UNIT – 1

INTRODUCTION

1.1 Focus of study

Four Year Bachelor of Business Studies (BBS) requires the preparation of project
report which is mandatory for the degree of BBS.
The focus of study of this project report is to determine the ratio analysis of
GLOBAL IME BANK.
A financial ratio is a relative magnitude of two selected numerical values taken
from an enterprise’s feedback statement often used in accounting, there are many
standard ratios used to try evaluating the overall financial condition of a
corporation or other organization. Financial analysis uses financial condition of a
corporation or other organization. Financial analysis uses financial ratio to
compare the strength and weakness in various companies.

1.2 STATEMENT OF THE PROBLEMS

Statement of the problems describe the context of the study and it also identifies the
general approach. The main focus is given to the statement of the problem which so being
tested or investigated.
In starting the research problem, one must consider problems of any area and relationships
between variables under study.
Nowadays banks are suffering in the level of profitability, efficiency, and there is presence
of unsoundness in the banking organization. Therefore, to know the reason behind this,
ratio analysis is done.

1.3 OBJECTIVITY OF THE STUDY

Main objective of this project report is to access the situations and trends and also to measure the
performance of management. The main objective is to measure the profitability by knowing the
gross profit, net profit, expenses and other ratios. Even it helps to determine operational
efficiency of the business can be determined by calculating operating ratios.
Profit and loss Account shows the amount of net and Balance sheet shows the amount of various
assets, liabilities and capital. Ratio analysis is of much help in financing forecasting and
planning. Ratio calculated for a number of years work as a guide for the future. Meaningful
conclusios can be drawn for the future from these ratios.

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1.4 SIGNIFICANCE OF THE STUDY
The main significance of the study is to observe the weakness and strength of the company.
Present performance can be compared with past performance of other competitive firms can also
be made. Even the shirt term and long term financial position of the business can be measured by
calculating liquidity and solvency ratios. In case of unhealthy short or long managers within a
firm, by current and potential shareholders(owners) of a firm and by a firm’s creditors.
Financial ratios quantify many aspects of a business and are integral part of the financial
statement analysis. Large multinational corporation may use International Financial Reporting
Standards to produce their financial statements.

1.5 LIMITATION OF THE STUDY

Though there are many significances and objectives of this study but there are some limitation
of the study. Due to lack of time. Money and effort study of all the factors was not possible.
Ratios calculated from financial statements and the ratios based upon them also defective.

1.6 ORGANIZATION OF THE STUDY

The organization of the study consists of five chapter. First chapter consists of five chapter
consists of review of literature, third chapter consists of Research methodology, Four chapter
consists of Data presentation and analysis and fifth chapter consists of conclusion and
recommendations. Introduction of focus of the study, statement of the problem. Objectives of the
study, Significance and organization of the study. Review of literature consists of conceptual and
previous studies. Research methodology consists of research design, population and sample,
types of data, data collection procedure. Data presentation and analysis consists of the way of
presenting the data and properly and analyzing the result.

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 UNIT – 2

Review of literature

2.1 CONCEPTUAL
1. MEANING OF RATIO ANALYSIS

Ratio analysis refers to the analysis and interpretation of the figures appearing in the
financial statements (i.e., Profit and Loss Account, Balance Sheet and Fund Flow statement etc.).

It is a process of comparison of one figure against another. It enables the users like shareholders,
investors, creditors, Government, and analysts etc. to get better understanding of financial
statements.

Khan and Jain define the term ratio analysis as “the systematic use of ratios to interpret the
financial statements so that the strengths and weaknesses of a firm as well as its historical
performance and current financial conditions can be determined.”
Ratio analysis is a very powerful analytical tool useful for measuring performance of an
organization. Accounting ratios may just be used as symptom like blood pressure, pulse rate,
body temperature etc. The physician analyses these information to know the causes of illness.
Similarly, the financial analyst should also analyze the accounting ratios to diagnose the financial
health of an enterprise.

Generally, ratio analysis involves four steps:

(i) Collection of relevant accounting data from financial statements.

(ii) Constructing ratios of related accounting figures.

(iii) Comparing the ratios thus constructed with the standard ratios which may be the
corresponding past ratios of the firm or industry average ratios of the firm or ratios of
competitors.

(iv) Interpretation of ratios to arrive at valid conclusions.

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 2. ANALYSIS OF FINANACIAL STATEMENT
The traditional financial statement that comprise that comprise of the balance sheet and profit
and loss account do not give enough information related to financial operation of the company.
These financial statements prepared as per the statutory requirements of law need to be analyzed
in order to evaluate the past performance of the company and the future prospects. There are
many tool of financial statements analysis like:
a. Ratio Analysis
b. Dupont Analysis
c. Trend Analysis
d. Commonsize statements
e. Comparative Analysis

3. OBJECTIVE, UTILITIES, USES OR ROLE OF RATIO ANALYSIS

Ratio analysis serves the purposes of various interested parties of the financial statements. The
interested parties are top management, shareholders, creditors, employees, government and tax
authorities. With the use of ratio analysis, one can measure the financial condition of the
business concern and assess as whether the condition is strong, questionable or poor.

Various objectives, utilities, uses or role of ratio analysis for various parties like the
management, Share holders / Investors, Creditors, Employees and Government are listed
as follows.

A. TO Management:

1. Ratio analysis helps the management to assess the performance of the business concern and

improve the management functions such as planning, coordination and control.

2. Some ratios are calculated for a number of years. These are working as guide to the

management. Meaningful conclusions can be drawn from these ratios.

3. The financial strength and weakness of the business concern can be find out through

calculating some ratios. It means that communication is facilitated by ratios.

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4. If financial position is very weak, better co-ordination is formulated by the top management

for improving efficiency.

5. Standard ratios can be used for finding variations or deviations. Such variations can be found

by comparing the actual with the standards so as to take a corrective action at the right time.

B. To Shareholders / Investors:

1. The safety of investment is find out by the shareholders.

2. Long term solvency ratios ensure the growth of the business concern and possibility of getting

back their investments.

3. Ratio analysis will be useful for deciding whether the present financial position warrants

further investments or not.

C. To Creditors:

1. The ratio analysis ensures the payment at a specified time or not.

2. If the short term solvency ratios are in satisfactory condition, the creditors can extent credit

facilities.

D. To Employees:

1. If financial position is strong, then, the employees are getting wages, salaries and perquisites

in time.

2. They can get adequate financial increment and promotion in time.

3. There is a guarantee in employment.

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E. To Government

1. The government can prepare the industrial policies on the basis of financial position

information available from various units.

2. Various loan scheme with subsidies can be chalked out by the government.

3. The government can assess the economic condition of the nation.

4. The contribution of each industrial sector to GDP is also identified by the government.

2.2 PREVIOUS STUDIES

I had seen the previous project of my seniors and know the format and way to make this project.

On the basis of old student I had prepared this project. It is not copied one, rather I had only

taken old project as sample and that helped me a lot. The project of Geeta Niraula related to the

ratio analysis of Surya Nepal concluded that current ratio 1.6:1 and liquid ratio is 0.35:1.

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 UNIT – 3

RESRARCH METHODOLOGY

3.1 RESEARCH DESIGN

Research Design is the conceptual structure within which research is conducted. In

other words, it is the plan, structure and strategy of investigation conceived so as to
obtain answers of research questions and to control variance. Some of the research
design are as follows:

a. Conventional Research
b. Historical Research
c. Developmental Research
d. Case study Research
e. Descriptive Research
f. Evaluation Research

3.2 POPULATION AND SAMPLE

There are many banks in Nepal. But study of all the study of all the banks is not possible so
GLOBAL IME BANK is taken as sample to study the ratio analysis.

1. INTRODUCTION OF GLOBAL IME BANK

Global IME Bank Ltd. (GIBL) emerged after successful merger of Global Bank Ltd (an “A”
class commercial bank), IME Financial Institution (a “C” class finance company) and Lord
Buddha Finance Ltd. (a “C” class finance company) in year 2012. Two more development banks
(Social Development Bank and Gulmi Bikas Bank) merged with Global IME Bank Ltd in year
2013. Later, in the year 2014, Global IME Bank made another merger with Commerce and Trust
Bank Nepal Ltd. (an “A” class commercial bank). During 2015-16, Global IME Bank Limited
acquired Pacific Development Bank Limited (a "B" Class Development Bank) and Reliable
Development Bank Limited (a "B" Class Development Bank).
 
Global Bank Limited (GBL) was established in 2007 as an ‘A’ class commercial bank in Nepal
which provided entire commercial banking services. The bank was established with the largest
capital base at the time with paid up capital of NPR 1.0 billion. The paid up capital of the bank

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has since been increased to NPR 10.31 billion. The bank's shares are publicly traded as an 'A'
category company in the Nepal Stock Exchange.
 
It is in line with the aim of the bank to be “The Bank for All” by giving necessary
impetus to the economy through world class banking service.
 
For the day to day operations, the bank has been using the world renowned FINACLE
software that provides real time access to customer database across all branches and
corporate locations of the bank. This state of the art customer database has also been
linked to a Management Information System that provides easy reach to all possible
database information for balanced and informed decision making.  A disaster recovery
system (DRS) of the Bank has also been established in the Western Region of Nepal (200
kms west of Kathmandu).
 
The bank has been able to achieve excellent diversification of its assets. A well balanced
distribution of exposure in areas of national interest has been possible through long term
forecasting and timely strategic planning. The bank has diversified interests in hydro
power, manufacturing, textiles, services industry, aviation, exports, trading and
microfinance projects, just to mention a few.
 
The exemplary performance of the bank in these last eleven years has elevated it to a
premier status in the industry. The bank has been handling government transactions and
is officially among one of the few commercial banks trusted by the Government in
handing Government revenue transactions of various offices. The bank has been able to
earn the trust and confidence of the public, which is reflected in the large and ever
expanding customer base with more than 10,00,000 number of accounts in deposit base
and above 24,000 in credit. Through all this the bank has been able to truly achieve its
vision of being “The Bank for All”. Even with all this success, the bank remains
internally focused towards manpower development, product innovation and process
innovation etc., to have a strong and solid foundation, which are ongoing and continuous
improvement initiatives undertaken by the management and staff alike.

GIBL has been conferred with “The Bank of the Year Award 2014”  for Nepal by the
Bankers Magazine (Publication of the Financial Times, UK), “Best Internet Bank 2016-
Nepal” by International Finance Magazine, London and “Best Employer Award 2018” by
World HRD Congress, India. 

GIBL was appointed as the first handling bank unit of CREF (Central Renewable Energy Fund)
under AEPC (Alternative Energy Promotion Center). 
 

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PROMOTERS
 GIBL has been promoted by a group of prominent indigenous entrepreneurs who have written a
history of success in their field of ever growing business. The promoters of the bank include
renowned, well established and respected businessmen/industrialists in Nepal from a variety of
different sectors that include finance, remittance, trading, export, automotive services,
manufacturing, media services and hydropower to name a few.
The collective experience of the promoters have been realized to customize the bank's offerings
and services to compete with best in the banking industry and instill a culture based on our core
values of integrity, business ethics, teamwork, respect, humility, professionalism, loyalty and
good governance.
 
SHAREHOLDERS STRUCTURE
Authorized Capital of Global IME Bank is NPR 16,000 million and Paid up Capital is NPR
10,310.51 million. The promoters hold 51.18% while 48.82% is floated for the public. Current
shareholder structure of the bank is as below:
  Percentage of Ownership Capital Invested
Promoter Shareholder 51.18% NPR 5,276.92 million
Public Shareholders 48.82% NPR 5,033.59 million
 Total 100% NPR 10,310.51 million
MISSION
To win respectable market share through customer focused quality products and services,
innovative business solutions and technology driven banking thereby enhancing the growth and
profitability of the bank so as to ensure the optimum benefit to all stake holders at all times.

VISION
The bank shares a common vision of “The Bank for All” amongst its Promoters, Directors,
Management Team and Staff in commitment to providing the highest standard of services for
customers from all regions and societies.

BANK'S PRODUCT AND SERVICES

The bank offers a complete range of banking products in deposits, lending, trade finance and
remittances. The bank’s deposit product portfolio encompasses customer tailored saving
deposits, fixed deposits, call and current deposits.  The lending product portfolio includes
commercial loan products such as demand loans, cash credits, overdrafts, trust receipts and term
loans, whereas a complete portfolio of personal and retail credit products are also provided by
the bank. Non-fund based products such as bank guarantees and letters of credit are also
available to the bank’s customers. GIBL's focus has been stretched out to financial supports to
Corporate and Infrastructure Sectors with preference on renewal energy, SME, Retail and Micro
Financing Loans. In continuation of living with its vision “The Bank for All”, the bank has
launched Agricultural Loan in co-ordination with food processing industries as about 70% of the
Nepalese population depend on agriculture for their livelihood.

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VALUE ADDED SERVICES

In addition to the above, the bank also offers a variety of value added services to its customers.
The bank has also been providing Internet/Mobile Banking Services (through its website
www.globalimebank.com), SMS Banking Services and SMS Notification Services among other
such value added proposition to its customers. The bank has also been issuing VISA debit and
VISA credit cards to its customers since 2009. GIBL is the only bank to provide SMS alert to its
customers on credit transactions and credit card transactions besides other transactions.

GIBL has introduced "Global Smart" an advance banking application with customized features
on updated format for financial transaction through SMS and Internet Connectivity.

CORRESPONDENT NETWORK
The bank has been maintaining harmonious correspondent relationships with above 60 different
international banks from various countries to facilitate trade, remittance and other cross border
services. Through these correspondents the bank is able to provide services in any major
currencies in the world. The bank also maintains its extension offices in India and Middle East to
assist in the remittance of funds from overseas Nepalese workers. These services are soon to be
expanded to South Korea.

BRANCHLESS BANKING
As part of financial inclusion, Global IME Bank has addressed new strategy of launching
branchless banking service in the remotest parts of the country where presence of financial
institutions are very less in number or not at all. Within the short duration of 3 years bank has
already launched 131 branchless banking services catering more than 22,000 customers on their
daily deposits and withdrawals. Our branchless banking locations also offer micro lending
facility to small farmers and businessmen
.
BRANCH NETWORK
The bank is now operating 136 branches, 10 extension counters and 15 revenue collection
counters spread throughout Nepal. All of the bank's branches have been established as full
service outlets that offer a large range of banking services to its customers. The bank also
operates 142 ATMs throughout the country strategically placed for the convenience of
customers.

3.1 TYPES OF DATA

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It consists of sources of primary and secondary data of the company while preparing this project

report.

1. Primary source of data

a. Observation of working environment

b. Direct interface with the walk-in-customers

c. Interaction with the staffs at different level of bank.

2. Secondary sources of data

a. Income statement and balance sheet of the bank.

b. Information and data from the website of the bank

3.4 DATA COLLECTION PROCEDURE

Primary data are those data, which are afresh and for the first time on account of

concerned investigation. The primary data is thus original in character. Research

colleclts the necessary data from the field of industry. In the initial stage, the primary

data are raw in nature.

Secondary data are defined as complied data taken from several primary sources

an synthesized or summarized in some way. The main sources of secondary is

published and unpublished.

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 UNIT – 4

DATA PRESENTAION AND ANALYSIS

Data are raw fact and figures that have no meaning without a context. Data are of two type i.e

primary and secondary data. Sources of primary data are interview, questionnaire and

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 observation. Data that are develop by others in the past for their purpose and used by researchers

in the present are known secondary data. The sources are Government reports and publication,

publication by private institution.

Collected data helped to do proper ratio analysis of the banking organization i.e . Global IME

bank Limited which helped the allocate the strength and Weakness of the bank. Through thus

analysis we can also give any sort suggestion to the bank.

YEARS FIXED SAVING CURRENT CALL OTHERS TOTAL

2070/71 4474.5 7260.3 2294.4 3823.1 231 18023.9

2071/72 6383.5 6723.1 2474.4 4093 369 2031.6

2072/73 7850.2 6607.5 2428.2 3907.3 23 21018.4

2073/74 8543 6783.2 2474.9 4053 387 21854.1

2074/75 8905.2 6888.7 2525 4502.5 214 23035.4

TABLE SHOWING DIFFERENT FISCAL YEAR DEPOSITS

(Amount in millions)

Table 2.1

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Pie chart showing Different Years of EBL in different Account

231

3823
4474.5

2294

7260

FIXED SAVINGS CURRENT CALL OTHERS

FIGURE 2.1 (a) 2070/71

2071/72
369

4093

6383.5

2474.4

6723.1

FIXED SAVING CURRENT CALL OTHERS

FIGURE 2.1(b)

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 2072/73
23

3907.3

7850.2

2428.2

6607.5

FIXED SAVING CURRENT CALL OTHERS

FIGURE 2.1 (c)

2073/74
23

3907.3

7850.2

2428.2

6607.5

FIXED SAVING CURRENT CALL OTHERS

FIGURE 2.1(d)

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 2074/75
214

4502.5

8905.2

2525

6888.7

FIXED SAVING CURRENT CALL OTHERS

FIGURE 2.1 (e)

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2.2 STUDY OF GLOBAL IME BANK LENDING

During this fiscal year, there could not be any significant improvement in loans of large

industry, businesses and infrastructure development due to minimal industrial sector growth and

liquidity shortage. There was some improvement in loans to the hydroelectricity sector. Year ban

has continued its policy of granting loans to such infrastructural development sectors.

GRAPH SHOWING DIFFRERNT YEARS CAPITAL, DEPOSITS AND LOANS

ADVANCE

Chart Title
10000
9000
8000
7000
6000
5000
4000
3000
2000
1000
0
2070/71 2071/72 2072/73 2073/74 2074/75

FIXED SAVING CURRENT CALL OTHERS

Figure no. 2.2

Above Table and chart show that deposits and loan of GLOBAL IME BANK increasing year

by year. With a few capital and assets, the company able to collects and invests the large amount

in the fiscal year 2070/71 the firm capital. Deposits, loan , advance, fixed assets was only Rs.

603, 18023.9 , 9694, and Rs. 321 million respectively. With excellent management of leading

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and borrowings of GLOBAL IME BANK able t o made RS capital, Rs. 23035.4 Deposit,

17957 loans & advance and Rs Fixed assets figure.are shown

2.3 STUDY OF QUARTERLY INCOME EXPENSES AND PROFITS

The customers of GLOBAL IME BANK are increasingly day by day due to proper service and

good customer’s cares. Satisfied customers are the main reason of it’s good performance. Good

ending and borrowing policy of GOBAL IME BANK is able to earn profit every year. The

profits of each quarter of year are as shown below

(Amount in thousands)

TITLE First Quarter Second Quarter Third Quarter Fourth Quarter

OPERATING 1,052,097 2,420,531 3,645,232 5,271,271

INCOME

PERMATIN 655,549 1,235,557 1,807,626 2,485,810

EXPENSES

OPERATING 396,548 1,184,974 1,837,606 2,785,461

PROFIT

NER PROFIT 346,785 954201 1,459,521 2,164,075

AFTER TAX

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 GRAPH SHOWING QUARTERLY INCOME. EXPENSES AND NET PROFIT

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0
FIRST QUARTER SECOND QUARTER THIRD QUARTER FOURTH QUARTER

OPERATING INCOME PERMATING EXPENSES OPERATING PROFIT NET PROFIT AFTER TAX

The given table and graph shows that the company is also to maintain high operating profit

And net income maintain low expenses in the given all five fiscal years company able company to earn

profit. It is good sing.

2.4 Financial Ratio Analysis of 4th Quarter of 2074/75

Table showing 4th Quarter of 2074/75 balance sheet

As at Fourth Quarter of the Financial Year 2074/75 (16/07/2018)

As per Directive no. 4

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 (RS. IN THOUSANDS)

S.N PARTICULARS AMOUNTS

.

1 CAPITAL AND LIABILITIES

1.1 PAID UP CAPITAL 8,888,376

1.2 Reserve and surplus 4,573,038

1.3 Debenture and Bond 400,000

1.4 Borrowings 1,034,649

1.5 Deposits 106,510,436

1.6 Income tax liabilities 917,002

1.7 Other Liabilities 5,453,662

TOTAL 127,777,163

2 Assets

2.1 Cash and Bank Balance 8,620,436

2.2 Investments 20,820,095

2.3 Loans and advance 93,373,418

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 2.4 Fixed Assets 1,324,471

2.5 Non Banking Assets 91,917

2.6 Other Assets 3,546,826

TOTAL ASSETS 127,777,163

TABLE SHOWING INCOME STATEMENT OF PROFIT AND LOSS

ACCOUNT

PROFIT AND LOSS ACCOUNT

S.N. PARTICULARS AMOUNT

1. Interest Income 11428059

2 Interest Expenses 7600268

A Net Interest Income 3827791

3 Fees commission and discount 395677

4 Other Operating Income 554078

5 Foreign Exchange Gain/loss(Net) 352241

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 B Total operating Income (A+3+4+5) 5,129,787

6 Staff expenses 946,128

7 Other Operating Expenses 1,185,472

C Operating Profit Before Provision (B-6-7) 2998187

8 Provision for Possible loss 207,834

D Operating Profit (C-8) 2790353

9 Non Operating Income/Expenses (Net) 89362

10 Write back of Provision for possible Loss 649462

E Profit From Regular Activities (D+9+10) 3529177

11 Extraordinary Income/Expenses (Net) (148224)

F Profit Before Bonus and Taxes (E+11) 3,380,953

12 Provision For Staff Bonus 307,359

13 Provision For Tax 917,002

G Net Profit/Loss (F+12+13) 2156592

May face great difficulty to collect additional debt. By chance of it get additional debt, the

cost of debt cold high.

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There is also advantages of high debt. The shareholder’s may enjoy high return per share.

1. Total Debt to Equity Ratio

This ratio shows the relationship between firm’s debt and equity financing it measures the

relative interest of the relative of the creditors and owner and debt equity ratio, an

important toll of financial analysis debts an arithmetical relation between debt fund and

owner’s fund. The ratio calculated as follows:

Total Debtto Equity ratio = Total debt/equity

= 114,315,749/13,461,414

= 8.492 times

Where, Equity= paid up capital + Reserve and surplus

= 8,888,376 + 4,573,038

= 13,461,414

Debt = 127,777,163 – 13,461,414

= 114,315,749

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A higher debt to equity ratio is more risky than low ratio. Lighter ratio shows that the outsider provides

more of the funds invested in the business. The lower ratio shows that owners provide more of the funds

invested in the business.

A higher debt to equity ratio shows the large share of financing by creditors as compared to that of

owners. It is indicate the margin of safety of the owners. The creditors prefer low debt to equity ratio. A

low debt to equity ratio implies large safety margin for creditors.

2. EQUITY MULTIPLIER

It measures rupees amount of assets for rupees of equity. The vequity multiplier

ratio is amount of assets for each amount of equity. It is relationship between total assets and

equity. It is calculated as:

Equity multiplier= Total assets / Equity

= 127,777,163 / 13,461,414

= 9.49 times

Here 9.49 times equity multiplier means GLOBAL IME able to produce assets 9.49 times

of its equity. Higher ratio shows management that is more efficient on utilization of

capital.

3. TOTAL ASSETS TURNOVER RATIO

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 The total asset turnover ratio indicates the efficiency with which
the firm uses its asset to generate income. The most important
turnover ratio for commercial banks is the total turnover ratio. It
can be calculated as follows:

Total Asset Turnover Ratio = Operating income/ Total Assets

= 5,129,787/ 127,923,146

= 4.01%

4. The Loan-to-Assets Ratio

The loan-to-assets ratio is another industry-specific metric that can help

investors obtain a complete analysis of a bank's operations. Banks that
have a relatively higher loan-to-assets ratio derive more of their income
from loans and investments, while banks with lower levels of loans-to-
assets ratios derive a relatively larger portion of their total incomes from
more-diversified, noninterest-earning sources, such as asset management
or trading. Banks with lower loan-to-assets ratios may fare better when
interest rates are low or credit is tight. They may also fare better during
economic downturns.

Loan to asset Ratio= Total loan/ Assets

= 93,373,418/ 127,777,163

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 =73.07%

5. Rerturn on asset ratio

The return-on-assets (ROA) ratio is frequently applied to banks because

cash flow analysis is more difficult to accurately construct. The ratio is
considered an important profitability ratio, indicating the per-dollar profit a
company earns on its assets. Since bank assets largely consist of money
the bank loans, the per-dollar return is an important metric of bank
management. The ROA ratio is a company's net, after-tax income divided
by its total assets. An important point to note is since banks are highly
leveraged, even a relatively low ROA of 1 to 2% may represent substantial
revenues and profit for a ban

Return on Asset = 1.69%

6. Return on Equity

It is the ratio of net income after Tax to common equity measures the
return on Equity(ROE) or Rate of return on the stockholder investments.

It can be calculated AS

ROE = NPAT/ Equity

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 ROE = 16.02%

7. INTEREST MARGIN
Net interest margin is an especially important indicator in evaluating banks
because it reveals a bank’s net profit on interest-earning assets, such as loans or
investment securities. Since the interest earned on such assets is a primary
source of revenue for a bank, this metric is a good indicator of a bank's overall
profitability, and higher margins generally indicate a more profitable bank. A
number of factors can significantly impact net interest margin, including interest
rates charged by the bank and the source of the bank's assets. Net interest
margin is calculated as the sum of interest and investment returns minus related
expenses; this amount is then divided by the average total of earning assets.

INTEREST MARGIN OG GLOBAL IME BANK = 10.55%

8. STAFF EXPENSES TO TOTAL INCOME RATIO

It is the ratio of staff expenses to Net Income, measured by the formula,

Staff expenses to total income ratio = Staff expenses / Total Income

=946128 / 5129787

=18.44%

9. EARNING PER SHARE

It is the ratio of Net profit after tax to No. of Common share. It is calculated
by this formula,

Earning per share(EPS) = NPAT / No. Of common share

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 10. Average yield

The average yield on an investment or a portfolio is the

sum of all interest, dividends or other income that the investment
generates, divided by the age of the investment or length of time the
investor has held it. The average annual yield is a particularly useful tool
for floating-rate investments, in which the fund's balance and/or the interest
rate change frequently. The average annual yield can also apply to a range
of other investments, from deposit accounts, stock shares, commodities
and/or real estate.

Average yield of global ime bank= 13.69%

11. Non Performing Loan to Total loan

Bank nonperforming loans to total gross loans are the

value of nonperforming loans divided by the total value of the loan
portfolio (including nonperforming loans before the deduction of
specific loan-loss provisions). The loan amount recorded as
nonperforming should be the gross value of the loan as recorded on
the balance sheet, not just the amount that is overdue.

Non performing loan to total loan of Global IME Bank is 0.69%

12. Capital To Risk Weighted Assets Ratio ( Capital Adequacy

Ratio)

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 Capital to Risk Assets Ratio(CRAR) is the ratio of a
bank’s capital to its risk. The banking regulator tracks a bank’s CRAR to
ensure that the banks can absorb a reasonable amount of loss and
complies with statutory Capital requirement. Higher the CRAR indicates
a bank is better capitalized.

CRAR of this bank is 11.67%

13. Total Loan Loss Provision to total Non Performing

Loans(NPL)

A loan loss provision is an expense set aside as an allowance

for uncollected loans and loan payments. This provision is used to cover a
number of factors associated with potential loan losses, including bad
loans, customer defaults, and renegotiated terms of a loan that incur lower
than previously estimated payments. Loan loss provisions are an
adjustment to loan loss reserves and are also known as valuation
allowances.

Total loan loss provision to total NPL = 224.29%

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 UNIT – 5
CONCLUSION AND RECOMMENDATION

Bank and financial institutions are playing an imperative role in our whole economy by
providing effective services and collecting deposits from public invest the collected deposits in
different productive sector and earn profit.

The Project report Analysis of EBL has provided me practical knowledge of commercial
activities. As far as possible, I did my best to collect the accurate data of GLOBAL IME BANK.
I could not find out annual report, any useful documents of past financial year. So i hade made
project on the basis of quarterly information. I collected data from website of GLOBAL IME
BANK and analysis of its, financial performance following conclusion are drawn :
1. GLOBAL IME BANK collects the deposit by offering different account Most Part of its
deposits comes from saving, current and fixed account.

2. Global IME Bank has made sustained efforts to device customer oriented. A variety of
financing options. Such diversified customer needs has been introduced its scheme satisfy
both the short and long term funding requirements of our customers.

3. GLOBAL IME Bank income is increasing every year. It is good sign.

4. Profit margin of GLOBLAL IME BANK is increasing quarterly. It indicates overall

efficiency of the business and better utilization of total assets.

5. Profit margin of GLOBAL IME BANK investment is loan and advances, government
bonds and securities, deposit other bank/ financial institutes, common securities and
bonds of different companies.

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 6. GLOBAL IME BANK net operating income is increasing every year. It is good sign.

7. The lending facilty in priority and deprived sector like agriculture, metal products,
manufacturing machinery and electronics, auto parts and installation other and parts and
installation other miscellaneous sectors, which is essential to generate public, is very low
i.

RECOMMENDATION

From the study of capital structure of GLOBAL IME BANK, following

recommendations can made.
1. GLOBAL IME BANK should increases its service and deprived sectors. Being a
commercial bank, it should not only be profit motive Lending on such sectors
increases the economics condition of the public.
2. Debt to equity ratio of GLOBAL IME BANK is very high. Debt to equity ratios
creates in insecurity to both owners and creditors. It also creates high risk. Therefore
bank should decreases debt to equity ratio.
3. Large population of Nepal lives in rural area. They are away from banking services.
Therefore GLOBAL IME BANK should open new branches in that area.
4. Time to time, GLOBAL IME BANK should provide research and training facilities to
its staff which increase the knowledge, experience, quality and efficiency.
Experienced and well trained staffs are the most important assets of any organization.
5. Decision regarding loan granting should be decentralization. By it credit or loan
manager can do his job smoothly and efficiency. Loan manager may be familiar with
new system and ideas regarding loan grating, which can implement efficiency and
effectively.
6.

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 BIBLIOGRAPHY

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