Acknowledgement

This report Impact of Mergers and Acquisitions on Financial Performance of

Business Universal Development Bank Limited has been prepared as a partial
fulfillment of the seminar course requirement for the degree of Masters of
Business Administration (MBA).
I am very grateful to Purbanchal University for the curriculum that has lead to
enhance my self confidence and motivation where I had gained advance
knowledge, ideas and experience.
I would like to express my sincere and deep sense of gratitude to my trainers and
supervisiors Professor Dr S.K Singh and Associate Professor Dr Deepak
Bhandari, Registrar, Pokhara University School of Business, Lekhnath and Purna
Khad ,Lecturer School of Business, Pokhara University, Lekhnath for his precious
guidance, constructive comment and suggestions in carrying out this report work.
Without their support, this work could not have taken the final shape.
I am equally grateful to Mr. Bisheshowor Acharya, CEO, Novel Academy,
Newroad Pokhara and and Dipendra pahari, MBA Coordinator, Novel Academy
for their co-operation and motivation. I would also like to express my gratitude to
my entire respected teacher, who gave me suggestion and guidance to make my
report as required.
Lastly, I am also thankful to all my family members, friends and all those who
directly and indirectly helped me with lots of valuable suggestion and inspirations
while making this report.

Sanjaya Bastola

EXECUTIVE SUMMARY

Mergers and acquisitions are a global business terms used in achieving business growth
and survival. Merger entails the coming together of two or more firms to become one big
firm while acquisition is the takeover or purchase of a small firm by a big firm; which are
both pursuing similar motives opined that mergers and acquisitions are aimed at
achieving cost efficiency through economies of scale, and to diversity and expand on the
range of business activities for improved performance. This report Impact of Mergers
and Acquisitions on Financial Performance of Business Universal Development Bank
Limited used to comparative analysis of the financial ratio with the former banks of
Business Universal Development Bank. The main objective of the study is to analyzing
the performance in term of Debt to Equity Ratio, Return on Total Assets, Return on
Equity, Net Income, Banks Assets Utilization, EPS, Equity Multiplier, Banks Income
Margin and Return on Investment have been examined to see the progress of the
company and to know each and every aspect of financial analysis. Business Universal
Development Banks financial performance seems to be petty sound and successful. The
current situation tells us that the role of bank is managing financial status and monetary
standards are the satisfactory. By observing at its activity ratios, we can found that
efficiency of bank is managing its resources. After computing the ratios, I came to
conclude that the Business Universal Development Bank has been doing well expect in
few sector. If we have a look on its ROA and ROE, we can say that Business Universal
Development Bank has maintained these ratio quite better with the passage of time it has
not fluctuated much rather in ROA we find them to be increasing. We find some
fluctuation in EPS thus I believe they must be more cautious in maintaining this ratio and
thus try to increase this by increasing market price of the share. Business Universal
Development Bank should do their best to improve their leverage position as all these
ratio shows that they have very high leverage and thus they also have a higher risk thus in
this respect they need to increase the amount of equity capital as too much leverage may
be associated with more risk. The overall performance of the bank through fiscal year
2069/2070 to 2071/2072 was quite satisfactory.

PAGE
DECLARATION...i
APPROVAL SHEET.....ii
ACKNOWLEDGEMENT....iii
EXECUTIVE SUMMARY...iv
TABLE OF CONTENTS...v-vi
LIST OF TABLE....vii
LIST OF ABBREBRATION ....viii
CHAPTER I: INTRODUCTION .1-10
1.1 Background of the Study......1
1.2 Introduction of the Organization.......1-2
1.3 Statement of the Problem..2-3
1.4 Objective of the Study..3
1.5 Scope of the Study........3
1.6 Study Methodology.......3-4
1.6.1

Approach of the Study.........3

1.6.2

Study Design........3

1.6.3

Sources of Information.....4

1.6.4

Work Schedule......4

1.6.5

Data Presentation and Analysis Technique.......4

1.7 Review of Literature......5-9

1.7.1

Conceptual Review .........5-8

1.7.2

Overview of Financial Intuitions in Nepal.......8-9

1.8 Limitation of the study...............10

1.9 Organization of the Project Report.........10

CHAPTER II: PRESENTATION AND ANALYSIS OF DATA...11-18

2.1 Introduction .11
2.2 Tools for Data Presentation and Analysis.11
2.3 Data Presentation and Analysis.....11-18
2.3.1 Debt to Equity Ratio.......12
2.3.2. Net Interest Income...12-13
2.3.3 Net Income.....13-14
2.3.4 Return On Assets....15
2.3.5 Return on Equity....15-16
2.3.6 Equity Multiplier.. .16-17
2.3.7 Banks Net Profit Margin. .17
2.3.8 Banks Degree of Assets Utilization ..18
2.3.9 Earning Per Share.. .. .. .. ..18-19

CHAPTER III: SUMMARY, CONCLUSION AND RECOMMENDATION

3.1 Summary and Conclusion...20
3.3 Recommendation....20-21
Bibliography (References)
Appendices

LIST OF TABLE
6

PAGE
Table 1: Debt to Equity Ratio....12
Table 2: Net Interest Income..13
Table 3: Net Income...14
Table 4: Return on Assets...15
Table 5: Return on Equity......16
Table 6: Equity Multiplier...17
Table 7: Banks Net Profit Margin..17
Table 8: Banks Degree of Assets Utilization (AU)18
Table 9: Earning Per Share (EPS).......................................................19

LIST OF ABBREVIATIONS

1. MBA = Masters of Business Administration

2.
3.
4.
5.
6.

ROA
ROE
AU
EPS
NII

=Return on Assets
= Return on Equity
=Assets Utilization
= Earnings Per Share
= Net Interest Income