Comparative Analysis on Financial Performance of Everest Bank LTD (EBL) and Nepal Arab Bank LTD (NABIL)

Abstract

This study has investigated a financial performance analysis of Nepalese commercial banks with references to Everest Bank Ltd and Nepal Arab Bank Ltd. The main objective was to explore and examine the financial performance. Qualitative analysis was undertaken by looking at various set of ratios that are routinely used to measure bank performance. Data collected and used secondary data from the annual report statements of the sample banks and NRB. Analysis was based on data extracted from annual reports and accounts of the companies for the relevant period. Conclusion were drawn from the computation of the relevant ratios that allowed the author to make effective comparison of the sampled banks.The main ratios that were employed put a particular focus on the banks liquidity, leverage,activity, profitability and market value ratios as reliable indicators of a bank performance.Subsequently, each bank performance was analyzed by using various statistical tools such as trend analysis, correlation and regression. The study covered two banks in Nepal over a period of past five years from 2012/13 to 2016/17. This study is descriptive and analytical research approach. The findings of this paper are based on a study conducted on the selected banks. Hence, the results show that EBL has good financial position as liquidity, leverage,and activity ratios are higher than NABIL. Secondly, NABIL has higher profitability ratios than EBL. Therefore, the results are valid for banking sector. Key Words:Liquidity, Leverage,Activity, Profitability, Market Value ratios, Trend Analysis, Correlation and Regression.