PROFITABILITY RATIOS ANALYSIS OF SIDDHARTHA

BANK LIMITED

A Project Work Report

By

Raj Binadi

Shanker Dev Campus

TU Regd. No: 7-2-39-367-2016

Campus Roll No.:379/073

Symbol No: 390050

Proposal No.: 71

Group: Account

Submitted to

The Faculty of Management

Tribhuvan University

Kathmandu

In Partial Fulfillment of the Requirements for the

DEGREE OF BACHELOR OF BUSINESS STUDIES (BBS)

Putalisadak, Kathmandu

January 2021
 DECLARATION

I hereby declare that the project work entitled PROFITABILITY RATIO ANALYSIS OF
SIDDHARTHA BANK LIMITED submitted to the Faculty of Management, Tribhuvan
University, Kathmandu is an original piece of work under the supervision of SAILENDRA
KUMAR BASNET, faculty member, SHANKER DEV CAMPUS, Kathmandu, and is submitted
in partial fulfillment of the requirements for the degree of BACHELOR OF BUSINESS
STUDIES (BBS). This project work report has not been submitted to any other university or
institution for the award of any degree or diploma.

…………………

Raj Binadi

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 SUPERVISOR’S RECOMMENDATION

The project work report entitled PROFITABILITY RATIO ANALYSIS OF SIDDHARTHA

BANK LIMITED submitted by RAJ BINADI of SHANKER DEV CAMPUS, Kathmandu, is
prepared under my supervision as per the procedure and format requirements laid by the Faculty
of Management, Tribhuvan University, as partial fulfillment of the requirements for the degree of
BACHELOR OF BUSINESS STUDIES (BBS). I, therefore, recommend the project work report
for evaluation.

………………..

Sailendra Kumar Basnet

(Project Work Supervisor)

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 ENDORSEMENT

We hereby endorse the project work report entitled PROFITABILITY RATIO ANALYSIS OF

SIDDHARTHA BANK LIMITED submitted by RAJ BINADI of SHANKER DEV CAMPUS,

Kathmandu, in partial fulfillment of the requirements for the degree of the BACHELOR OF
BUSINESS STUDIES (BBS) for external evaluation.

Prof. Dr. Kapil Khanal Prof. Dr. Keshav Raj Joshi

Chairman, Research Committee Campus Chief
Shanker Dev Campus Shanker Dev Campus

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 ACKNOWLEDGEMENT

This study attempts to examine the Profitability Ratio of SIDDHARTHA Bank limited with
available data and information. It also deals with problem identification besides this field study
to acquire the reality of banking operation of SIDDHARTHA Bank. For easier study, the data
has been presented by tables, graphs and have been interpreted using various statistical methods.
This report tries to focus on the study of SIDDHARTHA Bank only.
I express my heartiest gratitude to SAILENDRA KUMAR BASNET for guiding and inspiring
me to do this fieldwork. I would also like to thank Prof. Dr. KESHAV RAJ JOSHI (Campus
Chef), Dr. KAPIL KHANAL (Head of Research Department) and the entire staff members for
their kind co-operation and supports providing valuable information required for the completion
of the report.
Finally, I want to thank my colleagues for their continued moral support.

Raj Binadi

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 TABLE OF CONTENTS
Title Page … … … …… … … … … … … … … … … … … … … … … … … …….... …....… … .i
Declaration …. … … … … … … … … … … … … … … … … … … … … … … …..…..… … …ii
Supervisor’s Recommendation … … … … … … … … … … … … … … … … ……... ..… … …iii

Endorsement … … … … … … … … … … … … … … … … … … … … … … ……..….. … … .iv

Acknowledgements … … … … … … … … … … … … … … … … … … … … ….………. … … v
Table of Contents… … … … … … … … … … … … … … … … … … … … ….. ……..… … ….vi
List of Tables … … … … … … … … … … … … … … … … … … … … … … …………. …. ..vii
List of Figures … … … … … … … … … … … … … … … … … … … … … ……. ……… … viii
Abbreviations … … … … … … … … … … … … … … … … … … … … … …….. …..… … ix
CHAPTER I: INTRODUCTION … … … … .. … … … … … … … … … … … … … .1
Background of the Study … … … … … … … … … … … … … … .. … …1
Brief Introduction to SIDDHARTHA Bank Ltd. … … … … … … … .… …4
Objectives of the Study … … … … … … … … … … … … … … … … ….7
Rationale/Significance of the Study … … … … … … … … … … … …… .7
Literature Review … … … … … … … … … … … … … … … … ... … …7
Methods of Study … … … … … … … … … … … … ... ... . …. .. … … ...13
Limitations of Study… … … … … … … … … … … … … … … … … ...14
CHAPTER II: RESULTS AND ANALYSIS … … … … ….. … … …… … … … … ..16

Data Presentation … … … … … … … … … … … … … … … … … … ..16

Findings .. … … … … … … … … … … … .. … … … … … … … … … 29

CHAPTER III: SUMMARY AND CONCLUSION… … … … … … … … … … … …31

Summary… … … … ... … …. … … … … ... … … … … … … … … … ..31

Conclusion… … … … … … … … … … … … … … … … … … … … ...32

BIBLIOGRAPHY …………………………………………………………………………34

APPENDICES………………………………………………………………………………36

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 LIST OF TABLES

Table 1: Profit margin ratio of Siddhartha Bank . … … … … … … … … … … … … …. 17

Table 2: Exchange Gain to Total Income ratio of Siddhartha Bank … … … … … … … .. 18

Table 3: Return on Assets ratio of Siddhartha Bank …… … … … … … … … … … … .. 20

Table 4: Return on Equity of Siddhartha Bank …… … … … … … … … … … … … … 22

Table 5: Overhead to Total Income ratio of Siddhartha Bank … … … … … … …… … .. 23

Table 6: Staff expenses to Income ratio of Siddhartha Bank … … … … … … … … … 25

Table 7: Earnings per Share of Siddhartha Bank … … … … … .… … … …… … … …27

Table 8: Dividend payout ratio of Siddhartha Bank … … … … … … … …… … … .. 28

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 LIST OF FIGURES

Figure 1: Profit margin ratio of Siddhartha Bank … … … … … … … … … … … … … 17

Figure 2: Exchange Gain to Total Income ratio of Siddhartha Bank … … … … … … … 19

Figure 3: Return on Assets ratio of Siddhartha Bank … … … … … … … … … … … ... 21

Figure 4: Return on Equity of Siddhartha Bank ……… … … … … … … … … … … … 23

Figure 5: Overhead to Total Income ratio of Siddhartha Bank … … … … … … … … .. 24

Figure 6: Staff expenses to Income ratio of Siddhartha Bank … … … … … … … … … 26

Figure 7: Earnings per Share of Siddhartha Bank … … … … … … … … … … … … ... 27

Figure 8: Dividend payout ratio of Siddhartha Bank ……..… … … … … … … … … ... 29

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 ABBREVIATIONS

ABBS - Any Branch Banking System

ASBA - Application Supported by Blocked Amount
ATM - Automated Teller Machine
BFI - Banks and Financial Institutions
BS - Bikram Sambat
EPS - Earnings per Share
Etc. - Etcetera
FD - Fixed Deposit
FY - Financial Year
FOM - Faculty of Management
i.e., - That is
Ltd. - Limited
NPAT - Net Profit after Tax
NRB - Nepal Rastra Bank
NRs. - Nepalese Rupees
ROA - Return on Asset
ROE - Return on Equity
SWIFT - Society for Worldwide Interbank Financial
Telecommunication

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 CHAPTER I:

INTRODUCTION

1.1 Background of the Study

Profitability means ability to make profit from all the business activities of an Organization,
company, firm, or an enterprise. It shows how efficiently the Management can make profit by
using all the resources available in the market. According to Harward & Upton, “profitability is
the ‘the ability of a given investment to earn a return from its use.” However, the term
‘Profitability’ is not synonymous to the term ‘Efficiency’. Profitability is an index of efficiency;
and is regarded as a measure of efficiency and management guide to greater efficiency. However,
profitability is an important yardstick for measuring the efficiency, the extent of profitability
cannot be taken as a final proof of efficiency. Sometimes satisfactory profits can mark
inefficiency and conversely, a proper degree of efficiency can be accompanied by an absence of
profit. The net profit figure simply reveals a satisfactory balance between the values receive and
value given. The change in operational efficiency is merely one of the factors on which
profitability of an enterprise largely depends. Moreover, there are many other factors besides
efficiency, which affect the profitability.

Sometimes, the terms ‘Profit’ and ‘Profitability’ are used interchangeably. But in real sense, there
is a difference between the two. Profit is an absolute term, whereas, the profitability is a relative
concept. However, they are closely related and mutually interdependent, having distinct roles in
business. Profit refers to the total income earned by the enterprise during the specified period of
time, while profitability refers to the operating efficiency of the enterprise. It is the ability of the
enterprise to make profit on sales. It is the ability of enterprise to get sufficient return on the
capital and employees used in the business operation. As Weston and Brigham rightly notes “to
the financial management profit is the test of efficiency and a measure of control, to the owners a
measure of the worth of their investment, to the creditors the margin of safety, to the government
a measure of taxable capacity and a basis of legislative action and to the country profit is an
index of economic progress, national income generated and the rise in the standard of living”
while profitability is an outcome of profit. In other words, no profit drives towards profitability.
Firms having same amount of profit may vary in terms of profitability. That is why R. S. Kul

1
Shrestha has rightly stated, “Profit in two separate business concern may be identical, yet, many a
times, and it usually happens that their profitability varies when measured in terms of size of
investment”.
A bank is financial institution that accepts deposit from the public and creates credit. Leading
activities can be performed either directly or indirectly through capital markets. Due to their
impotence in the financial stability of a country, banks are highly regulated in most countries.
Most nation have institutionalized a system known as fractional reserve banking under which
bank hold liquid assets equal to only a portion of their current liabilities. In additional to their
regulation intended to ensure liquidity banks are generally subject to minimum capital
requirement based on an international of set capital standard known as the Basel accords.
(wikipedia.org)
The term 'bank' is derived from the Latin word 'bancus', Italian word 'banca' and French word 'banque' all
of which mean 'a bench'. At ancient times there used to be some moneylenders who sat in the bench for
keeping, lending and exchanging of money in the market place.
Bank is a financial intermediary accepting deposit and granting loans. In fact, a modern bank performs
variety of function that is difficult to precise and general definition of a bank
According to Prof. Kinly, "A bank is an establishment which makes to individuals such advance of money
as may be required and safely made, and to which individuals entrust money when not required by them
for use."
According to C.R. Crowther, "A bank collects money from those who have it to spare or who are saving it
out of their incomes, and it lends this money to those who require it". (wikipedia.org)

1.1.1 History of Banking Sector

Banking began with the first prototype banks of merchants of the ancient world, which made grain loans
to farmers and traders who carried goods between cities. This began around 2000 BC in Assyria and
Babylonia. Later, in ancient Greece and during the Roman Empire, lenders based in temples made loans
and added two important innovations: they accepted deposits and changed money. Archaeology from this
period in ancient China and India also shows evidence of money lending activity.
The origins of modern banking can be traced to medieval and early Renaissance Italy, to the rich cities in
the center and north like Florence, Lucca, Siena, Venice and Genoa. The Bardi and Peruzzi families
dominated banking in 14th-century Florence, establishing branches in many other parts of Europe. One of
the most famous Italian banks was the Medici Bank, set up by Giovanni di Bicci de' Medici in 1397. The

2
earliest known state deposit bank, Banco di San Giorgio (Bank of St. George), was founded in 1407 at
Genoa, Italy.
Modern banking practices, including fractional reserve banking and the issue of banknotes, emerged in
the 17th and 18th centuries. Merchants started to store their gold with the goldsmiths of London, who
possessed private vaults, and charged a fee for that service. In exchange for each deposit of precious
metal, the goldsmiths issued receipts certifying the quantity and purity of the metal they held as a bailee;
these receipts could not be assigned; only the original depositor could collect the stored goods.
Gradually the goldsmiths began to lend the money out on behalf of the depositor, which led to the
development of modern banking practices; promissory notes (which evolved into banknotes) were issued
for money deposited as a loan to the goldsmith. The goldsmith paid interest on these deposits. Since the
promissory notes were payable on demand, and the advances (loans) to the goldsmith's customers were
repayable over a longer time period, this was an early form of fractional reserve banking. The promissory
notes developed into an assignable instrument which could circulate as a safe and convenient form of
money backed by the goldsmith's promise to pay, allowing goldsmiths to advance loans with little risk of
default. Thus, the goldsmiths of London became the forerunners of banking by creating new money based
on credit. The Bank of England was the first to begin the permanent issue of banknotes, in 1695. The
Royal Bank of Scotland established the first overdraft facility in 1728. By the beginning of the 19th
century a bankers' clearing house was established in London to allow multiple banks to clear transactions.
The Rothschilds pioneered international finance on a large scale, financing the purchase of the Suez Canal
for the British government.

1.1.2 History of Banking Sector in Nepal

According to the history, it is found that people of our country have been involved in business and trade
since long time ago. Though the production of copper utensils had been started during the 7 th century,
business relationship could not be established with India since India was involved in the production of
copper utensil. However, the craft concerned with copper, wood and metal in our country did attract the
Chinese and the Tibetan a lot, thus resulting in the establishment of business relationship with China and
Tibet.
In 12th century there was silver coin called 'Dam'. Later on, in 14 th century 'TANKADHARI' one is that
dealt with the lending money to the public. It remains objective was to earn profit, so they used to change
high interest rate. To control interest rate 'TEJARATH ADDA' was established in 19 th century. It provides
loans to the people working in government offices on the basis of the security and to public on the basis of

3
collateral they deposit. It charges only 5% interest rate per annum. It only provides loans but does not
accept deposit.
Nepal bank Ltd. is the first modern bank of Nepal. It is taken as the milestone of modern banking of the
country. Nepal bank marks the beginning of a new era in the history of the modern banking in Nepal. This
was established in 1937 A.D. Nepal Bank Ltd. remained the only financial institution of the country until
the foundation of Nepal Rastra Bank is 1956 A.D.
In 1957 A.D. Industrial Development Bank was established to promote the industrialization in Nepal,
which was later converted into Nepal Industrial Development Corporation (NIDC) in 1959 A.D. Rastriya
Banijya Bank, was established in 1965 A.D. as the second commercial bank of Nepal. As the agriculture
is the basic occupation of major Nepalese, the development of this sector plays in the prime role in the
economy. So, separate Agricultural Development Bank was established in 1968 A.D. This is the first
institution in agricultural financing. (wikipedia.org)
There are various types of bank working in modern banking system in Nepal. It includes central,
development; commercial, financial, co-operative and Micro Credit (Grameen) banks. The NRB will
classify the institutions into “A”, “B”, “C”, “D” groups on the basis of the minimum paid-up capital and
provide the suitable license to the bank or financial institution. Group ‘A’ is for commercial bank, ‘B’ for
the development bank, ‘C’ for the financial institution and ‘D’ for the Micro Finance Development Banks.
There are 28 commercial banks, 57 development banks, 36 financial companies, 48 micro credit
(Grameen) development banks and 15 saving and credit co-operation (licensed by Nepal Rastra Bank) are
established so far in Nepal.

1.2 Profile of Organization

Siddhartha Bank Limited (SBL), established in 2002 and promoted by prominent personalities of Nepal,
today stands as one of the consistently growing banks in Nepal. While the promoters come from a wide
range of sectors, they possess immense business acumen and share their valuable experiences towards the
betterment of the Bank.

Within a short span of time, Siddhartha Bank has been able come up with a wide range of products and
services that best suits its clientele. Siddhartha Bank has been posting growth in its portfolio size and
profitability consistently since the beginning of its operations. The management of the Bank has been
thoroughly professional.

4
Siddhartha Bank has been able to gain significant trust of the customers and all other stakeholders to
become one of the most promising commercial banks in the country. The Bank is fully committed towards
customer satisfaction. The range and scope of modern banking products and services the Bank has been
providing is an example to its commitment towards customer satisfaction. It is this commitment that has
helped the Bank register quantum growth every year. And the Bank is confident and hopeful that it will be
able to retain this trust and move even further towards its mission of becoming one of the leading banks of
the industry.

Siddhartha Bank runs with a vision to be financially sound, operationally efficient and keep abreast with
technological developments.

The Bank desires to be one of the leading banks of the industry by fulfilling the interest of the stakeholders
and also aims to provide total customer satisfaction by way of offering innovative products and by
developing and retaining highly motivated and committed staff. It directs all its efforts to move ahead with
increased profits. The following mission statement is a guide to meet the Vision of the Bank:

 Be one of the leading banks of the industry in terms of profitability, productivity and innovation.
 Aim at total customer satisfaction by rendering efficient and diversified financial services through
improved technology.
 Build a highly motivated and committed team of staff by nurturing a good work culture to achieve
superior individual performance aiming to enhance organizational effectiveness.
 Be the place of pride to all its stakeholders.

1.2.1 Banking services rendered by Siddhartha Bank

SIDDHARTHA has been obtaining its objectives and targets through various kinds of banking
services with a large number of facilities. The services rendered by SIDDHARTHA Bank are as
follows:

• SIDDHARTHA Bank provides loan, advance and overdraft to the needy person and
customers against pledge and securities
• SIDDHARTHA Bank performs the agency services like, payment of subscription, rent
collection, dividend collection, interest collection etc. on behalf of the customers

5
 • SIDDHARTHA is a member of clearing house; it accepts cheque of any bank of its
customers only

• It also exchanges the foreign currency i.e., sale and purchase of currency.

Beside these, various instrumental and modern technological services are provided by
SIDDHARTHA Bank which are discussed below: -

• Deposits

• Guarantees

• Credit Cards

• Tele Banking

• Western Union Money Transfer

• SWIFT (Society for Worldwide Inter Bank Financial Tele- communication)

• Safe Deposit Locker

• Automated Teller Machines (ATM)

• Other facilities

1.3 Objectives of the Study

The main objective of the study is to analyze financial performance of and solvency position of
this bank through use of different ratios. Other objective of this study is as following: -
• To find out the profitability of the SIDDHARTHA Bank Limited.

• To analyze the profitability

• To determine factors of profitability

• To evaluate profitability ratio of SIDDHARTHA Bank Ltd.

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1.4 Rationale/Significance of the study

Generally, the study gives emphasis on the welfare of students while preparing fieldwork report;
they gain knowledge through their own experience enabling them to deal with problems relating
to their studies. The study also intends to let students know about required information by them.
The following are the few points that highlights of the significance of field work report:

• The fieldwork report may be useful for the library purpose so that any students want to
prepare a report can have some idea about it.
• It helps to increase the practical knowledge.

• The fieldwork report can be used as guideline while preparing a small project report.

• By analyzing the problem, it provides chances to improve

• It makes the student more creative.

1.5 Literature Review

Determinants of bank profitability can be split between those that are internal and external.
Internal determinants of bank profitability can be defined as those factors that are influenced by
the bank’s management decisions and policy objectives. Management effects are the results of
differences in bank management objectives, policies, decisions, and actions reflected in
differences in bank including profitability. Management decisions, especially regarding loan
portfolio concentration, were an important contributing factor in bank performance. Researchers
frequently attribute good bank performance to quality management. Management quality is
assessed in terms of senior officers’ awareness and control of the bank’s polices and
performance.
Most of the ratios were significantly related to profitability, particularly capital ratios, interest
paid and received, salaries and wages.
A number of studies have included that expense control is the primary determinant of bank
profitability. Expense management offers a major and consistent opportunity for profitability
improvement. With the large size and the large differences in salaries and wages, the efficient
use of labor is a key determinant of relative profitability. Staff expenses, as conventional wisdom

7
proposes, is expected to be inversely related to profitability because these costs reduce the
‘bottom line’ or the total operations of the bank. The level of staff expenses appears to have a
negative impact on banks’ ROA in the study. There is a positive relationship between staffs and
total profits. External determinants of bank profitability are concerned with those factors which
are not influenced by specific bank’s decisions and policies, but by events outside the influence
of the bank. The steps of analysis are as follows
i) Selection of the information relevant to the decision.

ii) Arrangement or the selected information to highlight the significant relationship of

the financial yardsticks.
iii) Interpretation and drawing of inferences and conclusions.

To evaluate the profitability ratio of a firm, the analyst needs a certain parameter of the company
by which the quantitative relationship and its position come out. The most widely and effective
used tool of the profitability ratio is the ratio analysis. The profitability ratio is the measurement
of relationship between two accounting figures, expressed in mathematical way or the numerical
relationship between two variables expressed as (I) percentage or, (ii) fraction or (iii) in
proportion of numbers.

1.5.1Conceptual Framework

The modern financial evaluation has greatly affected the Profitability ratio of banks. Nowadays,
finance is best characterized as ever changing with new ideas and techniques. Only efficient
manager of the company can achieve the set-up goals. If a bank does not maintain adequate
equity capital, it makes the bank riskier. If a bank has inadequate equity capital, it must be used
more debt that has high fixed cost. So, any firm must have adequate equity capital in their capital
structure. The main objectives of the bank are to collect deposits as much as possible from the
customers and to mobilize into the most profitable sector. If a bank fails to utilize its collected
resources than it cannot generate revenue. Resource mobilization management of bank includes

8
resource collection, investment portfolio, loans and advances, working capital, fixed assets
management etc. It measures the extent to which bank is successful to utilize its resources. To
measure the bank profitability in many aspects, we should analyze its indicator with the help of
financial statements. Profitability ratio is the process of identifying the financial strength and
weakness of the concerned bank. It is the process of finding strength and weakness of the
concerned bank.

1.6 Financial Analysis

Financial statement analysis generally begins with the calculation of set of financial ratios
designed to reveal the relative strength and weaknesses of a company as compared to other
companies in the same industry and to show weather the firm's position has been improving or
deteriorating over time.

1.6.1 Ratio analysis

Ratio analysis is the systematic use of profitability ratio information of the firm’s strength and
weakness as its historical performance, and current condition can be determined.
After calculating various ratios, we need to compare with the certain standard and draw out the
conclusion of the result. The comparison classified by Weston and Brigham into six types viz; (I)
Liquidity ratios, (ii) leverage ratios, (iii) Activity ratios, (iv) Profitability ratios, (v) Growth ratios
and (vi) Valuation ratios.

1.6.2 Profitability ratio

Profitability ratios are related to profit. These ratios are designed to highlight the end result of
business activities. The operating efficiency of a firm and its ability to ensure adequate return to
its shareholders depends ultimately on the profits earned by it. In this regard, profitability ratios
are the measure of efficiency and the search for. These ratios measure the overall effectiveness of
management. It provides an incentive to achieve efficiency. In this report, the following
profitability ratios are used:

9
1.6.2.1 Profit margin ratio

The profit margin ratio, also called the return on sales ratio or gross profit ratio, is a profitability
ratio that measures the amount of net income earned with each rupees of sales generated by
comparing the net income and net sales of a company. This ratio measures how effectively a
company can convert sales into net income.

1.6.2.2 Exchange gain to total income ratio

An exchange gain/loss is caused by a change in the exchange rate of two currencies, such as
when an invoice denominated in one currency is paid in another. The exchange gain to total
income ratio measures total income and exchange gain ratio.

1.6.2.3 Return on assets

Return on assets, is also called return on investment, which is a ratio between net profit and total
assets. This ratio measures the rate of return earned by the firm as a whole for all its investors.
Higher ratio indicates the higher return on assets or on amount contributed by investors on
account of efficient management of assets or capital.

1.6.2.4 Return on equity

This ratio is also known as return on shareholders' fund and return on net worth. It measures the
relationship between net profit after tax and shareholders' equity. The main objective of this ratio
is to find out how efficiently the funds supplied by the shareholders are utilized. Higher ratio
reflects the more profitability enjoyed by the shareholders, where as poor or lower ratio reflects
the reverse situation.

10
1.6.2.5 Overhead to total income ratio

Overhead ratio is the comparison of operating expenses and the total income which is not related
to the production of goods and service. By definition, the ratio of operating expenses to the sum
of taxable equivalent net interest income and other operating income. The overhead ratio shows
the proportion of expenses to total income which cannot be used for production of goods and
services. A company would try as much as it can to lower these expenses without it affecting the
production of goods and services so as to maintain the competition in the industry.

1.6.2.6 Staff expenses to total income ratio

It is the ratio of Staff Expenses to Net Income. This ratio is computed to compare the efficiency
of company's staffs with the staffs of peer companies, competitors and own historical records in
term of total income. The lower of this ratio indicate more efficiency of the staffs of the
company.

1.6.2.7 Earnings per Share

Earnings per share (EPS), also called net income per share, is a market prospect ratio that
measures the amount of net income earned per share of stock outstanding. In other words, this is
the amount of money each share of stock would receive if all of the profits were distributed to the
outstanding shares at the end of the year. Earnings per share is one of the most quoted statistics
for publicly traded companies. It is the ratio of net profit after tax between numbers of common
share.

1.6.2.8 Dividend Payout Ratio

The dividend payout ratio measures the percentage of net income that is distributed to
shareholders in the form of dividends during the year. In other words, this ratio shows the portion
of profits the company decides to keep to fund operations and the portion of profits that is given
to its

11
shareholders.

1.7 Review of Books and Journals

Further R.S. Sayers in his book Modern Banking Writers, “Ordinary banking business consist of
changing cash for bank deposits and bank deposits from one person to corporation (one depositor
to another) giving bank deposits in exchange for bill of exchange, government banks, recurred
and unsecured promises businessmen to repay. “Erich A. H. in his book has described
profitability ratio as “Profitability ratio is both an analytic and judgmental process that helps to
answer the questions that have been properly posed to and therefore, it is a mean to an end. We
can stress enough that financial analysis is an aid that allows those responsible for results to
make sound decisions. “Liquidity is other financial indicator of the business enterprises. I.M.
Pandey says, "A firm should ensure that it does not suffer from lack of liquid. And also, that it is
not too much highly liquid. The failure of a company to meet its obligations, due to lack of
sufficient liquidity will result in bad credit image. Loss of creditor’s confidence, or even in low
suits resulting in the closure of the company. A very high degree of liquidity is also bad; idle
assets earn nothing. The firm’s funds will be unnecessarily tied up in current assets. Therefore, it
is necessary to strike a proper balance between liquidity and lack of liquid. “Liquidity is
measured by the speed with which a bank’s assets can be converted into cash and other current
obligations. It is also important in view of survival and growth of a bank.

1.7.1 Review of some acts relating to banking in nepal

Commercial Bank Act 2031 was formulated to facilitate the smooth run of commercial banks.
All the commercial banks are functioning under this act. This act defines the bank as, "A
commercial bank is one which exchange money, deposits money, accepts deposits, grants loans
and performs commercial banking function and which is not a bank meant for co-operative,
agriculture, industry or for specific purpose."
The preamble of Nepal Bank Act 1994 clearly states the need of commercial bank in the country.
In absence of any bank in Nepal, the economic progress of the country was being hampered and
causing inconvenience to the people and therefore with the objective of fulfilling that need by
providing services the people and for the betterment of the country, this law is hereby
promulgated for the establishment of the bank and its operation. A bank shall be established

12
under the Company Act with the recommendation of the Rastra Bank. The bank may determine
the location of its head office with the approval of the Rastra Bank. The bank shall be an
autonomous corporate body with the perpetual succession. It may sue or be sued in its own name.
Subject to this Act and other current Nepal law, the bank may acquire, use and sell movable and
immovable property. Any bank may open or shift the location of, or close branches depots or
other offices with the approval of the NRB. In case any foreign commercial bank desires to open
a branch, representative office or liaison such branch under the company Act with the approval
of NRB, and provisions of the act shall apply to such foreign bank The NRB shall obtain the
consent of His Majesty’s Government before granting approval. While granting approval, NRB
may prescribe condition according to the need, and the foreign bank shall company with the
conditions thus prescribed by the NRB.

1.8 Methods of Study

Evaluating the profitability ratio of Siddhartha Bank in a micro level and to highlight the efforts
of the profitability ratio of these banks in the economy at the macro level forms the basic
objective of this research.
Research Design

Keeping in mind the objective of the study, descriptive cum analytical research design
has been followed. The study is based on the wide range of variables and factors
influencing profitability ratio of the bank. Comparative data banks are presented in such a
way to make the report informative to the reader.

Population and Sample

Among 27 commercial banks, SIDDHARTHA Bank Limited have been selected for the
present study. Financial statements of latest 5 years (2071/72 to 2075/76) have been taken
as sample for the comparative analysis of Profitability ratio. The recommendation and
suggestions, which are derived from the study, by taking the above commercial banks as
samples, will be equally useful for the other commercial banks in Nepal.

13
 Sources of Data

This study is based on secondary data. Secondary data can define as the data collected
earlier for a purpose other than one currently being pursued. As a researcher I have
scanned lot of sources to get an access to secondary data which have formed a reference
base to compare the research findings. Secondary data in this study has provided an
insight and forms an outline for the core objectives established. The various sources of
secondary data used for this study are newspapers, magazines, text books, marketing
reports of the company, internet, etc.

Techniques of Analysis

In the course of analysis, data gathered from the various sources will be inserted in the
tabular from according to their homogeneous nature. They are table, graph, mean,
standard deviation ratio and percentage.

1.9 Limitation of the Study

This study is conducted in partial fulfillment of the requirement for the BBS 4 th year. So, it
possesses some limitation of its own. One of the limitations of the study is; with regard to
tempera coverage of the study to arrive any meaningful conclusions regarding the trend in the
pattern and structure of financing a time service of fairly a long period are needed. But this study
has covered only last five financial year. Other limitations are as follows:
• Though there are 27 commercial banks, this study covers only one SIDDHARTHA Bank
Ltd.

• Being a student time and resources consentient

• Limited variable has been selected.

• Simple techniques have been used in analysis

• The qualitative factors such as growth and expansions policy of the bank quality and
general economic conditions have not been studied.

14
 CHAPTER II

RESULTS AND ANALYSIS

2.1 Data Presentation

Presentation and data analysis of data is the main body of the study. Introduction, review of
literature and research methodology is presented in the previous chapter that provide the basic
inputs to analyze and interpret the data. In this chapter, data are presented and analyzed.

2.2 Financial Analysis

Financial statement analysis generally begins with the calculation of set of financial ratios
designed to reveal the relative strength and weaknesses of a company as compared to other
companies in the same industry and to show weather the firm's position has been improving or
deteriorating over time. It helps the concerned parties to spot out the financial strength and
weakness of the firm.

2.3Ratio Analysis

Ratio analysis is the systematic use of profitability ratio information of the firm’s strength and
weakness as its historical performance, and current condition can be determined. It provides the

15
trends of organization's financial performance. Ratios are very useful, essential and powerful
tools to interpret the financial performance of the company. In this report, following ratios are
used:

A. Profit Margin Ratio

It is the ratio of net profit to net sales. It is measured by this formula:

net profit
Profit margin ratio = ×100
net sales

(in Millions)

F/Y NPAT Total Income Ratio in%(x) Index (%)

2071/72 776.97 2055.15 37.8 100

2072/73 1270.04 2842.57 44.67 118.17

2073/74 1488.04 3703.86 40.17 106.26

2074/75 1904.06 4428.84 42.99 113.73

2075/76 2275.68 6086.15 37.39 98.91

Mean= 40.6

S.D.=2.85
Table 1: Profit margin ratio of Siddhartha Bank
C.V.=7.017%
Source: Appendix 1

16
 Profit margin ratio
46
44.67
44
42.99

42
40.17
40

37.8
38 37.39

36

34

32
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 1: Profit margin ratio of Siddhartha Bank ltd.

The profit margin ratio of Siddhartha Bank shows the different year ratios viz. 37.8 in 2071/72,
44.67 in 2072/73, 40.17 in 2073/74, 42.99 in 2074/75, and 37.39 in 2075/76 and the mean,
standard deviation and coefficient of variance are 40.6, 2.85% and 27.017% receptively.

B. Exchange Gain to Total Income Ratio

The exchange gain to total income ratio measures total income and exchange gain ratio, it is
measure by this formula:

Exchange Gain

Exchange gain to total income Ratio = ×100

Total Income

(in Millions)

17
 F/Y Exchange gain Total Income Ratio in %(x) Index (%)

2071/72 142.34 2055.15 6.92 100

2072/73 167.08 2842.57 5.87 84.82

2073/74 164.75 3703.86 4.45 64.3

2074/75 190.87 4428.84 4.3 62.13

2075/76 201.67 6086.15 3.31 47.83

Mean=4.97

S.D.=1.27
Table 2: Exchange Gain to Total Income ratio of Siddhartha Bank C.V.=25.58%
Source: Appendix 2

Exchange Gain to Total Income ratio

8

6.92
7

6 5.87

5
4.45 4.3
4
3.31
3

0
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 2: Exchange Gain to Total Income ratio of Siddhartha Bank ltd.

18
The exchange gain to income ratio of Siddhartha Bank shows the different year ratios viz. 6.92 in
2071/72, 5.87 in 2072/73, 4.45 in 2073/74, 4.3 in 2074/75, and 3.31 in 2075/76 and the mean,
standard deviation and coefficient of variance are 4.97, 1.27% and 25.28% receptively.

C. Return on Assets

It is the ratio of net income to total assets measures the return on total assets (ROA) after interest
and taxes. It is measured by this formula

NPAT
Return on Assets =
Total Assets
×100

(amount in Millions)
F/Y NPAT Total assets Ratio in %(x) Index (%)

2071/72 776.97 50719.74 1.53 100

2072/73 1270.47 74826.32 1.7 111.11

2073/74 1488.04 89900.15 1.655 108.17

2074/75 1904.06 119869.21 1.588 103.79

2075/76 2275.68 140031.12 1.625 106.20

Mean=1.62
S.D.=0.057

19
 C.V.=3.56%

Table 3: Return on Assets ratio of Siddhartha Bank

Source: Appendix 3

Return on assets
1.75

1.7
1.7
1.655
1.65
1.625

1.6 1.588

1.55 1.53

1.5

1.45

1.4
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 3: Return on assets of Siddhartha Bank ltd.

The return on assets ratio shows the different year ratios viz. 1.53 in 2071/72, 1.7 in 2072/73,
1.655 in 2073/74, 1.588 in 2074/75, and 1.625 in 2075/76 and the mean, standard deviation and
coefficient of variance are 1.62, 0/057% and 3.56% receptively.

D. 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 investment.
NPAT
Return on equity (ROE) =
Equity
×100

20
 (amount in Millions)

F/Y NPAT Equity Ratio in %(x) Index (%)

2071/72 776.97 3447.41 22.5 100

2072/73 1270.47 4496.14 28.25 125.55

2073/74 1488.04 7584.53 19.61 87.15

2074/75 1904.06 8464.38 22.25 98.89

2075/76 2275.68 8887.6 25.60 100.39

Mean=23.64

S.D.=2.96

Table 4: Return on Equity of Siddhartha Bank CV.=12.54

Source: Appendix 4

21
 30
28.25

25.6
25
22.5 22.25

20 19.61

15

10

0
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 4: Return on Equity of Siddhartha Bank ltd.

The return on Equity ratio shows the different year ratios viz. 22.5 in 2071/72, 28.25 in 2072/73,
19.61 in 2073/74, 22.25 in 2074/75, and 22.6 in 2075/76 and the mean, standard deviation and
coefficient of variance are 23.64, 2.96% and 12.54% receptively.

E. Overhead to Total Income Ratio

It is the ratio of Overhead to Net Income, measured by the following formula.

Overhead
Overhead to total Income Ratio = ×100
Total Income

(amount in million)

F/Y overhead Total Income Ratio in%(x) Index (%)

2071/72 647.98 2055.15 31.52 100

2072/73 896.8 2842.57 31.54 100.06

2073/74 1253.1 3703.86 33.83 107.32

2074/75 1549.76 4428.84 34.99 111.008

22
2075/76 2472.97 6086.15 40.63 128.9
 Mean=34.5

S.D.=3.34

C.V.=9.69%

Table 5: Overhead to Total Income ratio of Siddhartha Bank

Source: Appendix 5

Chart Title
45
40.63
40
34.99
35 33.83
31.52 31.54
30

25

20

15

10

0
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 5: Overhead to Total Income ratio of Siddhartha Bank

The Overhead to Total Income ratio shows the different year ratios viz. 31.52 in 2071/72, 31.54
in 2072/73, 33.83 in 2073/74, 34.99 in 2074/75, and 40.63 in 2075/76 and the mean, standard
deviation and coefficient of variance are 34.5, 3.34% and 9.69% receptively.

23
F. Staff Expenses to Total Income Ratio

It is the ratio of Staff Expenses to Net Income. This ratio compares the efficiency of company's
staffs with the staffs of peer companies, competitors and own historical records in term of total
income. The lower of this ratio indicate more efficiency of the staffs of the company.
It is measured by the formula

Staff Expense
Staff expenses to total income ratio =
Total Income
×100

(amount in Millions)

F/Y Staff expense Total income Ratio in %(x) Index %

2071/72 328.131 2055.15 15.96 100

2072/73 372.85 2842.57 13.11 82.14

2073/74 590.32 3703.86 15.93 99.81

2075/76 1085.84 4428.84 24.51 153.57

2075/76 1689.2 6086.15 27.75 173.87

Mean=19.45

S.D.=5.64%

Table 6: Staff expenses to Income ratio of Siddhartha Bank C.V=29.01%

Source: Appendix 6

24
 Chart Title
30
27.75

25 24.51

20

15.96 15.93
15
13.11

10

0
2071/72 2072/73 2073/74 2075/76 2075/76

Figure 6: Staff expenses to Income ratio of Siddhartha Bank ltd.

The staff expenses to total income ratio show the different year ratios viz. 15.96 in 2071/72,
13.11 in 2072/73, 15.93 in 2073/74, 24.25 in 2074/75, and 27.75 in 2075/76 and the mean,
standard deviation and coefficient of variance are 19.45, 5.64% and 29.01% receptively.

G. Earnings per Share:

It is the ratio of Net Profit after Tax to No. of Common Share. It is calculated by this formula,

NPAT
Earnings per Share (EPS) =
No of common shares
×100

25
 F/Y NPAT No. of Common share Ratio in %(x) Index%

2071/72 767.08 20.31 37.68 100

2072/73 1270.47 44.96 28.25 74.9
2073/74 1488.04 52.50 28.34 53.98
2074/75 1904.06 84.64 22.49 59.68
2075/76 2275.68 88.87 25.6 67.9

Mean=28.47
Table 7: Earning Per Share of Siddhartha Bank.
S.D.=5.07
Source: Appendix 7
C.V.=17.83

Earnings per Share

40 37.68

35

30 28.25 28.34
25.6
25
22.49

20

15

10

0
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 7: Earnings per Share of SIDDHARTHA BANK ltd.

26
Earnings per Share show the different year earnings per share viz. 37.68 in 2071/72, 28.25 in
2072/73, 28.34 in 2073/74, 22.49 in 2074/75, and 25.6 in 2075/76 and the mean, standard
deviation and coefficient of variance are 28.47, 5.07% and 17.83% receptively.

H. Dividend Payout Ratio

It is the ratio of dividend to net income. It is calculated by the following formula:

𝐷𝑖𝑣𝑖𝑑𝑒𝑛𝑑

Dividend payout ratio = ×100

𝑁𝑒𝑡 𝐼𝑛𝑐𝑜𝑚𝑒

F/Y Dividend NPAT Ratio in%(x) Index (%)

2071/72 21.05 767.08 2.74 100

2072/73 39 1270.47 3.07 112.04

2073/74 14 1488.04 0.94 34.3

2074/75 13.16 1904.06 0.69 25.18
2075/76 25.26 2275.68 1.11 40.5

Mean=1.71
Table 8: Dividend payout ratio of Siddhartha Bank S.D.=0.99
Source: Appendix 8 C.V.=57.89

27
 Dividend payout ratio
3.5
3.07
3
2.74

2.5

1.5
1.11
1 0.94
0.69
0.5

0
2071/72 2072/73 2073/74 2074/75 2075/76

Figure 8: Dividend payout ratio of Siddhartha Bank ltd.

Dividend payout ratio show the different year ratio viz. 2.74 in 2071/72, 3.07 in 2072/73, 0.94 in
2073/74, 0.69 in 2074/75, and 1.11 in 2075/76 and the mean, standard deviation and coefficient
of variance are 1.71, 0.99% and 57.89% receptively.

Findings

In this fieldwork report, we study about Siddhartha Bank profitability position and we found the
financial position of Siddhartha Bank is better. In compliance with analysis, the following
finding as made:

• The gross margin ratio shows an increasing trend as compared to the base year, which is
beneficial to the bank. The min. index value is 198.91 as that of 2075/76 and the max
index value is 118.17 as that of 2072/73.
• The exchange gain to total income ratio shows is decreasing trend as compared to the
base year, which is not beneficial to the bank. The min. index value is 47.83 as that of
2075/76 and the max index value is 100 as that of 2071/72.

28
• The return on assets of Siddhartha Bank shows an increasing trend and has max. Index
value of 111.11 in the year 2072/73 as compared to base year 2071/72 i.e., 100. It shows
that, Siddhartha Bank is successful in deriving benefit from the assets it has used.
• The trend of return on equity (ROE) is increasing. It shows that the bank is able to satisfy
its shareholders to the fullest. The max return index is 125.55 which is 25.55% more than
that of the base year 2071/72. Thus, it is able to achieve the goal of wealth maximization
too.
• The Overhead to Total Income ratio shows an increasing trend. The max. Index value is
128.9 as that of 2075/76 and the min. increased index value is 100.06 as in 2072/73. This
shows the operational efficiency of Siddhartha Bank is satisfactory.
• The Staff Expenses to Total Income ratio of Siddhartha Bank has increased by 73.87% in
the year 2075/76 compared to base year.
• The earning per share of Siddhartha Bank decreases continuously during the year
2071/72 to 2075/76 and maximum earning per share is 37.68 and the least price is 25.6.
This shows the return of each equity shareholder is in satisfactory condition.
• Dividend payout ratio shows decreasing trends as compared to base year. The min. index
value is 25.18 as that of 2074/75 and the max index value is 112.04 as that of 2072/73.
• The position of profit over different years i.e. (2071/72 to 2075/76) shows the profit of

Siddhartha Bank increase continually.

• The position of income of Siddhartha Bank over different year i.e. (2071/72 to 2075/76)
shows that income composition of Siddhartha Bank is no more difference.
• The position of expenses of Siddhartha Bank over different year i.e. (2071/72 to 2075/76)
shows that expenses of Siddhartha Bank is no more difference.

29
 CHAPTER III:

SUMMARY AND CONCLUSION

3.1 Summary

Nepal is one of the least developed countries of the world. For most of the developing process, it
is financially depending upon the foreign countries. It is economically too weak. Thus, the
economic condition of the people is weak. In Nepal 85% of the people are depended upon
agricultural sector which is unable to provide full employment to the people. Nepal government
has to activate people in the nation’s development through overall industrialization of nation. For
this purpose, development of sound banking system is essential.

The commercial banks are of foremost importance to a country because of their roles as a strong
pillar for the economic development of a nation. With the wave of the globalization and
advancement in technologies, without the strong base of commercial banking platform, the
economic development of a nation is bound to be paralyzed. Thus, it would be very legitimate to
say that the commercial banks are of a more importance to a developing country like Nepal and
Siddhartha Bank Ltd. being the pioneer financial institutions of Nepal, has undouble filled such
gap to a great extent.

In Nepalese banking sector, commercial banks including ventures banks are operating at present.
In the absences of modern banking any country cannot develop the economic activity. Therefore,
it is essential to find out whether or not the banks are serving an important contribution to
develop sectors of economy. Profitability ratio is said to be general business of fund, which
shows the bank ability to meet cash requirement. In this record, this study has been based upon
the objective to evaluate the profitability ratio of Siddhartha Bank Ltd.

30
Basically, banks are proliferating, cutthroat competition is prevailing plus there is an unhealthy
competition. So, in this competitive banking scenario, Siddhartha Bank Ltd. is retaining and
maintaining its strengths and proving itself as a benchmark in the Nepalese banking industry.

The financial performance of Siddhartha Bank Ltd. reveals that it is in sound financial position.
Siddhartha Bank Ltd. earns the profit every year in increasing trend. The bank is very much in
line with its desire objective and goals. The bank has been able to successfully overcome all the
economic and competitive barriers to establish it as financially feasible unit. The investors of
Siddhartha Bank Ltd, are receiving sufficient rate of return on their investment and the creditors
are also satisfied. Siddhartha Bank Ltd. has been playing an important role in financial economic
sector of the country. It has fulfilled its objectives for which it has made at the time of the
establishment.

3.2 Conclusion

With some commercial banks and development banks operating in Nepal, the market seems over
crowed and the banks are now finding a tough competition among themselves. Since the entry
barriers are not so high due to the government’s liberal policy, this competition is expected to be
more intense in the near future, as there is always the possibility of a new player entering this
sector. Siddhartha Bank has not maintained a balanced ratio among its deposit liabilities.
Consequently, the bank does not seem to be able to utilize its high-cost resources in high yielding
investment portfolio. The investment portfolio of the bank has not been managed so efficiently as
to maximize the returns there from. The operational efficiency of the bank is found
unsatisfactory because of the series of operational loss over the period. Lower market value is a
reflection of a weaker profitability ratio of the bank.

On the basis of this study, the following conclusion can be made:

• The overall results are satisfactory. But in some case the Siddhartha Bank Ltd should take
certain steps to improve the bank current financial condition. Therefore, some
recommendations are being put forward for its improvement along with its development
of the country.

31
• The proportion of the saving deposit account is high in total deposit liability. So, it is
recommended that the bank should utilize the amount collected from the saving deposit
account carefully. It should be invested in the higher yielding areas.
• The cash and bank balance in the Siddhartha Bank Ltd are satisfactory. It is higher a bit
though.

Bank should analyze the opportunities for short term investment.

• Bank should not spend too much in the fixed assets because it yields only a nominal
portion, almost no yield.
• The profitability ratio shows the profitability position of Siddhartha is satisfactory. It
should give continuity to this growth trend in future.
• These ratios show that Siddhartha is more efficient in mobilizing the resources of owners
and its operational efficiency is also satisfactory.
• The bank has been successful in winning the trust of the customer, as volume of expenses
is no more difference and it's growing slowly than previous years. There is general rise
and fall in expenses level during different years. It should give basic priority to the
customers and personnel first and then the organizational objectives, which will help to
develop effective value chain in the organization.
• Branches existing in some limited areas will not enable a bank to boost up its campaign
of deposit mobilization and credit disbursement as desired. Therefore, Siddhartha is
recommended to open new branches at certain places every year after making feasibility
of studies. And also, it has launched various ideas as SIDDHARTHA PREPAID card,
extended banking hours, etc. so as to collect maximum amount of funds from general
public.
• Besides these, all the other functions of the company are satisfactory, no comments upon
it.

32
 BIBLIOGRAPHY

Adhikari, D., & Pandey, D. (2017). Business Research Method. Kathmandu: Asmita Publication.

Bhandari, D. (2012). Principle & Practice of Banking & Insurance. Kathmandu: Asia
Publication.

Gupta, B. E., & Kolari, J. W. (2016). Commercial Banking. New Delhi: Wiley India.

Joshi, S. (2009). Banking and Insurance Management. Kathmandu: Taleju Prakashan.

Pandey, I. M. (2018). Financial Management . New Delhi: Vikas Publishing.

Poudel, R., Baral, B., Keshar, J., Joshi, P., Gautam, R., & Rana, R. (2016). Fundamental of
Financial Markets and Institutions. Kathmandu: Asmita Publication.

Poudel, R., Baral, B., Keshar, J., Joshi, P., Gautam, R., & Rishi, R. (2008). Fundamental of
Financial Management. Kathmandu: Asmita Publication.

Poudel, R., Baral, B., Keshar, J., Padam, J., & Gautam, R. (2016). Fundamental of Corporate
Finance. Kathmandu: Asmita Publication.

Sayers, R. S. (1941). Modern Banking. London: Oxford University.

33
Website accessed
http://en.wikipedia.org/wiki/Bank http://nrb.org.np/
http://www.myaccountingcourse.com/financial-ratios
http://www.siddharthabank.com.np
Journal

“Banking and Financial Statistics” SIDDHARTHA BANK 2076

Report

Annual report of SIDDHARTHA Bank Ltd., 2071 to 2076

34
 APPENDICES

Appendix 1

Calculation of Mean, Standard Deviation and Coefficient of Variation of table 1

F/Y NPAT Total Income Ratio in % Index % X2 (X- X ¿2
(x)
2071/72 776.97 2055.15 37.8 100 1428.84 7.84
2072/73 1270.04 2842.57 44.67 118.17 1995.4 16.56
2073/74 1488.04 3703.86 40.17 106.26 1613.62 0.184
2074/75 1904.06 4428.84 42.99 113.73 1848.14 5.71
2075/76 2275.68 6086.15 37.39 98.91 1398.01 10.3
∑x=203.02 ∑ (X- X ¿
2
=
40.59

∑X 203.02
Mean ( X ) =
N
= 5
= 40.6

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ
5
2.85
√
= 40.59 = 2.85

Coefficient of Variance (C.V) = x̅ = 40.6 ×100= 7.017%

Appendix 2
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 2

F/Y Exchange Total Income Ratio in % Index X2 (X- X ¿2

Gain (X) %
2071/72 142.34 2055.15 6.92 100 47.88 3.8

2072/73 167.08 2842.57 5.87 84.82 34.45 0.81

2073/74 164.75 3703.86 4.45 64.3 19.8 0.27

2074/75 190.87 4428.84 4.3 62.13 18.49 0.448

2075/76 201.67 6086.15 3.31 47.83 10.95 2.755

35
 ∑X = 24.85 ∑ (X- X ¿2
=8.08
∑X 24.85
Mean ( X ) =
N
= 5
= 4.97

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 1.27
√
= 8.08 = 1.27
5

Coefficient of Variance (C.V) = = ×100 = 25.58%

x̅ 4.97

Appendix 3

Calculation of Mean, Standard Deviation and Coefficient of Variation of table 3

F/Y NPAT Total Assets Return in %(x) Index X2 (X- X ¿2

2071/72 776.97 50719.74 1.53 100 2.34 0.0081

2072/73 1270.47 74826.32 1.7 111.11 2.89 0.0064

2073/74 1488.04 89900.15 1.655 108.17 2.739 0.0012

2074/75 1904.06 119869.21 1.588 103.79 2.52 0.001

2075/76 2275.68 140031.12 1.625 106.20 2.64 0.00005

∑X = 8.098 ∑ (X- X ¿2
= 0.0167
∑X 8.098
Mean ( X ) =
N
= 5
= 1.62

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 0.057
√
= 0.0167 = 0.057
5

Coefficient of Variance (C.V) = = ×100 = 3.56%

x̅ 1.62

36
 Appendix 4
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 4

F/Y NPAT Equity Ratio in % Index X2 (X- X ¿2

(X)
2071/72 776.97 3447.41 22.5 100 506.25 1.299

2072/73 1270.47 4496.14 28.25 125.55 798.06 21.24

2073/74 1488.04 7584.53 19.61 87.15 384.55 16.25

2074/75 1904.06 8464.38 22.25 98.89 495.06 1.3

2075/76 2275.68 8887.6 25.60 100.39 628.003 3.837

∑X=118.21 ∑ (X- X ¿2
=43.926

∑X 118.21
Mean ( X ) =
N
= 5
= 23.641

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 2.96
5√
= 43.926 = 2.96

Coefficient of Variance (C.V) = = ×100 = 12.54%

x̅ 23.641

Appendix 5
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 5
F/Y Operating Total Ratio in %(X) Index% X2 (X- X ¿2
Expense operating
income
2071/72 647.98 2055.15 31.52 100 993.51 8.89

2072/73 896.8 2842.57 31.54 100.06 994.77 8.76

2073/74 1253.1 3703.86 33.83 107.32 1144.46 0.4489

2074/75 1549.76 4428.84 34.99 111.008 1224.3 0.24

37
 2075/76 2472.97 6086.15 40.63 128.9 1650.79 37.57

∑X=172.51 ∑ (X- X ¿
2

=55.91

∑X 172.51
Mean ( X ) =
N
= 5
= 34.5

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 3.34
√
= 55.91 = 3.34
5

Coefficient of Variance (C.V) = = ×100 = 9.69%

x̅ 34.5

Appendix 6
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 6

F/Y Staff Expense Total Income Ratio in%(X) Index% X2 (X- X ¿2

2071/72 328.131 2055.15 15.96 100 254.72 12.19

2072/73 372.85 2842.57 13.11 82.14 171.87 40.19

2073/74 590.32 3703.86 15.93 99.81 253.76 12.39

2074/75 1085.84 4428.84 24.51 153.57 600.74 25.6

2075/76 1689.2 6086.15 27.75 173.87 770.06 68.89

∑X=97.26 ∑ (X- X ¿2
=159.26

∑X 97.26
Mean ( X ) =
N
= 5
= 19.45

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 5.64
√
= 159.26 = 5.64
5

Coefficient of Variance (C.V) = = ×100 = 29.01%

x̅ 19.45

38
 Appendix 7
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 7

F/Y NPAT No. of Ratio in%(X) Index (%) X2 (X- X ¿2

In million Common
Shares
2071/72 767.08 20.31 37.68 100 1419.78 84.82

2072/73 1270.47 44.96 28.25 74.9 798.06 0.048

2073/74 1488.04 52.50 28.34 53.98 803.15 0.0169

2074/75 1904.06 84.64 22.49 59.68 505.8 35.76

2075/76 2275.68 88.87 25.6 67.9 655.36 8.23

∑X=142.36 ∑ (X- X ¿2
=128.87

∑X 142.36
Mean ( X ) =
N
= 5
= 28.47

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ 5.07
√
= 128.87 = 5.07
5

Coefficient of Variance (C.V) = = ×100 = 17.83%

x̅ 28.47

Appendix 8
Calculation of Mean, Standard Deviation and Coefficient of Variation of table 8
F/Y Dividend NPAT Ratio in%(X) Index (%) X2 (X- X ¿2

2071/72 21.05 767.08 2.74 100 7.5 1.06

2072/73 39 1270.47 3.07 112.04 9.42 1.85

2073/74 14 1488.04 0.94 34.3 0.88 0.59

2074/75 13.16 1904.06 0.69 25.18 0.476 1.04

2075/76 25.26 2275.68 1.11 40.5 1.232 0.36

39
 ∑X=8.55 ∑ (X- X ¿2
=4.9

∑X 8.55
Mean ( X ) =
N
= 5
= 1.71

Standard Deviation (σ) =

√
∑ (X −X )2
n
σ
√
= 4.9 = 0.99
0.99
5

Coefficient of Variance (C.V) = = ×100 = 57.89%

x̅ 1.71

40