Investment Policy Analysis of Neplese Commercial Banks (A Comparative Study of NABIL Bank NIBL)

Abstract

Banking sector plays an important role in the economic development of the country commercial banks one of the vital aspects of this sector which deals in the process of channel sings available resources in the needed sector. A good investment policy attracts both borrowers and lenders which enhances the volumes and quality of the deposit, loan and investment. The purpose of the investment policy is to guide the foundation in effectively supervising, monitoring and managing its investments. This study is basically related to various aspect of investment policy of commercial banks in Nepal (NABIL and NIBL). Investment decision is one of the major decision functions of financial management. The main objective of the study is to evaluate and assess the investment policy and strategies followed by the bank. This study analyze trends and relationship of investment, deposits, loan and advances, and net profits of the selected commercial banks. The research is conducted under ‘descriptive research design’ to fulfill the objectives of the study area. This research is based on secondary data, which include annual reports published by the concerned bank and other publications related to the concerned topic for five fiscal year 2015/15 to 2018/19. Some financial and statistical tools have been applied to examine facts and descriptive techniques have been adopted to evaluate investment performance of Nabil and compare it with NIBL. The major ratio analysis consists of the composition of liquidity ratio, assets management ratio, risk ratio, profitability position other related ratios. Under these, main ratios and their trend position are studied in the chapter four. In order to test the relationship between the various components of investment policy, Karl Pearson’s correlation coefficient r is calculated and analyzed. Under this study two commercial banks are taken into consideration sample banks especially in Nabil Bank ltd. And Nepal Investment Bank Ltd. To make this thesis more understandable to the readers available data and information are presented in different suitable table, diagrams with appropriate analysis and interpretations. This thesis work has been divided into five chapters. This research helps to gain and share some practical knowledge of banding and management of the commercial banks in the perspective of improving financial performance. The study helps financial intuitions and as well as me.