Trend Analysis

Of
Sanima Bank Limited
For
Five years
2069/070 to 2073/074

Submitted By: Submitted To:

Manish Maharjan
Emba Fall 2017
Introduction
Sanima Bank Limited commenced its operation in 2004 as a National Level Development Bank. later
on after acquiring Bagmati Development Bank Ltd, , it has been functioning as an "A" Class
Commercial Bank since February 2012 with its registered office at 'Alakapuri', Naxal, Kathmandu with
altogether paid capital worth Rs. 530,59,00,000.00

Sanima Bank is committed to provide one window financial solutions to the different customer
segments and to achieve healthy growth in profitability consistent with the bank's risk appetite. The
Bank has been dedicated to maintain the highest level of ethical standards, professional integrity,
corporate governance and regulatory compliance. As a result, it is perceived as a Strong and Reliable
player in the banking industry.

It has been committed to meet customer expectations in all areas of its business through continuous
improvement for overall benefit of the economy. It offers a wide range of banking products and
financial services to corporate and retail customers through 74 full-fledged branches and one
extension counter from all 7 provinces. It has been operating with 60 and 14 branches outside the
Kathmandu and inside the Kathmandu valley respectively. It also has 14 ATM services layout inside
the Kathmandu and 49 ATM services Layout outside the valley.

Its current products and services is:

Vision
To be a trusted and leading bank in Nepal

Mission
We will continuously be innovative and keep up with changes to satisfy investors, staff, customers,
regulators and the people of the community we serve.

Capital Structure (As on Assar End 2074)

Authorized Capital: Rs.9, 000, 000,000
Issued Capital: Rs.8, 001,255,440
Paid-up Capital: Rs.8, 001,255,440
Shareholding Pattern
Promoters: 51%
General Public: 49%

Objectives
The objectives of the study is to analyze the five different trends of banking aspects for five years.
The objectives are:
1. To analyze the trend of deposit liabilities
2. To analyze the trend of borrowings
3. To analyze the trend of interest expenses
4. To analyze the trend of interest income
5. To analyze the trend of net profit

For the project report, I am going to analyze the trends of the following 5 different financial aspects
of the bank of the last five years and forecast the chance of occurrence in the near future which are
as follows.

Deposit Interest Interest

Fiscal Year Liabilities Borrowings Expenses Income Profit

2069/2070 17,789,328,915 1,480,125,530 1,023,257,441 1,678,789,938 305,061,132

2070/2071 24,873,849,358 898,267,865 1,199,787,864 2,018,505,630 427,595,604

2071/2072 34,045,316,291 1,687,185,281 1,409,493,594 2,548,883,528 624,141,298

2072/2073 46,344,181,075 3,281,939,578 1,540,143,649 3,263,021,831 1,000,428,648

2073/2074 57,754,053,647 611,009,105 2,794,576,846 5,044,308,250 1,332,877,736

Trend analysis of Deposit Liabilities

Since the number of years i.e. n=5 is an odd number, we take x = (X-X-bar)
X Y
x=(X-Xbar) x² xy
Year Deposit Liabilities

1 2069/2070 17,789,328,915.00 (2) 4 (35,578,657,830.00)

2 2070/2071 24,873,849,358.00 (1) 1 (24,873,849,358.00)

3 2071/2072 34,045,316,291.00 - - -

4 2072/2073 46,344,181,075.00 1 1 46,344,181,075.00

5 2073/2074 57,754,053,647.00 2 4 115,508,107,294.00

n=5 ∑Y=180,806,729,286.00 ∑x²=10 ∑xY=101,399,781,181.00
Now,
The linear equation Y-hat= b₀+b₁*x
We know,
b₀=∑Y/n
=180,806,729,286.00/5
= 36,161,345,857.20
And
b₁=∑xY/∑x²
= 101,399,781,181.00/10

= 10,139,978,118.10

Hence,

Y-hat= 36,161,345,857.20 + 10,139,978,118.10 * x

Forecasting the deposit liabilities for the fiscal year 2074.075

x=(X-X-bar)

= (6-3) =3

Therefore,

Y-hat= 36,161,345,857.20 + 10,139,978,118.10 * 3

= Rs. 66,581,280,211.50

Hence the bank may maintain the deposit liabilities of Rs 66,581,280,211.50 in the coming fiscal year 2074.075
according to the trend of the last five years.

X Y Percent of trend
x=(X-Xbar) Y-hat

Year Deposit Liabilities Y/Y-hat*100

1 2069/2070 17,789,328,915.00 (2) 15,881,389,621.00 112.0136798

2 2070/2071 24,873,849,358.00 (1) 26,021,367,739.10 95.59009199

3 2071/2072 34,045,316,291.00 - 36,161,345,857.20 94.14836612

4 2072/2073 46,344,181,075.00 1 46,301,323,975.30 100.0925613

5 2073/2074 57,754,053,647.00 2 56,441,302,093.40 102.3258704

Graphically,

Trend Analysis of Deposit Liabilities

Y Deposit Liabilities Y-hat

70,000,000,000.00

60,000,000,000.00

50,000,000,000.00
DEPOSIT LIABILITIES

40,000,000,000.00

30,000,000,000.00

20,000,000,000.00

10,000,000,000.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

Percent of Trend
Base line Percent of trend Y/Y-hat*100

115.00

110.00
PERCENT OF TREND

105.00

100.00

95.00

90.00

85.00
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

From the graph, it is clear that the fluctuation of deposit liabilities drastically occurs in the fiscal year 2070/071
from the percent of trend 112.01 in the fiscal year 2069/070 to 95.59.
Trend Analysis of Borrowings

X Y
x=(X-Xbar) x² xy
Year Borrowings

1 2011 1,480,125,530.00 -2 4 (2,960,251,060.00)

2 2012 898,267,865.00 -1 1 (898,267,865.00)

3 2013 1,687,185,281.00 0 0 -

4 2014 3,281,939,578.00 1 1 3,281,939,578.00

5 2015 611,009,105.00 2 4 1,222,018,210.00

n=5 ∑Y=79,58,527,359 ∑x²=10 ∑xY=645,438,863

Now,
The linear equation Y-hat= b₀+b₁*x
We know,
b₀=∑Y/n
=7,958,527,359/5
= 1,591,705,472
And
b₁=∑xY/∑x²
= 645,438,863/10

= 64,543,886.30

Hence,

Y-hat= 1,591,705,472 + 64,543,886.30 * x

Forecasting the borrowings for the fiscal year 2074.075

x=(X-X-bar)

= (6-3) =3

Therefore,

Y-hat= 1,591,705,472 + 64,543,886.30 * 3

= Rs. 1,785,337,130.70

Hence the bank may maintain the borrowings of Rs 1,785,337,130.70 in the coming fiscal year 2074.075
according the trend of the last five years.
 X Y Trend Line Percent of Trend
Year Borrowings Y-hat (Y/Y-hat)*100
2069/2070 1,480,125,530.00 1,462,617,699.20 101.20
2070/2071 898,267,865.00 1,527,161,585.50 58.82
2071/2072 1,687,185,281.00 1,591,705,471.80 106.00
2072/ 2073 3,281,939,578.00 1,656,249,358.10 198.15
2073/ 2074 611,009,105.00 1,720,793,244.40 35.51

Trend analysis of Borrowings

Y Borrowings Trend Line Y-hat

3,500,000,000.00

3,000,000,000.00

2,500,000,000.00
BORROWINGS

2,000,000,000.00

1,500,000,000.00

1,000,000,000.00

500,000,000.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

Chart Title
Base line Percent of Trend (Y/Y-hat)*100

250.00

200.00
PERCENT OF TREND

150.00

100.00

50.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

From the graph, it is clear that the fluctuation of borrowings drastically occurs in the fiscal year 2072/073 from
the percent of trend 106.00 in the fiscal year 2071/072 to 198.15.
Trend Analysis of Interest Expenses
X Y
x=(X-Xbar) x² xy
Fiscal Year Interest Expenses
1 2069/2070 1,023,257,441 -2 4 (2,046,514,882.00)
2 2070/2071 1,199,787,864 -1 1 (1,199,787,864.00)
3 2071/2072 1,409,493,594 0 0 -
4 2072/ 2073 1,540,143,649 1 1 1,540,143,649.00
5 2073/ 2074 2,794,576,846 2 4 5,589,153,692.00
n=5 ∑Y=7,967,259,394 ∑x²=10 ∑xY=3,882,994,595

Now
The linear equation = b₀+b₁*x

b₀=∑Y/n
= 1,593,451,878.80

b₁=∑xY/∑x²
=388,299,459.50

Hence
Y- hat=
1,593,451,878.80+ 388,299,459.50*x

To forecast the interest expenses for 2074/2075

x=6-3=3
Y- hat=
1,593,451,878.80+ 388,299,459.50*3
= 2,758,350,257.30
Hence the bank may have interest expenses of Rs 2,758,350,257.30 in the fiscal year. Here b₁ is the slope
which depicts that the bank has a trend of the interest expenses of 2,758,350,257.30 each year.

X Y Percent of trend
Y-hat
Year Interest Expenses Y/Y-hat*100

2069/2070 1,023,257,441.00 816,852,959.80 125.27

2070/2071 1,199,787,864.00 1,205,152,419.30 99.55

2071/2072 1,409,493,594.00 1,593,451,878.80 88.46

2072/ 2073 1,540,143,649.00 1,981,751,338.30 77.72

2073/ 2074 2,794,576,846.00 2,370,050,797.80 117.91

 Trend Analysis of Interest Expenses
Y Interest Expenses Y-hat Linear (Y-hat)

3,000,000,000.00

2,500,000,000.00

2,000,000,000.00
INTEREST EXPENSES

1,500,000,000.00

1,000,000,000.00

500,000,000.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

Percent of trend of Interest Expenses

Base Line Percent of trend Y/Y-hat*100

140.00

120.00

100.00
PERCENT OF TREND

80.00

60.00

40.00

20.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

From the graph, it is clear that the fluctuation of interest expenses of the bank is higher in the fiscal year
2073/074 from the percent of trend 77.72 to 117.91
Trend Analysis of Interest Income
X Y
x=(X-Xbar) x² xy
Fiscal Year Interest Income
1 2069/2070 1,678,789,938 -2 4 (3,357,579,876.00)
2 2070/2071 2,018,505,630 -1 1 (2,018,505,630.00)
3 2071/2072 2,548,883,528 0 0 -
4 2072/ 2073 3,263,021,831 1 1 3,263,021,831.00
5 2073/ 2074 5,044,308,250 2 4 10,088,616,500.00
n=5 ∑Y=14553509177 ∑x²=10 ∑xY=7,975,552,825.00

Now
The linear equation = b₀+b₁*x

b₀=∑Y/n
= 2,910,701,835.40

b₁=∑xY/∑x²
=797,555,282.50

Hence
Y- hat=
2,910,701,835.40+797555282.50*x

To forecast the interest income for 2074/2075

x=6-3=3
Y- hat=
2,910,701,835.40+797555282.50*3
=5,303,367,682.90

Hence the bank may have interest income of Rs 5,303,367,682.90 in the fiscal year 2074/2075. Here b₁ is
the slope which depicts that the bank has a trend of the interest income of Rs 797,555,282.50 each year.

X Y Percent of trend
Y-hat
Year Interest Income Y/Y-hat*100
2069/2070 1,678,789,938.00 1,315,591,270.40 127.61
2070/2071 2,018,505,630.00 2,113,146,552.90 95.52
2071/2072 2,548,883,528.00 2,910,701,835.40 87.57
2072/ 2073 3,263,021,831.00 3,708,257,117.90 87.99
2073/ 2074 5,044,308,250.00 4,505,812,400.40 111.95
 Trend Analysis of Interest Income
Y Interest Income Y-hat

6,000,000,000.00

5,000,000,000.00

4,000,000,000.00
INTEREST iNCOME

3,000,000,000.00

2,000,000,000.00

1,000,000,000.00

-
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

Base Line Percent of trend Y/Y-hat*100

140

120

100
PERCENT OF TREND

80

60

40

20

0
2069/2070 2070/2071 2071/2072YEARS 2072/ 2073 2073/ 2074

From the graph, it is clear that the interest income of the bank fell off in the fiscal year 2070/071.
Trend Analysis of Net Profit
X Y
x=(X-Xbar) x² xy
Fiscal Year Net Profit
1 2069/2070 305,061,132 -2 4 (610,122,264.00)
2 2070/2071 427,595,604 -1 1 (427,595,604.00)
3 2071/2072 624,141,298 0 0 -
4 2072/ 2073 1,000,428,648 1 1 1,000,428,648.00
5 2073/ 2074 1,332,877,736 2 4 2,665,755,472.00
n=5 ∑Y=3,690,104,418.00 ∑x²=10 ∑xY=2,628,466,252.00

Now
The linear equation = b₀+b₁*x

b₀=∑Y/n
= 738,020,883.60

b₁=∑xY/∑x²
=262,846,625.20

Hence
Y- hat=
738,020,883.60+262,846,625.20*x

To forecast the interest income for 2074/2075

x=6-3=3
Y- hat=
738,020,883.60 + 262,846,625.20*3
=11,575,503,174.00
Hence the bank may ma net profit of Rs 11,575,503,174.00 in the fiscal year 2074/2075. Here b₁ is the
Slope which depicts that the bank has a trend of the interest income of Rs. 262,846,625.20 each year.

X Y Y-hat Percent of trend

Year Net Profit Y/Y-hat*100
2069/2070 305,061,132.00 212,327,633.20 143.67
2070/2071 427,595,604.00 475,174,258.40 89.99
2071/2072 624,141,298.00 738,020,883.60 84.57
2072/ 2073 1,000,428,648.00 1,000,867,508.80 99.96
2073/ 2074 1,332,877,736.00 1,263,714,134.00 105.47
 Trend Analysis of Net profit
Y Net Profit Y-hat

1.4E+09

1.2E+09

1E+09
NET PROFIT

800000000

600000000

400000000

200000000

0
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

Baseline Percent of trend Y/Y-hat*100

160

140

120
PERCENT OF TREND

100

80

60

40

20

0
2069/2070 2070/2071 2071/2072 2072/ 2073 2073/ 2074
YEARS

From the graph, it is clear that the net profit fluctuates more during the fiscal year 2069/070 to 2070/071
in five years.
Conclusion
From the above study, it can be concluded that with the analysis of trend of past five years we can predict
the chance of occurrence in the near future. The analysis helps us to get pre- aware related to the activities
that may happen in coming days. The bank needs to pre- determine and set a target which it formulates the
new policies, plans and strategy for its achievement. Hence, trend analysis is very important tool for the
managers to know about the incidents in the near future and prepare the plans, policies and decide accordingly.