A Case Study of Nabil Bank

CHAPTER- I INTRODUCTION 1. 1 Concept of depository pecuniary institutioning The term stick is derived from the latin article bancus, Italian word banca, French word banque which essence bench utilise by medieval funds exchanges and German word margin which means colligation stock company. According to oxford dictionary assert means an establishment for corroborateing money and valuable safety of the money being salaried out on the customer order by means of cheque.Historic each(prenominal)y, banks have been recognized for the great range of monetary function they offer from checking accounts of saving plans to loan for businesses consumers and governments. Hence, bank can be place by the function they per give in the economy. Bank is a monetary institution which deals with money. Banks collect the money from the surplus unit (savers) and lend to dearth units (users). Bank raises the funds by accepting deposits, borrowing funds and unexclusiveize justice.These fund s ar used by the banks to buy securities and to make loans. Since, it accepts deposits and grants loan, it is regarded as the trader of money. Banks can be divided int three types on the merelytocks of their functions and serve ie. Central bank, commercial bank and Development bank. Commercial bank offer serve to individuals, hey are primarily concerned with receiving deposits and lending to businesses. Commercial bank is also known as the financial service unavoidably in the economy. 1. Introduction of Nabil apparelment Banking Nabil Bank Limited, the first foreign joint venture bank of Nepal, started operations in July 1984. It has paid up cracking of NRs200 one billion million million. Nabil was incorporated with the objective of extending international standard modern banking serve to heterogeneous sectors of the society. Pursuing its objective, Nabil provides a full range of commercial banking go with its 47 points of representation across the kingdom and over 17 0 reputed similar banks across the globe.Nabil Bank Limited with its mission to be the 1st pick Provider of Complete Financial Solutions ventured into great(p) grocery store link activities and incepted its full owned ancillary Nabil giftment Banking Ltd. (Nabil entrust) which renders investing banking related function to the masses. Thus, Nabil embellish targets to establish itself as one of the leading merchandiser Bankers in its oblivious span of operation and as an Investment Banker with plastered professional expertness in long run introducing innovative products and services in the Nepali peachy market with strict adherence to prevalent rules and regulations. . 2. 1 go of Nabil Investment Banking Nabil Invest renders its institutional and retail clients huge range of services some of which are delivered currently while others leave behind be delivered in due course with required exploration & innovation and due favorable reception received from the Regula tors as and when required, detailed as under 1.Management of Public Offers/ encourage Public Offers Nabil Invest renders both its institutional and retail client services of managing public offer of shares/ debentures/right issuance of securities to existing shareholders/further public offer of securities etc to its byplay and has team of professional expertise to render step services at competitive rates. . Underwriting Nabil invest on selective solelyt post independent appraisal of proposals reviewed through its professional team is reading underwriting related services to its clientele as SEBON has made it mandatory for every institutions going public to underwrite at least fifty share of the securities on offer prior public issue. 3. Portfolio ManagementThe Clients can delegate all their investment management related decisions to a pool of corporate pay experts of Nabil Invest who inturn will use the vast pool of industry special data collected and analyzed by its resea rch unit for reservation investments for clients portfolio which focuses primarily on safety of principal investment along with maximation of returns to Clients. 4. Registrar to Securities (RTS)Nabil Invest renders Registrar to Securities (RTS) related services to the valued shareholders of its institutional client and in the process keep on improving eccentric & seasonable delivery of services, the major hitch in this nature of services by competing institutions. 5. Loan Syndication Nabil Invest will use its existing affinity with other Banks/Financial Institutions to acquire required financial support for the financial closure of certain projects which it identifies as feasible and recommends for investment.The financial closure will be reached with either one institution or a class of Banks/Financial Institutions depending on the size of projects and the requirement to diversify the risks to various portfolios from the slice of member Banks/Financial Institutions. 6. Other Services Besides the services identified, Nabil Invest will always keep on exploring innovative products and services that matches regional and global standards and target to launch the same in customization with the local market with due approval taken from the Regulators, if & when required.Thus, Nabil Invest intends to cater wide clientele transformation Investment Banking related services setting example and obtaining first mover advantage in the capital market of the country. 1. 3 Objectives of the field bat The objectives of the fieldwork are as follows- ?To identify capital organize of Nabil Invest ?To analyze financial position and performance of Nabil Invest ? To evaluate portfolio of Nabil Invest 1. 4 Methods of data collection Data collection is the process of collection of data and knowledge through different sources or methods. To prepare this fieldwork report, the following method has been used- Secondary Method-The data , which is not orginally collected but obtai ned from make and unpublished sources, are called secondary data. These data are not captain in character. The sources helping as secondary data for this field work reports are the annual reports of Nabil Bank, websites of nabil bank and nabil investment, books etc. CHAPTER-II DATA ANALYSIS AND presentment 2. 1 with child(p) Structure of Nabil Invest Table 2. 1 bang-up Structure ProposedEffective NRs(000)%NRs(000)% Nabil Bank78000527800074. 29 CG Finco P. Ltd27000182700025. 71 world-wide Public4500030-- Total150000100105000100 bug- Annual wrap up of Nabil Bank From the to a higher place parry, it is shown the proposed and effective capital structure of Nabil invest. Nabil Invest proposed 52% capital of Nabil Bank, 18% capital of CG Finco P. Ltd and 30% capital of General Public. However, Nabil Invests effective capital structure is 74. 29% by Nabil Bank and 25. 71% by CG Finco P. Ltd. It can be shown graphically as follows- physical body 2. 1- A Pie chart of Proposed Capit al Structure of Nabil Invest physique 2. 2- A Pie chart of Effective Capital Structure of Nabil Invest 2. 2 Financial position and performance of Nabil Invest 2. 2. 1 balance wheel sheet of Nabil InvestTable 2. 2 NRs(000) Capital & Liabilities2010/112009/10 Share Capital10500070000 Reserves and Surplus7457-529 Accounts Payable72182628 Provision for Staff Bonus1065- Deferred revenue Liability60- Other Liabilities and Provisions69417 Total12149472117 Assets2010/112009/10 Balance with banks2633770000 Investments83400- Advance revenue (net of income tax liabilities)4453- Fixed assets (net of depreciation)61691941 Deferred tax assets-176 Other assets1135- Total12149472117 In the above, the balance sheet size grew by around 68% mainly due to rise in paid up capital.Paid-up capital which got increased by NRs. 35million was contributed by CG Finco P. Ltd. NRs. 27 million and Nabil Bank NRs. 8 million. In addition, net realize earned during the course of instruction also contributed to increment. Net worth of the Company surpassed paid-up capital aft(prenominal) it registered profit. It can be graphically presented as below- design- A Bar Diagram of Assets And Share Capital of Nabil Invest 2. 2. 2 Income parameter of Nabil Invest Table 2. 3NRs (000) Particulars2010/112009/10 IPO Fees305- delight Income12979- Management Services6196- Gross Income19480- Personnel Expenses1574222General Operating Expenses4927482 depreciation charge1267- Gross expenses7768705 Operating returns11712-705 Staff Bonus1065- Profit before value10647-705 Tax Expense2662-176 Profit after Tax7985-529 Opening Retained Earning-529- Closing Retained Earning7457-529 Source- Annual Report of Nabil Bank A significant volume of the profit was contributed by delight income which not only incorporates return on equity placement but also the proceeds realized in the form of sharing of reside income with BFIs / Other Institutions whose public offers are being managed by NI in the capacity of Is sue Manager.In addition, the Company also managed to earn returns by rendering specialized management services to the Bank. It is graphically Presented as - Fig- A bar diagram of profit of Nabil Invest 2. 3 Portfolios of Nabil Invest Table2. 4 (in million) Particulars2010/112009/10 1. Nepal presidency Treasury Bills64895896 2. Nepal organisation Saving Bonds-- 3. Nepal Government other securities22552077 4. Nepal Rastra Bank Bonds-- 5. Foreign Bonds178187 6. Local Licensed Institutions305- 7. Foreign Banks36615391 8. nonionized Institutions Shares192159 9.Organized Institutions Bonds andDebentures-- 10. Other Investments 10. 1 NCM Mutual fund1. 21. 2 10. 2 Swift Investment1. 61. 5 Total Investment13082. 813712. 7 Source- Annual Report of Nabil Bank The above table shows the portfolios of Nabil Invest in different securities and bonds. Here the two years monetary years investment portfolios are provided. In the given table the highest summate of investment was done in Government Treasury Bills. It can be identify that Nabil Invest is targeted towards the Government T- bills and securities. It can be due to no default risk and it is a risk free asset.I has also a high rate of investment in foreign banks. The terminal heart and soul of investment of Nabil Invest is in mutual fund and Swift Investment. The above table is presented in a graph as below- Fig- A bar diagram of Portfolios of Nabil Invest 2. 4 Study leave alone After thoroughly analyzing, it is analyzed that Nabil bank has been operating as the subsidiary bank for Investments ie. Nabil Investment Banking. Nabil Investment Banking (Nabil Invest) is providing innovative, quality and timely services to the investors at large. From the analysis of data, it the capital structure of Nabil Invest has been identified.The proposed capital structure of Nabil Invest is 52% by Nabil bank, 18% by CG Finco P. Ltd and 30% by the General Public. But it is in effect that 74. 29% of capital is owned by Nabil bank and 25. 71% capital is owned by CG Finco P. Ltd. From this it can In F/Y 2009/10, the profit after tax is negative NRs 529,000 whereas in F/Y 2010/11, the profit after tax is NRs 7,985,000. This shows the increasing turn out of profit of Nabil Invest. The high volume of the profit was contributed by the interest income. The portfolios of investment shows the different areas of investment by Nabil Invest.The highest amount of investment of Nabil Invest was Government Treasury bills for financial year 2009/10 and 2010/11 ie. NRs 5896 million NRs 6489 million respectively. It has also invested in Government Bonds, Securities and other Investments. CHAPTER-III SUMMARY AND CONCLUSION 3. 1 Summary NABIL Bank stands as the Bank of 1st Choice in the industry considering its network, a number of branches, a large capital base, different customized services and products, a chain of ATMs service points covering a wide regional / local spectrum. NABIL stands ahead in everything it does.The strategic purpose of Nabil is to cook values and economic opportunities across all the economic zones of the country and architecting products and services to that end. Nabil Investment Banking (Nabil Invest), a subsidiary of Nabil bank Ltd is rendering the investment banking related services to the masses. Thus, Nabil Invest targets to establish itself as one of the leading Merchant Bankers in its short span of operation and as an Investment Banker with strong professional expertise in long run introducing innovative products and services in the Nepalese capital market with strict adherence to prevailing rules and regulations.From the analysis, Nabil Invest has 74. 29% capital of Nabil Bank and 25. 71% capital of CG Finco P. Ltd. However, the proposed capital structure of NI is 52% of Nabil Bank, 18% of CG Finco P. Ltd and 30% of General Public. The income disputation of Nabil Invest shows increasing trend of profit in each fiscal year ie. NRs 7985000 in F/Y 2010/11 and negative NRs 529000 in F/Y 2009/10. In fiscal year 2010/11 the profit was contributed by the interest income which not only incorporates return on equity placement but also the proceeds realized in the form of sharing of interest income.The balance sheet of Nabil Invest shows the increase in amount of share capital of Nabil Invest as well as increased in fixed assets and other assets. From Investments Portfolios of Nabil Invest, it is recognized that highest amount of investment has been made for the Government Treasury Bills in each fiscal year. The lowest amount of investment has been made for other investments like NCM Mutual storehouse and Swift Investment. 3. 2 Conclusion From the above study, it is clear that for the purpose -To be the first Choice Provider of Complete Financial Solutions Nabil bank has created a subsidiary ie.Nabil Investment Banking Ltd. (Nabil Invest). Nabil Investment over the period will be managing public issues, underwriting of securities, management of clients portfolio & rendering the services of the registrar to securities to client institutions. In addition, the unit will also be delivering Bond/Debenture trust territory services, work as Assets Management Company of the mutual fund promoted by Nabil, provide investment advisory services etc.Further, the Unit will keep on exploring and introducing innovative instruments in the Nepalese capital market. It is providing innovative, quality and timely services to the investors at large. Thus, the ultimate goal of Nabil Invest would be to change the unit as just not a Merchant Banker but as an Investment Banker providing innovative, quality and timely services to the investors at large. This would tag itself from its competitors and create a niche of itself in the market.