Chapter 4: Presentation and Discussion

Presentation means the presentation of collected data through table, figures etc. Presentation is
the process of understanding the study or the report and calculating the opinion. Analysis of data
means the process where the statement or the report gets resolve by breaking them into simple
statement. Analysis means to find something and give opinion about the presented data. The
main aim of this chapter is presenting and analyzing data according to research methodology to
attain the objective of this study. In this chapter, an attempt has been made to comparative
analysis on financial performance of Nabil Bank and Kumari Bank Limited for its operational
period of five years that is 2011 to 2015. The data for this study are presented in tabular form and
are analyzed with the help of financial tools viz. ratio analysis, income and expenditure statement
analysis, balance sheet analysis and statistical tools such as arithmetic mean, standard deviation,
and coefficient of variation
4.1 Presentation of result and Descriptive analysis
4.1.1 Tier -1 Capital Adequacy Ratio

capital adequacy ratio (a) core

year Nabil Kumari
2011 8.83 12.35
2012 9.3 11.3
2013 9.98 11.24
2014 9.74 10.85
2015 9.74 9.89
mean 9.52 11.13

SD 0.46 0.89
CV 4.79 7.97
 14

12

10

8
Nabil
6 Kumari

0
2011 2012 2013 2014 2015

4.1 tier -1 capital adequacy ratio

We can see that throughout the five years Nabils tier 1 capital adequacy ratio is in increasing
trend from 2011 to 2013 and after that almost constant where as Kumari bank ratio is in
decreasing trend from 2011 to 2015 but it has still higher than Nabil. The above data shows Nabil
has highest ratio in year 2013, i.e 9.98% and lowest ration in 2011, i.e 8.83% whereas Kumari
has highest ration in 2011 i.e 12.35% and lowest in 2015 i.e 9.89%. According to NRB directives
to minimum capital fund to be maintained is 6% and both bank have maintained above 6%.
From the mean point of view Kumari has maintained a bit higher tier -1 capital adequacy ratio.
Tier -1 capital adequacy ratio of Kumari is thought to be more stable and more aligned with the
concept of capital. It is able to maintain sufficient capital and has the ability to bear more risk
and be more competitive as compared to Nabil. The cofficent of variation of Kumari bank is
7.97 % which is higher than of Nabil i.e 4.79% with standard devation of 0.88% of Kumari and
0.46% of Nabil. This shows that both banks are stable but Nabil has comparatively more
fluctuations in its ratio.
4.1.2 Tier -2 Capital adequacy ratio
capital adequecyratio (a) supplemenrty
year Nabil Kumari
2011 1.75 1.41
2012 1.71 0.9
2013 1.61 0.93
2014 1.5 0.96
2015 1.39 0.96
mean 1.59 1.03
SD 0.15 0.19
CV 9.34 18.44

Table. 4.2 Tier -2 Capital adequacy ratio

2
1.8
1.6
1.4
1.2
Nabil
1
Kumari
0.8
0.6
0.4
0.2
0
1 2 3 4 5

capital adequecyratio (a) supplementry

2011 2012 2013 2014 2015
Nabil 1.75 1.71 1.61 1.5 1.39
Kumari 1.41 0.9 0.93 0.96 0.96
Both Nabil bank and Kumari banks ratio is in decreasing trend when looking at the five years
dats. As a whole it is seen that Nabil and Kumari both are able to maintain sufficient amount of
supplementary capital. The above data shows tier-2 capital adequacy ratio of Nabil bank is littler
higher than the Kumari bank. Nabil has highest in the fisal year 2011 i.e 1.71% and lowest in
fisal year 2015 i.e 1.39% whereas Kumari banks has highest during fisal year 2011 i.e 1.41%
and lowest in fiscal year 2013 i.e 0.90% .

The cofficent of variation of Nabil and Kumari are 9.34% and 18.44% respectively. With
standard devation of 0.15% and 0.19% respectively. From the view point of mean Nabil has
maintained higher tier 2 capital adequacy ratio. It shows tier-2 capital is being used to a greater
degree in order to meet the minimum capital requirements. This also indicates a relatives shift to
a less atable form of capital.

4.1.3 Capital Adequacy Ratio

Capital Adequecy Ratio
year Nabil Kumari
2011 10.58 13.76
2012 11.01 12.2
2013 11.59 12.17
2014 11.24 11.81
2015 11.67 10.84
Mean 11.22 12.16
SD 0.45 1.05
CV 3.97 8.65
 16

14

12

10

8 Nabil
Kumari
6

0
2011 2012 2013 2014 2015

capital adequacy ratio total capital fund

2011 2012 2013 2014 2015
Nabil 10.58 11.01 11.59 11.24 11.67
Kumari 13.76 12.2 12.17 11.81 10.84

The ratio of Nabil is in increasing trend from 2011 to 2015 but the ratio of Kumari bank is in
decreasing trend . Kumari bank ratio is highest during fiscal year 2011 i.e 13.76 % and lowest in
fiscal year 2015 i.e 10.84%. According NRB directives to minimum capital fund to be
maintained is 10 % and both bank have maintained above 10% .

The cofficent of variation of Nabil and Kumari are 3.97% and 8.65% respectively. With
standard devation of 0.45% and 1.05% respectively. From the view point of mean Kumari has
maintained higher ratio than that of Nabil .It shows Kumari has better stability and good
financial healh. Kumari has better capacity to meet the time labilities and other risk such as
credit risk, operational risk etc as compared to Nabil it ensures that an adequate amount of
capital and reserve is maintained to safeguard the solvency.
4.1.4 Non performing loans to total loans

Non performing loans to total loans

year Nabil Kumari
2011 1.77 1.12
2012 2.33 2.21
2013 2.13 2.81
2014 2.23 4.03
2015 1.82 2.49
mean 2.06 2.53
SD 0.25 1.05
CV 12.12 41.52

4.5

3.5

2.5
Nabil
2 Kumari
1.5

0.5

0
2011 2012 2013 2014 2015

Non performing loans to total loans

2011 2012 2013 2014 2015
Nabil 1.77 2.33 2.13 2.23 1.82
Kumari 1.12 2.21 2.89 4.03 2.49

Nabil ratio is increasing trend till fiscal year 2012 and maximum at 2012 i.e 2.33% then after the
npl has been in decreasing trend then after. But the ratio of npl of Kumari bank is in increasing
trend till 2014 and maximum at 2014 i.e 4.03% then it declining after 2014. It shows that the
losses for Kumari are much higher than Nabil.
The data above shows Kumari non performing loans to total loans ratio is maximum in fiscal
year 2014, i.e 4.03% and minimum in 2011, i.e 1.12%. Nabil has maximum ratio at 2012, i.e
2.33% and minimum in 2011 , i.e 1.77%.
The standard deviation of Nabil bank and Kumari bank are 0.25% and 1.05% respectively and
cofficet of variation is 12.12 % and 41.52 % respectively. From the mean point of view the ratio
is Kumari is higher than Nabil. Nabil has smaller L.LP ratio which shows smaller losses for the
bank while a larger ratio of Kumari means larger losses for the bank as if writes off bad loans. A
lower ratio indicater that LLP is less relative to total loans and that is better for the bank.

4.1.5 Total credit to total deposit ratio

Total credit to total deposit

Nabil Kumari
2011 78.29 87.87
2012 77.91 82.33
2013 74.9 79.47
2014 74.55 82.7
2015 64.43 81
Mean 74.02 82.67
SD 5.62 3.17
Cv 7.59 3.83
 100
90
80
70
60
50 Nabil
40 Kumari

30
20
10
0
2011 2012 2013 2014 2015

Total credit to total deposit

2011 2012 2013 2014 2015
Nabil 78.29 77.91 74.9 74.55 64.43
Kumari 87.87 82.33 79.47 82.7 81

Nabil ratio is decreasing form 2011 to 2015 . the ratio of Kumari is fluctuation for the five years.
The above data shows ratio of Nabil is highest in fiscal year 2011 i.e 78.29% and lowest in fiscal
year 2015 i.e 64.43%. the ratio of Kumari is highest in fiscal year 2011 i.e 87.87% and lowest in
fiscal year 2013 i.e 79.47%.
The cofficent of variation of Nabil and Kumari are 7.59% and 3.83% respectively and standard
devation is 5.62% and 3.17% respectively. From the view point of mean Kumari bank has higher
cd ratio than Nabil which shows Kumari is successful to mobilize its total deposit on loan and
advance. Higher the CD ratio more the effectiveness of the bank utilize the fund it collected.
4.1.6 Loan loss provision to loans and advance

loan loss provision to total loans and advance (%)

year Nabil Kumari
2011 0.28 0.77
2012 0.97 1.3
2013 0.06 1.6
2014 0.43 1.07
2015 0.24 1.08
mean 0.40 1.16
SD 0.39 0.31
CV 97.90 26.47

1.8

1.6

1.4

1.2

1
Nabil
0.8 Kumari
0.6

0.4

0.2

0
2011 2012 2013 2014 2015

loan loss provision to total loans and advance (%)

2011 2012 2013 2014 2015
Nabil 0.28 0.97 0.06 0.43 0.24
Kumari 0.77 1.3 1.6 1.07 1.08

Nabil banks loan loss provision to total loans ratio and Kumari banks ratio is fluctuation for
the past five years. The above data shows ratio of Nabil is highest in fiscal year 2012 i.e 0.97%
and lowest in fiscal year 2015 i.e 0.06 %. the ratio of Kumari is highest in fiscal year 2013 i.e
1.6% and lowest in fiscal year 2011 i.e 0.77%.
The cofficent of variation of Nabil and Kumari are 97.9% and 26.47% respectively and standard
devation is 0.39% and 0.31% respectively. From the view point of mean Kumari bank has higher
ratio than Nabil which shows Kumari has larger losses for the bank as if writes off bad loans and
provison for possible losses is also higher than the Nabil.. A lower ratio indicater that provision is
less relative to total loans and that is better for the bank.

4.1.7 Return on equity

Return on Equity
year Nabil Kumari
2011 0.29 0.12
2012 0.3 0.11
2013 0.33 0.12
2014 0.28 0.13
2015 0.22 0.12
mean 0.28 0.12
SD 0.04 0.01
CV 14.22 5.89
 0.35

0.3

0.25

0.2
Nabil
0.15 kumari

0.1

0.05

0
2011 2012 2013 2014 2015

Return on Equity
2011 2012 2013 2014 2015
Nabil 0.29 0.3 0.33 0.28 0.22
Kumari 0.12 0.11 0.12 0.13 0.12

ROE of Nabil and Kumari is fluctuation for the five years. The above data shows ratio of
Nabil is highest in fiscal year 2013 i.e 33% and lowest in fiscal year 2015 i.e 22 %. The ratio of
Kumari is highest in fiscal year 2014 i.e 13% and lowest in fiscal year 2012 i.e 11%.
The cofficent of variation of Nabil and Kumari are 14.22% and 5.89% respectively and standard
devation is 4% and 1% respectively. From the view point of mean ROE Nabil bank has higher
than Kumari. It shows that Nabil has effectively used investment funds to generate earnings
growth higher ROE of Nabil indicates that shareholder will undertake higher investment.

4.1.8 Return on Assets

Net profit to total assets

year Nabil Kumari
2011 2.43 1.23
2012 2.8 1.1
2013 3.25 1.03
2014 2.65 1.1
2015 2.06 1.06
 mean 2.64 1.10
SD 0.44 0.08
CV 16.72 6.92

3.5

2.5

2
Nabil
1.5 Kumari

0.5

0
2011 2012 2013 2014 2015

Net profit to total assets

2011 2012 2013 2014 2015
Nabil 2.43 2.8 3.25 2.65 2.06
Kumari 1.23 1.1 1.03 1.1 1.06

ROA of Nabil is increasing for 3 years and declining there after whereas ROA of Kumari is
some how constant at the same level.. The above data shows ratio of Nabil is highest in fiscal
year 2013 i.e 3.25% and lowest in fiscal year 2015 i.e 2.06 %. The ratio of Kumari is highest in
fiscal year 2011 i.e 1.23% and lowest in fiscal year 2015 i.e 1.06%.
The cofficent of variation of Nabil and Kumari are 16.72% and 6.92% respectively and standard
devation is 0.44% and 0.08% respectively. From the view point of mean ROA Nabil bank has
higher than Kumari. It shows that Nabil has effectively used assets to generate earnings . Higher
ROA of Nabil indicates that and shows better quality of assets and efficient assets utilization to
generate profit.
4.1.9 Government security to total investment

Government security to total investment

year Nabil Kumari
2011 0.67 0.79
2012 0.57 0.88
2013 0.48 0.87
2014 0.45 0.84
2015 0.48 0.80
mean 0.53 0.68
SD 0.09 0.04
CV 16.52 5.47

1.00
0.90
0.80
0.70
0.60
0.50 Nabil
0.40 kumari

0.30
0.20
0.10
0.00
2011 2012 2013 2014 2015

Government security to total investment

2011 2012 2013 2014 2015
Nabil 0.67 0.57 0.48 0.45 0.48
Kumari 0.79 0.88 0.87 0.84 0.80

The ratio Nabil and Kumari is fluctuation for the five years. Kumari bank ratio is higher than
Nabil for past five years. The data shows that government securities to total investment ratiois
higher of Kumari banks means Kumari banks investment done more on risk free instrunment
than Nabil and Kumari has higher risk free investment in its investment portfolio compared to
Nabil.
The cofficent of variation of Nabil and Kumari are 16.52% and 5.47% respectively and standard
devation is 0.09% and 0.04% respectively. The mean shows Kumari has higher mean compare to
Nabil. The ratio shows that Kumari has lower risk involved in bank instrunment.
Kumari has higher risk free instrunment in their portfolio compare to Nabil on there investment.

4.1.10 Earnings per share

Earnings per per share

year Nabil Kumari
2011 65.91 15.67
2012 83.23 17.18
2013 91.05 18.17
2014 76.12 18.69
2015 57.24 16.24
Mean 74.7 17.2
SD 13.5 1.1
CV 18.0 6.6

100
90
80
70
60
50 Nabil
40 kumari

30
20
10
0
2011 2012 2013 2014 2015

Earnings per per share

 2011 2012 2013 2014 2015
Nabil 65.91 83.23 91.05 76.12 57.24
Kumari 15.67 17.18 18.17 18.69 16.24

EPS of Nabil and Kumari is fluctuation for the five years. EPS of Nabil is higher than the
Kumari for five years. The above data shows EPS of Nabil is highest in fiscal year 2013 i.e Rs
91.05 and lowest in fiscal year 2015 i.e Rs 57.24. The EPS of Kumari is highest in fiscal year
2014 i.e Rs 18.69 and lowest in fiscal year 2011 i.e Rs 15.67.
The cofficent of variation of Nabil and Kumari are 18% and 6.6% respectively and standard
devation is 13.5% and 1.1% respectively. From the view point of mean EPS Nabil bank has
higher than Kumari. It shows that Nabil provide better returns flowing to the banks owners, its
shareholder measured relative to the number of share to the public. Higher the EPS higher will
be the ability to provide the dividend to its shareholders.

4.1.11 Net profit to total loans

Net profit to total loans

year Nabil Kumari
2011 3.73 1.68
2012 4.14 1.52
2013 5.04 1.45
2014 4.54 1.5
2015 3.31 1.46
Mean 4.15 1.52
SD 0.68 0.09
CV 16.27 6.10
 6

3 Nabil
Kumari
2

0
2011 2012 2013 2014 2015

Net profit to total loans

2011 2012 2013 2014 2015
Nabil 3.73 4.14 5.04 4.54 3.31
Kumari 1.68 1.52 1.45 1.5 1.46

The above ratio shows Nabil is increasing for 3 years and declining there after for two years
whereas the ratio of Kumari is some how constant at the same level.. The above data shows ratio
of Nabil is highest in fiscal year 2013 i.e 5.04% and lowest in fiscal year 2015 i.e 3.31 %. The
ratio of Kumari is highest in fiscal year 2011 i.e 1.68% and lowest in fiscal year 2013 i.e 1.45%.

The cofficent of variation of Nabil and Kumari are 16.72% and 6.10% respectively and standard
devation is 0.68 and 0.09 respectively. From the view point of mean net profit to total loans
Nabil bank has higher than Kumari. It shows that Nabil has effectively provide loans to generate
profit .
4.1.12 Cash Reserve Ratio

cash reserve ratio

year Nabil Kumari
2011 4.9 5.74
2012 8.6 13.52
2013 9.32 12.43
2014 11.32 13.62
2015 14.15 7.48
mean 9.66 10.56
SD 3.42 3.69
CV 35.42 34.91

16

14

12

10

8 Nabil
kumari
6

0
2011 2012 2013 2014 2015

cash reserve ratio

2011 2012 2013 2014 2015
Nabil 4.9 8.6 9.32 11.32 14.15
Kumari 5.74 13.52 12.43 13.62 7.48

Nabil ratio is inecreasing form 2011 to 2015 . The ratio of Kumari is fluctuation for the five
years. The above data shows ratio of Nabil is highest in fiscal year 2015 i.e 14.15% and lowest in
fiscal year 2011 i.e 4.9%. the ratio of Kumari is highest in fiscal year 2014 i.e 13.62% and lowest
in fiscal year 2011 i.e 5.74%.
The cofficent of variation of Nabil and Kumari are 35.52% and 34.91% respectively and
standard devation is 3.42% and 3.69% respectively. From the view point of mean Kumari bank
has higher CRR ratio than Nabil which shows Kumari has more liquidity and more cash reserve
in the NRB. %. According to NRB directives to minimum CRR to be maintained is 6% and both
bank have maintained above 6%.

4.1.13 loans and advance to total assets ratio

loans and advance to total assets ratio

year Nabil Kumari
2011 63.25 72.84
2012 59.75 72.02
2013 60.72 71.28
2014 59.55 73.52
2015 57.89 72.43
mean 60.23 72.42
SD 1.97 0.84
CV 3.27 1.16
 80

70

60

50

40 Nabil
Kumari
30

20

10

0
2011 2012 2013 2014 2015

loans and advance to total assets ratio

2011 2012 2013 2014 2015
Nabil 63.25 59.75 60.72 59.55 57.89
Kumari 72.84 72.02 71.28 73.52 72.43

Nabil ratio is decreasing form 2011 to 2015 . the ratio of Kumari is constant for the five years.
The above data shows ratio of Nabil is highest in fiscal year 2011 i.e 63.25% and lowest in fiscal
year 2015 i.e 57.89%. the ratio of Kumari is highest in fiscal year 2014 i.e 73.52% and lowest in
fiscal year 2013 i.e 71.28%.
The cofficent of variation of Nabil and Kumari are 3.27% and 1.16% respectively and standard
devation is 1.97% and 0.84% respectively. From the view point of mean Kumari bank has higher
loans and ddvance to total assets ratio than Nabil which shows Kumari is successful to mobilize
its total assets. Higher the loans and ddvance to total assets ratio more the effective utilization of
the bank assets for the operation and generation of profit.
Chapter 5
SUMMARY AND CONCLUSION
5.1 Summary and conclusion

The major findings of the study on the comparative financial analaysis of Nabil and Kumari bank
were capital , assets , earnings and liquidity of both bank are being observed are as follows.

Kumari bank has higher loans and advance to total assets ratio compare to Nabil. The
higher the ratio of Kumari indicates that the bank is loan up and iys liquidity is low. The
non performing loans to total loan ratio of Kumari is higher than the Nabil. The smaller
the non performing loans to total loan ratio shows smaller losses for the bank while the
larger ratio of Kumari means larger lossess for the bank as it writ eoff bad loans. Kumari
bank has higher loan loss provision to loans and advance ratio than Nabil , which shows
Nabil bank has efficiently manage its laon and advance and has made effort for timely
recovery of laona. Similarly , it has made effort to cope with probability of loan loss.

Kumari has higher CRR ratio than Nabil , therefore it has better abaility to meet deposit
obligation with its available funds.

Credit to deposit ratio of Kumari is higher than Nabil which shows Kumari is successful
to mobilize the total deposit on loans and advance and more effective to utilize the fund
it collected.

Kumari banks has higher loan loss provision to loans and advance ratio. It means that ,
Nabil bank has efficiently manage its laon and advance and has made effort for timely
recovery of loan. Similarly , it has made effort to cope with probability of loan loss.

Kumari has higher government securities to total investment ratio is higher than Nabil
banks means Kumari banks investment done more on risk free instruments than Nabil
and Kumari has higher risk free investment in its investment portfolio compared to Nabil.
The ratio shows that Kumari has lower risk involved in bank investment.

EPS of Nabil is higher than the Kumari for five years.. It shows that Nabil provide better
 returns flowing to the banks owners, its shareholder measured relative to the number of
share to the public. Higher the EPS higher will be the ability to provide the dividend to its
shareholders.

Net profit to total loans ratio of Nabil bank has higher than Kumari. It shows that Nabil
has effectively provide loans to generate profit.

ROA ratio of Nabil bank has higher than Kumari. It shows that Nabil has effectively used
assets to generate earnings. Higher ROA of Nabil indicates that it shows better quality of
assets and efficient assets utilization to generate profit.

ROE ratio of Nabil bank has higher than Kumari. It shows that Nabil has effectively used
investment funds to generate earnings growth higher ROE of Nabil indicates that
shareholder will undertake higher investment.

In overall, kumari has lower risk on its investment portfolio. Even through Nabil have lower
non performing loans. It has lower loan loass provision than kumari. Nabil has higher
earnings per share and provide higher return on equity as well as on assets. Kumari bank has
higher loans and advance to total assets ratio than Nabil which shows Kumari is successful to
mobilize its total assets. Higher the loans and advance to total assets ratio more the effective
utilization of the bank assets for the operation and generation of profit. It can be conclude
that the performance of both Nabil and kumari was found better.

5.2 Recommendation

Kumari has high cash reserve as compared to Nabil so in order to earn more profit
and remain competitive in today world, it needs to increase its ratio of investment.

Kumari bank non performing loans is also comparatively higher than Nabil meaning
 kumari needs to analyze the risk involved before thet sanction any additional loans,
and if non the non performing loans goes any higher the bank may go under and
occur huge loss.

Kumari has higher CRR ratio, kumari should mobilize its ideal cash funds into low
risk investment because it has significant proportion of cash reserve kept unutilized
and it adds up to be a burden to the bank.

EPS of Kumari is lower than the Nabil. It shows that Nabil provide better returns
flowing to the banks owners. Higher the EPS higher will be the ability to provide the
dividend to its shareholders. So, kumari should try to increase the EPS to give higher
return to the equity holder.

ROA ratio of Nabil bank has higher than Kumari. It shows that Nabil has effectively
used assets to generate earnings. So, kumari also needs to mobilize of assets and
efficient assets utilization to generate profit.

5.3 Conclusion
The tier-1 capital adequacy ratio of kumari bank is more than of nabil, kumari is able to
maintain sufficient capital fund and has the abaility to bear more risk and be more
competitive. However, Nabil bank has maintain higher tier 2 capital adequacy ratio