FINANCIAL ANALYSIS OF KUMARI

BANK LIMITED

A Proposal

Submitted by:
Symbol No:
T.U. Reg. No College

Submitted to:
The Faculty of Management
Tribhuvan University Kathmandu

In Partial fulfillment of the requirement for the Degree of

BACHELOR OF BUSINESS STUDIES (BBS)

February 2025
 ACKNOWLEDGMENT

I would like to express my gratitude to my respected supervisor Mr, for the valuable
suggestions and encouragement without which this work would not have been
completed.

I would like to express my gratitude towards our campus chief Mr. sir for his kind
cooperation and encouragement in completion of this project report. I am highly
indebted to all my teacher of College who has provided crucial information through
orientation class regarding preparation of my project report.

I must give special thanks to the respected teachers, library staffs compliment for
their idea, opinion, suggestion and valuable time and effort in going through my
work.

Finally, I offer thanks to all who directly and indirectly contributed to prepare this
report.

BBS 4th year

ii
 TABLE OF CONTENTS

Title Page………………………………………………………………………………………….……….. i

Acknowledgement………………………………………………………………………….………….. ii

Table of contents……………………………………………………………………………………….. iii

CHAPTER 1 INTRODUCTION……………………………………………….. 1
1.1. Background of the Study……………………………………………………………………1

1.1.1. Profile, events and activities of the organization: ....................

2

1.2. Statement of Problem ........................................................................... 3

1.3. Objective of the Study ........................................................................... 3

1.4. Rationale of the Study ...........................................................................

3

1.5. Literature Review ................................................................................... 4

1.5.1 Review of Previous Works……………………………………………………………5

1.5.2. Research gap ................................................................................. 6

1.6. Research Methodology………………………………………………………………………6

1.6.1. Types of Research .......................................................................... 7

1.6.2. Population and Sampling ............................................................... 7

1.6.3. Types of Data ................................................................................ 8

iii
 1.6.4. Data Analysis Tools ........................................................................
8
1.7. Limitation of the Study……………………………………………………………………………9

1.8. Report Structure…………………………………………………………………………………..10

REFRENCES…………………………………………………………………………………………………..10

iv
 CHAPTER 1

INRODUCTION

1.1. Background of the Study:

A bank is a financial institution licensed to receive deposit and make

loans. Banks may also give financial services such as wealth management,
currency exchange and safe deposit boxes. There are two types of banks:
commercial / retail banks and investment banks. In most countries, banks are
regulated by the national government or central bank.

Financial analysis is the process of evaluating businesses, projects,

budgets and other finance-related entities to determine their performance
and suitability. Typically, financial analysis is used to analyze whether an entity
is stable, solvent, liquid or profitable enough to warrant a monetary
investment. When looking at a specific company, a financial analyst conducts
analysis by focusing on the income statement, balance sheet and cash flow
statement. Financial analysis also helps to evaluate and decision making for
business operation. In financial analysis process ratio analysis process is the
most dominant and logical structure to help business related stakeholder.
Under the financial ratio analysis process there are few categories to identical
area of financial institution. So business stakeholders try to concentrate to get
overall business overview from profitability, liquidity, assets management and
solvency ratio analysis. These ratios not only help in decision making process
also emphasized on risk avoiding and profit raising related factors. To
calculate this ratio need to take quantitative data from bank trading activity
and other sources.

1
1.1.1. Profile, events and activities of the organization:

Kumari Bank Limited (KBL):

Kumari Bank Limited, came into existence as the fifteenth commercial bank of
Nepal by starting its banking operations from Chaitra 21, 2057 BS ( April 03, 2001)
with an objective of providing competitive and modem banking service in the
Nepalese financial market. The bank has paid up capital of 13.87 billion.

Kumari Bank Limited has been providing wide range of modern banking
services through 246 points of representations located in various urban, semi-urban
and rural parts of a country, with 196 branches, 14 extension counters and 38
branchless banking units. It also provides E-banking and SMS banking services in
Nepal. The bank always focus on building sound technology driven internal system to
cater the changing needs of the customers that enhance high comfort and value. The
adoption of modern Globus Software developed by Temenos NV, Switzerland and
arrangement of centralized data base system enables customer to make highly
secured transactions in any branch regardless of having account with particular
branch. Similarly, the bank has been providing 365 days banking facilities, extended
banking hours till 7 PM in the evening.

Visa Electron Debit Card, which is accessible in entire VISA linked ATMs and
POS (Point of Sale) terminals both in Nepal and India, has also added convenience to
the customers. The bank has been able to get recognition as an innovative and fast-
growing institution striving to enhance customer value and satisfaction by backing
transparent business practice professional management and corporate governance.
The key focus of the bank is always center on serving unfulfilled needs of all classes
customers located in various parts of the country by offering modern and
competitive banking products and services in their door step. The bank always
prioritizes the priorities of the valued customers.

Vision:

• To establish ourselves as a leader in banking by providing a range

of financial services suitable to the needs of the market with high
priority on customer

2
 care while simultaneously embracing the interests of all stakeholders and
value of a good corporate citizen.

Mission:

• Leveraging and integrating the existing strengths of the

institutions.
• Reaching out and serving wide range of customers within and
outside the country.
• Developing a culture of “Giving Extra Care to the Customers”.
• Being innovative in designing and delivering services.
• Adopting prudent investment practices for building up a sound
assets base.

1.2. Statement of the problem:

The study shows the following statement of problem:

• What are the assets and liabilities position of Kumari Bank
Limited?
• What is the profitability position of Kumari Bank Limited?

1.3. Objective of the study:

This study serves a number of objectives which are as follows:

• To determine the assets and liabilities position of Kumari Bank
Limited.
• To analyze the profitability of the bank.

1.4. Rational of the Study:

3
 In this changing pace of the time, most of the commercial banks are gaining a
wide popularity through their efficient management and professional services and
playing a great role in the economy. The main purpose of the commercial banks is to
have efficient financial management so that stakeholders get satisfactory. This study
adds new idea and findings about the concerned bank.

This study is helpful for all the concerned parties which add new ideas and
findings about Kumari Bank Limited. This studies that will have importance to various
groups but in particular is directed to a certain groups of people/organizations are:-

1. To the investors
2. To the creditors
3. To management of the bank
4. To the customers
5. To the other parties
6. And this study will be equally useful to the other readers, students of
related subjects and other people who are concern with banking field.

1.5. Review of Literature:

Literature review is a comprehensive study of such document and preparation

of a summary of the study of books, articles and resource reports available in the
market on a topic. They are the secondary source and do not report new or original
experimental work. Most often associated with academic oriented literature, such
reviews are found in academic journals and are not to be confused with reviews that
may also appear in the same publication. Literature review is the basis of research in
nearly every academic field. Some of the study is also done through by reviewing the
previous year thesis, through articles of the concerned bank found in the internet
etc. A narrow scope literature review may be included as part of a peer- reviewed
journals, article presenting new research, serving to situate the current study within
the body of the relevant literature and to provide context for the reader.

4
1.5.1. Review of Previous Works:

Ranabhat, R. “Financial Analysis of Muktinath Bikas Bank Limited”.

The objectives of the report are as follows:
• To explore the profitability position. To ascertain the liquidity
position.

The conclusion of this report are as follows:

• The profitability position of the bank seems to be sufficient
throughout the year but it is decreasing. The bank must utilize its
deposits and manpower effectively.
• The liquidity position of the bank is good since the quality of the
current assets is very good.

Das, A. “Comparative Financial Analysis of Nepal Bank Limited and Nabil Bank
Limited".
The objectives of the study are as follows:
• To analyze the liquidity position of selected commercial bank.
• To analyze the guidelines and provisions related to loan
classification and loan loss provision.

The conclusion of the study are as follows:

• The liquidity position of Nepal Bank Limited is higher than Nabil
Bank Limited.
• The average mean, Standard Deviation and Coefficient of
Variation of Nabil Bank Limited is higher than Nepal Bank Limited
which represents the higher return as well as it is highly risky
than Nepal Bank Limited.

5
Manandhar, N. “Financial Performance Analysis of Standard Chartered Bank
Nepal Limited".
The objectives of the study are as follows:
• To analyze the financial performance.
• To evaluate the financial position in terms of ROA and ROE.
The conclusion of the study are as follows:
• The cash and bank balance is not properly utilized. So, it hurts the
financial performance of the bank.
• The ROA and ROE of the bank is not satisfactory because it is in
decreasing trend.

1.5.2. Research gap:

Research gap refers to difference in result between previous and present

study in similar field. So, to find the gap we need to study and analyze the study
conducted on same topic in different time period. There have been numerous
studies conducted on the field of financial analysis but this report will help to find
out reliable and current results.

Previous study on analysis of financial statement of commercial bank provide

concentrated or limited information as previously most banks don't properly disclose
their every financial transaction but this report will provide more information about
financial analysis of Kumari Bank Limited. It is necessary to find out fresh pattern of
financial analysis of Kumari Bank Limited.

1.6. Research Methodology:

Research methodology is the specific procedures or techniques used to

identify, select, process, and analyze information about a topic. It is a systematic way
of solving the research problem. It may be understood as a science of studying how
research is done scientifically. In it, the various sequential steps that are generally
adopted by the researcher in studying his research problem with certain objectives in

6
view are studied. A research methodology helps us to find out accuracy, validity and
suitability. The nature of the data used in this study is mainly based on secondary.

1.6.1. Types of Research:

Research method section describes the rational for the application of specific
procedures or techniques used to identify, select and analyze information applied to
understanding the research problem. It allows the reader to critically evaluate a
study's overall validity and reliability. Financial ratios are important tools of financial
analysis. It's based on Quantitative data and tools.

Quantitative research:

Quantitative research is inquiry into an identified problem, based on testing a

theory, based on testing a theory, measured with numbers, and analyzed using
statistical techniques. The goal of quantitative methods is to determine whether the
predictive generalizations of a theory hold true. We will explore some of the issues
and challenges associated with quantitative research in this section. Seek the advice
of faculty members who have conducted quantitative studies for advice, support and
encouragement.

Qualitative research:

A study based upon a qualitative process of inquiry has the goal of understanding
a social or human problem from multiple perspectives. Qualitative research is
conducted in a natural setting and involves a process of building a complex and
holistic picture of the phenomenon of interest. We will explore some of the issues
and challenges associated with qualitative research in this section. Look for
colleagues who engage in qualitative research to serve as a sounding board for

7
procedures and processes you may use as a new faculty member. This research is
based on Quantitative research methods.

1.6.2. Population and Sampling:

A population is a complete enumeration of each and every unit of the universe

as a whole. It is related to the total study of material in detail. There are 28 A class
licensed banks in Nepal but this study considers only Kumari Bank Limited as a
sample. Sample is a small separated part showing the quality of the whole. In
sample, only a part of the universe is considered and conclusions about the entire
universe are drawn on that basis. Here for the proposed study, I have taken Kumari
Bank Limited as a sample.

1.6.3. Types of Data:

Data are the foundation of the research. Basically, there are two types of data.
They are as follow:

Primary Data: Primary data is the type of data which is collected by researcher
himself during their own research using research tools such as experiments, survey,
questionnaire and observation.

Secondary Data: Secondary data is the type of data which is collected by someone
other than the user. Common sources of secondary data are published records of
organizations, information collected by government, organizational records.

The data used in this report are of secondary data. This research has been conducted
in secondary data basis, so the last five years is collected from:
• Website of Kumari Bank Limited
• Annual report of Kumari Bank Limited

1.6.4. Data Analysis Tools:

8
The collected data will be analyzed with the help of different financial tools.

Financial Tools:
Financial tools are those which are used for the analysis and interpretation of
financial data. Here in this study, the financial tools included are:

Profitability ratios:

Net Profit after tax

• Return on Shareholders fund (ROE) =
Total Equity

• Return on capital employed (ROCE)= Net

Profit after tax Total Capital Empolyed

• Return on assets (ROA) = Net Profit after tax

Total Assets

Analysis of assets and liabilities:

Current Assets
• Current ratio (CR) =
Current Liabilites

Quick Assets
• Quick ratio (QR) =
Current Liabilites

9
1.7. Limitations of the Study:

Almost data are taken from the audited balance sheet from the head office of
Kumari Bank Limited, in order to draw a clear, true and suggestive financial analysis.
However, limitations of the study are as follows:
• This study is based on secondary data.
• This data covers only five years period from FY 2076/77 to 2079/80.
• The data used on the calculations will be rounded up.
• The data will be analyzed by comparing with the five years average data
because of the unavailability of the standard company average.
• This study will be carried out based on the published financial statements
namely balance sheets, profit and loss accounts, related schedules and
published annual report. These published documents have their own
limitations.

1.8. Report Structure:

Chapter one deals with the subject matter of the study. The whole research will be
based on the introduction chapter. The outline of the research is presented in the
chapter. It includes review of literature, objectives of the study, the research
methodology used to evaluate the financial analysis of Kumari Bank. It also consists
of research design, sources of data, population and sample.

BIBLIOGRAPHY:

Ranabhat, R. "Financial Analysis of Muktinath Bikas Bank Limited".

Das, A. "Comparative Financial Analysis of Nepal Bank Limited and Nabil Bank
Limited".

10
Manandhar, N. "Financial Performance analysis of Standard Chartered Bank Nepal
Limited".

Website of Kumari Bank Limited: www.kumaribank.com

Website of research info: www.google.com
Annual report of Kumari Bank Limited (2076/77-2079/80)

11