Comparative Study of Commercial Banks of Nepal
CHAPTER I INTRODUCTION
1.1 INTRODUCTION TO THE TOPIC
Banking industry has stood as the most vulnerable yet the most profitable sector in Nepalese economy. The banking sector is prospering with much lesser difficulty in spite of increasing economic downturn and political instability in the nation. The clear picture is reflected in Nepal stock exchange; where 90% of stock traded is that of financial sector of which majority shares are held by commercial banks. With more number of commercial banks catering to the same market, it has given rise to the intense competition. So far, there are 31 commercial banks, 87 development banks, 79 finance companies, 21 micro-finance development banks, 16 saving and credit cooperatives and 38 NGO (financial intermediaries) all these financial institutions are doing very well even in the slowdown of the economy. With increasing number of finance companies, development banks and cooperatives; commercial banks had no option but to increase their banking services, thereby maintaining competitive edge over others. In terms of market competitiveness, market leaders in Nepalese banking sector are Standard Chartered Nepal Bank Limited, Himalayan Bank Limited, NABIL Bank Limited, Nepal Investment Bank Limited and Everest Bank Limited. So for my comparative study I too have considered these five banks. Since there is intense competition in the Nepalese banking industry I have tried to do comparative study in terms of deposit, lending, capital fund, profit after tax and market share value between these five banks.
1
1.2 OBJECTIVES OF THE STUDY
To compare the capital structure of these five banks. To do the comparison regarding the lending and deposit position of these banks. To identify the profit after tax of these five banks. To compare the non-performing loans of these banks.
To identify and compare the current market share of these banks.
1.3 METHODOLOGY
The methodology used in these report preparation is Exploratory
1.1 INTRODUCTION TO THE TOPIC
Banking industry has stood as the most vulnerable yet the most profitable sector in Nepalese economy. The banking sector is prospering with much lesser difficulty in spite of increasing economic downturn and political instability in the nation. The clear picture is reflected in Nepal stock exchange; where 90% of stock traded is that of financial sector of which majority shares are held by commercial banks. With more number of commercial banks catering to the same market, it has given rise to the intense competition. So far, there are 31 commercial banks, 87 development banks, 79 finance companies, 21 micro-finance development banks, 16 saving and credit cooperatives and 38 NGO (financial intermediaries) all these financial institutions are doing very well even in the slowdown of the economy. With increasing number of finance companies, development banks and cooperatives; commercial banks had no option but to increase their banking services, thereby maintaining competitive edge over others. In terms of market competitiveness, market leaders in Nepalese banking sector are Standard Chartered Nepal Bank Limited, Himalayan Bank Limited, NABIL Bank Limited, Nepal Investment Bank Limited and Everest Bank Limited. So for my comparative study I too have considered these five banks. Since there is intense competition in the Nepalese banking industry I have tried to do comparative study in terms of deposit, lending, capital fund, profit after tax and market share value between these five banks.
1
1.2 OBJECTIVES OF THE STUDY
To compare the capital structure of these five banks. To do the comparison regarding the lending and deposit position of these banks. To identify the profit after tax of these five banks. To compare the non-performing loans of these banks.
To identify and compare the current market share of these banks.
1.3 METHODOLOGY
The methodology used in these report preparation is Exploratory