CHAPTER II
RESULT AND ANALYSIS
2.1 Result and Analysis
This chapter is basically concerned with the presentation and analysis of data. The data collected
for the study has been depicted in tabular from and analyzed with the help of pictorial and
diagrammatic presentation and trend analysis. Here the main data relevant to GIBL are
presented, discussed and analyzed using different statistical tools. Whole preparing this report,
data are taken from annual report of GIBL. Analysis and interpretation using various accounting
ratios give skilled and experienced analyst better understanding of liquid. This is given in the
forms of tables, charts, figure, trend line and necessary description.
2.1.1 Liquidity ratio
A liquidity ratio is an indicator of whether a company's current assets will be sufficient to meet
the company's obligations when they become due. The liquidity ratio includes the current ratio
and the acid test ratio or quick ratio. The current ratio and quick ratio are also referred to as
solvency ratios.
a) Current Ratio
The current ratio is a liquidity ratio that measures a company's ability to pay short-term and long-
term obligations. To gauge this ability, the current ratio considers the current total assets of a
company (both liquid and liquidity) relative to that company's current total liabilities. The
current ratio is called "current" because unlike some other liquidity ratios it corporate all current
assets and current liabilities. Following bar diagram can help us to understand it briefly.
Current assets
Current ratio =
Current liability
Table 1
Current ratio (Amount in Rs.)
year current assets current liabilities current ratio
2070/71 35593951713 35625163138 0.99
2071/72 42577585706 44818482586 0.95
2072/73 62576398593 65884378154 0.94
2073/74 76251638685 76871457297 0.99
2074/75 87947592841 89200385062 0.98
Source: Annual report of GIBL
Above table shows current assets, current liabilities and their ratio fiscal year 2070/71 to
2074/75. In the fiscal year 2070/71, current assets are Rs. 35593951713 current liability is Rs.
35625163138 and current ratio is 0.99 of GIBL. After the fiscal year 2071/72, 2072/73,
2073/2074 and 2074/75 the current ratio of GIBL bank is 0.95, 0.94, 0.99 and 0.98. The bank
shows that, current liability is greater than current assets. Following bar diagram and trend line
can help us to understand it briefly.
1
0.99 0.99
0.99
0.98
0.98
0.97
0.96
0.95
0.95
0.94
0.94
0.93
0.92
0.91
2070/71 2070/72 2072/73 2073/74 2074/75
Current Ratio
Figure 1: Current assets and current liabilities
From the above diagram, in the fiscal year 2070/71, current assets are Rs. 35593951713 current
liability is Rs. 35625163138 and current ratio is 0.99 of GIBL. After the fiscal year 2071/72,
2072/73, 2073/74 and 2074/75 the current ratio of GIBL bank is 0.95, 0.94, 0.99 and 0.98. The
bank shows that, current liability is greater than current assets. It shows that, the bank of GIBL is
not maintained of his liquidity position (i.e. 2:1). As a conclusion, the researcher found that the
liquidity position of the GIBL bank is so bad.
b) Quick ratio
The quick ratio is a measure of how well a company can meet its short term financial liability.
Quick ratio is also known as acid test ratio. It can be calculated as follows
Current assets−prepaid −sto ck
Quick Ratio =
Current liability
Table 2
Quick ratio
(Amount in Rs.)
fiscal year Quick assets Current liabilities Quick ratio
2070/71 4861029511 29200385062 0.17
2071/72 8407046364 35625163138 0.24
2072/73 6237789256 44818482586 0.14
2073/74 7225507364 65884378154 0.11
2074/75 10265272065 76871457297 0.13
Source: Annual report of GIBL
Table 2 shows quick ratio of Global IME Bank Limited. In fiscal year 2070/71 quick assets is
4861029511 and current liability is Rs. 29200385062. After that fiscal year 2071/72, 2072/73,
2073/74 and 2074/75 the quick assets is Rs. 8407046364, 6237789256, 7225507364 and
10265272065 and current liability is Rs. 35625163138, 44818482586, 65884378154 and
76871457297. These data can be presented in following bar diagram.
0.3
0.25 0.24
0.2
0.17
0.15 0.14
0.13
0.11
0.1
0.05
0
2070/71 2070/72 2072/73 2073/74 2074/75
Quick Ratio
Figure 2: Quick assets and current liabilities
In above diagram, in fiscal year 2070/71 quick assets is 4861029511 and current liability is Rs.
29200385062. After that the fiscal year 2071/72, 2072/73, 2073/74 and 2074/75 the quick assets
is Rs. 8407046364, 6237789256, 7225507364 and 10265272065 and current liability is Rs.
35625163138, 44818482586, 65884378154 and 7687457297. As a conclusion, the researcher
found that, the liquidity position of bank is not good.
2.1.2 Saving deposit to total deposit ratio
A saving account is a deposit account held at a retail bank than pay interest but can not be used
directly as money in the narrow sense of a medium of exchange (for example by writing a
cheque). These accounts let customer set aside a portion of their liquid assets while earning a
monetary return. It can be calculate as follows:
Total saving deposit
Saving deposit Ratio =
Total deposit
Table 3
Saving deposit (Amount in Rs.)
Fiscal Year Saving Deposit Total Deposit Saving Deposit Ratio
2070/71 7385578203 28392822287 0.26
2071/72 9523215715 35414007591 0.27
2072/73 12418043803 44740731784 0.28
2073/74 19831625077 64934358551 0.30
2074/75 18020151712 76339485090 0.23
Source: Annual report of GIBL
From table no. 3, saving deposit is Rs. 73855788203 and total deposit is Rs. 28392822287. As
on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving deposit amount is Rs.
9523215715, 12418043803, 19831625077 and 18020151712. And total deposit is Rs.
35414007591, 4474731784, 64934358551 and 76339485090.
0.35
0.3
0.3 0.28
0.27
0.26
0.25 0.23
0.2
0.15
0.1
0.05
0
2070/71 2070/72 2072/73 2073/74 2074/75
Saving Deposit Ratio
Figure 3: Saving deposit
In above diagram, fiscal year 2070/71, saving deposit is Rs. 73855788203 and total deposit is Rs.
28392822287. As on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving deposit
amount is Rs. 9523215715, 12418043803, 19831625077 and18020151712. And total deposit is
Rs. 35414007591, 44740731784, 64934358551 and 76339485090. In conclusion the researcher
found that, the saving deposit of GIBL bank is good.
2.1.3 Fixed deposit to total deposit
A fixed deposit is a type of financial instrument offered by banks and it allow individual to
deposit sum of money for deposit period of time, like one month, six month, one year, five year,
ten year etc. In general fixed deposit account offer higher interest rates than saving account. It
can be calculate as follows.
¿
Fixed deposit Ratio = Total ¿ deposit Total deposit
Table 4
Fixed deposit ratio (Amount in Rs.)
FY Fixed Deposit Total Deposit Deposit Ratio
2070/71 10708836223 28392822287 0.38
2071/72 11876223355 35414007591 0.34
2072/73 14034643827 44740731784 0.31
2073/74 19633982453 64934358551 0.30
2074/75 33333642035 76339485090 0.43
Source: Annual report of GIBL
Table no. 4 shows fixed deposit ratio of GIBL from fiscal year 2070/71 to 2074/75. In fiscal year
2070/71, the fixed deposit ratio is 0.38. And in fiscal year 2071/72, 2072/73 and 2073/74 , the
fixed deposit ratio is decreasing order 0.34, 031 and 0.30. The last fiscal year 2074/75, fixed
deposit ratio increased i.e.0.43.
0.5
0.45 0.43
0.4 0.38
0.35 0.34
0.31 0.3
0.3
0.25
0.2
0.15
0.1
0.05
0
2070/71 2070/72 2072/73 2073/74 2074/75
Fixed Deposit Ratio
Figure 4 : Fixed deposit ratio
In above diagram, In fiscal year 2070/71, the fixed deposit ratio is 0.38. And in fiscal year
2071/72, 2072/73 and 2073/74, the fixed deposit ratio is decreasing order 0.34, 0.31 and 0.30.
The last fiscal year 2074/75, fixed deposit ratio increased i.e.0.43. In conclude the researcher
found that, fixed deposit ratio of GIBL bank is not so good.
2.14 Current deposits to total deposit
A ratio that is used in determining the amount of loans that a bank has out versus the amount of
current deposits on hand at that same time. This is ratio is determined by dividing the bank's loan
amounts by its total amount of deposits.
Current deposit
Current deposit Ratio =
Total deposit
Table 5
Current deposit (Amount in Rs.)
Fiscal Year Current Deposit Total Deposit Current Deposit Ratio
2070/71 6385578203 28392822287 0.22
2071/72 9923215715 35414007591 0.28
2072/73 14418043803 44740731784 0.32
2073/74 17831625077 64934358551 0.27
2074/75 19020151712 76339485090 0.24
Source: Annual report of GIBL
From table no. 5, current deposit is Rs. 63855788203 and total deposit is Rs. 283928822287. As
on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the current deposit amount is Rs.
9923215715, 14418043803, 17831625077 and 19020151712. And total deposit is Rs.
35414007591, 44740731782, 64934358551 and 76339485090.
0.35
0.32
0.3 0.28
0.27
0.25 0.24
0.22
0.2
0.15
0.1
0.05
0
2070/71 2070/72 2072/73 2073/74 2074/75
Current Deposit Ratio
Figure 5 : Current deposit ratio
In above diagram, fiscal year 2070/71, current deposit is Rs. 73855788203 and total deposit is
Rs.28392822287. As on as fiscal year 2071/72, 2072/73, 2073/74 and 2074/75, the saving
deposit amount is Rs.9523215715, 12418043803, 19831625077 and 18020151712. And total
deposit is Rs.35414007591, 44740731784, 6493438551 and 76339485090. In conclusion the
researcher found that, the saving deposit of GIBL bank is good.
2.2 Major Finding
By studying the liquidity position of GIBL, following finding have been made:
a) The GIBL bank shows that the trend line is fluctuating mode. As a conclusion, the
researcher found that the current ratio of GIBL bank is not good.
b) In above trend line analysis, in fiscal year 2070/71, the quick ratio of the bank is 0.17.
Than the fiscal year 2071\72, 2072/73, 2073/74 and 2074/75 the quick ratio of bank is
0.24, 0.14, 0.11 and 0.13. For the above analysis the researcher conclude that the liquidity
ratio of the bank is not so good.
c) In above trend line analysis, In fiscal year 2070/71 to in fiscal year 2073/74 saving
deposit ratio is increasing mode i.e. 0.26, 0.27, 0.28 and 0.30. And in fiscal year 2074/75,
saving deposit is 0.23 that is decreasing mode. For the above analysis the searcher
conclude that the saving deposit is good.
d) In above trend line analysis, In fiscal year 2070/71 to in fiscal year 2073/74 saving
deposit ratio is increasing mode i.e. 0.26, 0.27, 0.27 and 0.30. And in fiscal 2074/75,
saving deposit is 0.23 that is decreasing mode. For the above analysis the searcher
conclude that the saving deposit is good.
e) In above trend line analysis, the fixed deposit ratio is 0.38 in a fiscal year 2070/71 of the
bank. After that the fixed deposit ratio is decreasing order in fiscal year 2071/72, 2072/73
and 2073/74 the fixed deposit ratio is 0.34, 0.31 and 0.30. In fiscal year 2074/75, the
fixed deposit ratio is increased i.e. 0.43. From the above analysis the researcher
concluded that the fixed deposit ratio is not so good.
f) Current deposit to total deposit ratio of bank was 0.22, 0.28, 0.32,. 0.27 and 0.24 from
fiscal year 2070/71 to 2074/75 respectively. Bank has highest deposit ratio in 2072/73
(i.e. 0.32) and lowest ratio was 0.22 in 2070/71. For the above analysis the searcher
conclude that the current deposit is good.
CHAPTER III
SUMMARY AND CONCLUSION
3.1 Summary
Nepal is one of the least developed countries of the word. For most of the developing process, it
is financially depending upon the foreign countries. It is economically too weak. Thus, the
economic condition of the people is weak. In Nepal 85% of the people are depended upon
agricultural sector which is unable to provide full employment to the people. Nepal government
has to activate people in the nation's development thought overall industrialization of nation. For
this purpose, development of sound banking system is essential. In Nepalese banking sector,
development banks including share holder operating at present. In the absences of modern
banking any country cannot develop the economic actively. Therefore, it is essential to find out
whether or not the banks are serving an important contribution to develop sector of economy.
Liquidity is said to be general business of fund, which shows the bank ability to meet cash
requirement. In this record, this study has been based upon the objective to evaluate the liquidity
of Shiddhartha bank limited.
Global IME Bank Ltd. (GIBL) emerged after successful merger of Global Bank Ltd (an "A"
class commercial bank), IME Financial Institution (a "C" class finance company) and Lord
Buddha Finance Ltd. (a "C" class finance company) in year 2012. Two more development banks
(Social Development Bank and Gulmi Bikas Bank) merged with Global IME Bank Ltd in year
2013. Later, in the year 2014, Global IME Bank made another merger with commercial and
Trust Bank Nepal Ltd. (an "A" class commercial bank).
In addition to Siddhartha Bank, the growth and transformation of Global IME Bank Ltd. (GIBL)
offers a strong example of how financial institutions in Nepal are evolving to meet modern
banking standards. Global IME Bank Ltd. was established in 2012 through the successful merger
of three financial institutions: Global Bank Ltd. (an "A" class commercial bank), IME Financial
Institution, and Lord Buddha Finance Ltd. (both "C" class finance companies). This strategic
merger aimed to combine the strengths of these institutions and create a more robust and
competitive bank.
The expansion of Global IME Bank continued in 2013 with the merger of two more development
banks, Social Development Bank and Gulmi Bikas Bank. These mergers allowed the bank to
expand its reach and services to a broader population across different regions of the country. In
2014, the bank further strengthened its position by merging with Commerz and Trust Bank
Nepal Ltd., another "A" class commercial bank.
Through these successive mergers, Global IME Bank has emerged as one of the leading
commercial banks in Nepal. Its growth illustrates the potential of consolidation and strategic
partnerships in enhancing the banking sector’s capacity to support national development goals.
The evolution of such banks is a positive sign for Nepal’s financial future, as it reflects efforts to
modernize banking services and improve financial inclusion across the country.
In conclusion, for Nepal to achieve economic progress, the role of banks is paramount.
Institutions like Siddhartha Bank and Global IME Bank are vital in ensuring that financial
resources are efficiently managed and directed toward productive economic activities.
Strengthening liquidity and encouraging mergers that enhance banking capabilities will be
essential steps in driving Nepal's development forward.
3.2 Conclusions
All the ratios are not satisfactory but maximum ratios are good and satisfactory in bank. For
ratios are calculated under the study out of the Two are good but Two ratio is not good the bank's
liquidity position is good in overall. The bank can take cooperative actions to improve the saving
deposit to total deposit ratio saving deposits can be increased to maintain sufficient liquidity
position by analyzing the position. The saving deposit account is nearly constant trend. The
highest ratio is 0.30 times in final year 2072/73 and the lowest ratio is 0.23 times in final year
2072/74. But the ratio is not satisfactory due to the last year ratio was decline. Fixed deposit is
fluctuated the lowest ratio is 0.31 times and highest ratio is 0.43 times on 2071/72. It is
satisfactory.
The GIBL bank shows that the trend line is fluctuating mode. As a conclusion, the researcher
found that the current ratio of GIBL bank is not good. Therefore, bank should maintain the
current assets than the current liability. The quick ratio of the bank is 0.17. Than the fiscal year
2070/71, 2071/72, 2072/73 and 2073/74 the quick ratio of bank is 0.24, 0.14, 0.11 and 0.13. For
the above analysis the researcher conclude that the liquidity ratio of the bank is not so good. So
that, bank should manage the quick assets and current liability. Saving deposit ratio is increasing
mode i.e. 0.26, 0.27, 0.28 and 0.30. And in fiscal year 2073/74, saving deposit is 0.23 that is
decreasing mode. For the above analysis the researcher conclude that the saving deposit is good.
The fixed deposit ratio is 0.38 a fiscal year 2069/70 of the bank. After that the fixed deposit ratio
is decreasing order in fiscal year 2070/71, 2071/72 and 2072/73 the fixed deposit ratio is 0.34,
0.31 and 0.30. In fiscal year 2073/74, the fixed deposit ratio is increased i.e. 0.43. From the
above analysis the researcher concluded that the fixed deposit ratio is not so good. Thus, bank
should manage the efficiency of fixed deposit for increment.
References
Annual Report of Global IME Bank Limited, 2070/71 to 2074/75
American Institute of banking (1972). Principle of banking operation. New York:
American institute of Banking.
Aryal, I.R, & Dhungyal, T.P (1975). A new history of Nepal, Kathmandu: Sangam press.
Bajracharya, B.C. (1996). Business statistics and business Mathematics. Kathmandu
Bhattarai, I. Gautam, A and Goet, J (2006). Budgeting New Delhi Lending Procedure and
control. Kathmandu: Asmita Books Publisher and Distrbutors Putalisadak.
Global IME Bank Ltd. (n.d.). About Us. Retrieved from [Link]
Koirala, Dr. Y. R. Dahal Sushil, Gautam, Chintamani (2016). Budgeting and control of
profit, Kathmandu Asmita Book Publication and Distrbutors Pvt. Ltd. Reports
Ministry of Finance, Government of Nepal. (2023). Economic Survey 2022/23.
Kathmandu: Ministry of Finance.
M.K Publishers and Distrubutiors.
Nepal Rastra Bank. (n.d.). Banking and Financial Statistics. Retrieved from
[Link]
Siddhartha Bank Limited. (n.d.). Annual Reports. Retrieved from
[Link]
World Bank. (2022). Nepal Overview.
[Link]
[Link]
[Link]
APPENDICES
1. Liquidity
The ability of a bank to meet its short-term financial obligations by converting assets into
cash without significant loss.
2. Commercial Bank (A Class)
A financial institution licensed by Nepal Rastra Bank to provide full banking services such as
deposits, loans, and other financial services.
3. Development Bank (B Class)
A bank that mainly focuses on providing financial assistance for the development of various
sectors like agriculture, infrastructure, and small industries.
4. Finance Company (C Class)
A financial institution that provides limited banking services like hire purchase, leasing, and
term loans.
Appendix B: Timeline of Global IME Bank Mergers
Year Merging Institutions Class Resulting Entity
Global Bank Ltd. + IME Financial Institution + Lord A + C + Global IME Bank
2012
Buddha Finance Ltd. C Ltd.
Global IME Bank
2013 Social Development Bank + Gulmi Bikas Bank B+B
Ltd.
Global IME Bank
2014 Commerz and Trust Bank Nepal Ltd. A
Ltd.
Appendix C: Economic Indicators of Nepal (Recent Years)
Indicator 2021/22 2022/23
GDP Growth Rate (%) 5.8 4.3
Agriculture Employment % 85 83.6
Inflation Rate (%) 6.3 7.2
Unemployment Rate (%) 11.4 10.7
Source: Ministry of Finance, Economic Survey 2022/23; World Bank.
Current assets
Current ratio =
Current liability
35593951713
CR (2070/71) = =0.99
35625163138
42577585706
CR (2071/72) = =0.95
44818482586
62576398593
CR (2072/73) = =0.94
65884378154
76251638685
CR (2073/74) = =0.99
76871457297
87947592841
CR (2074/75) = =0.98
89200385062