Ranking of Finance Companies of Nepal based on 6 Key Financial Indicators

July 17, 2019 | Investopaper

The banking sector is currently going through the merger and acquisition phase. Nepal Rastra Bank, the central bank of Nepal is trying to reduce the number of financial institutions in Nepal. In order to strengthen the financial condition, the central bank has forced the BFI to undergo the merger/acquisition. At current period, several A-class commercial banks and B-class development banks are eyeing on the finance companies. To improve the capital size and balance sheet, the big banks are making the strategy to acquire suitable finance companies. So, it might be a good time to grab the stocks of finance companies at current cheap prices. After the acquisition, investors are likely to make a handsome profit as seen in the past mergers/acquisition.

We have tried to rank the finance companies of Nepal based on the following indicators:

—Paid-up Capital

—Deposits

—Loans

—CCD Ratio

—SLR

—NPL

The fourth-quarter report of the fiscal year 2075/76 is yet to be published. So, we have included the data of the third quarter of the fiscal year 2075/76.

Jebils Finance is already acquired by Nepal Investment Bank and has started the joint operation. Likewise, Lalitpur Finance is in the acquisition process with Prime Commercial Bank. However, we have included them as they have published the report in the third quarter.

Look into the ranking of finance companies and feel free to use this information for your investment decisions.

Paid-up Capital of Finance Companies of Nepal

Deposits of Finance Companies of Nepal

Loans of Finance Companies of Nepal

CCD Ratio of Finance Companies of Nepal

Note: CCD Ratio %= Credit to Core Capital and Deposit. It should not exceed 80 %. 

Statutory Liquidity Reserve (SLR) 

Note: The minimum requirement for Statutory Liquidity Reserve (SLR) is 7 percent.

Non-Performing Loans (NPL)

Note: NPL% = Non-Performing Loan to Total Loan

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