against Deposit

 Youth Self Employment Loan
 Deprived sector Loan
C. Non-Funded Business: -

Non-funded business refers to banking services that do not involve the provision
of credit or loans. Non-funded business activities are revenue-generating services
offered by banks that do not require a direct investment of funds. These services
include various fee-based activities, such as account maintenance fees, transaction
fees, foreign exchange fees, and other charges that banks levy on customers for
providing banking services.

Examples of non-funded business activities include account opening and

maintenance, remittances, trade finance services, foreign exchange services,
investment advisory services, and other fee-based services. Non-funded business
is an essential part of a bank's revenue model and provides a stable and diversified
source of income for the bank.

The term "non-funded" distinguishes these services from funded services, which
involve the provision of credit or loans. Funded services are riskier for the bank,
as they involve the direct investment of funds, while non-funded services are
generally less risky and generate a steady stream of income.

In summary, non-funded business activities refer to banking services that do not

involve the provision of credit or loans, but rather generate revenue through
various fee-based activities. These services are an essential part of a bank's
revenue model and provide a stable and diversified source of income for the bank.

Banks do operate at the full level though both – Funded and non-funded sources.
While loan-based products are regarded as funded businesses, several non-funded
businesses are being conducted by the banking industry too.

Today, banks no longer depend just on funded business. Non-funded businesses

are making equal contributions towards their profit. Banks have been providing
non-funded facilities to their customers against some charges and commissions.
Non-funded business can be simply understood as those facilities where banks
don’t receive direct funds around. It is important to realize the fact that banks
 10

don’t meet their liability for the payment towards their party. Following are the
types of Non-funded businesses can be provided at any NCBL’s branches:-

I. Bank Guarantee
II. Remittance - NCBL Remittance (Domestic, only from our branches)
- Western Union Money Transfer
- IME
- Himal Remit
- Prabhu Money Transfer
- Best Remit
- City Express
III. Utility Payment
D. E-Product: -

Following are the types of E-Product can be provided at any NCBL’s branches:-
- Internet Banking
- SMS Banking
- Interbank Payment System (IPS)
- NCBL Standardization Program
1.1.3 Introduction of Deposit
Deposit refers to the ability of a business or investment to generate deposit over a
specific period of time, usually measured as a percentage of revenue or investment. It
is a measure of the financial success of a business or investment, and is calculated by
comparing the revenue earned to the expenses incurred in generating that revenue. A
profitable business or investment is one that generates more revenue than it spends,
resulting in a positive net income or profit. High profitability is generally seen as a
desirable outcome, as it allows the business or investment to reinvest profits, pay
dividends to shareholders, and grow over time.

Deposit is the basis for company's effectiveness assessment. To evaluate the deposit,
one may use the ratios relating selected profit type given in the profit and loss
statement (typically the net profit) to the level of sales, assets or equity. The greater
the values of these ratios, better the company's profitability. There are no reference
values for the ratios, thus to assess them we analyze how they change in time. The
group of profitability ratios includes:
 11

 Gross profit margin,

 Operating profit margin,
 Return on sales (ROS) / Net profit margin,
 Return on assets (ROA),
 Basic earnings power ratio,
 Return on equity (ROE),
 Return on share (initial) capital.

1.3 Objectives of the study

Every study is done to achieve some objectives or definite purpose. The purpose of
the study may differ from firm to firm according to nature, types, structure and
research. The main objective of the study is to Profitability analysis of National
Cooperative Bank Limited using different ratios.
 To find out the Deposit analysis of NCBL.
 To evaluate Deposit analysis of National Cooperative Bank limited.

1.4 Rationale of the study

In today's competitive world this type of the report of the study is very important for
the bachelor level students. it contributes towards fulfillment of the local services to
the National Cooperative Bank Limited thesis can be beneficial. This is important for
the study to investigation and the instauration both as follows:-

For the investigators

 Help to make practical use of the study.
 Contribute towards developing the skills in investigators while interacting
with people.
 Assist in developing capacity of making intense study on any topic
 It can be an information tool to students and other people conducting research
work.

For the National Cooperative Bank Limited.

 In case of any drawbacks, it can receive suggestion and help for its progress.
 12

 The information collected income of research and investigation can be helpful

for future plan.
 The investigation may act as a media for the advertisement as the investigators
makes the detailed study of the bank.
Deposit analysis is a crucial tool for evaluating the financial performance of a
business. By analyzing NCBL's profitability, stakeholders can gain insights into the
company's overall health, including how efficiently it generates profits, manages costs,
and uses its resources.

The Deposit analysis of NCBL Nepal can be useful for investors who are considering
investing in the company. By evaluating the company's profitability, investors can
assess the potential returns they can expect from their investment, which can help
them make informed investment decisions.

Analyzing NCBL’s Deposit can help the company benchmark its financial
performance against its peers in the industry. This can provide insights into how the
company is performing compared to its competitors and help identify areas where it
may need to improve to remain competitive.

Profitability analysis can also help guide strategic decision-making for NCBL. By
understanding the company's profitability, management can identify areas where it
may need to adjust its operations to improve its financial performance.

1.5 Literature Review

An argument in Deposit analysis is the major concern to different companies.
Specifically, the factors affecting Profitability decision is a major argument among the
companies. In an attempt to answer this argument, academics and practitioners
developed a number of theories, which have been subjected to empirical test. The
academic literature has been very helpful to provide clear guidance on practical issues
and for the purpose literature review section is being carried out, which consist of
valid and authentic books and journals concerning past studies on Deposit analysis
policy. Development banks’ Deposit exposure can be measured by analyzing the
sources and uses of Deposit analysis.
 13

Different Deposit exposure ratios such as borrowed funds to total assets, core deposit
to total assets, loans to deposits, and commitments to lend to total assets are used to
measure the Profitability analysis of a cooperative bank (Saunders & Cornett, 2004).A
research conducted by Wang (2002) reveals that there is a positive relationship
between Profitability and operating performance. Seventeen years data of sample
firms was taken. They examined the association between profitability and the
information system taking the sample. Meanwhile the research also reveals that there
is positive relationship of Profitability Ratio. Similarly, Eljelly (2004) found that there
is significant negative relationship between the firm’s profitability analyses when it is
measured by current ratio.
The study also found that at industry level, however, cash gap is important to measure
the Deposit analysis than current ratio that affects profitability. Walt (2009) through
his research reveals due to convertibility into Profitability is more important, he also
adds that importance of profitability does not mean that company the company that
more Deposit . Don (2009), while comparing relative importance of both states that
Deposit is more important than Deposit , because it determines the survival of the
company.
Qasim Saleem & Ramiz Ur Rehman (2011) by taking five years data of twenty-six
enterprises examined the relationship between Profitability of firm and profitability,
found that there is positive relationship between firms’s Profitability. Profitability
management is of crucial importance in financial management decision. The optimal
o Profitability management is could be achieve by company that manage the trade-off
between profitability and Profitability management (Bhunia& Khan, 2011).

Various indicators of bank reports and statement show the quality of the bank
performance. Bank performance can be evaluated on the basic of Profitability and
profitability position of the bank. If the bank has high Profitability it cannot reach on a
desired profit and if the bank has the shortfall of the Profitability, it cannot satisfy its
customers. Many research studies have been conducted by the different student,
experts and researchers about the Profitability Ratio analysis of National Cooperative
Bank Limited. Some studies are related to case study of a single bank and some are
comparative in nature. The financial and statistical tools used by most of the
researchers were ratio analysis, test of hypothesis, correlation analysis and trend
analysis. Regression analysis and primary tools have been used by many researches.
 14

This research will include different tools like ratio analysis, correlation-regression
analysis and interview as primary tools of analysis, regression and interview are the
specific tools used in this research and also used the latest data to show the Financial
Analysis of National Cooperative Bank Limited. This research can help the person
who wants to know about financial study of National Cooperative Bank limited. This
research may be new as well as the research work may be appreciable.

1.6 Research Methodology

The present study is mainly based on two type of research design i.e description and
analytical. Descriptive research design describes the general pattern of the Nepalese
investors, business structure, problem of investment policy etc. The analytical
research design makes analysis of the gathered facts and information and makes a
critical evaluation of it.
Finally, research design is the plan, structure and strategy of investigations conceived
so as to obtain answer to research questions and to control variances. To achieve this
study descriptive and analytical research design has been used.

1.6.1 Types of Data

For the purpose of the study, two types of data are use and they are as follows:

Primary Data: -

I would collect through the administration of questionnaire, observation group

discussion and interview with bank’s shareholders as well as staffs of the National
Cooperatives Bank Limited. I would collect about bank profitability, and purpose of
loans, diversification, tangibility, legality, management perception and other factor
affecting the Investment policy of the bank.
Secondary Data: -
I would collect the secondary data through news, feeds, reports and publication like
government reports and publication reports of different NGO,s and INGO,s and from
the previous data of National Cooperative Bank Limited.

1.6.2 Data Collection Procedure

When the opportunity has been given by the college to study about the report to
complete the BBS level, when college provide me letter, I then went to National
 15

Cooperative Bank Limited, to find out the annual structure of the bank of last three
years. And after all, researches I started to create the project report on my specific
topic. In this topic there are different tools and techniques are used to analysis the
working capital of the bank. Specially by looking the objectives used the different
tools such as income statement balance sheet and using the ratio.

1.7 Limitation of the study

The limitations of the study are as follows:
 The study was carried out only period of three F/Y.
 The availability of primary data is very hard to assess. So, the study is the
mostly based on secondary data.
 The study was conducted within the limited time which means the study has
been conducted within the fixed duration of limited time.
 Being the data used in field report is rounded into nearest rupee which may
lead in inaccurate result.
 Most of the data are taken from secondary sources. Thus, the actual
performance of each and every deposit can be analyzed.
 16

CHAPTER II

RESULTS AND ANALYSIS

2.1 Data Presentation

Presentation means the presentation of the collected data through table; figure etc.
presentation is the process of understanding the study or the report and calculating the
opinion. An analysis of a data means the process where the statement or the report
gets resolve by breaking them into simple statement. Analysis means to find out
something and give opinion about the presented data.

2.1.1 Total Deposit Position of NATIONAL COOPERATIVE BANK LTD.:

Table No-1 Total deposit of NCBL (amount in millions)
Fiscal Fixed Current Saving Margin Call & short Total
year deposit deposit deposit deposit deposit
2076/77 8494.85 1739.76 9211.72 373.04 5887.55 23594.12
2077/78 15541.1 2106.14 9581.57 570.88 6033.00 31155.67
2078/79 18000.2 2500.3 9818.2 778.02 6432.33 37529.5
Source: Annual reports of National Cooperative Bank Ltd.

Figure No-3 Total deposit of NCBL

Source: Annual Reports of National Cooperative Bank Ltd.
 17

In the above table and chart, we see that, in fiscal year 2076/77, the fixed deposit
account 26% the current deposit account occupied 5.47 %, saving deposit account
29% and in fiscal year 2076/77, the fixed deposit account 36% the current deposit
account occupied 7.37 %, saving deposit account 39%. In fiscal year 2077/78 the
fixed deposit account 49.88% the current deposit account occupied 6.76 %, saving
deposit account 30.75%. Similarly in the fiscal year 2078/79 the ratio is different for
the different deposits as in the previous year.

2.1.2 Saving Deposit to Total Deposit Ratio of National Cooperative Bank Ltd.
Table No-2 Saving Deposit to Total Deposit Ratio: (amount in millions)
Fiscal year Saving deposit Total deposit Ratio
2076/77 9211.72 23594.67 0.39
2077/78 9581.57 31155.67 0.31
2078/79 9818.2 37529.5 0.26
Source: Annual reports of National Cooperative Bank Ltd.

Figure No-4 Saving Deposit to Total Deposit

Source: Annual reports of National Cooperative Bank Ltd.

From the above table and chart, the ratio is fluctuating state. In fiscal year 2076/77 the
bank has saving deposit of 0.38 and in fiscal year 2076/77 the bank has saving deposit
of 0.39 times to total deposit liability and in 2077/78 0.31 times of total deposit
liability and in the year 2078/79 it became .26 times.
 18

2.1.3 Fixed Deposit to Total Deposit Ratio of National Cooperative Bank Ltd.
Table No-3 Fixed Deposit to Total Deposit (amount in millions)
Fiscal year Fixed deposit Total deposit Ratio
2076/77 8494.85 23594.12 0.36
2077/78 15541.10 31155.67 0.50
2078/79 18000.2 37529.5 0.48
Source: Annual reports of National Cooperative Bank Ltd.

Figure No -5 Fixed Deposits to Total Deposit

Source: Annual Reports of National Cooperative Bank Ltd.

From the above table and chart, the ratio is fluctuating in increasing trend. The ratio
of fiscal year in 2077/78 is 0.5 times is increased from the ratio of 0.36 times of fiscal
year 2076/77 and in the year 2078/79 it reached 0.48 times.

2.1.4 Current Deposit to Total Deposit of National Cooperative Bank Ltd.

Table No-4Current Deposit to Total Deposit (amounts in millions)
Fiscal year Current deposit Total deposit Ratio
2076/77 1739.76 23594.12 0.073
2077/78 2106.14 31155.67 0.067
2078/79 2500.3 37529.5 0.066
Source: Annual reports of National Cooperative Bank Ltd.
 19

Figure No-6 Current Deposits to Total Deposit

Source: Annual reports of National Cooperative Bank Ltd.

From the above table and bar diagram, the ratio is fluctuating in decreasing trend. The
ratio of fiscal year in 2076/77 is 0.059 times then in fiscal year 2077/78 is 0.067 times
is increased from the ratio of 0.07 times of fiscal year 2076/77 and in the year
2078/79 it was observed that the ratio became 0.066 times.

2.1.5 Cash & Bank Balance to Current Deposit of NCBL

Table No-5Cash &Bank Balance to Current Deposit (amounts in millions)
Fiscal year Cash & bank balance Current deposit Ratio
2076/77 1468 1739.76 0.84
2077/78 1820 2106.14 0.86
2078/79 2240 2500.3 0.90
Source: Annual reports of National Cooperative Bank Ltd
 20

Figure No-7 Cash &Bank Balance to Current Deposit

Source: Annual reports of National Cooperative Bank Ltd
From the above table and trend line chart, we found the increasing trend of cash and
bank balance to current deposit ratio. In fiscal year 2076/77 the cash and bank balance
ratio is 0.91 times to current deposit. In fiscal year 2076/77 the cash and bank balance
ratio is 0.84 times to current deposit. It is increased to 0.86 times in fiscal year
2077/78 and in the year 2078/79 it was found 0.90 times.

2.1.6 Cash and Bank Balance to Total Deposit of National Cooperative Bank Ltd.
Table No-6 Cash and Bank Balance to Total Deposit (amounts in millions)
Fiscal year Cash and bank balance Total deposit Ratio
2076/77 1468 23594.12 0.062
2077/78 1820 31155.67 0.058
2078/79 2240 37529.5 0.060
Source: Annual reports of National Cooperative Bank Ltd.
 21

Figure No-8 Cash and Bank Balance to Total Deposit

Source: Annual reports of National Cooperative Bank Ltd.

From the above table and chart, the ratio is fluctuating in decreasing trend. In fiscal
year 2076/77, the bank has the Profitability against fixed deposit in the ratio of 0.053
times. In fiscal year 2076/77, the bank has the Profitability against fixed deposit in the
ratio of 0.062 times. 0.058 Times against total deposit in fiscal year 2077/78 which
is decreased to 0.058 from 0.062 times and in the year 2078/79 it was found 0.060
times.

2.1.7 Balance to NRB to Total Deposit Ratio of National Cooperative Bank Ltd.
Table no:-7 Balance to NRB to Total Deposit Ratio (amounts in millions)
Fiscal year Balance with NRB Total deposit Ratio
2076/77 7068 23594.12 0.30
2077/78 12925 31155.67 0.41
2078/79 13135 37529.5 0.35
Source: Annual reports of National Cooperative Bank Ltd.
 22

Figure No-9 Balance to NRB to Total Deposit

Source: Annual reports of National Cooperative Bank Ltd.
From the above table and chart, the ratio is fluctuating in increasing trend. In fiscal
year 2076/77, the bank has balance with NRB to total deposit ratio is 0.28 times In
fiscal year 2076/77, the bank has balance with NRB to total deposit ratio is 0.30 times.
0.41 Times against total deposit in fiscal year 2077/78 which is increased to 0.41
from 0.30 times. But it was decreased to 0.35 in the year 2078/79.

2.1.8 Total Investment to Total Deposit of National Cooperative Bank Ltd.

TableNo-8 Total Investment to Total Deposit (amounts in millions)
Fiscal year Total investment Total deposit Ratio
2076/77 18277 23594.12 0.77
2077/78 30972 31155.67 0.99
2078/79 30023 37529.5 0.80
Source: Annual reports of National Cooperative Bank Ltd.
 23

Figure No:-10 Total Investment to Total Deposit

Source: Annual reports of National Cooperative Bank Ltd.
From the above table and chart, the ratio is fluctuating in increasing trend. The bank
has invested 70% of the deposit in fiscal year 2076/77. The bank has invested 77% of
the deposit in fiscal year 2076/77. This is increased in 2077/78 to 99%. And in the
year 2078/79, it was found 0.80.

2.2 Analysis of the Results

None of the organization is perfect in each and every way. I here are some
weaknesses and treats, which affect the organization's performance. It may have lots
of strength to be proud of but beside with some weakness and threats as well. And the
organization does not remain same forever there will be lots of opportunities in order
to expand the transactions. So National Cooperative Bank Ltd. has also its strength to
be proud, some weakness to be recovered and threats to be faced patiently. The
present study has been undertaken to examine and evaluate the Profitability and
profitability position of National Cooperative Bank Ltd. Limited. The study also
examines the financial performance of NCBL. The financial statement of three years
that is from 2076/77 to 2078/79 has been examined for the purpose the study. The
study has resorted mainly to secondary data that has been first processed and analyzed
 24

comparatively. Individual interview with the management personal has been taken
whenever necessary. This study is exploratory as well as analytical sometimes.
National Cooperative Bank Ltd. is the first cooperative bank in Nepal established in
2003. Among many joint venture joint venture banks, it is leading one, which is
always running in profit due to its proper management and good policies. Data that I
have presented is all from the secondary sources, which are in the annual reports.

2.3 Major Findings

However, Deposit analysis typically involves evaluating a company's financial
statements to determine its ability to generate profits, such as through the calculation
of ratios like net profit margin, return on assets, and return on equity. These ratios can
help identify areas where a company may be able to improve profitability, such as by
reducing costs, increasing revenue, or optimizing its asset utilization. Ultimately, the
major finding of a profitability analysis of NCBL would depend on the specific
financial data and analytical approach used.

National Cooperative Bank Ltd. has also its strength to be proud, some weakness to
be recovered and threats to be faced patiently. The major findings are as follows:-

Strength
 National Cooperative Bank Ltd. is well known for providing highly
personalized services to its customers. It provides different service like ATM,
credit cards, tele banking service, safe deposit locker etc.
 Human resources in National Cooperative Bank Ltd. is well trained and they
are dedicated to the bank too. National Cooperative Bank Ltd. is providing
high remuneration and other facilities to as well to its staff.
 Strong commitment to cooperative principles: NCBL is a cooperative bank
that operates according to the principles of mutual assistance, democratic
control, and social responsibility. The bank's commitment to these principles
is likely to appeal to customers who value ethical and socially responsible
banking practices.
 NCBL has a strong focus on serving the needs of rural and agricultural
communities in Nepal. This focus is likely to provide the bank with a stable
customer base and a unique niche in the market.
 25

Weakness
 The increase in the number of branches increases the cost operation.
 The political instability in the country can be considered another weakness of
the bank.
 National Cooperative Bank Ltd. pays high interest rate on deposits. For this
reason, the bank also charges high interest rates on credit, which has bad
impact in investment situation in nation.
 NCBL operates primarily in rural and semi-urban areas of Nepal. While this
focus provides the bank with a unique niche in the market, it also limits its
ability to grow and diversify its customer base beyond these areas.
 NCBL offers a limited range of products and services compared to larger
commercial banks in Nepal. This may make it more difficult for the bank to
compete with larger banks and attract customers who require a broader range
of financial products and services.
 NCBL may face challenges in keeping up with advances in technology and
digitization, which are becoming increasingly important in the financial
services industry. A lack of investment in technology infrastructure could
potentially limit the bank's ability to compete with larger banks and meet the
evolving needs of its customers.

Opportunities
 A lot of people deposit their fund in this bank due to its skill in attracting
people by adopting attractive policies like high interest rate.
 Staff can perform their more efficiently with the help of computers. The
environment of the bank is sound which help to enhance its stall its better
profitability.
 People in various sectors get employed through this bank, which has highest
number of branches among joint venture banks in the nation.
 The demand for financial services is increasing in Nepal due to economic
growth, increasing urbanization, and a growing middle class. NCBL's focus on
rural and agricultural sectors and financial inclusion could position it to
capitalize on this growing demand.
 There are many opportunities for NCBL to leverage technology to improve its
operations and offer new products and services. For example, the bank could
 26

explore mobile banking, online banking, and digital payments to improve

customer experience and increase efficiency.

Threats
 Banks must land and invest its fund to parties having good reputation.
Otherwise, the bank will have to regret later on.
 Excess government pressure may create irregular banking transaction, which
leads to bad reputation of the bank.
 The economic condition of country is deteriorating.
 There is increasing number of competitors.
 NCBL faces intense competition from larger commercial banks in Nepal,
which may have larger marketing budgets and a broader range of products and
services. This competition could potentially limit the bank's ability to attract
new customers and grow its market share.
 Nepal has a history of political instability, which can impact the country's
economic growth and stability. Any political or economic instability could
potentially impact NCBL's operations and Deposit .
 NCBL is exposed to interest rate risk, which could impact the bank's Deposit.
If interest rates rise, the bank's borrowing costs could increase, and its net
interest margin could decline.
 27

CHAPTER III
SUMMARY AND CONCLUSION

3.1 Summary
Deposit analysis of a bank typically involves examining key financial ratios such as
net interest margin (NIM), return on assets (ROA), and return on equity (ROE). NIM
is the difference between the interest earned on loans and investments and the interest
paid on deposits, and it indicates the bank's ability to generate income from its core
lending and investing activities. ROA measures the bank's Deposit in relation to its
total assets, while ROE measures Deposit in relation to shareholder equity.

Factors that can influence a bank's Deposit include the level of competition in the
market, interest rate environment, the quality of the bank's loan portfolio, and the
bank's operating efficiency. A bank that is able to attract and retain customers,
maintain a strong credit quality, and operate efficiently is more likely to be profitable.

In the case of NCBL, the bank's Deposit is likely to be influenced by its ability to
serve the rural and agricultural sectors of Nepal effectively, its ability to compete with
other banks in the market, and its management of credit risk and operating expenses.
The bank's commitment to promoting financial inclusion and socio-economic
development in Nepal through the provision of affordable and accessible financial
services to its members is likely to play a significant role in its profitability.

In conclusion, a comprehensive profitability analysis of NCBL would require access

to the bank's financial statements and performance data. However, factors such as
market competition, interest rate environment, loan portfolio quality, and operating
efficiency are likely to be significant determinants of the bank's Deposit .

A bank is institution, which deals in money. Bank draws surplus money from the
people who save and lend them to the people who want to use it for productive
purpose. In this process the bank earns commission. The rate of interest paid to
depositor is generally lower than the rate the rate charged to the borrowers. The
 28

difference between these two rates of interest is the profit of the bank. Deposit
collection is the main function of cooperative bank.
The present study has been undertaken to examine and evaluate the Deposit analysis
of National Cooperative Bank Ltd. The study also examines the financial performance
of NCBL. The financial statement of three years that is from 2076/77 to 2078/79 has
been examined for the purpose the study. The study has resorted mainly to secondary
data that has been first processed and analyzed comparatively. Individual interview
with the management personal has been taken whenever necessary. This study is
exploratory as well as analytical sometimes. National Cooperative Bank Ltd. is the
first cooperative sector bank in Nepal established in 2003. Among many joint venture
joint venture banks, it is leading one, which is always running in profit due to its
proper management and good policies. Data that I have presented is all from the
secondary sources, which are in the annual reports.

3.2 Conclusion
NCBL's commitment to promoting financial inclusion and socio-economic
development in Nepal through the provision of affordable and accessible financial
services to its members is likely to be a key driver of the bank's long-term profitability.
The bank's focus on serving the rural and agricultural sectors in Nepal, while also
catering to the needs of urban customers, is likely to provide a stable customer base
for the bank.

However, a Deposit analysis typically involves evaluating a company's financial

statements to determine its profitability, which can be assessed through various ratios
and metrics. The conclusions drawn from a profitability analysis would depend on the
specific financial data analyzed, the analytical approach used, and the context of the
industry and market in which the company operates.

Overall, NCBL's Deposit is likely to depend on its ability to attract and retain
customers, maintain a strong credit quality, manage operating expenses efficiently,
and adapt to changes in the market and regulatory environment. The bank's adherence
to cooperative principles of mutual assistance and social responsibility is also likely to
be a key factor in its long-term success and Deposit .
 29

However, a thesis conclusion for a Deposit analysis of NCBL would depend on the
specific research questions and hypotheses addressed, the methodology employed, the
financial data analyzed, and the conclusions drawn from the analysis. The conclusion
of a Deposit analysis thesis would typically summarize the findings of the study,
highlight any significant trends or relationships identified in the data, and discuss the
implications of the results for the company's financial performance and future
prospects.

In Nepalese banking sector, cooperative banks including ventures banks are operating
at present. In the absences of modern banking any country cannot develop the
economic activity. Therefore, it is essential to find out whether or not the banks are
serving an important contribution to develop sectors of economy. Deposit is said to be
general business of fund, which shows the bank ability to meet cash requirement. In
this record, this study has been based upon the objective to evaluate the Profitability
analysis of National Cooperative Bank Ltd.
 The deposit of National Cooperative Bank Ltd.is in increasing trend. The
share of fixed deposit is more than that of savings, currents, margin and other
deposits.
 Fixed deposit is fluctuated in increasing trend. It is increased to 0.50 from 0.36.
 The investment to total deposit ratio is fluctuating in increasing trend. Since
the ratio is increasing the bank has satisfactory result.
 The trend analysis shows that the deposit of National Cooperative Bank Ltd. is
in increasing trend. In addition to this, the bank is being able to satisfy its
customers and in providing higher quality and newer service to them.
 Thus, the bank's performance is effective Deposit and Deposit and towards the
customers and may attract more customers.
 The overall results are satisfactory. But in some case the NCBL should take
certain steps to improve the bank current financial condition. Therefore some
recommendations are being put forward for its improvement along with its
development of the country.
 The proportion of the saving deposit account is high in total deposit liability.
So, it is recommended the bank should utilize the amount collected from the
saving deposit account carefully. It should be invested in the higher yielding
areas.
 30

 The cash and bank balance in the National Cooperative Bank Ltd. is
satisfactory. It is higher a bit though. Bank should analyze the opportunities
for short term investment.
 Investment to deposit ratio is fluctuating adversely. It may harm operation of
the bank. So, the investment from the deposit source should always be aware
of Profitability need and keep in mind to maintain the optimum Profitability.
 Bank should not spend too much in the fixed assets because it yields only
nominal portion, almost no yield.
 Interest rate on deposit should be competitive.
 Bank should provide more facilities to the staff, it has to provide job
satisfaction, training and should encourage its staff.
 31

REFERENCES

 Brigham, Eugene F., "fundamental of financial management", Holt Rincht and

Winston: The Dryden Press, 1998.
 Don, M. (2009): Deposit v/s Deposit-Striking the Right Balance.
In Resolved Question, www.answers.Yahoo.com/question.
 Eljelly, A. (2004) “Deposit Tradeoff: An Empirical Investigation in an
Emerging Market.” International Journal of Commerce & Management.Vol.
14, No2, pp. 48-61.
 National Cooperative Bank Limited, "Annual Report 2076/77 to 2078/79."
 QASIM SALEEM & RAMIZ UR REHMAN. (2011). Impacts of Profitability
analysis.
 Walt (2009): What is more important, Deposit of a Company.
 WANG, (2002). Deposit Ratio management, operating performance, and
corporate value: evidence from Japan and Taiwan. Journal of Multinational
Financial Management.
Websites:

 www.wekipedia.com
 www.google.com
 www.ncbl.coop