FINANCIAL PERFORMANCE OF KIST BANK

In partial fulfillment of the requirement for the degree of

Bachelor in Business Administration (BBA)
March 2014

Kathmandu, Nepal
Table of Contents
CHAPTER 1
1. Introduction
1.1 Background of the study
1.2 Background of the Company
1.3 Statement of Problem
1.4 Objective of Study
1.5 Significance of the Study
1.6 Limitation of Study
1.7 Organization of Study


1.0 Introduction


1.1 Background of study

The bank is an institution established by law, which deals with money and credit is called
banking. In other words, it is obvious that an institution which deals with money, receiving it on
deposits from customers, honoring customers drawings against such deposits and demand,
collecting cheques from customers, and lending or investing surplus deposits until they are
required for repayment.


The financial institutions or banks are the crucial ways not only for financing activities but also
provides all types of activities related to finance. Financial performance of financial institutions
is well advanced in its measurement within the field of finance and management. The core aim
of the study is to analyze the financial data of Kist bank ltd..

A sound banking system is important because of the key role it plays in the economy
intermediation, maturity transformation, facilitating payment flows, credit allocation and
maintaining financial discipline among the borrowers In any economy whether highly developed
financial market or less well developed financial markets, bank remain at the centre of
economic and financial activity and stand apart from other institution as primary providers of
payment services and a fulcrum for monetary policy implementation.

Financial analysis is an integral aspect of operating a successful business. Analysis of firms
income statement and balance sheet can provide valuable data that executives and managers can
use to make informed business decision. A bank should be certain that its financial statements
are accurate. Data gleaned from inaccurate financial statement will yield financial analysis that
may not be helpful in making proper decision. A greater awareness of financial statements and
their interrelationship can lead to improved profitability or cash flow.



1.2 Background of the Company
Kist bank stands for the customers convenience, support and providing Power to Succeed.

Kist Bank, established in 2003, with a vision of becoming the best Bank on operational
excellence and superior financial performance, has the authorized Capital of NPR 10 billion;
issued capital of NPR 2 billion and Paid-Up Capital NPR 2 billion.

60% of the paid-up capital is held by the promoters and remaining 40% by the general public.
The share of the Bank is listed at Nepal Stock Exchange Limited (NEPSE), the only Stock
Exchange in the country, as 'A' category company...The Bank has a seven member Board of
Directors with the representation of three Directors from the promoters' group, two Directors
from general public and one as Professional Director.

Kist Bank stands for customers' convenience and support. The Bank is driven by values of
efficiency in operations, integrity and a strong focus on catering the needs of every customer by
offering high quality and cost effective products and services.
The Bank has wider range of products and services, which covers Business Banking,
Institutional Banking, Small and Medium Enterprises Banking, Consumer Banking, Micro-
financing, Transaction Banking. The Bank has also been providing Cards, Remittance, Internet
Banking, Mobile Banking (both through four wheeler vehicle and cell phone), etc services.

The Bank has 365 days banking and provides evening banking services from all branches.
Deposit and Withdrawal services are available from all branches at free of cost.

The Bank is equipped with a robust system for Risks Management. The professional
management team, along with dedicated employees, is always looking forward to serving the
customers, understanding their needs and designing the tailored-made products and services,
who are equipped with a state-of-art technology and IT infrastructures.

Mission
Our mission is to become the leading bank by providing the best quality financial products and
services to our customers, enhancing our shareholders value, contributing to the economic
prosperity of the country and creating excellent opportunity for our employees.
Vision
Our vision is to become the best bank based on operational excellence and superior financial
performance.
Board of directors
Mr. Ram Prasad Dahal
Chairman
Mr. Bishnu Gopal Shrestha
Director
Mr. Pushpa Bahadur Pradhan
Director
Mr. Dakshya Poudyal "Subhash"
Director
Ms. Kusum Lama
Director
Mr. Parmeshwor Lal Pradhan
Director
MR. Rishi Ram Gautam
Professional Director






Management team


Mr. Kumar Lamsal
(Chief Executive Officer)

Mr. Bal Kumar Pandey
(Chief Legal & Compliance Officer)

Mr. Bhesh Raj Khatiwada

( Chief Credit Officer)

Mr. Ashok Sherchan
(Deputy Chief Executive Officer)
Mr. Bam Dev Dahal
(Chief Operating Officer)
Mr. Mukunda Subedi
(Head - Central Finance)
Mr. Tara Manandhar
(Chief Business Officer)
Mr. Rishi Ram Neupane
(Head - IT Department)
Mr. Pradeep Khanal
(Head-Deposit Marketing/ Branch Co-ordination)
Mr. Ranjan Pandey
(Manager-Central Credit Risk Assessment)
Mr. Surendra Chand
(Head-Central Credit Administration)





Share capital
The Authorized Capital of the Bank is Rupees 10 billion and the Issued & Paid-Up Capital is
Rupees 2 billion. 60 percent of the Paid-Up Capital is held by the promoter and remaining 40%
is held by the general public. The Bank is listed at Nepal Stock Exchange Limited (NEPSE).
Authorized Capital
The authorized capital of the Bank is Rupees 10,000,000,000.00 (Rupees Ten billion Only)
divided into 100 million equity shares of Rupees 100.00 each.
Issued Capital
The issued capital of the Bank is Rupees 2,000,000,000.00 (Rupees Two billion Only) divided
into 20 million equity share of Rupees 100.00 each.
Paid-Up Capital
The Paid up capital of the Bank is Rupees 2,000,000,000.00 (Rupees Two billion Only) divided
into 20 million equity share of Rupees 100.00 each.
Year Total Paid up capital
Commencement of
business
30 Million
2005 IPO of Rupees 20 million totaling Paid-Up Capital Rupees 50 million
2006
1:1 right share issue of Rupees 50 million totaling Paid-Up Capital to
Rupees 100 million
2007
1:1 right share issue of Rupees 100 million totaling Paid-Up Capital to
Rupees 200 million
Early 2008
1:3 right share issue of Rupees 600 million totaling Paid-Up Capital to
Rupees 800 million
By the end of 2008
1:1.5 right share issue of Rupees 1.2 billion totaling to Paid-Up Capital
to Rupees 2 billion

Share capital structure of the Bank
Group Share Holders
No. of
Share
Share Capital in
%
Paid Up Capital
Payment in
%
A Promoter 12,000,000 60 1,200,000,000.00 100
B
General Public (Including
Staff)
8,000,000 40 800,000,000.00 100
Total: 20,000,000 100 2,000,000,000.00 100

BRANCHES
The Bank has been providing its service to its customers through its own office building at
Anamnagar in the capital, as well as in other different parts of country. We are available with 51
branches spread throughout the country with the eagerness to serve the customers.
ATM SERVICES
Kist is providing self service banking (SSB) to its esteem customers through Kist SSB Card
using own ATM Switching software. Till date we have 78 ATM outlets. Our customer can
transact from our terminal free of cost. In additional to this customers can use any other SCT
member banks' terminal paying charges.

Our customers can now have access to 24 hours banking service through our 78 ATM locations
among which 46 ATMs are inside the valley and the rest 32 are outside the valley.
PRODUCTS AND SERVICES
Personal Banking
Savings Account
Fixed Deposit Account
NaraNari Nikshep-2
Call Deposit
Current Account

Coporate Banking
Term Loan
Chelibeti Laghu Udyamshil Karja
Kist Microfinance Wholesale Loan
Salary Solutions
Bank Guarantee Business
Transaction Banking
Ncell Pre-paid Top-Up
Card Transaction Limits
NCell Pro Payment
Kist Mobile Wallet
E-Banking
SWOT ANALYSIS
This free sample SWOT analysis shows strengths, weaknesses, opportunities and threats. We
cover over 40,000 companies and industries. This sample SWOT analysis for Kist Bank can
provide a competitive advantage.
Strengths

-high profitability and revenue
-existing distribution and sales networks
-barriers of market entry
-domestic market

Weaknesses

-small business units
-future competition




Opportunities

-venture capital
-income level is at a constant increase
-global markets
-growth rates and profitability
-new markets

Threats

-growing competition and lower profitability
-increasing rates of interest
-rising cost of raw materials
-government regulations
-increase in labor costs
-price changes
-tax changes
-external business risks
-global economy

1.3 Statement of Problem
The present study has tried to analyze and evaluate the financial performance of bank taking a
case of Kist Bank ltd.. Furthermore the study has tried to answer the following research
questions:
What is financial position of Kist bank ltd. in market?
How far the bank has been able to meet the shareholders expectation?
How viable the bank is in long term?



1.4 Objective of study

Each activity of human being is driven to world the following objective

To evaluate liquidity, leverage, and profitability ratios of Kist bank limited.
To study the cash flow statement of banks.
To make neces s ar y s ugges t i ons and r ecommendat i ons f or ef f ect i ve
f i nanci al performance in future.


1.5 Significance of the Study
The topic under study will help different parties since the significance of banking business for a
national development is obvious. The study has multidimensional significance:
Holding of Share
Shareholders are the owners of the company. Time and again, they may have to take decisions
whether they have to continue with the holdings of the company's share or sell them out. The
financial statement analysis is important as it provides meaningful information to the
shareholders in taking such decisions.

Decisions and Plans
The management of the company is responsible for taking decisions and formulating plans and
policies for the future. They, therefore, always need to evaluate its performance and effectiveness
of their action to realize the company's goal in the past. For that purpose, financial statement
analysis is important to the company's management.

Extension of Credit
The creditors are the providers of loan capital to the company. Therefore they may have to take
decisions as to whether they have to extend their loans to the company and demand for higher
interest rates. The financial statement analysis provides important information to them for their
purpose.

Investment Decision
The prospective investors are those who have surplus capital to invest in some profitable
opportunities. Therefore, they often have to decide whether to invest their capital in the
company's share. The financial statement analysis is important to them because they can obtain
useful information for their investment decision making purpose.


1.7 Limitations of study
The major limitations of this research are related with the ratio analysis of
financial p e r f o r ma n c e o f Ki s t b a n k l i mi t e d . Use and Limitations of
Financial statement analysis (using Ratios) attention should be given to the following
issues when using financial ratios: A reference point is needed. To be meaningful, most
ratios must be compared to historical values of the same firm, the firm's forecasts, or
ratios of similar firms. Most ratios by themselves are not highly meaningful. They should
be viewed as indicators, with several of them combined to paint a picture of the firm's
situation. Year-end values may not be representative. Certain account balances that are
used to calculate ratios may increase or decrease at the end of the accounting period
because of seasonal factors. Such changes may distort the value of the ratio. Average
values should be used when they are available. Ratios are subject to the limitations of
accounting methods. Different accounting choices may result in significantly different
ratio values. Va r i o u s limitations have been faced while preparing this report which is
expressed below:

This study is conducted mainly based on secondary type of data i.e. annual
reports and textbooks factors.
Study conducted only on the basis of five years data.
Limited interaction with concerned heads due to busy schedule
This study only explains about ratio and cash flow statements.



1.8 Organization of study

This study has been divided in to five chapters

Chapter1:- Introduction
Chapter2:-Research Methodology
Chapter3:- Presentation and Analysis Of data
Chapter4:- Summary, Conclusion and Recommendation

INTRODUCTION

Thi s chapt er cover s t he gener al backgr ound of t he gener al per f or mance
anal ys i s , introduction of the organization, statement of problem, objective and limitations of
the study and organization of the research study Kist Bank Ltd.

RESEARCH METHODOLOGY

This chapter focuses the research design, sample data analysis tools and their using
techniques.

PRESENTATION AND ANALYSIS OF DATA

This chapter concern with measurement of financial performance using ratio
analysis tools and their trend analysis.

SUMMARY, CONCLUSION AND RECOMMENDATION

This chapter gives summarization, conclusion and recommendation of the study