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A Study
On
COST AND BENEFIT ANALYSIS

NABIL BANK LIMITED
A Project Work Report
Submitted by:
RABINDRA MAGAR
TU Registered No:
Symbol No.:
Sakwo Campus
Submitted to:
Faculty of Management
Tribhuvan University
Kathmandu
Partial fulfilment of the requirement for the degree

Of
BACHELOR OF BUSINESS STUDIES (BBS)
Kathmandu, Nepal
July, 2024
Cost and Benefit Analysis
Nabil Bank Limited
Declaration of Originality and Fulfillment

of Degree Requirements
I, Rabindra Magar, hereby declare that the project work titled “Cost and Benefit Analysis of
Nabil Bank Limited,” submitted to the Faculty of Management, Tribhuvan University,
Kathmandu, is an original piece of work. This project report was completed under the
supervision of Ms. Palpasa Shrestha at Sakwo Campus, Sankhu, and Kathmandu.
Furthermore, I affirm that this project work has not been previously submitted to any other
university or institution for the award of any degree.
Signature
Rabindra Magar
July, 2024
RABINRA MAGAR 1
Nabil Bank Limited
Supervisor’s Recommendation
I hereby recommend the project work report titled “Cost and Benefit Analysis of Nabil Bank
Limited,” submitted by Rabindra Magar of Sakwo Campus, Sankhu, Kathmandu. The report
was prepared under my supervision, adhering to the procedure and format requirements set by
the Faculty of Management, Tribhuvan University. It serves as partial fulfillment of the
requirements for the award of the degree of Bachelor of Business Studies (BBS).
I recommend this project work report for evaluation.
Sincerely,
Signature
Rabindra Magar
July, 2024
RABINRA MAGAR 2
Nabil Bank Limited
Endorsement
We hereby endorse the project work report titled “Cost and Benefit Analysis of Nabil Bank
Limited,” submitted by Rabindra Magar of Sakwo Campus, Sankhu, Kathmandu. The report
is in partial fulfillment of the requirements for the degree of Bachelor of Business Studies
(BBS) and is intended for external evaluation.
Sincerely,
Signature Signature
Ms. Palpasa Shrestha Mr. Lakash Shrestha
Instructor Principal
RABINRA MAGAR 3
Nabil Bank Limited
ACKNOWLEDGEMENT
This report entitled “Cost and Benefit Analysis of Nabil Bank Limited “has been undertaken in
partial fulfilment of the requirements for the degree of Bachelor of Business Studies (BBS) under the
curriculum prescribed by the Faculty of Management, Tribhuvan University. The study was possible
under the supervision of my college lecturers and faculty member. My sincere gratitude goes to my
esteemed supervisors Ms. Palpasa Shrestha, Mr. Dinesh Dhungana, Mr. Anup Poudel and Mr. Lakash
Shresthafor his constructive guidelines, suggestions, timely supervision and kind cooperation in
completing this project work. There guidance and help has been a great source of encouragement and
inspiration to me in the preparation of this report. However, it would be a matter of injustice for me to
forget the names of those individuals whose valuable suggestions and cooperation helped to complete
this report.
First and foremost, I would like to express my special gratitude to my friends for their sound suggestions
and help. I would like to thank all my well-wishers and all those personalities who made it possible for
me to write this report and who supported me throughout the writing process. In spite of my best efforts,
this project is subject to the possibility of errors and mistakes.
Finally, I am deeply indebted to all the members of my family who have inspired and supported me in
various ways to bring this report to its present form.
Rabindra Magar
(BBS 4th Year)
Sakwo Campus
Thank you,
July, 2024
RABINRA MAGAR 4
Nabil Bank Limited
Contents
Introduction of Nabil Bank ................................................................................................................... 10
Profitability Score ............................................................................................................................. 10
Impressive Growth ............................................................................................................................ 10
Strategic Focus .................................................................................................................................. 10
Objectives of Study ............................................................................................................................... 10
Profile of Nabil Bank Ltd. .................................................................................................................... 10
Founding ........................................................................................................................................... 11
Ownership Change ............................................................................................................................ 11
Branch Network ................................................................................................................................ 11
International Correspondent Banking ............................................................................................... 11
Investment Banking .......................................................................................................................... 11
Board of Directors and Management Team of Nabil Bank .................................................................. 11
Shareholding structure of Nabil Bank ................................................................................................... 12
Recent Developments ........................................................................................................................... 12
Financials .......................................................................................................................................... 13
A Journey of Growth and Capital Expansion ....................................................................................... 13
Inception ........................................................................................................................................... 13
Ownership ......................................................................................................................................... 13
Paid-Up Capital................................................................................................................................. 13
Continuous Growth ........................................................................................................................... 13
Financial Services ............................................................................................................................. 13
Statement of Problem for Nabil Bank Ltd. ........................................................................................... 13
Competition....................................................................................................................................... 14
Digital Transformation...................................................................................................................... 14
Risk Management ............................................................................................................................. 14
Regulatory Compliance .................................................................................................................... 14
Asset Quality..................................................................................................................................... 14
Customer Trust.................................................................................................................................. 14
Profitability ....................................................................................................................................... 14
Financial Analysis of Nabil Bank Limited ........................................................................................... 14
F.Y. 2070/2071 to F.Y. 2074/2075 ....................................................................................................... 14
Shareholders’ Fund ............................................................................................................................... 15
Financial data for Nabil Bank over a five-year period:......................................................................... 15
Paid-up Capital of Nabil Bank in the Last Five Years .......................................................................... 16
RABINRA MAGAR 5
Nabil Bank Limited
Deposits and Loans & Advances of Nabil Bank for the fiscal years from 2070/71 to 2074/75 ........... 17
Deposits and Loans of Nabil Bank for the fiscal years from 2070/71 to 2074/75 ................................ 18
Net Profit of Nabil Bank ....................................................................................................................... 18
Net profit of Nabil Bank for the fiscal years from 2070/71 to 2074/75 ................................................ 19
Return on Equity (ROE) and Return on Assets (ROA) of Nabil Bank ................................................. 19
Earnings per Share (EPS) and Non-Performing Loans (NPL) of Nabil Bank ...................................... 20
Earnings per Share (EPS) and Non-Performing Loans (NPL) of Nabil Bank for the fiscal years from
2070/71 to 2074/75 ............................................................................................................................... 21
Earnings per Share (EPS) of Nabil Bank for the fiscal years from 2070/71 to 2074/75....................... 21
Dividend History of Nabil Bank ........................................................................................................... 22
Market Price and Market Capitalization of Nabil Bank........................................................................ 23
Market Capitalization of Nabil Bank for the fiscal years from 2070/71 to 2074/75 ............................ 24
Financial Analysis of Nabil Bank Limited: Third Quarter, F.Y. 2075/76 ............................................ 24
Nabil Bank Limited’s financial performance for the fiscal year 2075/76 based on their annual report:
.............................................................................................................................................................. 26
.............................................................................................................................................................. 27
.............................................................................................................................................................. 28
.............................................................................................................................................................. 28
Nabil Bank Posts Net Profit of Rs 7.52 Arba in FY 2079/80 [Q4 Report] ........................................... 29
Nabil Bank Limited - Major Financial Indicators for FY 2079/80 ....................................................... 29
Financial report table for Nabil Bank Limited ...................................................................................... 30
Comparing figures from the fiscal year 2079/80 to 2078/79 ............................................................ 30
Nabil Bank Posts Rs 3.20 Arba in Net Profit | Annualized EPS at Rs 23.74 [Q2 Report] ................... 31
Second quarter (Q2) of fiscal year (FY) 2080/81 ................................................................................. 32
Cost Structure of Nabil Bank Ltd. ........................................................................................................ 33
Personnel Costs ................................................................................................................................. 33
Administrative Expenses .................................................................................................................. 33
Operational Costs .............................................................................................................................. 34
Interest Expenses .............................................................................................................................. 34
Other Costs........................................................................................................................................ 34
Benefits of Nabil Bank’s Investment Projects and Strategic Initiatives ............................................... 34
Sustainable Banking.......................................................................................................................... 34
Investment in Sustainability-Focused Businesses............................................................................. 35
Balancing Profitability and Social Impact ........................................................................................ 35
RABINRA MAGAR 6
Nabil Bank Limited
Cost Optimization and Efficiency Improvement at Nabil Bank ........................................................... 35

Metrics Beyond Cost-Cutting ........................................................................................................... 35
Technology and Process Simplification ............................................................................................ 35
Cultural Alignment ........................................................................................................................... 36
Future Targets ................................................................................................................................... 36
Actionable Recommendations for Cost Optimization .......................................................................... 36
Analyzing Profitability Metrics and Financial Health .......................................................................... 36
Profitability Analysis ............................................................................................................................ 37
Revenue Sources ............................................................................................................................... 37
SWOT Analysis .................................................................................................................................... 38
Strengths ....................................................................................................................................... 38
Weaknesses ................................................................................................................................... 38
Opportunities................................................................................................................................. 38
Threats........................................................................................................................................... 38
Risk Assessment ................................................................................................................................... 38
Credit Risk ........................................................................................................................................ 38
Market Risk....................................................................................................................................... 38
Operational Risk ............................................................................................................................... 38
Strategic Initiatives ............................................................................................................................... 39
Digital Transformation...................................................................................................................... 39
Product Diversification ..................................................................................................................... 39
Branch Optimization ......................................................................................................................... 39
Regulatory Compliance ........................................................................................................................ 39
Basel III Implementation .................................................................................................................. 39
Ethical Practices and Transparency .................................................................................................. 39
Future Outlook and Strategic Roadmap ................................................................................................ 40
Growth Prospects .............................................................................................................................. 40
Nabil Bank’s Expansion Plans ...................................................................................................... 40
Domestic Expansion ..................................................................................................................... 40
Potential areas for growth that Nabil Bank could consider................................................................... 40
Product Diversification ..................................................................................................................... 40
Geographic Expansion ...................................................................................................................... 40
Partnerships and Alliances ................................................................................................................ 41
Challenges and Mitigation Strategies ................................................................................................... 41
Liquidity Risk Mitigation ................................................................................................................. 41
Overall Financial Health ................................................................................................................... 41
RABINRA MAGAR 7
Nabil Bank Limited
Risk Management Practices .............................................................................................................. 41

Adaptability to Market Changes ....................................................................................................... 41
Regulatory Intensity .......................................................................................................................... 42
Risk Standards .................................................................................................................................. 42
Risk Sustainability ............................................................................................................................ 42
Growth & Resiliency ........................................................................................................................ 42
Capital & Valuations......................................................................................................................... 42
‘Threat Actors’ .................................................................................................................................. 42
Fairness ............................................................................................................................................. 42
Responsible Systems ......................................................................................................................... 43
Market Overview and Industry Trends ................................................................................................. 43
Industry Landscape ........................................................................................................................... 43
Commercial Banks: ....................................................................................................................... 43
Development Banks: ..................................................................................................................... 43
Finance Companies: ...................................................................................................................... 43
Microfinance Banks: ..................................................................................................................... 43
Market Share and Positioning ............................................................................................................... 43
Market Share and Capitalization ....................................................................................................... 43
Competitive Advantages and USP .................................................................................................... 44
Limitations ........................................................................................................................................ 44
Digital Banking Trends ......................................................................................................................... 44
Digital Banking in Nepal and Nabil Bank’s Initiatives .................................................................... 44
Nabil Digi Bank Launch ............................................................................................................... 44
Breaking Barriers .......................................................................................................................... 45
Strategic Collaborations ................................................................................................................ 45
Nabil Sustainable Banking ............................................................................................................ 45
Customer Segmentation and Target Market ......................................................................................... 45
Retail Customers ............................................................................................................................... 45
Nabil Bank’s Retail Customer Base and Strategies for Attraction and Retention ........................ 45
Strategies to Attract and Retain Retail Customers ........................................................................ 45
Corporate and SME Clients .................................................................................................................. 46
Nabil Bank’s Focus on SMEs and Customized Financial Solutions ................................................ 46
SME Lending Focus ..................................................................................................................... 46
Process Simplification .................................................................................................................. 47
Collaboration with One to Watch (OTW)..................................................................................... 47
e@Nabil Corporate Internet Banking ........................................................................................... 47
RABINRA MAGAR 8
Nabil Bank Limited
SME Loans Made Easy ................................................................................................................. 47

Technology Infrastructure and Innovation:........................................................................................... 47
Core Banking Systems ...................................................................................................................... 47
Nabil Bank’s Core Banking Technology ...................................................................................... 47
Digital Channels.................................................................................................................................... 48
Nabil Bank’s Digital Banking Services ............................................................................................ 48
Financial Ratios and Comparative Analysis ......................................................................................... 49
Nabil Bank’s Return on Equity (ROE) and Efficiency ..................................................................... 49
Asset Quality Ratios ............................................................................................................................. 50
Non-Performing Loans (NPLs): ....................................................................................................... 50
Asset Quality Concerns: ................................................................................................................... 51
Comparison with Industry Benchmarks:........................................................................................... 51
Loan Portfolio Composition ................................................................................................................. 51
Sector-wise Breakdown .................................................................................................................... 51
Agriculture Sector ............................................................................................................................. 51
Risk Diversification Strategies.............................................................................................................. 52
Managing Concentration Risks at Nabil Bank .................................................................................. 52
Diversification of Loan Portfolios ................................................................................................ 52
Concentration Risk Management .................................................................................................. 52
Deposit Mobilization Strategies ............................................................................................................ 53
Nabil Bank’s Deposit Sources and Interest Rate Management ........................................................ 53
Deposit Sources ............................................................................................................................ 53
Interest Rate Management ............................................................................................................ 53
Liquidity Position.......................................................................................................................... 54
Corporate Social Responsibility (CSR) ................................................................................................ 54
Community Initiatives ...................................................................................................................... 54
Impactful Results .............................................................................................................................. 54
Future Expansion .............................................................................................................................. 55
Conclusion ............................................................................................................................................ 55
RABINRA MAGAR 9
Nabil Bank Limited
Introduction of Nabil Bank

Nabil Bank Limited is the first private sector bank of Nepal, established in July 1984. It holds
the distinction of being the first joint venture bank in Nepal.
The bank operates 79 branches and 132 ATMs across Nepal, with its head office located at
Durbar Marg, Kathmandu.
Additionally, Nabil Bank has a subsidiary company, Nabil Investment Banking Limited, which
engages in activities such as issuing shares, share registrars, mutual fund operations, and
portfolio management.
Profitability Score
Nabil Bank’s profitability score is lower than its peer group, indicating room for improvement.
Monitoring non-performing loans and fluctuating profitability ratios is crucial for informed
decision-making. As a leading commercial bank, Nabil Bank has consistently achieved the
highest profit among private banks for several years. In the fiscal year 2074/75, it recorded a
profit of Rs. 2,074.75 million.
Impressive Growth
In the fourth quarter of FY 2077/2078, Nabil Bank reported a net profit increase of 30.06%,
reaching Rs. 4.50 Arba. This growth underscores its significance in Nepal’s economy.
Strategic Focus
As the banking landscape evolves, Nabil Bank must balance costs and benefits. Strategic
considerations include managing risks, optimizing investments, and adapting to changing
customer preferences.
In summary, Nabil Bank’s profitability and strategic decisions play a pivotal role in shaping its
future prospects within Nepal’s financial ecosystem.
Objectives of Study
Assess the cost structure of Nabil Bank Ltd. across different operational aspects.
Evaluate benefits derived from investment projects and strategic initiatives.
Identify areas for cost optimization and efficiency improvement.
Provide actionable recommendations for enhancing the overall cost-benefit ratio.
Profile of Nabil Bank Ltd.
RABINRA MAGAR 10
Nabil Bank Limited
Nabil Bank Limited (previously known as Nepal Arab Bank Limited) is the first private
commercial bank in Nepal. Here are some key details about the bank:
Founding: Nabil Bank was founded in 1984 by multinational (primarily foreign)

investors as Nepal Arab Bank Ltd.
Ownership Change: In 1995, Nepal’s only billionaire businessman, Binod

Chaudhary, purchased the Dubai government-owned majority share.
Head Office: The bank’s head office is located in Durbar Marg, Kathmandu.
Branch Network: Nabil Bank operates through a wide network of 268 branch
offices, 316 ATMs, and numerous POS terminals across Nepal.
International Correspondent Banking: The bank has more than 200

international correspondent banking relationships.
Investment Banking: Nabil Bank operates its investment banking arm through its
subsidiary, Nabil Investment Banking Ltd.
Board of Directors and Management Team

of Nabil Bank
Chairman: Shambhu Prasad Poudyal
Background: Mr. Poudyal has been associated with Nabil Bank since 2004, initially as a
director. He also served as the executive chairman of Rastriya Beema Sansthan from 1999 to
2002.
Board Members:
Shambhu Prasad Poudyal: Chairman
Nirvana Kumar Chaudhary: Director
Pratap Kumar Pathak: Director
Virender Paul Dani: Director
Dayaram Gopal Agrawal: Director
Upendra Prasad Poudyal: Director
Malay Mukherjee: Director
The management team of Nabil is led by Mr. Anil Keshary Shah, who currently holds the
position of Chief Executive Officer (CEO) of the bank. Here are the details of the management
team:
Mr. Anil Keshary Shah
RABINRA MAGAR 11
Nabil Bank Limited
Position: Chief Executive Officer (CEO)

Mr. Ramesh Prasad Lohani
Position: Chief Operating Officer
Ms. Namita Dixit
Position: Chief Risk Officer
Mr. Gyaneshwar Acharya
Position: Chief Corporate Officer
Mr. Anil Kumar Khanal
Position: Chief Business Officer
Ms. Anjuli Shrestha
Position: Chief Finance Officer
Mr. Binay Kumar Regmi
Position: Chief Marketing Officer
Mr. Mohan Subba
Position: Head - Treasury
Mr. Yagya Prasad Sharma
Position: Head - SME, MF, and Mid-Corporate
Mr. Saroj Pyakurel
Position: Head - Consumer Lending
Shareholding structure of Nabil Bank

Local Ownership:
Local Public: 50%
Institutions: 30%
General Public: 10%
Foreign Ownership: 10%
The total ownership percentage sums up to 100%. Nabil Bank is the first joint venture
commercial bank in Nepal, with 50% foreign ownership. The rise of nationalism in the
Ottoman Empire eventually caused the breakdown of the Ottoman millet system, leading to
significant changes in governance and autonomy.
Recent Developments
RABINRA MAGAR 12
Nabil Bank Limited
In July 2022, Nabil Bank acquired Nepal Bangladesh Bank.

On 22 December 2022, Nabil Bank launched nBank, a neo banking service functioning as a
virtual branch.
Gyanendra Dhungana became the chief executive officer in July 2022.
Financials
Net income in 2022: रू 497 crore (US$37 million).
Total employees: 2239.
Nabil Bank is a dynamic financial institution committed to innovation and customer-centric
services.
It has a wide network of branches and a history of financial excellence.
A Journey of Growth and Capital Expansion

Nabil Bank Limited, a prominent commercial bank in Nepal, has a rich history that dates back to its
incorporation in 1984. Founded with a vision to provide modern banking services, Nabil Bank has
played a pivotal role in Nepal’s financial landscape.
Here are the key points about Nabil Bank:
Inception: Nabil Bank was established on July 12, 1984. Since then, it has been a cornerstone of
Nepal’s banking sector.
Ownership: The majority ownership of Nabil Bank lies with prominent Nepali
businessman Binod Chaudhary.
Paid-Up Capital: As of the most recent data available, Nabil Bank has a paid-up capital
of NPR 27.06 billion. This capital infusion has been instrumental in supporting the bank’s growth and
expansion.
Continuous Growth: Over the years, Nabil Bank has consistently expanded its services,
network, and customer base. It has become a trusted institution for individuals, businesses, and
investors.
Financial Services: Nabil Bank offers a wide range of financial services, including retail
banking, corporate banking, trade finance, remittance, and digital banking solutions.
Nabil Bank’s journey reflects resilience, adaptability, and commitment to serving the needs of the
Nepali community. As it continues to evolve, it remains a vital player in Nepal’s economic
development.
Statement of Problem for Nabil Bank Ltd.
RABINRA MAGAR 13
Nabil Bank Limited
While Nabil Bank has been a prominent player in Nepal’s banking sector, it faces several
challenges and areas of concern:
Competition: The banking industry in Nepal is highly competitive, with both domestic
and international banks vying for market share. Nabil Bank must continually innovate and
adapt to stay ahead.
Digital Transformation: Although Nabil Bank launched the virtual branch

service “nBank,” it needs to accelerate its digital transformation further. Enhancing online
services, mobile banking, and customer experience is crucial.
Risk Management: As a financial institution, Nabil Bank must effectively manage

risks related to credit, liquidity, and operational aspects. Striking the right balance between risk
and growth is essential.
Regulatory Compliance: Compliance with evolving regulatory requirements is a

constant challenge. Nabil Bank must stay updated and ensure adherence to legal and regulatory
frameworks.
Asset Quality: Maintaining a healthy loan portfolio and managing non-performing

assets (NPAs) is critical. Struggling borrowers and economic downturns can impact asset
quality.
Customer Trust: Building and maintaining customer trust is paramount. Any issues
related to transparency, customer service, or security can erode confidence.
Profitability: While Nabil Bank reported a net income of NPR 497 crore in 2022,
sustaining profitability amidst changing market dynamics remains a challenge.
Ensuring that costs incurred align with benefits generated across various dimensions of
operations is a significant challenge for Nabil Bank Ltd.
Efficient cost management and understanding benefits from investments and strategic
decisions are crucial for sustainability and stakeholder expectations.
Financial Analysis of Nabil Bank Limited

F.Y. 2070/2071 to F.Y. 2074/2075
In the last five years, Nabil Bank Limited has witnessed significant growth in its financial
metrics. Let’s delve into the details:
Paid-up Capital:
The bank’s paid-up capital increased from Rs. 3.05 billion in F.Y. 2070/71 to Rs. 8.047 billion
by F.Y. 2074/75.
This represents a 26.93% compounded annual growth rate (CAGR) over the five-year period.
RABINRA MAGAR 14
Nabil Bank Limited
Nabil achieved this capital growth primarily through bonus share issuance, reflecting its
strength and profitability.
Shareholders’ Fund
The shareholders’ fund, which was Rs. 7.64 billion in F.Y. 2070/71, has now reached Rs. 20.59
billion by the end of F.Y. 2074/75.
This impressive growth translates to a 25% compounded annual increase over the last five
years.
As of the third quarter of F.Y. 2075/76, the shareholders’ fund stands at Rs. 21.83 billion.
Total Assets:
Nabil Bank’s total assets have steadily risen.
Currently, the total assets amount to Rs. 160.98 billion at the end of F.Y. 2074/75.
These figures highlight Nabil Bank’s robust financial performance and its strategic positioning
in the banking sector.
Financial data for Nabil Bank over a five-

year period:
Fiscal Paid-up Capital Shareholders’ Fund (Rs. Total Assets (Rs.
Year (Rs. billion) billion) billion)
2070/71 3.05 9.49 87.27
2071/72 3.66 12.44 115.99
2072/73 4.75 14.67 127.33
2073/74 6.19 16.59 144.02
RABINRA MAGAR 15
Nabil Bank Limited
Fiscal Paid-up Capital Shareholders’ Fund (Rs. Total Assets (Rs.

Year (Rs. billion) billion) billion)
2074/75 8.04 20.59 160.98
Paid-up Capital: 26.93%

Shareholders’ Fund: 25.21%
Total Assets: 17.06%
Paid-up Capital of Nabil Bank in the Last

Five Years
RABINRA MAGAR 16
Nabil Bank Limited
Deposits and Loans & Advances of Nabil

Bank for the fiscal years from 2070/71 to
2074/75
Fiscal Year Deposits (Rs. billion) Loans and Advances (Rs. billion)
2070/71 75.39 56.2
2071/72 104.24 67.16
2072/73 120.34 77.76
2073/74 128.94 NA
2074/75 134.98 NA
RABINRA MAGAR 17
Nabil Bank Limited
The Compounded Annual Growth Rate (CAGR) for deposits is 16.41%. Loans and advances
have grown at a steady pace of about 19% compounded annually from 2070/71 to 2074/75.
The total outstanding loans stood at Rs. 115.42 billion, compared to Rs. 56.2 billion in 2070/71.
Additionally, shareholder equity increased threefold during this period.
Deposits and Loans of Nabil Bank for the

fiscal years from 2070/71 to 2074/75
Net Profit of Nabil Bank

Nabil Bank has the highest profit among the private banks of Nepal. In the fiscal year 2074/75,
the bank made a profit of Rs. 3.98 billion. The net profit has grown by 12.41 percent
compounded annually. In the fiscal year 2070/71, the bank made a profit of Rs. 2.32 billion.
Aside from fiscal year 2071/72, the bank has consistently improved its profitability. However,
in fiscal year 2071/72, the profit declined from Rs. 2.32 billion to Rs. 2.09 billion. Currently
(based on the third quarter of fiscal year 2075/76), Nabil Bank has made a profit of Rs. 3.19
billion in nine months.
The net profit of Nabil Bank in the last five years period is as follows:
Fiscal Year 2070/71: Rs. 2.32 billion
RABINRA MAGAR 18
Nabil Bank Limited

The Compounded Annual Growth Rate (CAGR) over this period is 12.41%.
Net profit of Nabil Bank for the fiscal years

from 2070/71 to 2074/75
Return on Equity (ROE) and Return on

Assets (ROA) of Nabil Bank
Return on Equity (ROE) measures the profitability of the company based on the total assets
minus liabilities. Likewise, Return on Assets (ROA) indicates the profitability on the equity
provided by the shareholders. ROE and ROA are important measures for the financial
performance of the company.
Nabil Bank has a high return on equity. However, due to various reasons, there has been a
gradual decline in net profit percentage for ROE. In fiscal year 2070/71, this was mainly due
to the sharp decline in net profit as turnover almost doubled to NPR 4 billion from NPR 2.4
billion last year. However, this was not seen as highly significant by many analysts as still, in
terms of absolute figures, Nabil Bank’s performance is far better than any other bank in Nepal.
Similarly, Return on Assets (ROA) has not declined as much compared to ROE. The ROA
stands at 2.61 percent in Fiscal Year 2074/75 vs 2.89 percent in FY 2070/71. ROA tells us how
well an institution leverages its assets to produce earnings.
The data presented below shows that despite various factors like an increase in paid-up capital
when compared to previous years, there was a significant decrease for both ratios over a five-
year period from FY 2070/71 till FY 2074/75.
RABINRA MAGAR 19
Nabil Bank Limited
Fiscal Year Return On Equity (ROE %) Return On Assets (ROA %)
2070/71 29.77 2.89
2071/72 27.03 2.86
2072/73 25.61 2.69
2073/74 22.41 2.32
2074/75 20.94 2.61
These figures provide valuable insights into Nabil Bank’s financial health and performance
trends over time.
Earnings per Share (EPS) and Non-

Performing Loans (NPL) of Nabil Bank
Among the commercial banks of Nepal, Nabil Bank has the highest Earnings per Share (EPS).
The annualized Earnings Per Share of Nabil Bank in the current fiscal year 2075/76 is 47.69.
The EPS of this bank has declined due to the merger to almost half due to its capital base by
more than three times during this period. However, earnings per share had increased in that
time period.
Likewise, Non-Performing Loans (NPL) of Nabil Bank is very satisfactory. The level has
declined to 0.55 percent in its below 1 percent from high as 2.23 percent in FY 2070/71. A
steady trend has been able to reduce the NPL below 1 percent from high as 2.23 percent in FY
2070/71.
Productivity Performance: The average deposits per branch have increased significantly over
five years shown in this chart that shows quality and performance levels improved at fast levels
based on stats and data presented.
RABINRA MAGAR 20
Nabil Bank Limited
Earnings per Share (EPS) and Non-

Performing Loans (NPL) of Nabil Bank for
the fiscal years from 2070/71 to 2074/75
Fiscal Year Earnings Per Share (EPS Rs.) Non-Performing Loans (NPL %)
2070/71 Rs:53 1.83
2071/72 Rs:57 2.22
2072/73 Rs:63 1
2073/74 Rs:59 1
2074/75
This data reflects Nabil Bank’s financial health and performance during these years.
Earnings per Share (EPS) of Nabil Bank for

RABINRA MAGAR 21
Nabil Bank Limited
Dividend History of Nabil Bank

The dividend history of Nabil Bank over the past five fiscal years is as follows:
Fiscal Year Bonus Share Cash Dividend Total Dividend
2070/71 20% 45% 65%
2071/72 30% 6.84% 36.84%
2072/73 30% 15% 45%
2073/74 30% 18% 48%
2074/75 12% 22% 34%
Nabil Bank has focused its dividend payout towards bonus shares for capital increment
purposes. The bank reached the minimum paid-up capital requirement of NPR 8 billion through
RABINRA MAGAR 22
Nabil Bank Limited
bonus share issuance only. From the profit of fiscal year 2074/75, the bank provided a generous
bonus share range from 12% to 30%, along with a 16% cash payout. The rate of dividend
declined in 2074/75 due to the substantial issue of bonus shares in previous years.
Market Price and Market Capitalization of

Nabil Bank
Nabil Bank has remained a leading stock in Nepal’s commercial bank sector. It holds the
highest market price per share among commercial banks. Over the past five years, Nabil’s
market price has fluctuated between Rs 921 and Rs 2,535 per share. However, it has gradually
declined from Rs 2,535 in fiscal year 2070/71 to Rs 921 in fiscal year 2074/75 due to
adjustments related to bonus shares and cash dividends.
Similarly, Nabil Bank boasts the highest market capitalization among Nepal’s commercial
banks. In fiscal year 2072/73, its market capitalization reached nearly Rs 98.28 billion.
However, by fiscal year 2074/75, it decreased by approximately one-third due to the decline in
market price. The current market valuation of Nabil is nearly Rs three billion less than the value
at the end of Ashad.
Here are the details for each fiscal year:
Market Price Per Share (MPS Market Capitalization (Rs

Fiscal Year
Rs) billion)
2070/71 2,535 59.01
2071/72 1,910 54.86
2072/73 2,344 92.88
2073/74 1,523 77.19
2074/75 921 60.88
(Source: Nabil Bank financial data)

The decline in market price and capitalization reflects the challenges faced by Nabil Bank in a
dynamic financial landscape, emphasizing the impact of market forces on banking institutions.
RABINRA MAGAR 23
Nabil Bank Limited
Market Capitalization of Nabil Bank for

Financial Analysis of Nabil Bank Limited:

Third Quarter, F.Y. 2075/76
In the unaudited third-quarter report of F.Y. 2075/76, Nabil Bank has shown a decent
performance. The deposits and loans have increased by 14.01 percent and 17.55
percent respectively in the nine months period. The deposits stood at Rs. 153.70 billion.
Likewise, the loans and advances by Nabil are Rs. 128.20 billion until the third quarter.
The paid-up capital of Nabil Bank stands at Rs. 9.01 billion, a rise of 12 percent due to the
adjustment of a 12 percent bonus share. Similarly, the bank has increased the reserves by 2.23
percent only in nine months. The reserve and surplus of Nabil are Rs. 12.82 billion until the
third quarter of F.Y. 2075/76.
RABINRA MAGAR 24
Nabil Bank Limited
Heading 3rd Qtr., F.Y. 2075/76 Ashar end, F.Y.
Paid-up capital (Rs. ‘billion’) 9.01 8.04
Reserve & Surplus (Rs. ‘billion’) 12.82 12.54
Deposits (Rs. ‘billion’) 153.70 134.81
Loans & Advances (Rs. ‘billion’) 128.20 109.06
Percentage Change:
Paid-up capital: 12.06%
Reserve & Surplus: 2.23%
Deposits: 14.01%
Loans & Advances: 17.55%
Third Quarter, Third Quarter, Percentage

Metric
FY 2075/76 FY 2074/75 Change
Net Interest Income

5.41 4.57 +18%
(Rs. billion)
Operating Profit Not specified Not specified
Distributable Profit
2.32 -
(Rs. billion)
RABINRA MAGAR 25
Nabil Bank Limited
Third Quarter, Third Quarter, Percentage

Metric
FY 2075/76 FY 2074/75 Change
Earnings Per Share

47.69 51.74 -7.83%
(EPS) (Rs.)
Non-Performing
0.64 1.07 -40.19%
Loans (NPL) (%)
Base Rate (%) 7.99 7.33 +9%
Nabil Bank’s performance in the third quarter of FY 2075/76 demonstrates growth in net
interest income and improved NPL capacity, despite a decline in EPS. The bank maintains a
low base rate in Nepal.
Nabil Bank Limited’s financial performance

for the fiscal year 2075/76 based on their
annual report:
Deposit Collection:
The total deposit collection during F.Y. 2075/76 was Rs. 153.70 billion.
Loans and Advances:
The bank’s total loans and advances showed steady growth, with an annual compounded rate
of approximately 19%.
For reference, in the preceding fiscal year (F.Y. 2074/75), the total loans and advances were
Rs. 115.42 billion.
Earnings per Share (EPS):
The annualized Earnings per Share (EPS) for Nabil Bank in F.Y. 2075/76 was Rs. 47.69.
However, it’s important to note that the EPS declined due to a significant increase in capital
during this period.
Deposit and Loan Growth:
In the unaudited third-quarter report of F.Y. 2075/76, Nabil Bank showed decent performance.
RABINRA MAGAR 26
Nabil Bank Limited
Deposits increased by 14.01%, reaching Rs. 153.70 billion.

Loans also grew by 17.55% during the nine-month period.
Capital Increment: Nabil Bank’s EPS declined to almost half compared to the highest EPS of
Rs. 83.68 in F.Y. 2070/71. This decrease was primarily driven by a more than threefold rise in
capital.
Financial Statements: According to the financial statements, Nabil Bank’s financial position as
of Ashad 31, 2076 (July 16, 2019), and its financial performance, changes in equity, and cash
flows were presented fairly in accordance with Nepal Financial Reporting Standards and
relevant laws.

annual report:
Deposit Collection:
Loans and Advances:
Rs. 115.42 billion.
Total Assets: The bank’s total assets amounted to NPR 1,127,260,224.
Current Assets:
Cash and Cash Equivalents: NPR 9,361,121
Loans & Receivables: NPR 768,137,178
Financial Assets Held at Amortized Cost: NPR 139,358,535
Financial Assets Held at Fair Value through Profit or Loss: NPR 12,098,312
Total Liabilities: The bank’s total liabilities were NPR 1,139,358,534.
Current Liabilities: Including Accrued Expenses & Other Payables.
Net Assets Attributable to Unit Holders: The net assets attributable to unit holders were NPR
9.02 per unit.
RABINRA MAGAR 27
Nabil Bank Limited

annual report:
Deposit Collection:
Loans and Advances:
Rs. 115.42 billion.
Net Profit: Until the third quarter of FY 2077/78, the bank earned a net profit of Rs. 3.67 Arba.
However, this net profit declined due to an impairment charge of Rs. 61.50 crores. Despite this,
the bank reported a 29.5% increase in net interest income compared to the same period in the
previous year.
Earnings per Share (EPS): Nabil Bank has historically had strong EPS performance. In the
fiscal year 2075/76, it achieved an impressive annualized EPS of 47.69. However, due to
significant capital increment, the EPS declined. Notably, in FY 2070/71, the bank had the
highest EPS of Rs. 83.68.
Loan Growth: Unfortunately, specific loan growth figures for FY 2077/78 are not available in
the provided sources. For detailed information, I recommend referring to Nabil Bank Limited’s
official annual reports.

annual report:
Deposit Collection:
Loans and Advances:
Rs. 115.42 billion.
RABINRA MAGAR 28
Nabil Bank Limited
Nabil Bank Limited’s financial performance for the fiscal year 2079/80 based on their annual
report:
Net Profit:
Nabil Bank reported a net profit of Rs 7.52 Arba during F.Y. 2079/80.
This represents a significant increase of 77% compared to the previous fiscal year (F.Y.
2078/79), where the net profit stood at Rs. 4.25 Arba.
Earnings per Share (EPS):
With the rise in profit, the Earnings per Share (EPS) for F.Y. 2079/80 reached a satisfactory
level of Rs. 27.82.
Nabil Bank Posts Net Profit of Rs 7.52 Arba

in FY 2079/80 [Q4 Report]
Nabil Bank Limited has reported a net profit of Rs 7.52 Arba in the fiscal year 2079/80. This represents
an increase of almost 77 percent compared to the previous year. In fiscal year 2078/79, the net profit of
the bank stood at Rs. 4.25 Arba. Additionally, the Earnings per Share (EPS) reached a satisfactory Rs.
27.82, and the per-share net worth of the bank is Rs. 214.69.
Nabil Bank Limited - Major Financial

Indicators for FY 2079/80
Paid Up Capital: Rs 27.05 Arba
Reserve and Surplus: Rs 31.03 Arba
Deposits from Customers: Rs 396.84 Arba
Loans & Advances to Customers: Rs 332.69 Arba
Net Interest Income: Rs 17.98 Arba
Operating Profit: Rs 11.06 Arba
Net Profit: Rs 7.52 Arba
Distributable Profit: Rs 3.96 Arba
Non-Performing Loans (NPL): 3.2%
Earnings per Share (EPS): Rs 27.82
Net Worth per Share: Rs 214.69
Base rate: 9.52%
These financial indicators provide insights into Nabil Bank Limited’s performance during the fiscal
year 2079/80. The bank’s capital, profitability, and asset quality are crucial factors for assessing its
financial health.
RABINRA MAGAR 29
Nabil Bank Limited
Financial report table for Nabil Bank

Limited
Comparing figures from the fiscal year 2079/80 to 2078/79
FY FY Percent
Metric
2079/80 2078/79 Change
Paid-up Capital (Rs.‘Arba’) 27.05 22.83 18.48%
Reserve and Surplus (Rs.‘Arba’) 31.03 30.15 2.92%
Deposits From Customers (Rs.‘Arba’) 396.84 326.22 21.65%
Loans & Advances To Customers

332.69 300.2 10.82%
(Rs.‘Arba’)
Net Interest Income (Rs.‘Arba’) 17.06 6.81 1011.80%
Operating Profit (Rs.‘Arba’) 11.98 6.28 76.11%
Net Profit (Rs.‘Arba’) 7.52 4.25 76.94%
Distributable Profit (Rs.‘Arba’) 3.96 - -
Non-Performing Loans, NPL (%) 3.2 1.62 97.53%
Base Rate (%) 9.52 8.77 8.55%
RABINRA MAGAR 30
Nabil Bank Limited
FY FY Percent
Metric
2079/80 2078/79 Change
Earnings Per Share, EPS (Rs.) 27.82 8.91 211.80%
Net worth Per Share (Rs.) 214.69 - -
Market Price Per Share (Rs.) [Ashad’s

599.2 - -
end]
P/E Ratio 21.54 - -
This table provides a clear comparison of key financial indicators over two consecutive fiscal years for
Nabil Bank Limited. It allows stakeholders to assess the bank’s performance and growth over time.
Nabil Bank Posts Rs 3.20 Arba in Net Profit

| Annualized EPS at Rs 23.74 [Q2 Report]
On January 21, 2024, Nabil Bank Limited reported a net profit of Rs 3.20 Arba for the second quarter
of the fiscal year 2081/82. This figure represents a decrease of 6 percent compared to the corresponding
period in the previous fiscal year when the bank earned Rs. 3.41 Arba. The decline in net profit is
attributed to an impairment charge of Rs. 1.97 Arba.
Other financial metrics include:
Net interest income: Rs. 8.24 Arba
Paid-up capital: Rs. 27.05 Arba
Total reserve and surplus: Rs. 28.25 Arba
Deposits from customers: Rs. 428.83 Arba
Loans to customers: Rs. 362.87 Arba (excluding deposits and loans to other BFIs)
The annualized earnings per share (EPS) stands at Rs. 23.74, and the per-share net worth is Rs. 204.43.
RABINRA MAGAR 31
Nabil Bank Limited
Second quarter (Q2) of fiscal year (FY)

2080/81
Q2 FY 2080/81 Q4 FY 2079/80 Percentage
Indicator
(Rs.‘Arba’) (Rs.‘Arba’) Change
Paid-up Capital 27.05 27.05 0%
Reserve and Surplus 28.25 29.85 -5.36%
Deposits From
428.83 396.84 +8.06%
Customers
Loans & Advances To

362.87 331.12 +9.59%
Customers
Q2, F.Y. Q2, F.Y. Percentage

Metric
2080/81 2079/80 Change
Net Interest Income

8.24 7.83 +5.24%
(Rs.‘Arba’)
Impairment Charges
1.97 1.88 +4.79%
(Rs.‘Arba’)
Operating Profit (Rs.‘Arba’) 4.56 4.86 -6.17%
Net Profit (Rs.‘Arba’) 3.20 3.41 -6.16%
RABINRA MAGAR 32
Nabil Bank Limited
Q2, F.Y. Q2, F.Y. Percentage

Metric
2080/81 2079/80 Change
Non-Performing Loans
3.8 2.98 +27.52%
(NPL %)
Base rate (%) 9.07 10.1 -10.20%
Earnings Per Share (EPS,

23.74 - -
Rs.)
Market Price Per Share (Rs.) 505 - -
P/E Ratio 21.27 - -
Cost Structure of Nabil Bank Ltd.

Nabil Bank Limited, as a leading commercial bank in Nepal, carefully manages its cost
structure across various operational aspects. Here are the key components:
Personnel Costs
Salaries and Benefits: This includes salaries, bonuses, and benefits for employees at all levels,
from frontline staff to senior management.
Training and Development: Investment in employee training and skill development contributes
to operational efficiency.
Administrative Expenses
Rent and Utilities: Costs associated with office spaces, utilities, and maintenance.
Technology Infrastructure: Expenses related to IT systems, software licenses, and hardware
maintenance.
Marketing and Advertising: Promotional activities to attract customers and enhance brand
visibility.
RABINRA MAGAR 33
Nabil Bank Limited
Legal and Compliance: Costs for legal services, regulatory compliance, and risk management.
Operational Costs
Branch Network: Expenses related to operating and maintaining branch offices.
ATM Network: Costs associated with ATM deployment, maintenance, and cash
replenishment.
Security and Surveillance: Ensuring the safety of physical assets and customer data.
Customer Service: Investments in customer support and relationship management.
Interest Expenses
Deposits and Borrowings: Interest paid on customer deposits and external borrowings.
Interbank Lending: Costs related to borrowing from other financial institutions.
Risk Provisions
Loan Loss Provisions: Setting aside funds to cover potential loan defaults.
Credit Risk Management: Costs associated with assessing and managing credit risk.
Other Costs
Taxes and Levies: Payments to regulatory authorities and government.
Miscellaneous Expenses: Any other operational costs not covered above.
Nabil Bank continually evaluates and optimizes its expenses to balance operational efficiency,
customer service, and profitability in the dynamic banking sector.
Benefits of Nabil Bank’s Investment

Projects and Strategic Initiatives
Nabil Bank Limited strategically invests in various projects and initiatives, yielding several
benefits:
Sustainable Banking
Through its “Nabil Sustainable Banking” initiative, the bank aims to:
Promote Financial Literacy: Reach those with limited financial access in rural areas.
Commercialize Agriculture: Support the agricultural sector, contributing to rural development.
Encourage Entrepreneurship: Foster economic growth.
RABINRA MAGAR 34
Nabil Bank Limited
Align with UN Sustainable Development Goals: Support goals adopted by the Nepalese
government.
Investment in Sustainability-Focused Businesses

Nabil Bank focuses on businesses prioritizing sustainability, including investments in sectors
like agriculture.
The bank actively supports urban and rural entrepreneurship programs, fostering economic
empowerment.
Balancing Profitability and Social Impact

By integrating sustainability into its operations, Nabil Bank achieves a balance between
profitability and positive social impact.
Strategic initiatives contribute to long-term growth while addressing societal needs.
Cost Optimization and Efficiency

Improvement at Nabil Bank
To enhance cost efficiency and operational effectiveness, Nabil Bank can consider the
following strategic measures:
Continuous Cost Review

Regularly assess spending patterns and identify areas for optimization.
Prioritize sustainable cost improvements over short-term cuts.
Metrics Beyond Cost-Cutting

Look beyond traditional cost-to-income ratios (CIR) and return on equity (ROE).
Consider customer-centric metrics like cost-to-serve (CTS) and full-time equivalents (FTE)
per customer.
Focus on productivity, efficiency, and profitability.
Technology and Process Simplification

Implement new technologies to streamline operations.
Simplify processes to reduce redundancies and enhance productivity.
RABINRA MAGAR 35
Nabil Bank Limited
Cultural Alignment
Embed a cost-culture mindset throughout the organization.
Align cost-reduction objectives with broader ambitions.
Future Targets
Aim for 10% cost efficiencies in the next 12 months and up to 20-30% over the next three
years.
These targets are crucial, especially considering inflationary pressures and the cost of
living/borrowing crisis.
By adopting these strategies, Nabil Bank can achieve sustainable cost optimization while
maintaining its commitment to customer value and long-term growth.
Actionable Recommendations for Cost

Optimization
Optimize Operational Efficiency
Invest in modern banking technologies to streamline processes.
Simplify workflows to minimize redundant steps.
Promote online banking and self-service options.
Effective Risk Management
Strengthen credit risk assessment processes to minimize non-performing loans (NPLs).
Analyzing Profitability Metrics and

Financial Health
Cost-to-Income Ratio (CIR)
The CIR evaluates income generation efficiency relative to operating costs.
Formula:
𝐺𝑟𝑜𝑠𝑠 𝐼𝑛𝑐𝑜𝑚𝑒
𝐶𝐼𝑅=𝑂𝑝𝑒𝑟𝑎𝑡𝑖𝑛𝑔 𝐸𝑥𝑝𝑒𝑛𝑠𝑒𝑠 × 100
A lower CIR indicates better cost management and operational efficiency.

Return on Investment (ROI)
ROI measures gain or loss relative to the amount invested.
RABINRA MAGAR 36
Nabil Bank Limited
Formula:
𝐍𝐞𝐭 𝐏𝐫𝐨𝐟𝐢𝐭 𝐟𝐫𝐨𝐦 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭
𝑅𝑂𝐼= 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭
× 𝟏𝟎𝟎
A positive ROI signifies profitable investments.

Benefit-Cost Ratio (BCR)
BCR assesses investment/project profitability.
Formula:
𝐓𝐨𝐭𝐚𝐥 𝐁𝐞𝐧𝐞𝐟𝐢𝐭𝐬
𝐵𝐶𝑅= 𝐓𝐨𝐭𝐚𝐥 𝐂𝐨𝐬𝐭
A BCR greater than 1 indicates a favorable project.

Net Present Value (NPV)
NPV considers the time value of money.
Formula:
(𝟏+𝐫) 𝐧×𝐍𝐞𝐭 𝐂𝐚𝐬𝐡 𝐈𝐧𝐟𝐥𝐨𝐰−𝐈𝐧𝐢𝐭𝐢𝐚𝐥 𝐈𝐧𝐯𝐞𝐬𝐭𝐦𝐞𝐧𝐭
𝑁𝑃𝑉= 𝒓
Net Interest Margin (NIM)

Measures the difference between interest earned on loans and interest paid on deposits. A
higher NIM indicates better profitability.
Nabil Bank should closely monitor NIM to optimize interest income while managing expenses.
Cost-to-Income Ratio (CIR)
Reflects cost management efficiency. It’s calculated as operating expenses divided by total
income.
A lower CIR allows more profit retention.
Return on Assets (ROA)
Assesses how effectively the bank uses assets to generate profits.
Nabil Bank should aim for a healthy ROA by balancing risk and return.
Profitability Analysis
Revenue Sources
Nabil Bank generates revenue primarily through interest charges on loans extended to
businesses, industries, and individuals. These charges exceed interest paid to depositors,
covering administration expenses.
As an intermediary, the bank channels savings into investments and consumption, serving both
investors and savers.
RABINRA MAGAR 37
Nabil Bank Limited
Beyond loans, Nabil Bank offers various financial services, including payment and remittance
functions.
SWOT Analysis
Here’s a concise SWOT analysis for Nabil Bank:
Strengths
Established joint venture with international partners.
Management support from the National Bank of Bangladesh.
Wide range of financial services offered.
Weaknesses
Economic limitations due to agrarian context.
Challenges in governing diverse territories.
Historical military defeats.
Opportunities
European ascendance and new trade routes.
Potential for modernization and adaptation.
Role as an essential part of modern society.
Threats
Nationalist movements impacting territorial control.
Decline in economic prominence.
Risk Assessment
Credit Risk
Evaluate the quality of loans and provisions for potential defaults.
Nabil Bank must maintain a robust credit risk management framework.
Market Risk
Monitor exposure to interest rate fluctuations, foreign exchange risk, and equity market
volatility.
Implement risk mitigation strategies.
Operational Risk
RABINRA MAGAR 38
Nabil Bank Limited
Identify and manage operational risks related to processes, technology, and human resources.
Strengthen internal controls and risk monitoring.
Strategic Initiatives
Digital Transformation
Invest in digital channels, online banking, and mobile apps.
Enhance customer experience and reduce operational costs.
Product Diversification
Introduce new financial products and services.
Explore opportunities in wealth management, insurance, and fintech partnerships.
Branch Optimization
Assess branch network efficiency.
Consider consolidating or expanding branches based on customer needs.
Regulatory Compliance
Basel III Implementation
Ensure compliance with Basel III capital adequacy requirements.
Maintain a strong capital position.
Anti-Money Laundering (AML) and Know Your Customer (KYC):
Strengthen AML/KYC processes.
Prevent illicit financial activities.
Discuss Nabil Bank’s capital position and risk management practices.
Ethical Practices and Transparency

Emphasize the importance of ethical governance and transparency.
Highlight the role of the board of directors in ensuring good corporate governance.
RABINRA MAGAR 39
Nabil Bank Limited
Future Outlook and Strategic Roadmap

Growth Prospects
Nabil Bank’s Expansion Plans
Nabil Bank Limited, a prominent commercial bank in Nepal, has been strategically expanding its reach
both domestically and regionally. Here are the key insights:
Domestic Expansion
Branch Network: Nabil Bank boasts a robust domestic presence with 266 branches across Nepal as of
mid-January 2024.
Market Share: The bank maintains a strong market share, holding 7.99% of total deposits and 8.35% of
total credit among commercial banks.
Regional Ambitions:
While specific details about Nabil Bank’s regional expansion plans are not readily available in the
search results, it’s essential to monitor their strategic moves.
Historically, banks in the region have expanded by acquiring assets and liabilities of other financial
institutions. For instance, Exim Bank Tanzania recently acquired First National Bank (FNB) Tanzania,
signaling its commitment to regional growth.
In summary, Nabil Bank continues to strengthen its domestic foothold while keeping an eye on regional
opportunities. As the financial landscape evolves, the bank’s expansion strategies will play a crucial
role in its future trajectory.
Potential areas for growth that Nabil Bank

could consider:
Product Diversification
Digital Banking Solutions: Enhance digital services, including mobile banking apps, online
payment gateways, and digital wallets. These offerings can attract tech-savvy customers and
improve overall customer experience.
Wealth Management Services: Introduce investment advisory services, mutual funds, and
portfolio management to cater to customers’ financial planning needs.
Microfinance and SME Lending: Target underserved segments by providing tailored financial
products for small businesses and micro-entrepreneurs.
Geographic Expansion
Rural and Underserved Areas: Extend branches and services to rural regions where banking
infrastructure is limited. This can foster financial inclusion and tap into untapped markets.
RABINRA MAGAR 40
Nabil Bank Limited
Cross-Border Operations: Explore opportunities in neighboring countries, leveraging existing

trade and cultural ties. Collaborate with other banks or acquire regional players to expand
footprint.
Partnerships and Alliances

Fintech Collaborations: Partner with fintech companies to offer innovative solutions, such as
peer-to-peer lending, robo-advisory, or block chain-based services.
Strategic Alliances: Collaborate with international banks or financial institutions to facilitate
cross-border transactions and enhance global connectivity.
Nabil Bank’s growth strategy should align with market trends, customer preferences, and
regulatory frameworks. Adaptability and agility are key in navigating the dynamic financial
landscape.
Challenges and Mitigation Strategies

Liquidity Risk Mitigation
Nabil Bank should focus on managing liquidity risk effectively. This involves ensuring that it has
sufficient liquid assets to meet its obligations.
Common instruments used to mitigate liquidity mismatches include organized tawarruq (commodity
murabahah), salam sukuk, and short-term ijarah sukuk.
However, challenges remain, such as infrastructure deficiencies in countries where Islamic finance is
still at an early stage and a lack of hedging instruments due to Shariah restrictions.
Overall Financial Health

Nabil Bank needs to assess its financial health comprehensively. This includes analyzing net income,
earnings per share (EPS), and dividends per share (DPS).
Investors should consider factors like asset quality, capital adequacy, and profitability.
Risk Management Practices

The bank should have robust risk management practices in place. This involves identifying, assessing,
and mitigating risks across its operations.
Regular stress testing and scenario analysis can help anticipate potential challenges.
Adaptability to Market Changes

Nabil Bank must stay informed about market trends, regulatory changes, and technological
advancements.
Agility in adapting to evolving customer preferences and industry shifts is crucial.
RABINRA MAGAR 41
Nabil Bank Limited
Potential challenges, such as regulatory changes or economic uncertainties
Regulatory Intensity
Given continued economic fluctuations, election-year uncertainties, and legal actions, Nabil Bank can
expect high regulatory intensity.
Areas of focus include risk management/governance, financial risk, and data.
Risk Standards
Regulators are emphasizing agility and risk mitigation.
Nabil Bank must demonstrate robust risk accountability and governance to meet heightened risk
standards.
Risk Sustainability
Demonstrating “sustainability” in risk functions is crucial.
It should be embedded across risk pillars and integrated into financial analysis and business as usual.
Growth & Resiliency

Regulatory scrutiny extends to firms considered “too big to manage.”
Nabil Bank’s ability for M&A activity or portfolio growth must align with sound liquidity management
and strong financial controls.
Capital & Valuations

Escalating attention on risk calculations, stress testing, capital planning, and broad risk management
(both financial and operational).
Nabil Bank should ensure compliance in these areas.
‘Threat Actors’
Regulators expect better detection, mitigation, tracking, and remediation of financial crime, fraud, and
misconduct.
Consumer protections must be maintained.
Fairness
Multi-agency focus on fairness principles, including access, treatment, and product risks.
Transparency and alignment with stated practices are essential.
RABINRA MAGAR 42
Nabil Bank Limited
Responsible Systems
Existing rules apply to “automated systems,” “predictive analytics,” and other innovative technologies.
Nabil Bank should address these across various risks within the organization.
Market Overview and Industry Trends

Industry Landscape
Commercial Banks:
Nepal has 20 commercial banks operating within its financial system.
These commercial banks play a significant role in the country’s economy.
Development Banks:
There are 17 development banks in Nepal.
These banks focus on providing financial services for development projects and small
businesses.
Finance Companies:
Nepal hosts 17 finance companies.
These companies offer various financial products and services to both individuals and
businesses.
Microfinance Banks:
A total of 57 microfinance banks operate in Nepal.
These microfinance institutions cater to the needs of marginalized communities and promote
financial inclusion.
In summary, these diverse financial institutions collectively contribute to Nepal’s economic
growth, financial stability, and accessibility to financial services. The banking sector’s
evolution includes recent trends such as mergers and acquisitions among commercial banks.
Market Share and Positioning

Market Share and Capitalization
Nabil Bank has a market value of Rs 77.27 Arba, making it one of Nepal’s prominent
commercial banks.
Nepal Investment Bank closely follows with a market cap of Rs 61.42 Arba, and Agricultural
Development Bank stands at Rs 57.71 Arba.
RABINRA MAGAR 43
Nabil Bank Limited
As of mid-January 2024, Nabil Bank’s market share among commercial banks is 7.99% in
deposits and 8.35% in credit.
Among all commercial banks, Nabil Bank has the highest total market capitalization, with a
total share price of Rs 165.40 billion 15.43 million. Its market value stands at Rs 198.39 Arba
(as of Bhadra 13, 2078 BS).
Competitive Advantages and USP

First Private Sector Bank: Nabil Bank was established in 1984 by transnational investors,
becoming Nepal’s first private sector bank. It paved the way for modern, international-standard
financial services in the country.
Robust Financial Position: The bank maintains strong financial positions and capital ratios,
ensuring stability and reliability for its customers.
Extensive Branch Network: Nabil Bank operates multiple branches across urban and rural
areas, effectively serving a diverse customer base.
Corporate Social Responsibility (CSR): The bank actively contributes to the community and
society through its CSR initiatives.
Resilience during Pandemic: Despite pandemic challenges, Nabil Bank achieved an 18%
growth in its balance sheet.
Limitations
No International Branches for Citizens Abroad: Unlike some other banks, Nabil Bank does not
have international branches specifically catering to citizens living abroad.
In summary, Nabil Bank remains a significant player in Nepal’s banking landscape, combining
its strong market presence with substantial capitalization. Its unique position as Nepal’s first
private sector bank contributes significantly to its USP.
Digital Banking Trends

Digital Banking in Nepal and Nabil Bank’s Initiatives
In recent years, digital banking services have gained significant traction in Nepal, transforming
the way people manage their finances. Nabil Bank, one of Nepal’s leading private sector banks,
has been at the forefront of this digital revolution. Here are some key points about the
increasing adoption of digital banking and Nabil Bank’s initiatives:
Nabil Digi Bank Launch
On its 36th anniversary, Nabil Bank introduced Nabil Digi Bank, a groundbreaking initiative
to transform the bank into a fully digital institution.
Nabil Digi Bank aims to meet customer needs by allowing them to enjoy banking services
anytime, anywhere, using their preferred devices.
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Nabil Bank Limited
This initiative reflects Nabil Bank’s commitment to providing complete financial solutions
while enhancing customer experiences.
Breaking Barriers
While mobile banking and internet banking have already enriched the lives of millions of Nepal
is, Nabil Digi Bank goes beyond conventional banking.
It breaks barriers by implementing digital strategies in collaboration with customers, FinTechs,
and other stakeholders.
The goal is to create a superior banking experience and make Nabil Bank a truly digital
institution.
Strategic Collaborations
Nabil Bank has signed strategic cooperation agreements to enhance its digital capabilities.
It partnered with ICICI Bank (India) for the exchange of best banking practices.
Additionally, Nabil collaborated with Huawei Technologies, a global ICT leader, to support its
digital transformation.
Nabil Sustainable Banking
Nabil Bank also launched the Nabil Sustainable Banking Unit to extend financial access to the
unbanked and promote entrepreneurship in remote areas.
In summary, Nabil Bank’s digital initiatives, including Nabil Digi Bank, demonstrate its
commitment to embracing technology, enhancing customer experiences, and driving Nepal’s
financial sector toward a digital future.
Customer Segmentation and Target Market

Retail Customers
Nabil Bank’s Retail Customer Base and Strategies for Attraction and Retention
Retail Customer Base at Nabil Bank: Nabil Bank Limited, a prominent bank in Nepal, caters
to a diverse retail customer base. Their individual account holders include a wide range of
customers, from salaried professionals to entrepreneurs and students. For specific details on
their customer demographics, you can visit their official website.
Strategies to Attract and Retain Retail Customers
Personalized Services: - Tailored Communication: Nabil Bank should focus on personalized
communication with customers. This includes addressing them by name, understanding their
preferences, and offering relevant services. - Customized Product Offerings: By analyzing
customer data, the bank can create personalized product bundles, such as customized savings
accounts, loan options, or investment plans. - Dedicated Relationship Managers: Assigning
dedicated relationship managers to high-value customers ensures personalized attention and
prompt service.
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Nabil Bank Limited
Loyalty Programs: - Reward Points and Discounts: Implementing a loyalty program that
rewards customers for their banking activities (e.g., transactions, bill payments) encourages
repeat business. - Birthday and Anniversary Rewards: Celebrating personal milestones with
special deals or discounts fosters a sense of value and connection. - Recommendation Engines:
Suggesting relevant products based on browsing history and preferences enhances the customer
experience. - Multi-Channel Engagement: Utilize various channels (mobile apps, SMS, email)
to engage customers and keep them informed about loyalty program benefits.
Exceptional Customer Service: - Prompt Issue Resolution: Address customer queries and
complaints promptly. A robust customer service system ensures satisfaction and builds trust. -
Apologize When Necessary: Mistakes happen; acknowledging them and offering solutions can
turn a negative experience into a positive one. - Consistency: Consistently delivering excellent
service across all touchpoints reinforces customer loyalty.
Added Value and Convenience: - Convenient Banking Channels: Offer online banking, mobile
apps, and ATMs for easy access to services. - Educational Content: Provide financial literacy
resources, tips, and workshops to empower customers. - Mission and Values: Inspire customers
by sharing the bank’s mission and commitment to social responsibility.
Measuring Success and Adaptation: - Key Performance Indicators (KPIs): Regularly assess
KPIs related to customer retention, engagement, and satisfaction. - Feedback and Adaptation:
Listen to customer feedback and adapt strategies accordingly. - Stay Ahead: Continuously
monitor market trends and consumer behavior to stay ahead in the loyalty game.
Remember, successful retail banking isn’t just about transactions; it’s about building lasting
relationships and providing value beyond the basics. Nabil Bank can achieve this by combining
personalized services, loyalty programs, and exceptional customer experiences.
Corporate and SME Clients

Nabil Bank’s Focus on SMEs and Customized Financial
Solutions
Nabil Bank, a prominent financial institution in Nepal, has strategically shifted its focus from
corporate banking to SME (Small and Medium Enterprise) banking. Here are key insights
about Nabil Bank’s approach:
SME Lending Focus
Nabil Bank has significantly increased its lending to SMEs and retail clients. In the current
fiscal year, they aim to support SMEs by expanding their lending books.
Approximately 50% of Nabil Bank’s overall lending portfolio now consists of SME and retail
exposure.
In this fiscal year alone, Nabil Bank has disbursed more than Rs 10 billion in loans under the
retail and SME portfolio.
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Nabil Bank Limited
Process Simplification
Nabil Bank is committed to streamlining processes for SMEs. They use the latest tools and
software to reduce turnaround time for service delivery.
The goal is to make access to financial solutions faster and more efficient for SME clients.
Collaboration with One to Watch (OTW)
Nabil Bank has partnered with OTW to support pandemic-affected MSMEs (Micro, Small, and
Medium Enterprises).
Through this collaboration, MSMEs receive collateral-free and interest-free loans for short-
term working capital needs.
Additionally, customized business advisory and development services help MSMEs preserve
business continuity and build resilience.
The aim is to contribute to job retention and overall economic recovery by providing immediate
revival funds for up to 18 months.
e@Nabil Corporate Internet Banking
Nabil Bank launched e@Nabil, an internet banking solution specifically for corporate
customers, including SMEs.
Corporate clients can access their operating accounts and conduct transactions online,
enhancing convenience and efficiency.
SME Loans Made Easy
Nabil Bank, in partnership with UKaid Sakchyam-Access to Finance Program, introduced the
“Nabil Sajilo Express Karja” (NSEK).
NSEK uses a credit scoring model to determine creditworthiness, allowing SMEs to receive
loan approval within 35 hours.
In summary, Nabil Bank’s commitment to SMEs includes tailored financial solutions,
simplified processes, and collaborative efforts to support Nepal’s business community during
challenging times.
Technology Infrastructure and Innovation:

Core Banking Systems
Nabil Bank’s Core Banking Technology
Nabil Bank, like many financial institutions, recognizes the importance of modernizing its core
banking system (CBS) to meet evolving customer needs and industry standards. Here are some
key aspects of Nabil Bank’s core technology:
Scalability:
Scalability refers to the system’s ability to handle increased transaction volumes, customer
growth, and changing business demands.
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Nabil Bank Limited
Nabil Bank’s CBS aims to scale efficiently, accommodating future expansion without
compromising performance.
Security:
Security is paramount in banking systems. Nabil Bank invests in robust security measures to
protect customer data, prevent fraud, and ensure compliance with regulations.
Encryption, access controls, and continuous monitoring are integral components of their
security framework.
Efficiency:
Efficiency involves streamlining processes, reducing operational costs, and enhancing
customer service.
Nabil Bank’s CBS focuses on automating routine tasks, optimizing workflows, and minimizing
manual interventions.
Recent Upgrades and Investments:
Nabil Bank has made strategic investments to enhance its core systems:
Digital Transformation: The bank has prioritized digital channels, enabling customers to
perform transactions seamlessly through online banking, mobile apps, and ATMs.
Real-Time Payments: Nabil Bank has upgraded its systems to support real-time payment
processing, improving fund transfers and customer experience.
Agile Workflows: The bank adopts agile methodologies, allowing faster development cycles
and quicker responses to market changes.
Cost Efficiency: By improving IT productivity, Nabil Bank aims to reduce operational costs
by up to 30%.
Selective Modernization: Rather than a full replacement, Nabil Bank selectively modernizes
its CBS based on business and IT needs, ensuring a cost-effective approach.
In summary, Nabil Bank’s core banking technology emphasizes scalability, security, and
efficiency while strategically investing in upgrades to meet the demands of a digital-led
banking landscape.
Digital Channels
Nabil Bank’s Digital Banking Services
Nabil Bank, a leading bank in Nepal, offers a range of digital banking services to enhance
customer convenience and security. Here are insights into their online banking platform,
mobile app, and internet banking services:
NBank Mobile App:
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Nabil Bank Limited
Overview: The nBank app is a 100% digital banking platform designed for seamless banking
on the go.
Features:
Superapp: Access services without logging in. Pay bills, book flights, calculate EMIs, and more
directly from the login page.
Quick Account Opening: Nepalese citizens can open an account within seconds. Unlock full
account features by completing KYC online.
Digital KYC: Complete your Know-Your-Customer requirements virtually, avoiding physical
branch visits.
International Registration: If abroad, register using an international number and operate your
account.
Remittance Made Simple: Send money from international banks directly to a Nabil Bank
account using nRemit.
Security Features: Multi-factor authentication, encryption, and biometric login options ensure
data safety.
NBank Web Service:
Overview: Nabil Bank’s web service complements the mobile app.
Security Measures:
Strong Encryption: Protects user information and transactions.
Two-Factor Authentication: Enhances security during login.
Auto-Logout: Ensures session timeouts for added safety.
SIM Verification: Validates user identity.
Overall Focus on Security:
Amidst convenience and innovation, Nabil Bank prioritizes security.
Robust measures safeguard customer data, ensuring financial information remains safe and
secure at all times.
In summary, Nabil Bank’s digital banking services combine user-friendly features with robust
security protocols, empowering customers to manage their finances efficiently and securely.
Financial Ratios and Comparative Analysis

Nabil Bank’s Return on Equity (ROE) and Efficiency
Return on Equity (ROE):
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Nabil Bank’s ROE can be calculated using the formula:

𝑅𝑂𝐸= (𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒/𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠′ 𝐸𝑞𝑢𝑖𝑡𝑦) ×100%
Unfortunately, specific financial data for Nabil Bank’s net income and shareholders’ equity is
not provided in the search results. However, you can find this information in the bank’s
financial reports or official statements.
Comparison with Industry Peers:
To assess how efficiently Nabil Bank utilizes shareholders’ equity, we need to compare its
ROE with industry peers.
Unfortunately, direct peer comparisons are not available in the search results. However, you
can refer to financial databases or industry reports to obtain relevant data for a comprehensive
analysis.
Factors Affecting Efficiency:
Nabil Bank’s efficiency in generating profits from shareholders’ equity depends on various
factors, including asset quality, cost management, and revenue generation.
Considerations:
Asset Quality: High non-performing assets (NPAs) can negatively impact profitability.
Cost of Funds: Lower cost of funds enhances efficiency.
Capitalization: Adequate capitalization is crucial for sustainable growth.
Business Strategy: Effective utilization of equity depends on the bank’s strategic decisions.
In summary, while specific ROE data is not available here, analyzing Nabil Bank’s financial
statements and comparing it with industry peers will provide deeper insights into its efficiency
and profitability.
Asset Quality Ratios

Non-Performing Loans (NPLs):
NPLs refer to loans where borrowers have defaulted or are not paying back as per the agreed
terms. These loans pose credit risk to the bank.
Nabil Bank’s NPLs stood at 3.80% as of mid-January 2024, which is higher than the industry
average of 3.63%.
The bank also reported sustained high delinquencies (0+ days overdue) of approximately 25%
during the same period, although a significant portion falls within the 1-30 days overdue
bucket.
The restructuring/rescheduling of stressed accounts and higher-than-industry-average growth
have partly influenced these figures.
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Nabil Bank Limited
Asset Quality Concerns:

Nabil Bank faces challenges in improving asset quality due to liquidity pressure on leveraged
borrowers (following working capital guidelines introduced by the central bank) and economic
slowdown-induced demand moderation.
Capitalization indicators have weakened due to factors like cash dividends, tax implications,
and rising credit costs.
Comparison with Industry Benchmarks:

Nabil Bank’s NPLs are higher than the industry average, indicating a need for focused efforts
to manage credit risk and improve asset quality.
The bank’s ability to address these challenges and enhance asset quality remains crucial for its
long-term stability.
In summary, Nabil Bank’s asset quality metrics, particularly NPLs, warrant close attention,
and efforts to mitigate credit risk are essential for sustained stability.
Loan Portfolio Composition

Sector-wise Breakdown
Nabil Bank’s Loan Portfolio by Sectors and Associated Risk Exposure
Nabil Bank, one of Nepal’s prominent commercial banks, has a diversified loan portfolio across
various sectors. Let’s categorize these sectors and discuss the risk exposure associated with
each:
Agriculture Sector
Loans to farmers, agricultural businesses, and agribusinesses fall under this category.
Market Risk: Vulnerability to fluctuations in crop prices, weather conditions, and market
demand.
Operational Risk: Challenges related to farming practices, supply chain disruptions, and natural
disasters.
Credit Risk: Default risk due to factors affecting farmers’ income and repayment capacity.
Manufacturing Sector:
This includes loans to manufacturing companies for production, expansion, or modernization.
Real Estate Sector:
Loans for real estate development, construction, and property purchase.
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Nabil Bank Limited
Infrastructure and Project Financing:

Includes loans to energy, cement, airlines, and telecommunication projects.
Other Sectors:
Nabil Bank also extends loans to various other sectors, such as services, trade, and small
businesses.
Conclusion: Nabil Bank’s loan portfolio diversification helps mitigate risks by spreading
exposure across different sectors. However, prudent risk management practices are crucial to
address sector-specific challenges and ensure sustainable lending.
Risk Diversification Strategies

Managing Concentration Risks at Nabil Bank
Nabil Bank, like other financial institutions, employs various strategies to manage
concentration risks. These risks arise when a bank has significant exposure to a particular
industry or sector, making it vulnerable to changes in that area. Here’s how Nabil Bank
addresses concentration risks:
Diversification of Loan Portfolios
Nabil Bank recognizes that holding a diverse range of loans is crucial for risk mitigation. By
diversifying their loan portfolio, they reduce the impact of potential losses from any specific
industry or sector.
Loan Participations: Nabil Bank engages in loan participations, allowing them to buy and sell
portions of loans. This strategy enables exposure to various industries and geographical
regions, spreading risk across the portfolio.
Industry and Geographical Diversification: The bank actively seeks loans from different sectors
and regions to avoid overreliance on any single segment.
Concentration Risk Management
Selling Overexposed Loans: When Nabil Bank identifies overexposure to a specific sector,
they can sell portions of those loans. This helps create a more balanced and stable loan
portfolio.
Acquiring Loans from Other Industries: By participating in loans from other industries, Nabil
Bank diversifies its risk further.
Enhancing Liquidity:
Loan Participations for Liquidity: Nabil Bank uses loan participations to enhance liquidity.
During economic stress or unexpected cash flow needs, they can sell participations to access
funds without liquidating other less liquid assets.
Technology and Loan Participations:
Nabil Bank leverages technology to streamline the loan participation process.
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Nabil Bank Limited
Real-Time Data: Modern platforms provide real-time data, enabling efficient connections with
other financial institutions.
Automation: Automated processes reduce approval times and document preparation, making
loan participations accessible and efficient.
In summary, Nabil Bank’s proactive approach involves diversification, risk management, and
leveraging technology to maintain stability and mitigate concentration risks in its loan
portfolio.
Deposit Mobilization Strategies

Nabil Bank’s Deposit Sources and Interest Rate
Management
Nabil Bank Limited, one of Nepal’s prominent commercial banks, employs various strategies
to attract deposits from diverse sources, including individuals, businesses, and government
entities. Let’s delve into these aspects:
Deposit Sources
Individuals: Nabil Bank offers a range of deposit products tailored to individual customers.
These include savings accounts, fixed deposits, recurring deposits, and special schemes. The
bank promotes these products through personalized customer service, competitive interest
rates, and convenient banking channels.
Businesses and Corporates: Nabil Bank actively targets businesses, corporations, and SMEs
(small and medium-sized enterprises). It provides customized solutions such as current
accounts, term deposits, and trade finance services. The bank’s relationship managers engage
with corporate clients to understand their financial needs and offer suitable deposit options.
Government and Public Entities: Nabil Bank collaborates with government bodies,
municipalities, and public institutions. These partnerships involve managing government
accounts, handling tax collections, and providing treasury services. Government deposits
contribute significantly to the bank’s liquidity.
Interest Rate Management
Competitive Rates: Nabil Bank adjusts its interest rates strategically to attract and retain
depositors. It monitors market conditions, liquidity requirements, and the competitive
landscape. Offering competitive rates ensures that customers choose Nabil Bank over other
alternatives.
Risk-Return Balance: The bank balances the need for attractive rates with risk management. It
considers factors like credit risk, liquidity risk, and operational costs. While higher rates attract
deposits, the bank must maintain profitability and stability.
Interest Rate Spread: Nabil Bank manages its interest rate spread—the difference between
lending and deposit rates. By optimizing this spread, the bank aims to maximize profitability
while ensuring fair returns for depositors.
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Nabil Bank Limited
Liquidity Position
Liquidity Management: Nabil Bank closely monitors its liquidity position. It maintains a mix
of liquid assets (such as cash, government securities, and short-term deposits) to meet
immediate obligations. Adequate liquidity ensures the bank can honor withdrawals and fund
loans.
Challenges: Liquidity challenges arise due to fluctuations in deposit inflows and loan demand.
The bank must strike a balance between maintaining sufficient liquidity and deploying funds
effectively.
CASA Ratio: The ratio of Current Account and Savings Account (CASA) deposits to total
deposits reflects the bank’s liquidity strength. Higher CASA deposits provide stable funding
and reduce reliance on expensive term deposits.
In summary, Nabil Bank’s success in attracting deposits lies in its customer-centric approach,
competitive rates, and prudent liquidity management. However, recent challenges related to
asset quality and liquidity warrant close monitoring. The bank’s commitment to maintaining a
robust deposit base and effective interest rate policies remains crucial for its sustained growth
and stability.
Corporate Social Responsibility (CSR)

Community Initiatives
Nabil Bank’s Commitment to Social Responsibility
Nabil Bank, as part of its corporate social responsibility (CSR) initiatives, has made significant
contributions in various areas:
Nabil School of Social Entrepreneurship (Nabil SSE):
Launched in November 2021, Nabil SSE fosters social entrepreneurship across Nepal. It
collaborates with eight different schools, including the School of Management at Tribhuvan
University.
The program offers two transformative components: the Fellowship Program and the
Certificate Course. Nepalese citizens with innovative ideas can apply to acquire knowledge,
financial access, and networks necessary for social enterprise development.
Nabil SSE has already supported many youths in turning their dreams into reality. Success
stories extend beyond national borders, with recipients of prestigious awards at both national
and international levels.
Impactful Results
Altogether, 335 candidates have enrolled in the Nabil SSE program, leading to the
establishment of 52 enterprises and the creation of 869 jobs across the country.
The bank recognizes the evolving need for mobilizing resources for social and environmental
well-being and is committed to promoting social finance for overall development in Nepal.
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Nabil Bank Limited
Nabil SSE’s success demonstrates the bank’s dedication to making a substantial difference in
society through sustainable banking and social entrepreneurship.
Future Expansion
On the occasion of Nabil SSE’s 2nd anniversary, the bank reaffirms its commitment to making
a positive impact on people’s lives.
Nabil Bank aims to expand its activities within Nepal and regionally, emphasizing social,
environmental, and economic development.
In summary, Nabil Bank’s CSR efforts, particularly through Nabil SSE, exemplify its
commitment to social responsibility, youth empowerment, and sustainable development in
Nepal.
Conclusion
Nabil Bank, a stalwart in the Nepalese banking industry for 35 years, has consistently led the
way. Its financial performance remains robust, with a solid track record over the past five years.
The bank’s high dividend payout and efficient management team contribute to its reputation as
a financially strong institution.
The brand loyalty associated with Nabil is unmistakable, bolstered by its ability to attract funds
at competitive rates. With a substantial deposits and loans portfolio, Nabil stands out among
its peers. As the liquidity situation in the economy improves, the bank’s profits are poised to
grow.
Investors looking for stability and long-term gains may find holding Nabil stock a prudent
strategy? Not only does it offer good dividends, but the market value of the stock is also likely
to rise as the overall share market trends positively. Nabil Bank’s adaptability, innovation, and
strategic navigation position it well for continued success in Nepal’s dynamic financial
landscape.
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A Study

COST AND BENEFIT ANALYSIS

A Project Work Report

Partial fulfilment of the requirement for the degree

Declaration of Originality and Fulfillment

I recommend this project work report for evaluation.

Ms. Palpasa Shrestha Mr. Lakash Shrestha

(BBS 4th Year)

Cost Optimization and Efficiency Improvement at Nabil Bank ........................................................... 35

Risk Management Practices .............................................................................................................. 41

SME Loans Made Easy ................................................................................................................. 47

Introduction of Nabil Bank

Profile of Nabil Bank Ltd.

Founding: Nabil Bank was founded in 1984 by multinational (primarily foreign)

Ownership Change: In 1995, Nepal’s only billionaire businessman, Binod

International Correspondent Banking: The bank has more than 200

Board of Directors and Management Team

Position: Chief Executive Officer (CEO)

Shareholding structure of Nabil Bank

In July 2022, Nabil Bank acquired Nepal Bangladesh Bank.

A Journey of Growth and Capital Expansion

Statement of Problem for Nabil Bank Ltd.

Digital Transformation: Although Nabil Bank launched the virtual branch

Risk Management: As a financial institution, Nabil Bank must effectively manage

Regulatory Compliance: Compliance with evolving regulatory requirements is a

Asset Quality: Maintaining a healthy loan portfolio and managing non-performing

Financial Analysis of Nabil Bank Limited

Financial data for Nabil Bank over a five-

2070/71 3.05 9.49 87.27

2071/72 3.66 12.44 115.99

2072/73 4.75 14.67 127.33

2073/74 6.19 16.59 144.02

Fiscal Paid-up Capital Shareholders’ Fund (Rs. Total Assets (Rs.

2074/75 8.04 20.59 160.98

Paid-up Capital: 26.93%

Paid-up Capital of Nabil Bank in the Last

Deposits and Loans & Advances of Nabil

2070/71 75.39 56.2

2071/72 104.24 67.16

2072/73 120.34 77.76

Deposits and Loans of Nabil Bank for the

Net Profit of Nabil Bank

Fiscal Year 2074/75: Rs. 3.98 billion

Net profit of Nabil Bank for the fiscal years

Return on Equity (ROE) and Return on

Fiscal Year Return On Equity (ROE %) Return On Assets (ROA %)

2070/71 29.77 2.89

2071/72 27.03 2.86

2072/73 25.61 2.69

2073/74 22.41 2.32

2074/75 20.94 2.61

Earnings per Share (EPS) and Non-

Earnings per Share (EPS) and Non-

2070/71 Rs:53 1.83

2071/72 Rs:57 2.22

Earnings per Share (EPS) of Nabil Bank for

Dividend History of Nabil Bank

Fiscal Year Bonus Share Cash Dividend Total Dividend

2070/71 20% 45% 65%

2071/72 30% 6.84% 36.84%

2072/73 30% 15% 45%

2073/74 30% 18% 48%

2074/75 12% 22% 34%

Market Price and Market Capitalization of