Financial Performance Analysis of Commercial Banks of Nepal [With Ranking]

INVESTOPAPER

All 28 commercial banks have published the fourth quarter report of the fiscal year 2075/76. They have shown good financial growth in this quarter. Commercial banks are able to justify their market price by showing good growth this year. Investors have already anticipated the good financial performance of banks in the month of April, So, stocks of the banking sector were one of the major gainers in the early Nepse surge. The commercial banks have shown good improvement in different financial indicators like paid-up capital, reserve, deposit, loans, profit, Earnings Per Share, net worth per share, net profit, etc this quarter.

Here, we have made an exclusive study of the financial performance of the 28 commercial banks of Nepal. We have ranked the banks in terms of different indicators.

Note:

It is based on the unaudited fourth-quarter report of the fiscal year 2075/76. After the audit, the numbers along with the ranking may vary.

PAID-UP CAPITAL OF COMMERCIAL BANKS OF NEPAL

Paid-up capital is the money provided by the shareholders into the company since the establishment. It includes the initial fund accumulated from the shareholders plus additional capital injected through right/ bonus shares or FPO as the company moves forward. Higher the capital, greater the financial strength of the company. In times of economic difficulty, companies with huge capital tend to survive than companies with low capital.

In the case of commercial banks of Nepal, except NCC Bank, all other banks have met the capital requirement of Rs. 8 Arba as directed by the central bank. The total capital of the commercial banks stands at Rs. 252.26 Arba until the end of the fiscal year 2075/76. So, the average capital of the banks is Rs. 9.01 Arba. 8 commercial banks have the capital above the average. Likewise, the remaining 20 banks have the capital below Rs. 9.01 Arba.

Agricultural Development Bank has the highest capital of Rs. 14.45 Arba. However, it includes the preference share worth Rs. 5.43 Arba. Similarly, Nepal Investment Bank has the capital of Rs. 12.87 Arba. Likewise, Mega Bank is at spot 3 in terms of the paid-up capital. Mega bank has the capital of Rs. 10.39 Arba

See the ranking of the 28 commercial banks based on capital until the end of the fiscal year 2075/76 in the table below:

RANK BANK PAID-UP CAPITAL ( in Rs. Arba)
1 Agricultural Development Bank Ltd. 14.45  

 

 

 

 

Above Industry Average

2 Nepal Investment Bank 12.87
3 Mega Bank Nepal Ltd. 10.39
4 Global IME Bank Ltd. 10.31
5 Nepal Bank Ltd. 9.81
6 NMB Bank 9.62
7 Prime Commercial Bank 9.32
8 Nabil Bank 9.01
9 Rastriya Banijya Bank 9  

 

 

 

Below Industry Average

10 Laxmi Bank Ltd. 8.92
11 Prabhu Bank Ltd. 8.89
12 Siddhartha Bank Ltd. 8.89
13 NIC Asia Bank 8.83
14 Kumari Bank Ltd. 8.69
15 Himalayan Bank Ltd. (HBL) 8.52
16 Nepal SBI Bank Ltd. 8.45
17 Century Commercial Bank 8.42
18 Citizens International Bank Ltd. 8.37
19 Sunrise Bank Ltd. 8.15
20 Everest Bank Ltd. 8.11
21 Nepal Bangladesh Bank 8.09
22 Bank of Kathmandu 8.06
23 Machhapuchre Bank Ltd. 8.06
24 Standard Chartered Bank 8.01
25 Civil Bank Ltd. 8
26 Janata Bank Nepal Ltd. 8
27 Sanima Bank Ltd. 8
28 Nepal Credit and Commerce Bank 7.02
Industry Average Rs. 9.01 Arba

 

RESERVE OF COMMERCIAL BANKS OF NEPAL

Reserve along with the capital determine the financial strength of the company. It is also the part of the shareholders’ fund which is not distributed. It includes a general reserve, retained earnings and share premium (if the shares are sold at a premium rate). Higher the reserve and surplus, the greater the strength.

The commercial banks of Nepal have accumulated total reserve and surplus of Rs. 189.24 Arba until the end of the fiscal year 2075/76. The average reserve stands at Rs. 6.76 Arba. Nine banks have reserves higher than the average. Likewise, the remaining 19 banks have reserve below Rs. 6.76 Arba.

Nepal Bank occupies the top spot with a total reserve of Rs. 19.63 Arba. Similarly, Rastriya Banijya bank has a reserve of Rs. 14.54 Arba followed by Nabil Bank with Rs. 14.24 Arba. Century Commercial Bank, Civil Bank, and Janata Bank have the lowest reserve with Rs. 1.75 Arba, Rs. 2.24 Arba, and Rs. 2.68 Arba respectively.

The table below shows the ranking of the 28 commercial banks based on the total reserve and surplus until the end of 2075/76.

RANK BANK RESERVE  ( in Rs. Arba)
1 Nepal Bank Ltd. 19.63  

 

 

 

Above Industry Average

2 Rastriya Banijya Bank 14.54
3 Nabil Bank 14.24
4 Agricultural Development Bank Ltd. 14.2
5 Nepal Investment Bank 12.74
6 Everest Bank Ltd. 9.53
7 NMB Bank 7.84
8 Himalayan Bank Ltd. (HBL) 7.56
9 Standard Chartered Bank 6.98
10 Siddhartha Bank Ltd. 6.20  

 

 

 

 

 

 

Below Industry Average

11 NIC Asia Bank 6.13
12 Global IME Bank Ltd. 6.04
13 Bank of Kathmandu 5.94
14 Nepal SBI Bank Ltd. 5.72
15 Prabhu Bank Ltd. 5.67
16 Nepal Credit and Commerce Bank 5.5
17 Nepal Bangladesh Bank 4.36
18 Prime Commercial Bank 4.26
19 Sunrise Bank Ltd. 4.2
20 Citizens International Bank Ltd. 4.09
21 Sanima Bank Ltd. 3.9
22 Laxmi Bank Ltd. 3.72
23 Mega Bank Nepal Ltd. 3.21
24 Machhapuchre Bank Ltd. 3.19
25 Kumari Bank Ltd. 3.18
26 Janata Bank Nepal Ltd. 2.68
27 Civil Bank Ltd. 2.24
28 Century Commercial Bank 1.75
Industry Average Rs. 6.76 Arba

DEPOSITS OF COMMERCIAL BANKS OF NEPAL

28 Commercial Banks have collected Rs. 27.90 Kharba as the deposits from customers until the end of the fiscal year 2075/76. The industrial average is Rs. 99.66 Arba for each bank. Eleven Banks have deposit collection above the average i.e Rs. 99.66 Arba.

Rastriya Banijya Bank has the highest deposit collection of Rs. 190.03 Arba followed by NIC Asia Bank with Rs. 176.82 Arba. Nabil Bank has the deposits of Rs. 164.37 Arba and is at number 3 in terms of deposit collection. Civil Bank has the lowest deposits among the commercial banks. The deposits of Civil Bank stand at Rs. 42 Arba only.

The table below shows the ranking of the 28 commercial banks based on total deposits from customers until the fiscal year 2075/76.

RANK BANK DEPOSITS  ( in Rs. Arba)
1 Rastriya Banijya Bank 190.03  

 

 

 

 

Above Industry Average

2 NIC Asia Bank 176.82
3 Nabil Bank 164.37
4 Nepal Investment Bank 149.39
5 Everest Bank Ltd. 129.55
6 Global IME Bank Ltd. 120.09
7 Agricultural Development Bank Ltd. 119.76
8 Nepal Bank Ltd. 117.2
9 Siddhartha Bank Ltd. 114.9
10 Prabhu Bank Ltd. 112.39
11 Himalayan Bank Ltd. (HBL) 109.39
12 NMB Bank 97.89  

 

 

 

 

 

 

 

Below Industry Average

13 Nepal SBI Bank Ltd. 97.88
14 Sanima Bank Ltd. 89.37
15 Machhapuchre Bank Ltd. 85.2
16 Bank of Kathmandu 82.94
17 Laxmi Bank Ltd. 79.74
18 Mega Bank Nepal Ltd. 78.68
19 Prime Commercial Bank 77.04
20 Janata Bank Nepal Ltd. 76.02
21 Standard Chartered Bank 75.73
22 Sunrise Bank Ltd. 75.43
23 Kumari Bank Ltd. 73.2
24 Citizens International Bank Ltd. 70.51
25 Nepal Credit and Commerce Bank 67.04
26 Nepal Bangladesh Bank 59.83
27 Century Commercial Bank 58
28 Civil Bank Ltd. 42
Industry Average Rs. 99.66 Arba

 

LOANS AND ADVANCES OF COMMERCIAL BANKS OF NEPAL

Commercial banks of Nepal have floated the loans and advances of Rs. 23.97 Kharba in total. The average lending of each bank stands at Rs. 85.62 Arba. 12 banks have total lending higher than the average. Rastriya Banijya Bank, NIC Asia Bank, and Nabil Bank occupy the top 3 spots with loans of Rs. 144.45 Arba, Rs. 142.58 Arba and Rs. 129.28 Arba respectively.

Similarly, Civil bank, Nepal Bangladesh Bank and Standard chartered bank have the lowest loan portfolio among the commercial banks. Civil bank has only Rs. 42.69 Arba in loans. Likewise, NBB has total loans and advances of Rs. 52.73 Arba. Standard Chartered has provided total loans and advances of Rs. 53.11 Arba until the end of the fiscal year 2075/76.

See the ranking of the 28 commercial banks based on loans and advances in the fiscal year 2075/76 in the table below:

RANK BANK LOANS AND ADVANCES ( in Rs. Arba)
1 Rastriya Banijya Bank 144.45  

 

 

 

 

Above Industry Average

2 NIC Asia Bank 142.58
3 Nabil Bank 129.28
4 Nepal Investment Bank 123
5 Agricultural Development Bank Ltd. 110.8
6 Global IME Bank Ltd. 108.99
7 Siddhartha Bank Ltd. 104.77
8 Everest Bank Ltd. 104.57
9 Himalayan Bank Ltd. (HBL) 92.82
10 Nepal Bank Ltd. 92.41
11 NMB Bank 88.49
12 Prabhu Bank Ltd. 86.42
13 Nepal SBI Bank Ltd. 84.3  

 

 

 

 

 

 

Below Industry Average

14 Sanima Bank Ltd. 81.25
15 Machhapuchre Bank Ltd. 75.3
16 Laxmi Bank Ltd. 75.23
17 Kumari Bank Ltd. 73.12
18 Prime Commercial Bank 72.52
19 Bank of Kathmandu 71.74
20 Mega Bank Nepal Ltd. 69.99
21 Sunrise Bank Ltd. 68.88
22 Janata Bank Nepal Ltd. 66.84
23 Citizens International Bank Ltd. 62.91
24 Nepal Credit and Commerce Bank 61.13
25 Century Commercial Bank 56.93
26 Standard Chartered Bank 53.11
27 Nepal Bangladesh Bank 52.73
28 Civil Bank Ltd. 42.69
Industry Average Rs. 85.62 Arba

 

NET INTEREST INCOME OF COMMERCIAL BANKS OF NEPAL

Net interest income is the major source of income of the banks. It is the difference between the interest income from loans and interest expenses on deposits. Commercial Banks, in total, have earned Rs. 127.42 Arba as the net interest income in the fiscal year 2075/76. The average net interest income stands at Rs. 4.55 Arba.

12 banks have a net interest income greater than the average. Whereas 16 banks have below-average net interest income. Rastriya Banijya Bank, Agricultural Development Bank, and Nabil are the top 3 banks in terms of net interest income. RBB has the highest net interest income of Rs. 10.23 Arba. Likewise, ADBL and Nabil have earned Rs. 7.37 Arba and Rs. 7.34 Arba as the net interest income.

Civil Bank, Century Commercial bank and Citizens bank occupy the lowest spots in the net interest income. Civil, Century and Citizens have net interest income of Rs. 2.20 Arba, Rs. 2.67 Arba and Rs.2.82 Arba respectively.

The table below shows the ranking of the 28 commercial banks based on net interest income until the fiscal year 2075/76.

RANK BANK Net interest income  ( in Rs. Arba)
1 Rastriya Banijya Bank 10.23  

 

 

 

 

Above Industry Average

2 Agricultural Development Bank Ltd. 7.37
3 Nabil Bank 7.34
4 NIC Asia Bank 6.96
5 Nepal Bank Ltd. 6.18
6 Nepal Investment Bank 6.15
7 Everest Bank Ltd. 5.64
8 Global IME Bank Ltd. 5.17
9 Himalayan Bank Ltd. (HBL) 5.04
10 Nepal SBI Bank Ltd. 4.75
11 Siddhartha Bank Ltd. 4.67
12 Prabhu Bank Ltd. 4.57
13 NMB Bank 4.27  

 

 

 

 

 

 

 

Below Industry Average

14 Sanima Bank Ltd. 4.1
15 Mega Bank Nepal Ltd. 3.8
16 Bank of Kathmandu 3.77
17 Prime Commercial Bank 3.6
18 Sunrise Bank Ltd. 3.6
19 Machhapuchre Bank Ltd. 3.52
20 Standard Chartered Bank 3.52
21 Janata Bank Nepal Ltd. 3.42
22 Nepal Credit and Commerce Bank Ltd. 3.09
23 Laxmi Bank Ltd. 3.04
24 Kumari Bank Ltd. 3.02
25 Nepal Bangladesh Bank 2.91
26 Citizens International Bank Ltd. 2.82
27 Century Commercial Bank 2.67
28 Civil Bank Ltd. 2.2
Industry Average Rs. 4.55 Arba

STAFF EXPENSES OF COMMERCIAL BANKS OF NEPAL

The industrial average of the 28 banks regarding the personnel expenses stands at Rs. 1.49 Arba. Rastriya Banijya Bank has the highest staff expenses with Rs. 3.12 Arba. Agricultural Development spent Rs. 2.91 Arba in staff expenses. Likewise, NIC Asia is at number 3 spot with Rs. 2.49 Arba as personnel expenses.

12 commercial banks have staff expenses above the industrial average i.e. Rs. 1.49 Arba. Whereas, 16 commercial banks have spent below the industrial average.

The table below shows the ranking of the 28 commercial banks based on staff expenses in the fiscal year 2075/76 :

RANK BANK Staff expenses  ( in Rs. Arba)
1 Rastriya Banijya Bank 3.12  

 

 

 

 

Above Industry Average

2 Agricultural Development Bank Ltd. 2.91
3 NIC Asia Bank 2.49
4 Nepal Bank Ltd. 2.11
5 Nabil Bank 2.10
6 Prabhu Bank Ltd. 1.79
7 Siddhartha Bank Ltd. 1.69
8 Nepal SBI Bank Ltd. 1.66
9 Everest Bank Ltd. 1.61
10 Himalayan Bank Ltd. (HBL) 1.59
11 Global IME Bank Ltd. 1.56
12 Nepal Investment Bank 1.54
13 NMB Bank 1.42  

 

 

 

 

 

 

Below Industry Average

14 Janata Bank Nepal Ltd. 1.29
15 Nepal Credit and Commerce Bank 1.24
16 Machhapuchre Bank Ltd. 1.22
17 Mega Bank Nepal Ltd. 1.18
18 Sanima Bank Ltd. 1.18
19 Bank of Kathmandu 1.16
20 Sunrise Bank Ltd. 1.12
21 Standard Chartered Bank 1.08
22 Kumari Bank Ltd. 1.03
23 Nepal Bangladesh Bank 1.02
24 Laxmi Bank Ltd. 1.01
25 Citizens International Bank Ltd. 0.99
26 Century Commercial Bank 0.9
27 Prime Commercial Bank 0.89
28 Civil Bank Ltd. 0.78
Industry Average Rs. 1.49 Arba

OPERATING PROFIT OF COMMERCIAL BANKS OF NEPAL

Operating Profit refers to the profit earned through the company’s business operation. It excludes deductions of interest and taxes. Sometimes, Operating Profit is referred to as operating income. Operating profit is a useful measure of profitability than the net profit. This is because it doesn’t include a one-time profit which causes a surge in the net profit. So, it is a more dependable indicator to measure the profitability of the business for the year.

Commercial banks of Nepal have improved the operating profit in the fiscal year 2075/76. 28 commercial banks of Nepal have earned Rs. 92.27 Arba as the operating profit in the fiscal year.  Rastriya Banijya Bank leads the commercial banks with an operating profit of Rs. 6.93 Arba. Nabil Bank is a close second with the operating profit of Rs. 6.08 Arba. The industrial average is Rs. 3.30 Arba. 11 commercial banks have an operating profit above the industrial average. Whereas, 17 banks have an operating profit below the industrial average i.e Rs. 3.30 Arba.

See the ranking of the 28 commercial banks based on the operating profit in the fiscal year 2075/76 in the table below:

RANK BANK Operating profit  ( in Rs. Arba)
1 Rastriya Banijya Bank 6.93  

 

 

 

 

Above Industry Average

2 Nabil Bank 6.08
3 Agricultural Development Bank Ltd. 5.48
4 NIC Asia Bank 4.58
5 Nepal Bank Ltd. 4.55
6 Everest Bank Ltd. 4.36
7 Nepal Investment Bank 4.23
8 Himalayan Bank Ltd. (HBL) 4.03
9 Global IME Bank Ltd. 3.92
10 Standard Chartered Bank 3.48
11 Siddhartha Bank Ltd. 3.32
12 NMB Bank 3.28  

 

 

 

 

 

 

Below Industry Average

13 Prime Commercial Bank 3.27
14 Sanima Bank Ltd. 3.21
15 Nepal SBI Bank Ltd. 3.13
16 Prabhu Bank Ltd. 2.87
17 Bank of Kathmandu 2.77
18 Sunrise Bank Ltd. 2.6
19 Mega Bank Nepal Ltd. 2.47
20 Machhapuchhre Bank Ltd. 2.42
21 Nepal Bangladesh Bank 2.34
22 Laxmi Bank Ltd. 2.3
23 Nepal Credit and Commerce Bank 2.15
24 Citizens International Bank Ltd. 2.11
25 Janata Bank Nepal Ltd. 2
26 Kumari Bank Ltd. 1.92
27 Century Commercial Bank 1.26
28 Civil Bank Ltd. 1.21
Industry Average Rs. 3.30 Arba

 

NET PROFIT OF COMMERCIAL BANKS OF NEPAL

Commercial Banks of Nepal have earned a profit of Rs. 65.41 Arba in total in the fiscal year 2075/76. The industrial average profit is Rs. 2.34 Arba. 11 commercial banks have earned a profit above Rs. 2.34 Arba. Likewise, 17 commercial banks have earned below the industrial average.

Rastriya Banijya Bank, Agricultural Development Bank, and Nabil Bank occupy the top 3 spots in the net profit with profit above Rs. 4 Arba. Rastriya Banijya Bank has made a huge net profit of Rs. 5.33 Arba followed by ADBL and Nabil with Rs. 4.35 Arba and Rs. 4.29 Arba as the net profit.

See the ranking of the 28 commercial banks based on the net profit in the fiscal year 2075/76 in the table below:

RANK BANK Profit  ( in Rs. Arba)
1 Rastriya Banijya Bank 5.33  

 

 

 

 

 

Above Industry Average

2 Agricultural Development Bank Ltd. 4.35
3 Nabil Bank 4.29
4 Nepal Investment Bank 3.42
5 Everest Bank Ltd. 3.05
6 NIC Asia Bank 3.05
7 Himalayan Bank Ltd. (HBL) 2.85
8 Global IME Bank Ltd. 2.8
9 Nepal Bank Ltd. 2.61
10 Standard Chartered Bank 2.5
11 Prime Commercial Bank 2.37
12 NMB Bank 2.31  

 

 

 

 

 

 

Below Industry Average

13 Siddhartha Bank Ltd. 2.31
14 Nepal SBI Bank Ltd. 2.3
15 Sanima Bank Ltd. 2.24
16 Prabhu Bank Ltd. 2.05
17 Bank of Kathmandu 1.94
18 Mega Bank Nepal Ltd. 1.72
19 Sunrise Bank Ltd. 1.71
20 Machhapuchhre Bank Ltd. 1.7
21 Nepal Bangladesh Bank 1.62
22 Laxmi Bank Ltd. 1.58
23 Nepal Credit and Commerce Bank 1.53
24 Citizens International Bank Ltd. 1.49
25 Janata Bank Nepal Ltd. 1.34
26 Kumari Bank Ltd. 1.33
27 Century Commercial Bank 0.86
28 Civil Bank Ltd. 0.76
Industry Average Rs. 2.34 Arba

 

DISTRIBUTABLE PROFIT OF COMMERCIAL BANKS OF NEPAL

The distributable profit refers to the profit that is finally available for distribution to the shareholders in the form of dividends. Investors can make a general assumption about the expected dividend from the distributable profit. In total, the commercial banks have earned Rs. 47.68 Arba which they can distribute to the shareholders.

The industrial average of the distributable profit is Rs. 1.70 Arba. 10 companies have a distributable profit above the average. Likewise, 18 banks have below-average distributable profit. Rastriya Banijya Bank again leads in terms of distributable profit with Rs. 3.62. Nepal Bank and Agricultural Development Bank distributable profit stand at Rs. 3.45 Arba and Rs. 3.31 Arba. Nabil Bank is the other commercial bank with above Rs. 3 Arba as the distributable profit.

See the ranking of the 28 commercial banks based on the distributable profit in the fiscal year 2075/76 in the table below:

RANK BANK Distributable Profit  ( in Rs. Arba)
1 Rastriya Banijya Bank 3.62  

 

 

 

 

 

Above Industry Average

2 Nepal Bank Ltd. 3.45
3 Agricultural Development Bank Ltd. 3.31
4 Nabil Bank 3.18
5 Global IME Bank Ltd. 2.43
6 Everest Bank Ltd. 2.19
7 NIC Asia Bank 2.15
8 Himalayan Bank Ltd. (HBL) 2.02
9 Standard Chartered Bank 1.8
10 Prabhu Bank Ltd. 1.73
11 Siddhartha Bank Ltd. 1.65  

 

 

 

 

 

 

Below Industry Average

12 Sanima Bank Ltd. 1.63
13 Prime Commercial Bank 1.6
14 Nepal SBI Bank Ltd. 1.6
15 Nepal Investment Bank 1.39
16 Mega Bank Nepal Ltd. 1.36
17 Machhapuchhre Bank Ltd. 1.32
18 Bank of Kathmandu 1.3
19 NMB Bank 1.27
20 Nepal Credit and Commerce Bank 1.2
21 Laxmi Bank Ltd. 1.16
22 Citizens International Bank Ltd. 1.12
23 Sunrise Bank Ltd. 1.12
24 Nepal Bangladesh Bank 1.04
25 Janata Bank Nepal Ltd. 0.97
26 Kumari Bank Ltd. 0.97
27 Civil Bank Ltd. 0.56
28 Century Commercial Bank 0.54
Industry Average Rs. 1.70 Arba


EARNING PER SHARE (EPS) OF COMMERCIAL BANKS OF NEPAL

Earning per share (EPS) is one of the important financial indicators of the company. It measures the profitability of the company. EPS is calculated by dividing net profit by the number of outstanding share of common stock. We have listed the EPS of 28 commercial banks in the table below. 13 banks have EPS above the industry average while the remaining 15 are below the industry average of Rs. 26.38.

Note:

  • The earning per share (EPS) is based on the un-audited fourth-quarter report of the commercial banks. After the audit, the numbers may vary.

The table below shows the ranking of the 28 commercial banks based on Earnings Per Share:

RANK BANK Earning Per Share, EPS (Rs.)
1 Rastriya Banijya Bank 59.17  

 

 

 

 

 

Above Industry Average

2 Nabil Bank 47.65
3 Agricultural Development Bank Ltd. 44.67
4 Everest Bank Ltd. 37.95
5 NIC Asia Bank 34.56
6 Himalayan Bank Ltd. (HBL) 33.41
7 Standard Chartered Bank 31.15
8 Sanima Bank Ltd. 28.04
9 Nepal SBI Bank Ltd. 27.26
10 Nepal Bank Ltd. 27.15
11 Global IME Bank Ltd. 27.11
12 Siddhartha Bank Ltd. 26.59
13 Nepal Investment Bank 26.54
14 Prime Commercial Bank 25.38  

 

 

 

 

 

 

Below Industry Average

15 Prabhu Bank Ltd. 24.18
16 NMB Bank 24.09
17 Bank of Kathmandu 24.04
18 Nepal Credit and Commerce Bank 23.58
19 Machhapuchhre Bank Ltd. 21.15
20 Sunrise Bank Ltd. 20.94
21 Nepal Bangladesh Bank 20.02
22 Citizens International Bank Ltd. 17.79
23 Laxmi Bank Ltd. 17.67
24 Janata Bank Nepal Ltd. 16.81
25 Mega Bank Nepal Ltd. 16.55
26 Kumari Bank Ltd. 15.36
27 Century Commercial Bank 10.23
28 Civil Bank Ltd. 9.5
Industry Average Rs. 26.38

NET-WORTH PER SHARE OF COMMERCIAL BANKS OF NEPAL

Net-worth refers to the value of the company left after deducting all the liabilities. It is calculated by subtracting total liabilities from the total assets. When the total net worth is divided by the number of outstanding shares, we get the net-worth per share. Higher the net-worth per share of the bank, greater the financial strength. From an investors point of view, owning companies with higher net-worth per share is a more safe investment strategy.

The average net-worth per share of the banks of Nepal is Rs. 179.82. Rastriya Banijya Bank has the highest net-worth per share of Rs. 326.91. Likewise, the Agricultural Development Bank and Nepal Bank have above Rs. 300 in net-worth per share. Century Commercial bank has the lowest net-worth per share of Rs. 120.80.

See the ranking of the commercial banks based on the net-worth per share in the table below:

RANK BANK Net worth per share (Rs.)
1 Rastriya Banijya Bank 326.91  

 

 

 

Above Industry Average

2 Agricultural Development Bank Ltd. 314.18
3 Nepal Bank Ltd. 300.05
4 Nabil Bank 258.06
5 Everest Bank Ltd. 217.52
6 Nepal Investment Bank 199.78
7 Himalayan Bank Ltd. (HBL) 188.76
8 Standard Chartered Bank 187.08
9 NMB Bank 181.49
10 Nepal Credit and Commerce Bank 178.38  

 

 

 

 

 

Below Industry Average

11 Bank of Kathmandu 173.72
12 Siddhartha Bank Ltd. 169.77
13 NIC Asia Bank 169.41
14 Nepal SBI Bank Ltd. 167.69
15 Prabhu Bank Ltd. 163.8
16 Global IME Bank Ltd. 158.62
17 Nepal Bangladesh Bank 153.91
18 Sunrise Bank Ltd. 151.47
19 Citizens International Bank Ltd. 148.87
20 Sanima Bank Ltd. 148.73
21 Prime Commercial Bank 145.72
22 Laxmi Bank Ltd. 141.67
23 Machhapuchre Bank Ltd. 139.57
24 Kumari Bank Ltd. 136.64
25 Janata Bank Nepal Ltd. 133.54
26 Mega Bank Nepal Ltd. 130.93
27 Civil Bank Ltd. 127.98
28 Century Commercial Bank 120.8
Industry Average Rs. 179.82

DIVIDEND PAYING CAPACITY OF COMMERCIAL BANKS OF NEPAL

Investors are waiting for the dividend declaration of the banks. The industry average of the dividend-paying capacity of the banks stands at 19.26 percent. This means that investors can expect decent returns in the form of dividends ranging from 15 to 20 percent.

Note:

  • The dividend-paying capacity is based on the un-audited fourth-quarter report of the commercial banks. After the audit, the numbers may vary.
  • It doesn’t include the distributable reserve from the previous years.
  • This is the maximum distributable amount from the profit of the fiscal year 2075/76. The banks can distribute less dividend. Dividend payout depends upon the decision of the board of directors of the respective banks.

See the ranking of the 28 commercial banks based on the dividend-paying capacity in the table below:

RANK COMMERCIAL BANK DIVIDEND PAYING CAPACITY(%)
1 Rastriya Banijya Bank 40.22  

 

 

 

 

Above Industry Average

2 Agricultural Development Bank Ltd. 36.70
3 Nabil Bank 35.29
4 Nepal Bank Ltd. 35.17
5 Everest Bank Ltd. 27.00
6 NIC Asia Bank 24.35
7 Himalayan Bank Ltd. (HBL) 23.71
8 Global IME Bank Ltd. 23.57
9 Standard Chartered Bank 22.47
10 Sanima Bank Ltd. 20.38
11 Prabhu Bank Ltd. 19.46
12 Nepal SBI Bank Ltd. 18.93  

 

 

 

 

 

 

 

 

Below Industry Average

13 Siddhartha Bank Ltd. 18.56
14 Prime Commercial Bank 17.17
15 Nepal Credit and Commerce Bank 17.09
16 Machhapuchre Bank Ltd. 16.38
17 Bank of Kathmandu 16.13
18 Sunrise Bank Ltd. 13.74
19 Citizens International Bank Ltd. 13.38
20 NMB Bank 13.20
21 Mega Bank Nepal Ltd. 13.09
22 Laxmi Bank Ltd. 13.00
23 Nepal Bangladesh Bank 12.86
24 Janata Bank Nepal Ltd. 12.13
25 Kumari Bank Ltd. 11.16
26 Nepal Investment Bank 10.80
27 Civil Bank Ltd. 7.00
28 Century Commercial Bank 6.41
Industry Average 19.26%

 

COST OF FUND OF COMMERCIAL BANKS OF NEPAL

Cost of fund is the average interest rate paid by the financial institutions to its deposit holders and lenders. Lower the cost of the fund, higher the competitive edge for the bank. In the case of Nepal, the commercial banks have the average cost of fund of 7.05 percent at the end of 2075/76. Eleven Commercial Banks have cost lower than the average. On the other hand, 17 banks have a higher cost of the fund the average of 7.05%.

Two government banks, namely Rastriya Banijya Bank and Nepal bank, have the lowest cost of the fund with 3.52 percent and 5.50 percent. Standard Chartered Bank also has a 5.50 percent cost of fund.

Citizens International Bank, Civil Bank, Kumari Bank, and Century Bank have the highest cost of the fund above 8 percent.

The table below shows the ranking of the commercial banks of Nepal based on the cost of the fund:

RANK BANK Cost of Fund (%)
1 Rastriya Banijya Bank 3.52  

 

 

 

 

Below Industry Average

2 Nepal Bank Ltd. 5.50
3 Standard Chartered Bank 5.50
4 Nabil Bank 6.13
5 Prabhu Bank Ltd. 6.16
6 Everest Bank Ltd. 6.21
7 Nepal Investment Bank 6.31
8 Nepal SBI Bank Ltd. 6.51
9 Himalayan Bank Ltd. (HBL) 6.55
10 NIC Asia Bank 6.97
11 Laxmi Bank Ltd. 7.01
12 Global IME Bank Ltd. 7.18  

 

 

 

 

 

 

Above Industry Average

13 Bank of Kathmandu 7.26
14 NMB Bank 7.26
15 Sunrise Bank Ltd. 7.33
16 Sanima Bank Ltd. 7.39
17 Agricultural Development Bank Ltd. 7.41
18 Nepal Credit and Commerce Bank 7.49
19 Janata Bank Nepal Ltd. 7.53
20 Siddhartha Bank Ltd. 7.54
21 Nepal Bangladesh Bank 7.6
22 Mega Bank Nepal Ltd. 7.67
23 Machhapuchre Bank Ltd. 7.88
24 Prime Commercial Bank 7.9
25 Century Commercial Bank 8.19
26 Kumari Bank Ltd. 8.35
27 Civil Bank Ltd. 8.45
28 Citizens International Bank Ltd. 8.58
Industry Average 7.05%

BASE RATE OF COMMERCIAL BANKS OF NEPAL

Base rate refers to the minimum standard rate below which the commercial banks are not allowed to lend. In other words, the base rate is the cost of doing the banking business. Banks in Nepal provide the loans at a certain premium above the base rate. Higher base rate results in higher lending rates. Hence, the low base rate is more favorable for the banks.

At current, the average base rate of the commercial banks of Nepal is 9.58 percent. Eleven commercial banks are operating with a base rate below 9.58 percent. On the other hand, 17 banks have a high base rate. Rastriya Banijya Bank is the bank with the lowest base rate of 5.50 percent. Likewise, Century Commercial banks have the highest base rate of 11.29 percent.

See the ranking of the commercial banks of Nepal based on the base rate in the table below:

RANK BANK Base rate (%)
1 Rastriya Banijya Bank 5.50  

 

 

 

 

 

Below Industry Average

2 Standard Chartered Bank 7.63
3 Nepal Bank Ltd. 7.98
4 Nabil Bank 8.09
5 Everest Bank Ltd. 8.12
6 Nepal Investment Bank 8.33
7 Himalayan Bank Ltd. (HBL) 9.05
8 Prabhu Bank Ltd. 9.36
9 Sanima Bank Ltd. 9.45
10 NIC Asia Bank 9.48
11 Global IME Bank Ltd. 9.54
12 Nepal SBI Bank Ltd. 9.72  

 

 

 

 

 

 

 

 

Above Industry Average

13 NMB Bank 9.86
14 Janata Bank Nepal Ltd. 9.95
15 Bank of Kathmandu 9.98
16 Mega Bank Nepal Ltd. 9.98
17 Prime Commercial Bank 10.03
18 Nepal Bangladesh Bank 10.2
19 Nepal Credit and Commerce Bank 10.23
20 Laxmi Bank Ltd. 10.31
21 Sunrise Bank Ltd. 10.32
22 Machhapuchre Bank Ltd. 10.37
23 Citizens International Bank Ltd. 10.52
24 Siddhartha Bank Ltd. 10.57
25 Agricultural Development Bank Ltd. 10.58
26 Kumari Bank Ltd. 10.83
27 Civil Bank Ltd. 11.11
28 Century Commercial Bank 11.29
Industry Average 9.58%

CCD RATIO OF COMMERCIAL BANKS OF NEPAL

CCD ratio is the measure of available loanable funds in the bank. Lower CCD ratio indicates that there is more fund available for the credit. The average CCD ratio of commercial banks of Nepal is 75.56 percent. Nepal Bank has the lowest CCD ratio with 70.17 percent. Likewise, Nepal Investment Bank has a CCD ratio of  71.97 percent. Similarly, the Agricultural Development Bank has the highest CCD ratio of 79.15 percent.

The table below shows the ranking of commercial banks of Nepal based on the CCD ratio:

RANK BANK CCD Ratio (%)
1 Agricultural Development Bank Ltd. 79.15  

 

 

 

 

 

 

 

Above Industry Average

2 Global IME Bank Ltd. 78.69
3 Kumari Bank Ltd. 78.32
4 Century Commercial Bank 78.09
5 Sanima Bank Ltd. 77.91
6 Janata Bank Nepal Ltd. 77.34
7 Laxmi Bank Ltd. 77.13
8 Prime Commercial Bank 77
9 Machhapuchre Bank Ltd. 76.98
10 NMB Bank 76.88
11 Siddhartha Bank Ltd. 76.85
12 Citizens International Bank Ltd. 76.79
13 Bank of Kathmandu 75.8
14 Mega Bank Nepal Ltd. 75.79
15 Himalayan Bank Ltd. (HBL) 75.59
16 Sunrise Bank Ltd. 75.57
17 Civil Bank Ltd. 75.5  

 

 

 

 

 

Below Industry Average

18 Everest Bank Ltd. 75.07
19 NIC Asia Bank 74.84
20 Nepal SBI Bank Ltd. 74.38
21 Prabhu Bank Ltd. 74.25
22 Nepal Credit and Commerce Bank 73.84
23 Standard Chartered Bank 73.13
24 Nabil Bank 72.9
25 Nepal Bangladesh Bank 72.88
26 Rastriya Banijya Bank 72.78
27 Nepal Investment Bank 71.97
28 Nepal Bank Ltd. 70.17
Industry Average 75.56%

NON-PERFORMING LOANS (NPL) OF COMMERCIAL BANKS OF NEPAL

Non-Performing Loans (NPL) is another major indicator of performance analysis of commercial banks. Lower NPL reflects the higher quality of lending. On the other hand, higher NPL is due to poor lending quality. The average NPL of commercial banks of Nepal is 1.32 percent. Sanima Bank is number one based on the NPL with 0.08 percent. Likewise,  Standard Chartered Bank has the NPL of 0.15 percent. Everest Bank is the close third with 0.16 percent NPL.

The ranking of commercial banks based on the NPL is shown in the table below:

RANK BANK NPL (%)
1 Sanima Bank Ltd. 0.08  

 

 

 

 

 

 

 

 

Below Industry Average

2 Standard Chartered Bank 0.15
3 Everest Bank Ltd. 0.16
4 Nepal SBI Bank Ltd. 0.2
5 Machhapuchre Bank Ltd. 0.37
6 NIC Asia Bank 0.46
7 Global IME Bank Ltd. 0.55
8 Nabil Bank 0.74
9 Siddhartha Bank Ltd. 0.75
10 NMB Bank 0.82
11 Mega Bank Nepal Ltd. 0.86
12 Prime Commercial Bank 0.92
13 Kumari Bank Ltd. 0.97
14 Sunrise Bank Ltd. 1.03
15 Janata Bank Nepal Ltd. 1.11
16 Laxmi Bank Ltd. 1.11
17 Himalayan Bank Ltd. (HBL) 1.12
18 Citizens International Bank Ltd. 1.19
19 Bank of Kathmandu 1.5  

 

 

 

 

Above Industry Average

20 Nepal Bangladesh Bank 1.56
21 Century Commercial Bank 1.72
22 Prabhu Bank Ltd. 2.31
23 Civil Bank Ltd. 2.37
24 Nepal Bank Ltd. 2.58
25 Nepal Credit and Commerce Bank 2.78
26 Nepal Investment Bank 2.78
27 Agricultural Development Bank Ltd. 2.9
28 Rastriya Banijya Bank 3.9
Industry Average 1.32%

CAPITAL ADEQUACY OF COMMERCIAL BANKS OF NEPAL

Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital to its risk. It is also known as Capital to Risk Assets Ratio. It determines the bank’s capacity to meet the time liabilities and other risks such as credit risk, operational risk, etc. In the case of Nepal, banks have an average capital adequacy ratio of 14.10 percent. 8 banks have higher than average CAR. Agricultural Development Bank has the highest capital adequacy of 20.33 percent. On the other hand, Laxmi bank has capital adequacy of 11.33 percent.

The table below shows the ranking of the commercial banks of Nepal based on the capital adequacy:

RANK BANK Capital Adequacy (%)
1 Agricultural Development Bank Ltd. 20.33  

 

 

 

Above Industry Average

2 Standard Chartered Bank 19.9
3 Civil Bank Ltd. 17.97
4 Nepal Bank Ltd. 17.41
5 Mega Bank Nepal Ltd. 15.48
6 NMB Bank 15.32
7 Bank of Kathmandu 14.58
8 Century Commercial Bank 14.24
9 Nepal Credit and Commerce Bank 14.04  

 

 

 

 

 

 

 

 

 

Below Industry Average

10 Nepal SBI Bank Ltd. 14.01
11 Everest Bank Ltd. 13.75
12 Nepal Bangladesh Bank 13.75
13 Nepal Investment Bank 13.65
14 NIC Asia Bank 13.48
15 Janata Bank Nepal Ltd. 13.33
16 Rastriya Banijya Bank 13.2
17 Citizens International Bank Ltd. 13.19
18 Sunrise Bank Ltd. 13.14
19 Sanima Bank Ltd. 13.11
20 Machhapuchre Bank Ltd. 12.88
21 Prime Commercial Bank 12.78
22 Himalayan Bank Ltd. (HBL) 12.73
23 Nabil Bank 12.71
24 Siddhartha Bank Ltd. 12.56
25 Global IME Bank Ltd. 12.31
26 Kumari Bank Ltd. 12.07
27 Prabhu Bank Ltd. 11.58
28 Laxmi Bank Ltd. 11.33
Industry Average 14.10%

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2 thoughts on “Financial Performance Analysis of Commercial Banks of Nepal [With Ranking]

  • August 26, 2019 at 3:04 am
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    Very nice and praiseworthy analysis.thanks.

    Reply
  • September 14, 2019 at 2:59 pm
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    Found all the needed information. Very good work.

    Reply

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