3 Government Banks Of Nepal: Comparative Analysis
May 15, 2020 | Investopaper
There are 3 government owned banks, namely:
Agricultural Development Bank (ADBL)
(Click on the links above for the third quarter performance report of the respective banks)
The three government banks have emerged as the competitive commercial banks from a weak financial position few years ago. Over the years, these banks have impressively reformed themselves. At present context, the banks have positioned themselves as the top banks in terms of profitability as well as the business portfolio. Here, we will try to make a financial comparison of these 3 banks.
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Note: This comparative study will be based on the un-audited third quarter report of the fiscal year 2076/77 published by the respective banks.
The financial indicators on which the comparison will be made are as follows:
Paid-Up Capital
Agricultural Development Bank has the highest paid-up capital among the three with Rs. 14.99 Arba. Nepal Bank and Rastriya Banijya Bank have a capital of Rs. 9.81 Arba and Rs. 9 Arba respectively.
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Note: The capital of Agricultural Development Bank includes the preference share of Rs. 5.44 Arba.
| Banks | Paid up capital(Rs.’Arba’) |
| Agricultural Development Bank | 14.99 |
| Nepal Bank | 9.81 |
| Rastriya Banijya Bank | 9 |
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Reserve & Surplus
Nepal Bank has the reserve and surplus of Rs. 19.29 Arba followed by Rastriya Banijya Bank and Agricultural Development Bank with Rs. 14.72 Arba and Rs. 12.87 Arba respectively.
| Banks | Reserve and Surplus(Rs.’Arba’) |
| Agricultural Development Bank | 12.87 |
| Nepal Bank | 19.29 |
| Rastriya Banijya Bank | 14.72 |
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Deposits
Rastriya Banijya Bank has the largest deposit from customers of Rs. 200.46 Arba. Agricultural Development Bank and Nepal Bank are way behind in deposit collection with Rs. 130.52 Arba and Rs. 122.70 Arba respectively.
| Banks | Deposits From Customers (Rs.’Arba’) |
| Agricultural Development Bank | 130.52 |
| Nepal Bank | 122.7 |
| Rastriya Banijya Bank | 200.46 |
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Loans & Advances
Rastriya Banijya Bank has floated more loans and advances to customers than other two with Rs. 148.63 Arba until the Chaitra end, 2076. Likewise, Agricultural Development Bank has provided loans of Rs. 121.40 Arba while the loans by Nepal Bank stand at Rs. 101.68 Arba.
| Banks | Loans & Advances To Customers (Rs.’Arba’) |
| Agricultural Development Bank | 121.4 |
| Nepal Bank | 101.68 |
| Rastriya Banijya Bank | 148.63 |
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Net Interest Income
Rastriya Banijya Bank has earned the highest net interest income in the nine months of the fiscal year 2076/77. RBB has a net interest income of Rs. 6.97 Arba followed by ADBL with Rs. 4.36 Arba and NBL with Rs. 4.22 Arba.
| Banks | Net Interest Income(Rs.’Arba’) |
| Agricultural Development Bank | 4.36 |
| Nepal Bank | 4.22 |
| Rastriya Banijya Bank | 6.97 |
Operating Profit
Rastriya Banijya Bank has generated over 1.50 times more operating profit than the other two banks. In the nine months, RBB’s operating profit stood at Rs. 4.17 Arba. Likewise, Agricultural Development Bank and Nepal Bank have an operating profit of Rs. 2.70 Arba and Rs. 2.65 Arba respectively.
| Banks | Operating Profit (Rs.’Arba’) |
| Agricultural Development Bank | 2.7 |
| Nepal Bank | 2.65 |
| Rastriya Banijya Bank | 4.17 |
Net Profit
Rastriya Banijya Bank has earned a net profit of Rs. 3.04 Arba. This is one Arba more than the profit of ADBL and NBL. Agricultural Development Bank has posted a profit of Rs. 2.04 Arba. Similarly, the net profit of Nepal Bank is Rs. 1.99 Arba.
| Banks | Net Profit (Rs.’Arba’) |
| Agricultural Development Bank | 2.04 |
| Nepal Bank | 1.99 |
| Rastriya Banijya Bank | 3.04 |
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Distributable Profit
Agricultural Development Bank has a highest distributable profit among the three with Rs. 1.26 Arba. Rastriya Banijya Bank is close second with Rs. 1.16 Arba. Nepal Bank has a distributable profit of negative Rs. 6 crores.
| Banks | Distributable Profit (Rs. ‘ Arba’) |
| Agricultural Development Bank | 1.26 |
| Nepal Bank | -0.06 |
| Rastriya Banijya Bank | 1.16 |
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Non Performing Loans (NPL)
Nepal Bank has the lowest Non Performing Loans of 2.64 percent. Agricultural Development is second with the NPL of 3.65 percent. RBB has the higher NPL of 4.64 percent.
| Banks | Non Performing Loans, NPL(%) |
| Agricultural Development Bank | 3.65 |
| Nepal Bank | 2.64 |
| Rastriya Banijya Bank | 4.64 |
Base Rate
Rastriya Banijya Bank has a lower base rate of 6.72 percent followed by Nepal Bank with 7.49 percent. Agricultural Development Bank has the higher base rate among the three with 9.97 percent.
| Banks | Base rate(%) |
| Agricultural Development Bank | 9.97 |
| Nepal Bank | 7.49 |
| Rastriya Banijya Bank | 6.72 |
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Earnings Per Share (EPS)
Rastriya Banijya Bank is ahead in terms of Earnings Per Share with Rs. 44.96. Nepal Bank and Agricultural Development Bank have an EPS of Rs. 27.13 and Rs. 26.55 respectively.
| Banks | Earnings Per Share, EPS(Rs.) |
| Agricultural Development Bank | 26.55 |
| Nepal Bank | 27.13 |
| Rastriya Banijya Bank | 44.96 |
Net-worth Per Share
Nepal Bank has a greater per-share net-worth of Rs. 296.63. Rastriya Banijya Bank the net-worth per share of Rs. 263.56 while ADBL has per-share networth of Rs. 232.11.
| Banks | Networth Per Share ( Rs.) |
| Agricultural Development Bank | 232.11 |
| Nepal Bank | 296.63 |
| Rastriya Banijya Bank | 263.56 |
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Comparative Analysis of 3 Government Banks Of Nepal
The comparative analysis of 3 government banks of Nepal is summarized in the table below:
| Headings | Nepal Bank | Agricultural Development Bank | Rastriya Banijya Bank |
| Paid up capital(Rs.’Arba’) | 9.81 | 14.99 | 9 |
| Reserve and Surplus(Rs.’Arba’) | 19.29 | 12.87 | 14.72 |
| Deposits From Customers (Rs.’Arba’) | 122.7 | 130.52 | 200.46 |
| Loans & Advances To Customers (Rs.’Arba’) | 101.68 | 121.4 | 148.63 |
| Net Interest Income(Rs.’Arba’) | 4.22 | 4.36 | 6.97 |
| Operating Profit (Rs.’Arba’) | 2.65 | 2.7 | 4.17 |
| Net Profit (Rs.’Arba’) | 1.99 | 2.04 | 3.04 |
| Distributable Profit (Rs. ‘ Arba’) | -6.2 | 1.26 | 1.16 |
| Non Performing Loans, NPL(%) | 2.64 | 3.65 | 4.64 |
| Base rate(%) | 7.49 | 9.97 | 6.72 |
| Earnings Per Share, EPS(Rs.) | 27.13 | 26.55 | 44.96 |
| Networth Per Share ( Rs.) | 296.63 | 232.11 | 263.56 |
Note:
The above figures are based on the un-audited quarterly report published by the respective banks. Investors are advised to take other things into consideration along with this report while making investment decisions. The numbers may vary after the final audit.
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