Table of Contents

1. Background of the study......................................................................2

2. Objectives of the study.........................................................................3
3. Rationale of the study...........................................................................3
4. Limitation of the study.........................................................................3
5. Literature Review.................................................................................3
5.1. Conceptual Review..........................................................................3
5.2. Review of previous research work...................................................4
6. Research Methodology.........................................................................5
6.1. Research Design...............................................................................5
6.2. Population and Samples...................................................................6
6.3. Sources of data.................................................................................6
6.4. Data collection and processing procedure........................................6
6.5. Data Analysis Tools and Techniques................................................6
7. Chapter Plan.........................................................................................7
BIBLIOGRAPHY ....................................................................................8

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1. Background of the study
Financial resource is an inseparable component in every sphere of life. It is equally
important to a social organization as well as for a business organization. Moreover, its
importance to a financial organization like a bank, that keeps money for individuals or
companies, exchanges currencies, make loans, and offers other financial services, can
hardly be neglected.
Finance plays an important role in the economy. As banks, credit unions, and other
financial institutions provide credit, they help expand the economy by directing funds
from savers to borrowers. A wide variety of financial institutions such as a bank has
different roles at finance and the economy as it links lenders and borrowers. These
institutions act as an intermediary among consumers, businesses, and governments by
lending out deposits and help to boost up the national economy. So, the smooth
operation of a bank mainly depends upon effective management of its financial
resources and effective management is possible upon effective analysis.
Commercial banks are the most significant of the financial intermediaries, accounting
for some 60 percent of the nation's deposits and loans. A commercial bank is a bank,
which pools together savings of community and arrange for their productive use,
accepting deposit on the condition that they are available on demand or on a short-
term notice.
According to Nepal Commercial Act 2031, a commercial bank is a bank which
operates currency exchanges transactions, accepts deposits, provides loans, and
performs dealings relating to commerce except the banks which have been specified
for the co-operative, agriculture and industry of similar specific objective The history
of commercial banking in Nepal started after the establishment of Nepal Bank
Limited in the year 1994 B.S. with a paid-up capital of Rs.8,42,000. Later Nepal
Rastra Bank was established as the central bank in 2013 followed by the
establishment of Rastriya Banijya Bank. After Nepal practiced Liberalization Policies,
Nepal had access to many joint venture banks and other financial institution. Today,
Nepal can take legitimate pride in the remarkable growth and progress in the banking
and financial industry. Nepal has opened its door to foreign commercial banks to
operate in the kingdom. Since then there are 20 commercial and 17 development
banks till date.

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2. Objectives of the study
The main objective of this study is to scrutinize the lending behavior of MBL into
multiple sectors. The specific objectives of this study are:
 To analyze the financial performance of the Machhapuchhre Bank Limited.
 To access the profitability position of the Machhapuchhre Bank Limited

3. Rationale of the study

Financial performance in border sense refers to the degree to which financial
objectives being or has been accomplished and is an important aspect of finance risk
management. It is the process of measuring the results of a firm's policies and
operations in monetary terms. Financial performance is important for the following
reasons:
 It is used to measure firm's overall financial health over the given period of
time.
 It's important to compare similar firms across the same industry or to compare
industries or sectors in aggregation.

4. Limitation of the study

This study has some limitations via inadequate coverage of commercial banks. This
Study contains the information based on facts but there consist some limitations as
follows.
 Among 20 Commercial Banks this study is concerned with only
Machhapuchhre Bank Ltd.
 This study has been made depending mostly on the personal experience
available published secondary data and direct interview with MBL staffs.
 The study only considers 3 fiscal years from 2020/21 to 2022/23.

5. Literature Review

5.1. Conceptual Review

Financial performance includes analysis and interpretation of financial statements of
the profitability and financial soundness of the business. The financial analysis
program provides vital methodology of financial analysis. Financial analysis often
assesses the firm's production and productivity performance. (Total business

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performance) probability performance liquidity performance working performance
fixed assets performance fund flow performance and social performance various
financial Ratios include.
 Working capital analysis
 Financial structure Analysis
 Activity Analysis
 Profitability Analysis
A financial performance report is a summary of financial performance of a company
that reports the financial health of a company helping investment decision.

5.2. Review of previous research work

Financial performance analysis is the process of identifying the financial strengths
and weakness of the firm by properly establishing the relationship between the items
of balance sheet and profit and loss account. It also helps in short term and long-term
forecasting and growth can be identified with the help of financial performance
analysis the dictionary meaning of analysis is to resolve or separated a thing in to its
element or component part for tracing their relation to the thing as whole and to each
other.
Financial performance review gives essential information relating to your industry or
competitors. Such as review normally cover accepts of performance that requires
investigation beyond normal financial reporting. Financial review can be packaged in
a form that can be integrated into the normal market intelligence system.
Pandey (2003), has conducted a research entitled "The Study on capital Structure of Standard
Chartered Bank Ltd. and Nepal Bangladesh Bank Ltd." The basic objective of the study was
to analyze the interrelationship of capital structure with various important variables such as
earning per share, dividend per share and net worth of the joint venture banks and to provide
suggestions to overcome various issues and gaps. The study had used financial tools such as
Ratio Analysis, EBIT-EPS analysis, overall capitalization rate, equity capitalization rate, total
value calculation etc. and Statistical tools such as Karl Pearson's correlation and probable
errors. The study concluded that all the joint venture banks are using high percentage of total
debt in raising the assets and all the banks are able to pay the interest. The study suggested
that the bank must control total deposit and the bank must also control investment. The bank
needed to reduce its expenses and control fluctuations in the earnings per share to improve its
market price per share.

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Rajlawat (1999), conducted a thesis entitled "The Capital Structure of Necon Air Limited".
The main objective of the study was to analyze and examine the capital structure of Necon
Air Limited, examine the financial position, highlight their growth and policies and review
various previous studies related to the study. The study uses primary as well as secondary data
for the analysis. The methodology used includes financial tools such as Ratio Analysis and
statistical tools such as correlation coefficient and probable error. The study had found that
Necon Air Limited has debt equity ratio higher than required. This higher debt capital was a
serious implication form the firm's point of view. In this condition, the capital structure leaded
to inflexibility in the operation of the firm as creditors would exercise pressure and interfere
with management. Necon Air had raised debt from different commercial banks and had to pay
heavy portion of profit as interest, so the payment of the interest will be hazardous when
profit is declining. So, it was suggested that Necon Air Ltd should decrease its debt capital as
far as possible. It had added that the ratio of 2:1 is the best ratio for optimal capital structure

6. Research Methodology
Research is the process of a systematic and in-depth study or search an any particular
topic subject or area of investigation and presentation of relevant data. It is a careful
search or inquiry into any subject matter. The process used to collect information and
data for the purpose of making business decisions. The methodology may include
publication research, interview surveys and other research techniques, could include
both present and historical information.

6.1. Research Design

Research design is the plan structure and strategy of investigation conceived so as to
obtain answer to the research questions and to control the variances. It is the
arrangement of condition for collection and analysis of data. To achieve the objective
of this study descriptive and analytical research design has been used. Historical data
are collected from MBL of over 3 Fiscal years and analyzed them based on the
statistical and financial tools.
A research design is their plan of a research study. The design of a study defines the
study type (descriptive) and sub type (e.g., descriptive- longitudinal case study)
research question, hypothesis independent and dependent variables experimental
design and if applicable data collection method and a statistical analysis plan.
Descriptive analytical design will be used to seek answer to research questions.

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6.2. Population and Samples
Population or universe refers to the industries of the same nature and its services and
product in general. Sample, on the other hand is the representative part of population
selected from it with the objective of investigating its properties. If some elements are
selected with the intention of finding out something about the population from which
they are taken then that group of elements is called a sample. At present, the total
number of objects in the general topic deals with the commercial banks operating in
Kanakai Municipality out of these total commercial banks Machhapuchhre Bank
Limited has been selected as the sample on convenience basis.

6.3. Sources of data

This study will be conducted through following source
 Secondary Source: The study will mostly be based on the secondary data. As
a secondary data during the research work, I will collect various data from
MBL such as annual reports, Booklets product paper etc. As well as surfing its
website www.machbank.com on internet and collecting various publications
and statistics from NRB supported the researcher to prepare this report.

6.4. Data collection and processing procedure

As stated earlier, this report will purely base on the secondary data, annual reports of
the bank for the study. This report will be prepared by using real data obtained from
various sources like financial news, newspapers, magazine of commercial work and
annual report.

6.5. Data Analysis Tools and Techniques

While collecting and interpreting relevant data facts and figures, with view to
systematic data collection and data interpretation the simple statistical tools [standard
Deviation (SD), Coefficient of Variance (CV)], as well as some other statistical tools
and financial tools [Horizontal analysis, Vertical analysis and Ratio analysis].

7. Chapter Plan
Chapter I: Introduction This section provides an overview of the study, including its
background, objectives, review of relevant literature, methods of data collection, and an
exploration of the rationale behind the research as well as an outline of the report's structure.

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Chapter II: Results and Findings The second chapter focuses on presenting data through
tables and figures, and conducting an in-depth analysis of the results and findings derived
from the systematic collection and examination of project work data.

Chapter III: Discussion and Conclusion In this chapter, the research findings are discussed
in detail, addressing key discoveries, existing issues, and identified gaps within the concerned
bank. Additionally, suggestions are offered to aid institutions in enhancing their financial
standing and overall performance

BIBLIOGRAPHY (APA)

Barnes, P. (1987). THE ANALYSIS AND USE OF FINANCIAL RATIOS:. Journal of Business Finance
& Accounting, 14(4) Winter 1987, 0306 686X $2.50, 457.

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Pandey (2003), The Study of Capital structure of standard Chartered Bank Limited.

Rajlawat (1999), The capital structure of Necon Air Limited.

Websites:
https://en.wikipedia.org/wiki/macchapuchrebank