Table 2.1
Total Deposit position of NABIL (Rs. in million) Year Fixe
d
Current Saving Others Call &
Short Deposit
Total Growth
%
2001/2002 3719 2851 4917 403 3948 1583
9
-0.006
2002/2003 2446 2704 4972 439 4945 1550
6
-2
2003/2004 2252 3034 5230 390 2541 1344
8
-13
2004/2005 2310 2688 5994 326 2801 14119 5
2005/2006 2079 2799 7026 342 2341 1458
7
3
2006/2007 3449 2910 8771 365 3851 19347 33
Source: NABIL Bank Ltd., Annual Financial Statement Figure 2.1
This table shows the total deposit mix of NABIL during the period of six years.
collection in the deposit mix of NABIL. Here, total deposit on NABIL in 2001/2002 was 15839 million which were 0.006% less than that of year 2000, in
2002/2003 by 2%. In the year 2003/2004 the deposit decreased by 13%. But in the year 2004/2005 the total deposit increased by 5% to Rs.14119 million. In the year 2005/2006 the deposit increased by 3% which reached to Rs.14587 million .In the year 2006/2007, the deposit increased by 33% which reached to Rs.19347 million.
From above analysis, we have found the increasing trend of total deposit. But, the various accounts have a fluctuating collection of deposit. So, such trend should be managed by implementing proper policies.
Table 2.2
Current Deposit Position of NABIL ( Rs. In Million)
Year Current Deposit Growth (Rs.) Growth %
2001/2002 2851 -30 -1
2002/2003 2704 -148 -5
2003/2004 3034 331 11
2004/2005 2688 -346 -13
2005/2006 2799 111 4
2006/2007 2911 112 4
Source: NABIL Bank Ltd., Annual Financial Statement Figure 2.2
Above table shows that the current deposit of NABIL. In the year 2001/2002 was Rs.2851 million, which was decreased by 1% than the previous year. There had been great decreased in current deposit during the year 2001/2002 by 1%
corresponding to Rs. 30 million. But there was a decrease in the year 2002/2003 by 5% and the current deposit reached Rs. 2704 million during year 2002/2003.
In the year 2003/2004 current deposit was Rs. 3034 million n which is Rs. 331 million more than that of year 2003/2004.But in the year 2004/2005 current deposit collection decreased by 15% corresponding to Rs.346 million increases.
In the year 2005/2006 current deposit collection increased by 4% corresponding to Rs.111 million increased. Now, in the recent year 2006/2007, the current deposit is increased by 4% i.e.Rs.112 million and has reached to Rs.2911 million.
From the above table it is seen that current deposit has an increasing trend but the increment is not consistent. Sometimes it increases largely while it increases with a low rate.
Table 2.3
Saving Deposit Position of NABIL (Rs. in million) Year Saving Deposit Growth Rs. Growth % 2001/200
Here is the figure of saving deposit of NABIL. In the year 2001/2002 was Rs.
4917 million, which was increased by 18% than in the year 2000/2001 corresponding to Rs.767 million. In 2002/2003 it was increased by 1% and in the year 2003/2004 it was increased by 5%. In the year 2003/2004 saving deposit was Rs.5230 million which is Rs.257 million less than of year 2002/2003. In the year 2004/2005 it again increased by 13% and reached Rs.
5994 million. In the year 2005/2006 it again increases by 15% and reached Rs.
7026 million. In the year 2006/2007, it continues to increase and reaches to Rs.8771 million which is the increase by 25% i.e. Rs.1745 million.
From the above table, saving deposit trend is seemed to be increasing. Most of the people deposit their fund in saving deposit account. So, NABIL should attract people towards saving deposit and manage its incremental trend.
Table 2.4
Fixed Deposit Position of NABIL (Rs. in million)
Year Fixed Deposit Growth (Rs.) Growth (%)
2001/2002 3719 -3949 -106
2002/2003 2446 -1273 -2
2003/2004 2252 -195 -9
2004/2005 2310 58 3
2005/2006 2079 -231 -11
2006/2007 3449 1370 67
Source: NABIL Bank Ltd., Annual Financial Statement
Figure 2.4
Here fixed
deposit of NABIL. In the year 2001/2002, 1999 it was increased by 31% to Rs.3719 million. Similarly, in the year 2002/2003it again decreased by 2% to Rs.2446. But there was decrease in fixed deposit during the year 2003/2004. It decreased by 9% to Rs.2252. In the year 2004/2005 it was increased by 3% and reached Rs.2310 million. In the year 2005/2006 it was increased by 11% and reached to Rs.2079.In the year 2006/2007, it has again decreased by 67% and reached to Rs. 3449 million.
Above table shows that the growth in fixed deposits it is rather fluctuating.
Since the fund of fixed deposit can be utilized for long-term investment, it should be made consistent. So, such increase and drastic decrease affects the profitability of the company.
Table 2.5
Interest Bearing Deposit Trend of NABIL (Rs. in million) Year Interest Bearing
Deposit
Growth (Rs.) Growth (%)
2001/2002 12585 3337 25
2002/2003 12363 -222 -2
2003/2004 10022 -2341 -23
2004/2005 11106 1084 10
2005/2006 11446 340 3
2006/2007 16071 4625 29
Source: NABIL Bank Ltd., Annual Financial Statements
Figure 2.5
Here Interest bearing deposit of NABIL .In the year 2001/2002 it was increased by 25% to Rs.12585. Similarly, in the year 2002/2003 it again decreased by 2%
to Rs. 12363. But there was decrease in interest bearing deposit during the year 2003/2004 it decreased by 23% to Rs.10022. In the year 2004/2005 it was increased by 10% and reached to Rs.11106 million. But there was increase in interest bearing deposit by 3% in year 2005/2006 and reached to Rs. 11446.In the year 2006/2007, it has increased to 29% and has reached to Rs.16071 million.
The interest bearing deposit sometimes increases hugely and while sometimes decreases in low rate. But with an increase trend of interest bearing Deposit Company can collect fund regularly and increasingly but in decreasing Time Company cannot fulfill their target fund.
Table 2.6
Non Interest Bearing Deposit Trend of NABIL (Rs. in million)
Year Non Interest
bearing deposit
Growth (Rs.) Growth (%)
2001/2002 3254 -97 -2
2002/2003 3142 -112 -3
2003/2004 3424 282 8
2004/2005 3012 -412 -14
2005/2006 3140 128 4
2006/2007 3276 136 4
Source: NABIL Bank Ltd, Annual Financial Statement
Figure 2.6
In above figure, the non-interest bearing deposit of NABIL In the year 2001/2002 was Rs. 3254 corresponding to 2% decreased in comparison to in the year 2001. Similarly during the year 2002/2003 it was decreased by 3% and reached to Rs.3142. In the year 2003/2004 it increased by 8% Rs. reached Rs.3424 million. In the year 2004/2005 the non-interest bearing deposit decreased by 14% million which is corresponding to Rs.3012. And in the year 2006 the interest bearing deposit increased by 4% and reached Rs.3140. Now, in the recent year 20066/2007, the non interest bearing deposit has increased by 4% and reached to Rs.3276 million.
The non-interest bearing deposit is in increasing and decreasing trend.
Table 2.7
Interest Expenses on Deposit (Rs. in million)
Year Interest on
Deposit
Total Deposit Rs. Ratio %
2001/2002 565 15839 3.57
2002/2003 457 15506 2.94
2003/2004 307 13448 2.28
2004/2005 265 14119 1.88
2005/2006 244 14587 1.67
2006/2007 359 19347 1.86
Average 14.2
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.7
Here, the interest expenses on deposit are presented. In the year 2001/2003 and Rs. 565 which was 3.5% of total deposit collected in the years. In the year 2002/2003 the total collection of deposit was Rs.15506 while interest on deposit was Rs. 457 of the total deposit, which is 2.29% ratio. In the year 2003/2004 total deposit and interest of rate on deposit are Rs. 12448 and Rs. 307, which is 2.28% of total deposit. In the year 2004/2005 the total collection of deposit was 14119 while interest on deposit was 265, which is only 1.88% of total deposit.
In current year 2005/2006 the collection of deposit was 14587 while interest on deposit was 244 which is 1.67%. In the year 2006/2007 the collection of deposit was 19347 and interest on deposit was 359 which is 1.86. This shows that NABIL has average 14.2% of interest expenses in total deposit.
So with similar policies adopted NABIL should manage to reduce the interest expenses in the future. Reduction in interest expenses increases the company's profitability.
Table 2.8
Cost of Deposit of NABIL (Rs. in million)
Year Total
5 2005/200
6
14587 244 11446 2.13
2006/200 7
19347 359 16071 2.23
Average 3
Source: NABIL Bank Ltd, Annual Financial Statement
Figure 2.8
Formula:
Cost of Deposit =
Here, cost of NABIL in the year 2001/2002 was 4.5% corresponding to Rs.401.
During the year 2002/2003 the cost of deposit was Rs.457, which is 3.7% of total interest bearing deposit of Rs. 12363. In the year 2003/2004 the cost of deposit decrease slightly with decrease in deposit was 3.06% i.e. Rs.307 million when the total interest bearing deposit is Rs.10022 million. In the year 2004/2005 the cost of deposit decreased in deposit and it was 2.4% i.e. Rs.265 million when the total interest bearing deposit is Rs.14119 million. In current year 2005/2006 total deposit is 14587 while a total deposit expense is 244 and interesting bearing deposit is 11446. In the year 2006/2007 total deposit is 19347 while a total deposit expense is359 and interest bearing deposit is 16071 and the ratio is 2.23% Therefore, cost of deposit reached at 3%.
The above analysis shows the cost of deposit if 100% of the deposits are utilized. Of the cost of deposit is reduced, he company can earn more profit. So by implementing good plans, company should reduce the cost of deposit.
Table 2.9
Deposit Lending Ratio (Rs. million)
Year Total Deposit
(Rs.)
Total Loans And Advance (Rs.)
Deposit Lending
%
2001/2002 15839 8324 52.55
2002/2003 15506 7438 47.96
2003/2004 13448 7756 57.67
2004/2005 14119 8189 57.99
2005/2006 14587 10586 72.57
2006/2007 19347 12922 66.79
Average 59.26
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.9
Formula:
Deposit Lending Ratio =
The above analysis shows the ratio of total loans and advances to total deposits if 100% deposits are being utilized. Here, deposit-lending ratio of NABIL in the year 2001 was 57.39%. Similarly during the year 2002 the deposit-lending ratio was 52.55% of total deposit. The ratio decreased by 47.96% of total deposit in the year 2003 and reached Rs. 7438.In the year 2004 the total deposit decreased but the loans and advances could be increased. Total loans and advances in the year 2005 were 57.99% of total deposit corresponding to Rs.8189.In the year 2006, both total deposit and loan and advances has been increased .Therefore, the deposit-lending ratio has reached to 72.57% of total deposit.
The above analysis shows that the deposit-lending ratio of NABIL is average of 57.69%. The deposit lending ratio should be maintained properly so that it would not affect organization's performance.
Table 2.10
Ratio of Interest Bearing Deposit to Total Deposits (Rs. in million) Year Interest bearing
deposit
Total deposit Ratio %
2001/2002 12585 15839 79.45
2002/2003 12363 15506 79.73
2003/2004 10022 13448 74.52
2004/2005 11106 14119 78.65
2005/2006 11446 14587 78.47
2006/2007 16071 19347 83.07
Average 79.98
Source: NABIL Bank Ltd, Annual Financial Statement.
Figure 2.10
Formula:
Ratio of Interest Bearing Deposit to total deposit = Interest Bearing Deposit Total Deposit
In the above table, ratio of interest bearing deposit to total deposits of NABIL, in the year 2001/2002 was 79.45% of total deposits. But in the year 2002/2003 it was 79.73% corresponding to Rs.15506. In the year 2003/2004 both the interest bearing deposit and total deposit decreased and the interest bearing deposit shared 74.52% of total deposit of Rs. 10022. It again decreased in year 2004/2005 and the ratio was 78.65% of total deposit. In the year 2005/2006 interest-bearing deposit is Rs.11446 corresponding to Rs. 14587 by 78.47%.Now, in the year 2006/2007, both the interest bearing deposit and total
The above table shows that the interest bearing deposit of NABIL, contributes by an average of 79.98% of total deposit.
Table 2.11
Ratio of non-interest bearing deposit to total deposit (Rs. in million)
Year Non Interest
bearing deposit
Total Deposit Ratio%
2001/2002 3254 15839 20.54
2002/2003 3142 15506 20.26
2003/2004 3424 13448 25.46
2004/2005 3012 14119 21.33
2005/2006 3140 14587 21.53
2006/2007 3276 19347 16.93
Average 21
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.11
Formula:
Ratio of non-interest bearing deposit = Non-Interest Bearing Deposit Total Deposit
In the above table, ratio of non-interest bearing deposit to total deposits of NABIL, in the year 2001/2002 the ratio is 20.54 % of total deposits corresponding to non-interest bearing deposit Rs.3254.But in the year 2002/2003 it was 20.26% corresponding to Rs.3142. Similarly in the year 2003/2004 non-interest bearing deposit shared 25.46% of total deposit Rs.
13448. In year 2004/2005 non-interest bearing deposit shared only 21.33% of total deposit as only Rs.3012 million was collected. In the year 2005/2006 non-interest-bearing deposit is shared only 21.53% of total deposit corresponding to Rs.3140.Now, in the current year 2006/2007, it shared to 16.93% of total
deposit where non-interest bearing deposit and total deposit are Rs.3276 and Rs.19347 million respectively.
The above table show that the non-interest bearing deposit of NABIL, contributes by an average of 21 % of total deposit.
Table 2.12
Ratio of current deposit to total deposit (Rs. in million)
Year Current deposit Total Deposit Ratio%
2001/2002 2851 15839 18
2002/2003 2704 15506 17.44
2003/2004 3034 13448 22.56
2004/2005 2688 14119 19.04
2005/2006 2799 14587 19.19
2006/2007 2911 19347 15.04
Average 18.54
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.12
Formula: Ratio of Current deposit =
From the above table, in the year 2001/2002 current deposit contributed total deposit by 22.5%. In the year 2002/2003 current deposit was Rs.2851, which is 17.43%. The current deposit collection was Rs.2704 million in 2003/2004. In the year 2004/2005 current deposit increased and shared total deposit by 22.56%. The current deposit collection was Rs.3034 million this year. In the year 2005/2006 current deposit decreased to 19.19% the amount of Rs.2688.Now, in the year 2006/2007 current deposit increased to 15.04% where current deposit and total deposit are Rs. 2799 and Rs. 19587 million respectively.
Therefore it is seen that current deposit shares an average of 18.54% of total
Table 2.13
Ratio of saving deposit to total deposit (Rs. in million)
Year Saving deposit Total Deposit Ratio%
2001/2002 4917 15839 31.04
2002/2003 4972 15506 32.07
2003/2004 5230 13448 38.89
2004/2005 5994 14119 42.45
2005/2006 7026 14587 48.17
2006/2007 8771 19347 61.13
Average 42.3
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.13
Formula:
Ratio of Saving Deposit = saving deposit Total deposit
From the above table, in the year 2001 saving deposit contributed total deposit by 31.04%. The saving deposit collection was Rs.4917 when total deposit collection was Rs.15839. In 2002, saving deposit Rs.4972 million which was 32.07% of total deposit of Rs.15506 million. In the year 2003 saving deposit Rs.5230 million which was 38.89% of total deposit of Rs.13448 million. In the year 2004 the saving deposit Rs.5994 million which was 42.45% of total deposit of Rs.14119 million .Similarly, in the year 2005 saving deposit Rs.7026 million which was 48.17% of total deposit of Rs.14587 million. And in the year 2006, saving deposit has increased to 61.13% of total deposit. Here, saving deposit and total deposit amounted to Rs.8771 and Rs.14347 million respectively.
Therefore it is seen that saving deposit shares an average of 42.3% of total deposit collected in NABIL.
Table 2.14
Ratio of Fixed deposit to total deposit (Rs. in million)
Year Fixed deposit Total Deposit Ratio%
2001/2002 3719 15839 23.48
2002/2003 2446 15506 15.77
2003/2004 2252 13448 16.75
2004/2005 2310 14119 16.36
2005/2006 2079 14587 14.25
2006/2007 3449 19347 17.82
Average 21.56
Source: NABIL Bank Ltd, Annual Financial Statement Figure 2.14
Formula:-Ratio of fixed deposit = Fixed Deposit Total Deposit
From the above table, in the year 2001/2002 fixed deposit contributed total deposit by 48.41% where fixed deposit was Rs.7668. It had reached to15.77 % in the year 2002/2003. In the year 2003/2004, the fixed deposit collection was Rs.2252 when total deposit collection was Rs.13448 and its ratio was 16.75%.Similarly, in 2004/2005 fixed deposit contributed total deposit of Rs.14119 million by Rs.2310 million which is 16.36% of total deposit. In the year 2005/2006 fixed deposit contributed total deposit of Rs.14587 million by Rs.2079 which is 14.25% of total deposit .Now, in the current year 2006/2007;
fixed deposit contributed total deposit by 17.82%. Here, the fixed deposit and total deposit amounted to Rs.3449 and Rs.19347 million respectively.
Therefore it is seen that fixed deposit shares an average 21.56% of total deposit
Therefore from the above calculation we can say that the total deposit collection of NABIL is in increasing trend. It is gradually increasing year by year. From the calculation we can say that in the year 2007 the collection of deposit would increase more than that of 2006.
SWOT Analysis
None of the organizations is perfect in each and every way. I here are some weaknesses and threats, which affect the organization’s performance. It may have lots of strength to be proud of but besides with some weakness and threats as well. And the organization does not remain same forever there will be lots of opportunities in order to expand the transactions. So NABIL has also its strength to be proud, some weakness to be recovered and threats to be faced patiently.
Strength
a. NABIL has 250 correspondent relationships besides numerous drawing arrangements with 75 banks in 40 countries of the world. Nabil has also drawing arrangement with the exchange companies and bank besides many others like Habib Qatar International Exchange Limited, Doha, Qatar.
b. To add its strength NABIL has vast network system in the nation thus helping customer to transact through bank from place to place. It has 17 branches nationwide which is the highest number of any joint venture bank in Nepal. It is the only bank to operate inside international airport of arrival and departure lounges.
c. Nabil is well known for providing highly personalized services to its customers. It provides different services like ATM, credit cards, Tele banking service, safe deposit locker etc. It has also introduced a number of attractive deposit skills.
d. Human resources in NABIL are well trained and they are dedicated to the bank too. NABIL is providing high remuneration and other benefits as well to its staff.
e. NABIL is well supplied with latest technology. Computer does most of banking services. Thus the services of the bank are prompt and accurate. The bank is capable to maintain the standard.
Weaknesses
a. The Increase in the number of branches increases the cost operation.
Administration expenses for personnel etc. are increased.
b. The political instability in the country can he considered another weakness of the bank.
c. Too much dependency in computers is not considered to be reliable.
d. NABIL pays high interest rates on deposits. For this reason the bank also charges high interest rates on credit, which has bad impact in investment situation in nation.
e. Staff is unwilling to give even required information. It seems that they don’t want to cooperate with once who are not really its customers.
Opportunities
a. A lot of people deposit their fund in this bank due to its skill in attracting people by adopting attractive policies like high interest rate, prompt services, credit card service, ATM etc.
b. Staff can perform their work more efficiently with the help of computers. The environment of the bank is sound which helps to enhance its stall bar its better profitability.
c. People in various sectors get employed through this bank, which has highest number of branches among joint venture banks in the nation.
d. Citizens of underdeveloped country like Nepal get the favorable chance to show their inner skills and talent.
e. The policies of the HMG and NRB rules and regulation always give confidence to the banking sector to uplift the economy of the nation.
Threats
a) Banks must land and invest its fund to parties having good reputation.
Otherwise the bank will have to regret later on.
b) Excess government pressure may create irregular banking transaction, which leads to bad reputation of the bank.
c) The economic condition of country is deteriorating.
d) There is increasing number of competitions. Now there are 13 commercial banks, which include 9 joint venture and 45 finance companies.