Comparative Study on Profitability of Nabil Bank and Nepal SBI Bank Limited

Abstract

Profitability is one of the important indicators for the efficient operation of an enterprise. Its shows how efficiently the management can make profit by using all the resources available in the market. The main objective of the study is to identify the profitability position of NABIL bank and Nepal SBI bank ltd. for this purpose top two joint venture banks has taken as sample by using convenient sampling. Data from financial statements of two banks for seven years period from F/Y 2070-71 to 207677

has used in the study and data collected from secondary sources. The variables used to measure the profitability are the ROA and ROE as dependant variables. The independent varaibles includes operating expenses, liquidity, bank size, capital etc. have used. Descriptive as well as analytical research design has applied to analyzed the data. The study find that average operating profit margin, net profit margin, ROA, ROE ratios of NABIL bank is higher than Nepal SBI bank ltd. The study conclude that NABIL bank profitability performance is better than Nepal SBI bank on the basis of average return. However,Nepal SBI bank is good performer due to lowest CV, more consistent and low variation. The independent varioables are negatively and positively related with bank profitability (ROA,ROE).ROA is positively related with liquidity and capital.ROA is negatively related with operating expenses and bank. ROE is negatively related with operating expenses, bank size and capital. There is positive effect liquidity on ROE. The study recommend that Nepal SBI bank should control the cost and expenses associated with bank operation to increase the profit. NABIL Bank has recommended to increase its cash and bank balance to fulfill demand of its depositors and NABIL bank should hold more cash and bank balance to create new investment opportunities.