MIRA INFORM REPORT
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Report Date : |
19.09.2011 |
IDENTIFICATION DETAILS
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Name : |
NEPAL INVESTMENT BANK LTD |
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Formerly Known As : |
Nepal Indosuez Bank Ltd |
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Registered Office : |
Durbar Marg, P O Box 3412, Kathmandu |
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Country : |
Nepal |
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Year of Establishment : |
1986 |
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Legal Form : |
Private Independent Company |
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Line of Business : |
Provision of a wide range of banking services, including
commercial and investment banking |
RATING & COMMENTS
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MIRA’s Rating : |
B |
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RATING |
STATUS |
PROPOSED CREDIT LINE |
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26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
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Status : |
Moderate |
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Payment
Behaviour : |
No Complaints |
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Litigation : |
---- |
NOTES :
Any query related to this report can be made
on e-mail : infodept@mirainform.com
while quoting report number, name and date.
ECGC Country Risk Classification List – March 31st, 2011
|
Country Name |
Previous Rating (31.12.2010) |
Current Rating (31.03.2011) |
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Nepal |
b1 |
b1 |
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Risk Category |
ECGC
Classification |
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Insignificant |
A1 |
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Low |
A2 |
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Moderate |
B1 |
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High |
B2 |
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Very High |
C1 |
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Restricted |
C2 |
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Off-credit |
D |
Company name & address
Nepal Investment Bank Ltd
Durbar Marg
PO Box 3412
Kathmandu,
Nepal
Tel: 977 (1) 422 8229
Fax: 977 (1) 422 6349
Web: www.nibl.com.np
Synthesis
Employees: 766
Company Type: Private Independent
Incorporation Date: 1986
Auditor: Joshi & Bhandary
Financials in: USD
(Millions)
Fiscal Year End:
15-Jul-2009
Reporting Currency: Nepalese
Rupee
Annual Sales: NA
Total Assets: 681.2
Business Description
Provision of a wide range of banking services, including commercial and
investment banking
Industry
Industry Commercial Banks
ANZSIC 2006: 6221 - Banking
NACE 2002: 6512 - Other
monetary intermediation
NAICS 2002: 522293 -
International Trade Financing
UK SIC 2003: 65121 - Banks
US SIC 1987: 6081 - Branches
and Agencies of Foreign Banks
Key Executives
|
Name |
Title |
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Prithivi Bahadur Pande |
Chairman and Chief Executive Officer |
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Sanjeev Karki |
Head Cash and Transfer |
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Shreechandra Bhatta |
Head Branch Co-ordination Cell |
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Rabin Sijapati |
Head of Operations |
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Shivanth Bahadur Pande |
Head Research and Development |
news
|
Title |
Date |
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FinMin for
high-level panel to probe 'scam' |
12-Sep-2011 |
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NRB limit
leads to drop in India ATM withdrawals |
2-Sep-2011 |
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10
companies hold 56pc of Nepse's total market cap |
29-Aug-2011 |
|
Nepse
closes 2.93 points lower |
27-Aug-2011 |
|
Last Fiscal
Year saw banks' profit growth plummeting |
26-Aug-2011 |
1 - Profit & Loss Item Exchange Rate: USD 1 = NPR 76.80092
2 - Balance Sheet Item Exchange Rate: USD 1 = NPR 77.816
Corporate Overview
Location
Durbar Marg
PO Box 3412
Kathmandu, Nepal
Tel: 977 (1) 422 8229
Fax: 977 (1) 422 6349
Web: www.nibl.com.np
Sales NPR(mil): NA
Assets NPR(mil): 53,010.8
Employees: 766
Fiscal Year End: 15-Jul-2009
Industry: Commercial
Banks
Incorporation Date: 1986
Company Type: Private
Independent
Quoted Status: Not
Quoted
Previous Name: Nepal
Indosuez Bank Ltd
Chairman and Chief
Executive Officer: Prithivi
Bahadur Pande
Contents
· Industry Codes
· Business Description
· Financial Data
· Key Corporate Relationships
Industry Codes
ANZSIC 2006 Codes:
6221 - Banking
NACE 2002 Codes:
6512 - Other monetary intermediation
NAICS 2002 Codes:
522190 - Other Depository Credit Intermediation
522293 - International Trade Financing
US SIC 1987:
6081 - Branches and Agencies of Foreign Banks
6029 - Commercial Banks, Not Elsewhere Classified
UK SIC 2003:
65121 - Banks
Business
Description
Provision of a wide range of banking services, including commercial and
investment banking
Source: Graham & Whiteside
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Executive report
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Board of
Directors |
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Chairman and Chief Executive Officer |
Chairman |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Director |
Director/Board Member |
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Executives |
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Chairman and Chief Executive Officer |
Chief Executive Officer |
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Assistant General Manager |
Division Head Executive |
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Head Branch Co-ordination Cell |
Division Head Executive |
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General Manager |
Division Head Executive |
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Assistant General Manager |
Division Head Executive |
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Head of Operations |
Operations Executive |
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Head Reconciliation |
Administration Executive |
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Head Cash and Transfer |
Finance Executive |
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Head of Legal Department |
Finance Executive |
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Head Cards and Remittance |
Finance Executive |
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Head Internal Audit and Compliance |
Accounting Executive |
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Head of Human Resources |
Human Resources Executive |
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Head Research and Development |
Research & Development Executive |
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Head of Corporate Banking |
Key Banking Contact |
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Press clippings
FinMin for
high-level panel to probe 'scam'
Kathmandu Post
(Nepal)
12 September 2011
[What follows is
the full text of the news story.]
KATHMANDU, Sept.
12 -- The government is planning to form a high-level committee to investigate
misappropriation of a huge amount of Indian currency with fake customs
documents on the pretext of importing goods from India.
Finance Minister
Barsa Man Pun said the government opted for such a committee as initial
investigations revealed large scale IC misappropriation and that banks' names
are being dragged into the issue. "It seems there has been
misappropriation worth billions of rupees," Pun said. "A separate
task force will be formed to make the investigation prompt and effective."
He said the scandal could be as big as the fake VAT bill scam.
Five Indian
traders were arrested with nine fake customs clearance documents worth Rs 10
million on August 29. Police confiscated fake customs documents worth Rs 7.52
million and bank vouchers of NIC bank worth IRs 2.3 million from them.
The DRI suspects
the illegal transfers were carried out to pay Indian traders for under-invoiced
goods and for selling IC notes in the black market. The central regional branch
of the DRI in Pathlaiya is investigating the matter. "Given the
seriousness of the issue, there is a need to form a high level team," a
Finance Ministry source said.
As the Birgunj
Customs has been giving little time to match the customs documents from banks
to find out whether they are real, the investigation has gone slow.
Ministry officials
say the regional office is not being able to take the probe to a higher level
as it also has to carry out its regular duties. Officials said there is a possibility
that an experts' team under the leadership of a DRI official and with
participation of Nepal Rastra Bank, Department of Customs and Inland Revenue
Department could be formed. The ministry has received suggestions to in-clude
the police in the panel.
Although the
central regional office of the DRI had sought details from banks, a number of
them are delaying the documents' submission, according to the DRI. The
documents obtained from the banks need to be verified by NRB. "Banks where
we suspected huge transactions had taken place reported non-transaction or
little transaction," said Mahendra Baniya, chief of the central regional
office. "As such, we are going to seek information on this from the
central bank."
Of late, the DRI
has found that Siddhartha Bank also issued demand drafts worth Rs 61.1 million
in the name of Shyam Galla Bhandar, one of the five firms involved in the IC
misappropriation.
Nepal Bangladesh
Bank has issued drafts worth Rs 7.8 million and Nabil Bank has been found to
have issued drafts worth Rs 411,000. "Pathalaiya office looked into the
documents of six banks on Sunday," Baniya said.
Earlier, DRI found
that drafts had been issued by NIC Bank worth Rs 770 million, Rs 62.9 million
by Everest Bank and Rs 16.4 million by Nepal Investment Bank in the name of
firms such as Digital World, Maxwell, GS Traders and Jai Mata Di Traders, all
involved in the misappropriation. A DRI official said that the depa-rtment has
been keeping an eye on promoters of banks that issued the drafts.
Birgunj Customs
Chief Lavanya Dhakal said the fake customs documents can be id-entified clearly
as the customs has not issued documents having code numbers above 200,000. The
confiscated fake documents have code numbers in the series of 900,000. Published
by HT Syndication with permission from EKantipur.com. For any query with
respect to this article or any other content requirement, please contact Editor
at htsyndication@hindustantimes.com
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Nepal
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· 8110 Government Administration
NRB limit leads to
drop in India ATM withdrawals
Kathmandu Post
(Nepal)
02 September 2011
[What follows is
the full text of the news story.]
KATHMANDU, Sept. 2
-- After Nepal Rastra Bank (NRB) reduced the limit for withdrawing Indian
currency through debit cards issued by Nepali banks and financial institutions
(BFIs), withdrawals from ATM counters in India have dropped sharply.
NRB officials said
withdrawals had plunged more than 40 percent. Last March, the central bank
lowered the withdrawal limit to IRs 10,000 per day and IRs 100,000 per month.
Earlier, card holders could withdraw up to IRs 25,000 per day and IRs 200,000
per month.
The central bank's
move sought to discourage the tendency of opening accounts in Nepali banks just
to withdraw IC in cash from bordering Indian towns and exchange it in Nepal by
charging a high commission.
A senior NRB
official said that the move had also discouraged capital flight for purchasing
Indian insurance schemes and other purposes as well as cross-border smuggling
of goods. Smugglers need IC notes to purchase goods in India as they don't make
payment by letter of credit (LC) like legitimate traders. An NRB investigation
had revealed that around Rs 19 billion was withdrawn from Indian ATMs from the
accounts of SBI, Everest, Kumari and Nepal Investment Bank (NIBL) in the last
fiscal year.
Banks have also
reported that there has been a sharp decline in withdrawals in the recent
months compared to the past. Everest Bank Limited (EBL),which has a wide
network in India for withdrawal of deposits through ATMs due to its alliance
with Punjab National Bank, reported a fall of more than 50 percent in
withdrawals through ATM counters in India.
EBL Deputy General
Manager Hum Nath Gurung said that withdrawals had come down to IRs 25 million
from more than Rs 50 million daily. "The earlier trend of massive
withdrawals has been reversed," said Gurung.
NIBL has a similar
story to tell. NIBL's card and remittance department chief Bikash Thapa said
that his bank ahd been witnessing a decline in withdrawals through ATMs of more
than 70 percent for the last few months after the central bank lowered the
withdrawal limit. "Average daily withdrawals through ATMs have come down
to IRs 7 million from Rs 20 million in the past," said Thapa.
According to them,
withdrawals from bordering Indian towns were massive in the past and that they
had slowed lately. "Withdrawals from bordering areas have been largely
controlled," said Thapa. "It is also due to monitoring by security guards
in Indian ATM counters of frequent ATM card users and those using multiple
cards."
NRB is of the view
that currency black marketers have been using ATM cards to withdraw IC notes
from ATM counters in bordering Indian towns to sell them in the local market at
a higher exchange rate.
Police have
arrested some persons involved in such practices. For example, police arrested
Pradip Rastogi, a 22-year-old resident of Raghunathpur, Birgunj, who made 23
citizenship certificates under different names to withdraw Indian currency from
bordering Indian towns.
He was also found to have opened 55 accounts in 11 branches of Nepal SBI
Bank. He held 23 cheque books for 23 accounts. However, NIBL chief executive
director Prithvi Bahadur Pande said that his bank had been able to control such
practices. Published by HT Syndication with permission from EKantipur.com. For
any query with respect to this article or any other content requirement, please
contact Editor at htsyndication@hindustantimes.com
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· 8700 Engineering & management services
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10 companies hold 56pc
of Nepse's total market cap
Kathmandu Post
(Nepal)
29 August 2011
[What follows is
the full text of the news story.]
KATHMANDU, Aug. 29
-- Ten companies account for a majority percentage of the total market
capitalisation of companies listed in the Nepal Stock Exchange (Nepse) at the
end of the last fiscal year. There are 207 companies listed in the domestic
bourse.
Of the 10
companies, seven are commercial banks, two hydropower companies and one is
communication related company. Their market capitalisation accounts for 56.26
percent (Rs 181 billion) of Nepse's total market capitalisation (Rs 323 billion
at the end of the last fiscal year.
When a few
companies holding a significant portion of the market capitalisation, the
market index fluctuates frequently, increasing risk. "A small fluctuation
in share prices of such companies results in a big movement in the capital
market," said stock market analyst Rabindra Bhattarai.
Market
capitalisation is also a symbol of people's faith in companies. However, it
also depends on companies' size.
As of the end of
the last fiscal year, Nepal Telecom has the biggest share in the total market
capitalisation-19.43 percent. Standard Chartered Bank, Nabil Bank, Nepal
Investment Bank, Himalayan Bank, Nepal SBI Bank, Everest Bank and Bank of
Kathmandu rank from second to eighth position, respectively. The other
companies making up the top ten are Butwal Power Company (ninth) and Chilime
Hydropower Company (tenth).
Top 10 companies
in terms of market capitalisation
Company Share in total market cap(%)
Nepal Telecom 19.43
Stand-Chart Bank 8.95
Nabil Bank 7.85
Nepal Investment Bank 3.83
Himalayan Bank 3.56
Nepal SBI Bank 3.26
Everest Bank 2.81
Bank of Kathmandu 2.40
Butwal Power 2.32
Chilime Hydro 1.85
Published by HT Syndication with permission from EKantipur.com. For any query
with respect to this article or any other content requirement, please contact
Editor at htsyndication@hindustantimes.com
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· 7823 Consulting Engineering Services
· 7869 Business Services n.e.c.
Nepse closes 2.93
points lower
Kathmandu Post
(Nepal)
27 August 2011
[What follows is
the full text of the news story.]
KATHMANDU, Aug. 27
-- For the last several weeks, the domestic capital market is witnessing
minimum fluctuation. Last week, the Nepal Stock Market (Nepse) index dropped
just 2.93 points to close at 346.92 points on Thursday from 349.84 points on
Monday. The index registered loss on each trading day, but none of the sub
indices witnessed major fluctuations.
Groups
representing commercial banks, finance companies, hydropower and insurance
companies witnessed negative growth of 4.79, 3.52, 3.41 and 1.23 points,
respectively. Likewise, groups representing hotel, development banks and others
registered minimum rise of 1.13, 0.74 and 1.17 points, respectively. There was
no change in the indices of manufacturing and trading groups.
Nepse's last
week's performance was also largely determined by groups representing banks and
financial institutions (BFIs). At the end of the fiscal year 2010-11, the
growth rate of BFIs' profit was not satisfactory.
Stock analysts say
that the present state of Nepse was the result of the unsatisfactory profit
growth of BFIs. "The profit growth rate of companies, especially BFIs, was
unsatisfactory and dividend offered was below the expectation of investors,"
said stock analyst Rabindra Bhattarai, adding that the low divided distribution
will have a negative impact on the market.
Last week, Nepse's
market capitalisation came down to Rs 309.28 billion from Rs 314.30 billion in
the previous week. Similarly, the transaction amount too registered a
significant decline compared to the earlier week. It came down to Rs 94.89
million last week from Rs 129.77 million in the previous week, a decline of
26.88 percent.
Bank of Kathmandu
topped the chart in terms of transaction amount with a turnover of Rs 13.54
million. Taragaon Regency Hotel took the pole position in terms of total shares
traded (40,100), while Jyoti Bikas Bank saw the highest number of transaction
(440).
Total Turnover
Aug 18 - Rs 129.77
million
Aug 25 - Rs 94.89
million
No of Shares traded
Aug 18 - 5,68,760
Aug 25 - 4,84,597
Top five companies in terms of turnover (in Rs million)
Bank of Kathmandu 13.54
IME Finance 8.62
National Life Insurance 5.89
Nepal Investment Bank 4.08
Taragaon Regency Hotel 3.73. Published by HT Syndication with permission
from EKantipur.com. For any query with respect to this article or any other
content requirement, please contact Editor at htsyndication@hindustantimes.com
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Last Fiscal Year
saw banks' profit growth plummeting
Kathmandu Post
(Nepal)
26 August 2011
[What follows is
the full text of the news story.]
KATHMANDU, Aug. 26
-- Commercial banks' profit growth took a beating last fiscal year amid protracted
liquidity crunch, increasing cost of fund and squeeze in the spread rate.
The un-audited
last quarter results of 31 commercial banks show that unless economic situation
improves, they won't enjoy the same kind of growth in profit that they had two
years ago.
The commercial
banks raked in Rs 14.67 billion in net profits in the last fiscal year, a
slight rise from the Rs 14.31 billion in 2009-10.
The profit growth
rate remained sluggish with a meager rise of 2.48 percent in 2010-11.
Bankers say the
growth rate could have been negative had the central bank not allowed them to
include the recovery of loans during the extended one month period in their
financial reports. They say the reason behind the low profitability is the
sluggish business growth. "Business is not growing at the same rate that
was witnessed in the previous years," said NIC Bank CEO Sashin Joshi.
"It is thoroughly reflected in the diminishing growth rate of deposit and
lending."
The growth rates
of deposits and lending were 8.91 and 12.59 percent respectively in the last
fiscal year compared to 13.71 and 20.27 percent in the previous year. With
banks fighting throughout the year to manage liquidity, they could not make
investment. Even those having a relatively better liquidity position remained
cautious in lending.
The default in
realty loan, delayed budget and more resources for provisioning also hit the
banks' profit. In Nepal Bankers' Association President Ashoke SJB Rana's view,
the increased cost of fund resulted in the low profit margin. With liquidity
situation remaining tight, banks were forced to accept deposits at higher
interest rate. Such was the situation that banks at one time agreed to impose a
cap on maximum interest rate at 12 percent. The rise in cost of fund, according
to the bankers, was also due to the central bank's policy of keeping the
interest rates of different savings accounts within the 2 percent gap.
Banks' financial
reports show their average cost of fund rose to 8.34 percent in the fiscal year
2010-11 from 6.25 percent in the previous fiscal year. Its effect was seen in
their net interest income the growth of which slowed down to 12.74 percent from
30.39 percent in 2009-10.
In 2010-11, seven
commercial banks-Rastriya Banijya Bank, Nepal Bangladesh Bank, Nepal Credit and
Commerce Bank, Kumari Bank, Sunrise Bank and Machhpuchhre Bank-saw their net
profit plunging. Machhapurchhre that had posted a profit of Rs 128.04 million
in 2009-10 saw its profit limited to only Rs 8.2 million.
Even though the
banks' overall profit growth declined, five commercial banks' net profit
crossed the Rs 1 billion mark last fiscal year. Like in the past two years,
Rastriya Banijya Bank (RBB) was the highest earner with a profit of Rs 1.75
billion even though its net profit declined by 14.85 percent. The bank had
earned Rs 2.01 billion in 2009-10. The Agricultural Development Bank Limited
(ADBL) followed with a net profit of Rs 1.60 billion. Among private commercial
banks, NABIL Bank earned the highest net profit of Rs 1.29 billion followed by
Nepal Investment Bank and Standard Chartered Bank that earned profits of Rs
1.26 billion and Rs 1.11 billion respectively. Published by HT Syndication with
permission from EKantipur.com. For any query with respect to this article or any
other content requirement, please contact Editor at
htsyndication@hindustantimes.com
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Nepal
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· 6000 Depository institutions
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· 85310 Social work activities with accommodation
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· 7823 Consulting Engineering Services
Last Fiscal Year
saw
Kathmandu Post
(Nepal)
25 August 2011
[What follows is the full text of the news story.]
KATHMANDU, Aug. 25
-- Commercial banks' profit growth took a beating last fiscal year amid
protracted liquidity crunch, increasing cost of fund and squeeze in the spread
rate.
The un-audited
last quarter results of 31 commercial banks show that unless economic situation
improves, they won't enjoy the same kind of growth in profit that they had two
years ago.
The commercial
banks raked in Rs 14.67 billion in net profits in the last fiscal year, a
slight rise from the Rs 14.31 billion in 2009-10.
The profit growth rate
remained sluggish with a meager rise of 2.48 percent in 2010-11.
Bankers say the
growth rate could have been negative had the central bank not allowed them to
include the recovery of loans during the extended one month period in their
financial reports. They say the reason behind the low profitability is the
sluggish business growth. "Business is not growing at the same rate that
was witnessed in the previous years," said NIC Bank CEO Sashin Joshi.
"It is thoroughly reflected in the diminishing growth rate of deposit and
lending."
The growth rates
of deposits and lending were 8.91 and 12.59 percent respectively in the last
fiscal year compared to 13.71 and 20.27 percent in the previous year. With
banks fighting throughout the year to manage liquidity, they could not make
investment. Even those having a relatively better liquidity position remained
cautious in lending.
The default in
realty loan, delayed budget and more resources for provisioning also hit the
banks' profit. In Nepal Bankers' Association President Ashoke SJB Rana's view,
the increased cost of fund resulted in the low profit margin. With liquidity
situation remaining tight, banks were forced to accept deposits at higher
interest rate. Such was the situation that banks at one time agreed to impose a
cap on maximum interest rate at 12 percent. The rise in cost of fund, according
to the bankers, was also due to the central bank's policy of keeping the
interest rates of different savings accounts within the 2 percent gap.
Banks' financial
reports show their average cost of fund rose to 8.34 percent in the fiscal year
2010-11 from 6.25 percent in the previous fiscal year. Its effect was seen in
their net interest income the growth of which slowed down to 12.74 percent from
30.39 percent in 2009-10.
In 2010-11, seven
commercial banks-Rastriya Banijya Bank, Nepal Bangladesh Bank, Nepal Credit and
Commerce Bank, Kumari Bank, Sunrise Bank and Machhpuchhre Bank-saw their net
profit plunging. Machhapurchhre that had posted a profit of Rs 128.04 million
in 2009-10 saw its profit limited to only Rs 8.2 million.
Even though the
banks' overall profit growth declined, five commercial banks' net profit
crossed the Rs 1 billion mark last fiscal year. Like in the past two years,
Rastriya Banijya Bank (RBB) was the highest earner with a profit of Rs 1.75
billion even though its net profit declined by 14.85 percent. The bank had
earned Rs 2.01 billion in 2009-10. The Agricultural Development Bank Limited
(ADBL) followed with a net profit of Rs 1.60 billion. Among private commercial
banks, NABIL Bank earned the highest net profit of Rs 1.29 billion followed by
Nepal Investment Bank and Standard Chartered Bank that earned profits of Rs
1.26 billion and Rs 1.11 billion respectively. Published by HT Syndication with
permission from EKantipur.com. For any query with respect to this article or
any other content requirement, please contact Editor at
htsyndication@hindustantimes.com
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Bank Botswana Limited [profile]
Standard Chartered
Plc [profile]
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Nepal
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· 6000 Depository institutions
· 6020 Commercial banks
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· Business Services [profile]
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· S&Ls/Savings Banks [profile]
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· 85310 Social work activities with accommodation
· 7320 Deposit Taking Financiers
· 7321 Banks
· 7823 Consulting Engineering Services
Inter-bank lending on rise
Kathmandu Post (Nepal)
23 August 2011
[What follows is the full text of the news story.]
KATHMANDU, Aug. 23
-- In an indication that the liquidity situation has eased, commercial banks
are increasingly providing inter-bank loans to B and C class financial
institutions (FIs). Such is the rise that inter-bank loan taken by FIs from
commercial banks is double of the transaction among commercial banks, according
to Nepal Rastra Bank (NRB).
"About two
dozen B and C financial institutions are receiving loans from commercial banks
daily, while inter-bank lending is being done only a dozen times among
commercial banks," said Bhaskarmani Gyawali, spokesperson for the central
bank. "Such a trend is being seen for the last two months," he added.
According to NRB
officials, B and C class financial institutions have received loans worth
around Rs 1 billion from commercial banks over the period.
In the wake
troubles in some of B and C class FIs due bad corporate governance and acute
liquidity crunch, commercial banks had almost stopped lending to them until two
months ago. The central bank then called a meeting of A, B and C banks and
financial institutions (BFIs) to ease inter-bank loans. As per the demand of
FIs, NRB on June 27, allowed them to get inter-bank loans by putting up good
loans and other types of assets (mainly fixed assets) as collateral for a
period of six months. As per the earlier provision, inter-bank loans used to
mature in a week.
According to NRB
Deputy Governor Maha Prasad Adhikari, banks are providing finance to FIs under
this new window along with regular means of inter-bank loans.
However, BFI
officials said the lending has not been on a large scale. "I don't have
any reporting of finance companies taking inter-bank loans from commercial
banks," said Rajendra Man Shakya, president of Finance Companies' Association.
"What I have is the reporting of finance companies-which sought inter-bank
loans under the new window of NRB-that they are yet to receive the loans."
However, the NRB spokesperson stood by his statement. "Given the
sensitivity of the issue, many BFIs are not coming open regarding inter-bank
lending transactions," said Gyawali. "It is real that there have been
good transactions between commercial banks and financial institutions."
With commercial banks
witnessing strong growth in deposits in recent months, most of them are in a
position to lend, according to NRB officials. On the other hand, worsened image
of FIs resulted in diversion of deposits to A-class banks.
Many bankers were
of the opinion that inter-bank lending between commercial banks and other FIs
has happened, but on a small scale. NIC Bank CEO Sashin Joshi said he do not
believe that so many FIs received inter-bank loans. "The volume of
transactions must be small," he said.
Similar was the
view of Nepal Investment Bank Executive Eirector Prithvi Bahadur Pande. "I
don't think there has been big inter-bank lending with B and C class FIs."
However,
Development Bankers' Association President Manoj Goyal has a different take.
"Given abundant resources with commercial banks, B and C FIs might have
received inter-bank loans as they offer higher interest rate," he said.
Published by HT Syndication with permission from EKantipur.com. For any query
with respect to this article or any other content requirement, please contact
Editor at htsyndication@hindustantimes.com
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Banks see sharp
fall in PE ratios
Kathmandu Post
(Nepal)
22 August 2011
[What follows is
the full text of the news story.]
KATHMANDU, Aug. 22
-- With share prices of commercial banks witnessing correction in the last
fiscal year, their price to earning ratio (PE ratio) came down sharply at the
end of fiscal year 2010-11.
PE ratio is
calculated by dividing share price by per share earning.
According to
unaudited fourth quarter reports of commercial banks, their PE ratios, one of
the major investment indicators of the stock market, came down sharply over the
last year along with the freefall in the stock market.
A majority of the
17 banks that published financial results of the last fiscal year saw their PE
ratio standing between 10 and 20. This is a sharp fall compared to the previous
year when the ratio was above 20. Last year, Machhapuchhre Bank's PE ratio was
as high as 56.90 followed by Global Bank with 52.48. Now, Global's ratio has
come down to 13.85.
Last year saw a
sharp correction in bank's PE ratios, which is evident with the fact that banks
like Standard Chartered witnessed a sharp decline in their PE ratios. The
Standard Chartered's ratio came down to 25.92 from 42.23. Other banks
witnessing PE ratio above 20 are DCBL Bank and Citizens Bank International.
Stock analysts say
an average PE ratio of 15 is justifiable for commercial banks. "PE ratios
of well-priced stock stand between 10 and 17, whereas if it goes lower than 10,
the stock is said to be less-priced," said analyst Rabindra Bhattarai.
Currently, Nepal
Investment Bank, Agriculture Development Bank, Nepal Bangladesh Bank and
Lumbini Bank have PE ratios less than 10. Bhattarai said for companies having
higher growth prospects, the PE ratio can go as high as 25 and still such stock
is not considered speculative.
NIC Bank CEO
Sashin Joshi expressed a similar view. "The reasonable PE ratio of
commercial banks should be between 15 and 20," he said. However, the
investors do not consider PE ratio while making investment decision.
"Other factors such as corporate governance, strategy and management of a
company are also taken into account before buying stock," said Joshi.
Despite the higher
PE ratio, according to Bhattarai, investors are interested in investing in
SCB's stock due to its goodwill and strong corporate governance.
Joshi predicted
further adjustment in PE ratio of some banks. Published by HT Syndication with
permission from EKantipur.com. For any query with respect to this article or
any other content requirement, please contact Editor at htsyndication@hindustantimes.com
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Nepse continues to
stagnate
Kathmandu Post (Nepal)
20 August 2011
[What follows is
the full text of the news story.]
KATHMANDU, Aug. 20
-- The capital market continued to stagnate last week with the Nepal Stock
Exchange (Nepse) index dropping mare 0.78 point to close at 352.54 points on
Thursday from 353.33 points on Monday.
None of the sub
indices, except hydropower and hotels, witnessed major fluctuations.
Groups
representing commercial banks, finance companies, development banks, hotels and
others witnessed negative growth of 0.67, 0.59, 1.14, 16.77 and 2.35 points,
respectively. Likewise, groups representing hydropower and insurance companies
registered growth of 11.90 and 1.88 points, respectively. There was no change
in the indices of manufacturing and trading groups.
Stockbrokers said
the present market situation should be taken positively. "The market,
which was on a freefall due to selling pressure, has attained stability. This
is a good sign," said Anjan Raj Poudyal, "If something positive
happens it will help make the capital market vibrant."
Market
capitalisation, which had settled at Rs 314.39 billion in the previous week,
barely changed and settled at Rs 314.30 billion on Thursday. The transaction
amount too decreased compared to the previous week. It decreased to Rs 129.7
million from Rs 155.4 million-a decline of 16.50 percent.
Bank of Kathmandu
topped the chart in terms of transaction amount with a turnover of Rs 20.5
million. Paschimanchal Development Bank topped in terms of total number of
shares traded with its 92,500 units, while Bishow Bikas Bank recorded the
highest number of transactions (518).
Top five companies
in terms of turnover (in Rs million)
Bank of Kathmandu
20.56
Paschimanchal Development Bank 12.02
Everest Bank 8.36
Standard Chartered Bank 7.77
Nepal Investment Bank 5.19
Total Turnover
Aug 11 - Rs 155.4 million
Aug 18 - Rs 129.7 million
No. of Shares
Aug 11 - 8,88,252
Aug 18 - 5,68,760 Published by HT Syndication with permission from
EKantipur.com. For any query with respect to this article or any other content
requirement, please contact Editor at htsyndication@hindustantimes.com
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FOREIGN EXCHANGE RATES
|
Currency |
Unit
|
Indian Rupees |
|
US Dollar |
1 |
Rs.47.47 |
|
UK Pound |
1 |
Rs.74.96 |
|
Euro |
1 |
Rs.65.79 |
RATING EXPLANATIONS
|
RATING |
STATUS |
PROPOSED CREDIT LINE |
|
|
>86 |
Aaa |
Possesses an extremely sound financial base with the strongest capability
for timely payment of interest and principal sums |
Unlimited |
|
71-85 |
Aa |
Possesses adequate working capital. No caution needed for credit
transaction. It has above average (strong) capability for payment of interest
and principal sums |
Large |
|
56-70 |
A |
Financial & operational base are regarded healthy. General
unfavourable factors will not cause fatal effect. Satisfactory capability for
payment of interest and principal sums |
Fairly Large |
|
41-55 |
Ba |
Overall operation is considered normal. Capable to meet normal
commitments. |
Satisfactory |
|
26-40 |
B |
Capability to overcome financial difficulties seems comparatively
below average. |
Small |
|
11-25 |
Ca |
Adverse factors are apparent. Repayment of interest and principal sums
in default or expected to be in default upon maturity |
Limited with
full security |
|
<10 |
C |
Absolute credit risk exists. Caution needed to be exercised |
Credit not
recommended |
|
---- |
NB |
New Business |
---- |
This score serves as a reference to assess SC’s credit risk
and to set the amount of credit to be extended. It is calculated from a
composite of weighted scores obtained from each of the major sections of this report.
The assessed factors and their relative weights (as indicated through %) are as
follows:
Financial
condition (40%) Ownership
background (20%) Payment
record (10%)
Credit history
(10%) Market trend
(10%) Operational
size (10%)
This report is issued at your request without any risk
and responsibility on the part of MIRA INFORM PRIVATE LIMITED (MIPL) or its
officials.