FINANCIAL PERFORMANCE

ANALYSIS OF BANK OF
KATHAMANDU LIMITED
BY
HIKMAT BAHADUR BIST
T.U.Reg.NO. 7-1-329-519-99
Roll No. :1966(2163)
1370(1526)

A Thesis submitted to:

Office of the Dean Faculty of
Management
Tribhuvan University

In partial fulfillment of the requirements of

the degree of MBS
Dhangadhi,Kailali
2010
 ACKNOWLEDGEMENT
In the context of this thesis work, first of all my deep senses of gratitude
goes to Dr. Padam Raj Joshi, lecture of Kailali Multiple Campus for his
supervision. I am very grateful to Mr. Joshi who provided me the basis
concepts and guidelines to accomplish this thesis work.
My deep and cordial gratitude also goes to Mr. Surendra chand, campus
chief, Kailali Multiple. Like wise I am very obliged to all teachers, staff of
department and library of campus for their help I am always in debited to the
author of the reference materials as those were very helpful for me.
I would like thank to Nepal stock Exchange, Nepal Rastra Bank and
selected Bank in this study, which provide sources of data and other
information of this study.
I am also very grateful to my family member for their prolonged support
and encouragement during my study.
 Table of contest
S.N Subject

Chapter I- Introduction (1-5)

1.1 General Background of the Study 1

1.3 Statement of the problem 3

1.4 Objectives of the study 3

1.5 Significance of the study 3
1.6 Limitation of the study 4
1.8 Organization of the study 4

Chapter -II Review of literature (6-19)

2.1 Conceptual Framework 6
2.1.2 Origin of Bank 6
2.1.3 Historical development of Bank 7
2.2 Research Review 9
2.2.1 Review of Articles, Journals and Newspaper 9
2.2.2 Review of Books 14
2.2.3 Review of thesis Related to the study 16

Chapter- III Research Method (20-36)

3.1 Introduction 20
3.2 Population and Samples 21
3.3 Sources of Data 23
3.4 Data Processing Procedures 23
3.5 Data analysis tools 23
3.6 Ratio analysis 24

(37-65)
Chapter IV Data Presentation & Analysis 37
4.1 Introduction of BOK
4.2 Analysis of liquidity Position 38
4.3 Analysis of Profitability 41

4.4 Assets management Ratio 49

4.5 Risk & Return Analysis 53
4.6 Cash flow Pattern 54
4.7 Non-performing loan to total loan & advance Ratio 57
4.8 Some financial indicators 58
4.9 Testing Hypothesis 63
4.10 Trend Analysis 63

Chapter V Summary conclusion and Recommendation (66-72)

5.1 Summary 66
5.2 Conclusion 70
5.3 Recommendation 71

Bibliography 73

Appendix-1 76
Appendix-2 77
 List of Table
Table No. Title Page No.
4.1 Current ratio 39
4.2 Cash and bank balance to deposit ratio 40
4.3 Operating profit margin to interest earned ratio 43
4.4 Return on asset ratio 45
4.5 Return on equity net worth 46
4.6 Return on capital employed 47
4.7 Net profit margin ratio 48
4.8 Fixed asset turnover ratio 50
4.9 Total asset turnover ratio 50
4.10 Net interest margin ratio 51
4.11 Earning per share 52
4.12 Risk return pattern 53
4.13 Cash flow pattern 54
4.14 Non performing loan to total loan ratio 57
4.15 Loan and advances to total deposit ratio 59
4.16 Interest income to total income ratio 60
4.17 Interest express to Interest earning ratio 61
4.18 Employee express to total income ratio 62
4.19 Office express to total income ratio 62
4.22 Trend percentage of investment and net profit 64

List of table of figure

No of figure Title Page No.
4.1 Cash bank balance to deposit 41
4.2 Operating profit and interest earned 44
4.3 Trend of net profit margin ratio 49
4.4 Trend of earning per share 53
4.6 Trend of NPL ratio 58
4.7 Trend percentage of investment and net profit 64
 Abbreviation

C/R = Current ratio

C/L = Current liabilities
C/A = Current asset
ROA = Return on assets
ROE = Return on equity
NPAT = Net profit after tax
SHE = Shareholders equity
PD = Preference dividend
CE = Capital employed
NPL = Nonperforming loan
FA = Fixed asset
TA = Total asset
TL = Total liabilities
B/S = Balance sheet
BIS = Bank for internal settlement
EBIT = Earning before interest and tax
T.D. = Total debt
A.M. = Arithmetic mean
S.D. = Standard deviation
S.E. = Standard error