February 7, 2020 | Investopaper
Everest Bank (EBL) and Himalayan Bank (HBL) are the two joint venture commercial banks. Both the banks are among very few that has led the banking industry of Nepal for several years. The banks have grown at a satisfactory rate from their inception until the current period. In the second quarter of the fiscal year 2076/77, both the banks have similar paid-up capital. So, we will try to make a comparative financial analysis of these two banks. The financial comparison will be based on the following indicators:
Paid Up Capital & Reserve
Himalayan Bank has a higher paid-up capital of Rs. 8.52 Arba while Everest bank’s capital is at Rs. 8.51 Arba. Likewise, Himalayan Bank has a greater reserve and surplus of Rs. 9.22 Arba. The reserves and surplus of the Everest Bank stand at Rs. 8.85 Arba.
Deposits & Loans
Everest Bank surpasses Himalayan Bank in terms of both deposit collection and loan disbursement to the customers. Until the second quarter of this fiscal year, the bank has a total deposit collection of Rs. 141.19 Arba and floated loans of Rs. 114.33 Arba. On the other hand, Himalayan Bank has a deposit and loans of Rs. 112.73 Arba and Rs. 97.71 Arba respectively.
Net Interest Income, Net Profit & Distributable Profit
In the first six months, Everest Bank generated a net interest income of Rs. 2.90 Arba which is higher than the Himalayan’s bank Rs. 2.58 Arba. However, Himalayan Bank excels in the net profit with Rs. 1.74 Arba. Everest Bank earned a net profit of Rs. 1.51 Arba in the 6 months period. If we look into the distributable profit, Himalayan Bank leads with Rs. 93 crores while Everest Bank’s distributable profit stands at Rs. 86 crores.
Non-Performing Loans & Base rate
Everest Bank has lower NPL as well as the base rate. Everest Bank NPL stood at 0.16 percent while the base rate is at 8.46 percent. Himalayan Bank has a higher NPL and base rate of 1.28 percent and 8.92 percent respectively.
Earnings Per Share (EPS) & Net worth per Share
With higher profit and similar capital, the EPS of Himalayan Bank is more than EBL and stands at Rs. 40.90. Likewise, Everest Bank has an Earnings Per Share (EPS) of Rs. 35.49. Similarly, HBL has more per-share net worth of Rs. 208.2 against the EBL’s Rs. 206.53.
The financial comparison of Everest Bank & Himalayan Bank is also summarized in the table below:
Face to Face: Everest Bank Vs Himalayan Bank
|HEADINGS||Everest Bank||Himalayan Bank|
|PAID-UP CAPITAL (Rs. In Arba)||8.51||8.52|
|RESERVE & SURPLUS (Rs. In Arba)||8.85||9.22|
|DEPOSITS From Customers(Rs. In Arba)||141.19||112.73|
|LOANS To Customers(Rs. In Arba)||114.33||97.72|
|NET INTEREST INCOME (Rs. In Arba)||2.9||2.58|
|PROFIT (Rs. In Arba)||1.51||1.74|
|DISTRIBUTABLE PROFIT (Rs. In Arba)||0.86||0.93|
|NON PERFORMING LOANS, NPL (%)||0.16||1.28|
|EARNINGS PER SHARE, EPS (Rs.)||35.49||40.9|
|NETWORTH PER SHARE (Rs.)||206.53||208.2|
|MARKET PRICE PER SHARE (Rs.) [Poush end, 2076]||596||562|
The above figures are based on the unaudited second-quarter report published by the respective company. 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.