A Comparative Financial Analysis of Nepalese Commercial Banks (with References to Sanima Bank Limited, Agricultural Development Bank Limited and Nabil Bank Limited)

Abstract

The objective of this study was to compare the financial performance of commercial banks in Nepal based on their financial characteristics and identify the determinants of performance exposed by the financial ratios, which were based on CAMEL Model. Three commercial banks for the period 2010/11 to 2019/20 were financially analyzed. The study is based on secondary data. Required facts and figures have been obtained from the annual reports. CAMEL model for evaluating the performance, the study is primarily based on secondary data derived from the each bank's annual reports, such as Agricultural Development Bank Limited, Sanima Bank Limited and Nabil Bank Limited corporate databases, websites, journals, and so on. The finding of the study is, ADBL, Sanima Bank, and Nabil Bank are able to manage their performance effectively and efficiently. ADBL appears to be able to outperform nabil bank and sanima bank in terms of capital adequacy ratio (CAR), return on assets (ROA), and credit deposit ratio (CDR). Similarly, in terms of non-performing loan (NPL) ratio, Sanima Bank appears to be able to perform better than ADBL and Nabil Bank. Similarly, nabil bank appears to be able to manage their good performance better than ADBL and sanima bank in terms of interest expenses to total loan (IETTL) ratio and return on equity (ROE). The implications of this research are investor who invests in bank and other project, this report will help investor to analysis comparative performance of bank. Other researcher can focus on any other related bank in their wish in which there is no study conducted. The model that can be used to calculate can be different. Other relevant data can be used to perform these kinds of research study. Primary data can be collected among customer investor and employer of the bank.