MBA-III, Uniglobe College, Kathmandu, Nepal

1. PRESENTATION
ON
INVESTMENT PORTFOLIO ANALYSIS OF
COMMERCIAL BANKS
PRESENTED BY:
PAWAN KAWAN
ROLL No: 14
MBA- III
UNIGLOBE COLLEGE

2. CHAPTER I
INTRODUCTION

3. BACKGROUND
• Commercial banks are organizations which
normally perform financial transactions.
• The banks are mobilizing the savings of the
people for the investment purposes.
• The investment portfolio should be carefully
analyzed so that the investment should ensure
minimum risk and maximum profit.

4. STATEMENT OF PROBLEM
• What is the relationship of investment with total
deposit, loan and advances and total profit?
• What is the proportion of investment of different
commercial banks?
• How much risk commercial banks are facing while
investing in different assets?
• Which bank has higher investment in five years?

5. OBJECTIVES OF THE STUDY
• To evaluate and analyze the variation in investment
structure.
• To analyze risk and return on investment portfolio of
different commercial banks.
• To analyze the relationship of investment with other
variables like deposit, loan and advance, net profit and size
of the firm.
• To find out the proportion of investment of commercial
banks.

6. SIGNIFICANCE OF THE STUDY
• The present study will be of substantial
importance for:
o investors, planners, researchers, students, and
policy makers to meet their personal and
organizational objectives by identifying the
various weaknesses prevailing in the investment.
• It is expected that this work will be helpful to
decision makers to maximize the values of their
organization.

7. RESEARCH HYPOTHESIS
• H1: Investment is positively related to Size of
the firm, Profitability and Deposits
• H2: Investment is negatively related with Loan
and advances

8. LIMITATION OF THE STUDY
• Only five commercial banks are selected.
• The study covers only five years period.
• The validity and confidence of the data
depends on their faith and trustworthiness of
the published data.

9. CHAPTER II
REVIEW OF LITERATURE

10. REVIEW OF LITERATURE
• Gitman and Joehnk, “ Investment is any vehicle
into which funds can be placed with the
expectation that will preserve or increases in
value and generated positive returns.”
• Weston & Brigham, “A portfolio simply represents
practice among investor of having their funds in
more than one asset. The combination of
investment asset is called a portfolio”.

11. • Makowitz showed that the variance of the rate of
return was a meaningful measure of portfolio risk
under a reasonable set of assumptions, this
theory indicated the importance of diversifying
the investments to reduce the total risk of the
portfolio.
• CAPM which was developed by Sharpe and
Litner, this model will allow investors to
determine the required rate of return for any
risky assets.
REVIEW OF LITERATURE Cont…

12. • The study of Edward J. Kane and Stephen A.
Buser’s in title” portfolio diversification at
commercial banks” deals how a firm perform
a useful function by holding a portfolio of
efficiently price securities. According to
them, it is rational for a firm to engage in prior
round of asset diversification on behalf of its
shareholder’s even when all assets are priced
efficiently and available for direct purchase by
shareholders.
REVIEW OF LITERATURE Cont…

13. CHAPTER III
METHODOLOGY

14. METHODOLOGY
• Research methodology refers to the various
sequential steps to adopt by a researcher in
studying a problem with certain objective in
view.

15. POPULATION AND SAMPLE
S.N Name of Banks Observations
1 Global Bank Ltd. 5
2 Kumari Bank Ltd. 5
3 Nepal Investment Bank Ltd. 5
4 Nepal SBI Bank Ltd. 5
5 Standard Charter Bank Nepal Ltd. 5
Total observations 25

16. Population Size = 32
Sample Size = 5
Sample Percentage = 15.62%
Cont…

17. NATURE AND SOURCES OF DATA COLLECTION
• The main source of secondary data comprises
annual reports of concerned banks, related
journals, newspapers, Internet, official
publication, related studies and thesis etc.

18. MODEL SPECIFICATION:
Model 1:
• Inv= a + β1 X1 + β2 X2 + β3X3 + β4X4 + ei
Where,
• a = Constant variable
• Inv = Log of Investment amount
• X1= Log of Deposit
• X2 = Log of net profit
• X3= Log of Loan and Advances (loan)
• X4 = Log of Size of bank (total assets)

19. CHAPTER IV
DATA ANALYSIS AND FINDING

20. ANALYSIS OF INVESTMENT
Proportion of Investment in percentage

21. Proportion of Investment (Mean)
13.61% 12.98%
32.79%
16.60%
45.54%
Global Kumari Nepal SBI NIBL SCB
Proportion of Investment

22. Proportion of Investment (Standard Deviation)
0
2
4
6
8
10
12
14
Global Kumari Nepal SBI NIBL SCB
Proportion of Investment (Standard Deviation)
Proportion of Investment
(Standard Deviation)

23. MULTIVARIATE ANALYSIS
• Multivariate analysis (MVA) is based on the
statistical principle of multivariate
statistics, which involves observation and
analysis of more than one statistical outcome
variable at a time.

24. Summary of model 1
Model Summary
Model R R Square Adjusted R Square Std. Error of the
Estimate
1 .985a .970 .964 .08896
a. Predictors: (Constant), Deposits, Profit, loan, Size

25. ANOVAa
Model Sum of
Squares
df Mean Square F Sig.
1
Regression 5.083 4 1.271 160.583 .000b
Residual .158 20 .008
Total 5.242 24
a. Dependent Variable: Investment
b. Predictors: (Constant), Deposits, Profit, loan, Size
Cont…

26. Coefficientsa
Model Unstandardized Coefficients Standardized
Coefficients
t Sig.
B Std. Error Beta
1
(Constant) -1.298 .782 -1.660 .113
Size 2.420 1.639 1.511 1.477 .155
Profit .016 .026 .041 .612 .547
loan -1.924 .190 -1.072 -10.143 .000
Deposits .521 1.529 .332 .341 .737
a. Dependent Variable: Investment
Cont…

27. CHAPTER V
CONCLUSION AND RECOMMENDATION

28. CONCLUSION
• Commercial Banks play very important role in the
economic life of the nation.
• Standard Charter Bank has high proportion of
investment than other banks with less variation.
• There is positive relationship of Investment with Size of
the firm, Net profit and Deposit but statistically
insignificant.
• There is negative relation of investment with Loan and
advance and is statistically significant.

29. RECOMMENDATION
• The commercial banks must have clear
investment policy on different securities.
• SCB must maintain present variation in
investment which is less than other banks.
• It is recommended that Nepal SBI bank must
control its variation which is very high than other
banks.
• Commercial banks must increase its net profit
and deposit in order to increase its investment.