Factor affecting the financial performance of nepalese commercial banks : NABIL Banks and Nepal Investment mega bank limited

Abstract

This thesis, which has been commissioned by Company X, is an examination of the financial performance of two prominent Nepalese banks, namely Nepal Investment Mega Bank Limited and NABIL Bank Limited, for five fiscal years. The aim was to examine and contrast their liquidity, leverage and profitability to discern how strategic and operationally efficient they are.

The theoretical framework draws on principles of financial management and aspects of prior works in liquidity management, leverage and profitability metrics-based setting. Such analytical methods were based on a comparative study of financial key ratios, such as Current Ratio, Debt to Equity Ratio, Return on Equity and Return on Assets.

Different approaches for financial strategies are revealed in the results. NABIL Bank, yields greater balance sheet and leverage due to its risk tolerant, growth-oriented strategy, whereas Nepal Investment Mega Bank connotes a more cautious position prioritizing stability and minimization of risk. For both banks, the analysis provides the trade-offs in terms of profitability and financial stability. Even though effective liquidity and leverage management is critical to maintain profitability while ensuring long term stability, the study concludes that this is an actionable finding around risk mitigation and financial liability operations.