FINANCIAL PERFORMANCE ANALYSIS OF GLOBAL IME BANK

LTD, HETAUDA
A Proposal

Submitted By:
BINITA SHRESTHA
T.U. Registration No: 7-2-242-206-2019
Exam Symbol No:
(Finance Group)
Makwanpur Multiple Campus, Hetauda

Submitted To:
The Faculty of Management
Tribhuwan University
Kathmandu, Nepal

In partial Fulfillment of Requirements for the degree of

BACHELOR OF BUSINESS STUDIES (BBS)
Hetauda, Makwanpur
Dec, 2023
1.1 Background
Bank is an institution which deals with money and credit. It accepts deposits from the public and
mobilizes find to productive sector. It also provides remittance facility to transfer money from
one place to another.

The term bank is oriented from the French word "banque" and the Italian word "Banco" which
means a bench for keeping, lending and exchanging of money or coins in the market place by
money lender and money exchanger. Bank is a business establishment that safeguards people's
money uses it to make loan and investment; people keep their money in banks rather than at
home for several reasons. Money is safer in the bank than at home.

Generally bank accepts deposit from business institutions and individuals which is mobilized
into productive sectors mainly business and consumers lending. Bank is therefore known as a
dealer of money. At present context, bank is not only confined to accepting deposits and
disbursing loan. In addition to this a bank may be engaged currency, joint venture, underwriting,
bank guarantee, discounting bills etc. in short the term 'modern bank' refers to an institutions
having the following features
1. It deals with money; it accepts deposit and advance loans.
2. It also deals with credit; it has the ability to create credit by expanding its liabilities.
3. It is commercial institution; it aims at earning profit.

Bank is the principle sources of credit for millions of individual's and family and for many units
of the governments. They are among the most important financial institution in the economy.
More over for small local business ranging from grocery store to automobiles dealers, banking is
often the major source of credit to stock the shelves with merchandise. Bank grants more
installment loans to consumers than any other financial institution.

Bank is a financial intermediary accepting deposits and granting loans. It offers the widest menu
of services of any financial institution. In fact a modern bank performs such a variety of function
that it is difficult to give a precise and general definition of a bank. It is because of this reason
that different economist's give different definition of the bank.

As per kent-" A bank is an organization whose principle operation is concerned with the
accumulation of the temporally idle money of the general public for the purpose of advancing to
other expenditure."

As per C.R. Crowther-" A banks collects money from those who have it into spare or who are
saving it out of their incomes and it lends this money to those who require it."

Historical background of the study

History of band in Nepal is in slow evaluation. Even now the banking system is still in the
evolutionary phase. So far as banking is concerned with debt, we may go back in the Nepalese
history, where a merchant namely "sankhdhar" is recorded. He was the person who alone paid all
debts of the people existing in the country at that time. Since then he introduced a new era called
"Nepal sambat." This record proves the existence of money lending function at that time.

Nepal bank ltd is the first modern bank of Nepal. It is taken as the milestone of modern banking
of the country. This was established in 1937 A.D. From the beginning it has rendered the
following services it the customers:
 Accept deposit
 Extend load
 Render customer related service i.e. issue of bill of exchange, hundis
 Invest in government bonds and securities
 Perform agency function

Until mid 1940s only metallic coins were used as medium of exchange, so the H.M.G felt the
need of separate institution or body to issue national currency and promote financial organization
in the country. Hence the Nepal rastra bank act 1955 was formulated which was approved by
H.M.G. Accordingly the Nepal rastra bank was established in 1956 A.D. as the central bank of
Nepal.

Introduction to Global Ime Bank Ltd

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 “B” class
development banks (Social Development Bank and GulmiBikas Bank) merged with Global IME
Bank Ltd in year 2013. Later, in the year 2014, Global IME Bank made another merger with
Comers 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). During 2019-
20, Global IME Bank Limited acquired Hathway Finance Limited (a “C” class finance company)
and merged with Janata Bank Nepal Limited (an “A” class commercial bank).

Global Bank Limited (GBL) was established in 2007 as an ‘A’ class commercial bank in Nepal
which provided entire commercial banking services. Authorized Capital of Global IME Bank is
NPR 25,000 million and Paid up Capital is NPR 21,632.50 million. 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. The bank is now operating 281 branches. 48 extension and revenue
collection counters and 260 branchless banking facilities spread throughout Nepal. All of the
country branches have been established as full service outlet that offers a large range of banking
service to its customers.

The capital structure of Global Ime Bank Ltd is given in the following table.
Capital structure Nrs.
Authorized capital 2500000000
Issued capital 2163250000
Paid up capital 2163250000
Retained earning 1673609000

1.2 Statement of the problem

Nepal, as an economically backward country, most of the resources of the country remain unused
due to lack of financing. This inadequacy of financing can be removed by participation of
foreign investors in the commercial banks. With this view joint venture banks are welcomed in
Nepal. Joint venture banks are in many numbers these days. They have contributed in making
follow of fund within the country. But the establishment of commercial bank does not guarantee
success. Success of commercial bank depends on its performance.

In others words, their contribution for the economic development purely depends upon their
performance. If the performance is good enough, it will be positive for all the sectors. Therefore
the paramount significant is not the establishment of the commercial bank but, how effectively
they are performing. A good performance is the combination of various factors. So the
effectiveness of policy, managerial skill, mobilization of fund and assets will be reflected by
their achievement.

How well the commercial banks of Nepal are doing is a matter of great concern.
What will be their situation in future are some arose question.
As it said, "morning shows the day" the present performance forecast their future position. There
is some of the problem that has encouraged this research study.
However, this study only takes into consideration the operational or financial performance of the
"GLOBAL IME BANK LTD".
This study attempts to answer the following research question
 What is the position of GIBL'S profits, loan and deposits over the different period?
 How is the relationship between loan and deposits?
 How is the liquidity position if GIB Ltd?
 What is the GIB Ltd's turnover different period?

1.3 Object of the study

The basic objective of this study is to examine and evaluate the financial performance of
"GLOBAL IME BANK LIMITED". To achieve these prime objectives, the followings
objectives are also considered in this study.
 To examine the financial statement of the bank and analyze them to see the financial
soundness of the bank.
 To observe the return the equity.
 To highlight the relationship between the loan and deposit.
 To survey on study of customer satisfaction.
1.4 Significance of the study
This case study is important for the following reasons:
 To increase the knowledge of student in banking field.
 To practice what we study theoretically.
 This project report is also helpful to general readers who want to know about the bank.
 To provide information to customer of the bank.
 This project report may help in many ways as suitable suggestion has been provided
here.

1.5 Literature Review

1.5.1 Conceptual review
Previous study materials, books and research reports related to current research issues are
considered as literature. Review of previous study is very important in an academic research and
it helps to complete the research work. We used to do literature review to understand our
literature problem better and know the methodology that can be used in the research.

1.5.2 Review of previous work

For the literature I have choose some of the previous report for the review which are mentioned
below.

In the research the following are taken as the objectives:

a) To analyze the total risk and the return of the bank.
b) To examine the portfolio investment of the Global Ime Bank Ltd, Hetauda.
C) To determine the co-relation between the various investment portfolio.

The study results found that the organization has the significant rate of return and its risk on the
investment in also high.
The correlation of the various portfolios is positive co- related.

The basic objective of this study is to examine and evaluate the financial performance of
"GLOBAL IME BANK LTD". To achieve these prime objectives, the followings objectives are
also considered in this study.
 To examine the financial statement of the bank and analyze them to see the
financial soundness of the bank.
 To observe the return over the equity.
 To highlight the relationship between the loan and deposit.

Base on my study I have found following conclusion.

 Bank has been successful in maintaining good profit.
 Earnings per share have also been in increasing trend.
 The total deposit position of the bank shows that bank has been
successful in winning the trust of the customer as the volumes of
deposits in increasing is being higher every year.
  There is moderate degree of positive correlation ship between the
total deposit and loan issued.
 The turnover of the bank has also been satisfactory.
 Bank has been successful in recovery of the issued in land timely,
which is quite clear from the income generated by the bank.

1.5.3 Research Gap

In the previous research there is findings of financial performances and the result of the hetauda
branch. In the research, I have tried to analyze the overall financial performance of the current
situation of Global ime bank ltd. So that to differentiate the previous studies and find out the
current result.

1.6 Research Methodology

The research methodology is the process of coming to the solution of the problem through
planned and systematic dealing with the collected analysis and interpretation of the facts and
figures. As this field study is entirely related with the operation performance of GIB Ltd, so only
the needed and useful research methodology has been used, for the purpose of achieving the
objectives, the below mentioned methodology is purposed to follow. It includes research design
of data, data gathering procedure, presentation and analysis technique.
1.6.1 Types of Research
Researcher uses different kinds of research as per the nature of research and research problem.
Such research may be descriptive, exploratory, experimental, etc. researcher should indicate with
research design he/she followed while conducting research and what is the logic of using such
research design.

1.6.2 Population and Sample

As we know, population is the entire collection of overall observation of the interest for the
research. And sample is that representative part of the population that characterizes the small
portion of the population. In this research, we have introduced Global Ime Bank Ltd, hetauda
alone as a population and it is descriptive type of research.

1.6.3 Types of Data

This case study is primarily based on secondary data that were provided by the GIB Ltd. It
includes mostly the prospectus of the company and audited annual report that contain balance
sheet and profit and loss a/c. the other additional information has been collected from various
sources.

1.6.4 Data Collection Procedure

The analysis of this study is based on certain design. To accomplish any type of research and to
fulfill the objective of the study, a well-set research design is necessary. This study is followed
on analytical as well as exploratory research design. For the analytical purpose, the annual report
published by the bank and other data has been collected from different sources, published on
different years. Period cover only five fiscal years.

1.7 Limitation of the study

This case study has the following limitations:
 Only the GIBL is taken in study.
 The study is confined to evaluate financial performance of GIBL.
 The truth of research result is based upon the available data from the bank.
 The study covers fortnightly period only.
 Past five years trends is taken in study.
 Within a limit of time, in addition to being regular in the class, it is quite difficult to
manage for the project work. Hence, a sufficient time could not be spending in course of
collecting information.
 Sometimes the uncooperative behavior of the bank is also creating difficulty in preparing
report.
 Report, preparation cost have to beard by student themselves. Cost is accrued in every
steps of preparing report and it is difficult to spend such a huge mount for the students.

Only some statistical methodology has been considered for computation or analysis of data.

1.8 Organization of the study

The report is organized in five chapters. Each unit has a clear thematic contain and the same
entire five chapter together present the overall report on the topic.
This study will be divided into five chapters as follows.

Chapter one: Deals with the subject matter of the study. The outline of the research is
presented in the chapter. The whole research will be based on the introduction chapter. It deals
with general background of the study, statement of the problems, objectives of the study,
importance of the study, limitation of the study and organization of the study. It deals with the
review of literature. It includes a discussion on the conceptual framework on relative topics or
previous studies. It also includes review of various studies (i.e. various books, journals and
articles, bachelor's degree thesis etc) related with the topic. It also explains the research
methodology used to evaluate the data and information regarding this research. It consists of
research design; source of data, population and sample statistical tools and graphical tools and is
also includes limitation of the study.

Chapter two: is the main part of the study which fulfills the objective of the study by
presenting data and analyzing them with the help of various tools as per methodology. In this
chapter, descriptive analysis of the gathered data and information using statistical as well as
financial tools is carried out. In this chapter, major findings of the study have been conducted
based on primary and secondary data.
Chapter three: includes the discussions and conclusion of the study. This chapter deals with
the summarization of the study and gives recommendations for implications of such reports and
improvement in the related field.