Top National Level Development Banks In Nepal: Comparative Study

August 23, 2021 | Investopaper

At current, there are 8 national level development banks in Nepal. They are:

1. Muktinath Bikas Bank

2. Jyoti Bikas Bank

3. Garima Bikas Bank

4. Shine Resunga Development Bank

5. Mahalaxmi Bikas Bank

6. Lumbini Bikas Bank

7. Shangrila Development Bank

8. Kamana Sewa Bikas Bank

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Here, we will try to make a financial comparison of these eight national level development banks of Nepal on the basis of the un-audited fourth quarterly report of the fiscal year 2077/78. The comparative analysis will be based on the following indicators.

Paid-Up Capital And Reserve & Surplus

Muktinath Bikas Bank has the highest paid-up capital of Rs. 4.81 Arba while Kamana Sewa Bikas Bank has the lowest capital of Rs. 2.65 Arba

Similarly, Mahalaxmi Bikas has the greater reserve and surplus of Rs 2.38 Arba. Shangrila Development Bank, on the other hand, has the lowest reserve with Rs 98 crores.

The paid-up capital and reserve & surplus of the national level development banks of Nepal is shown in the table below:

Development Banks In Nepal	Paid up capital (Rs.’Arba’)	Reserve and Surplus (Rs.’Arba’)
Garima Bikas Bank	3.67	1.61
Jyoti Bikas Bank	3.84	1.48
Kamana Sewa Bikas Bank	2.65	1.29
Lumbini Bikas Bank	2.9	2.38
Mahalaxmi Bikas Bank	3.34	2.16
Muktinath Bikas Bank	4.81	1.99
Shangrila Development Bank	2.73	0.98
Shine Resunga Development Bank	3.4	1.41

Source: Unaudited Fourth Quarter Report, FY 2077/78

Note: The Reserve and Surplus includes share premium, general reserve and retained earnings.

Deposits And Loans

Muktinath Bikas Bank has the largest deposit collection as well as loans and advances among the development banks. Until Ashad’s end 2078 BS, Muktinath Bikas Bank has collected Rs. 86.90 Arba as deposits from the customers. Likewise, it has floated Rs 72.89 Arba as loans and advances to the customers.

Shine Resunga Development Bank has the lowest deposit collection (from customers) of Rs 35.41 Arba and loans & advances (to customers) of Rs. 29.15 Arba.

The table below shows the Deposits and Loans of the national level development banks of Nepal.

Development Banks In Nepal	Deposits From Customers (Rs.’Arba’)	Loans & Advances To Customers (Rs.’Arba’)
Garima Bikas Bank	63.9	51.8
Jyoti Bikas Bank	49.55	43.08
Kamana Sewa Bikas Bank	44.45	38.83
Lumbini Bikas Bank	36.37	29.74
Mahalaxmi Bikas Bank	38.6	29.43
Muktinath Bikas Bank	86.9	72.89
Shangrila Development Bank	41.79	33.09
Shine Resunga Development Bank	35.41	29.15

Source: Unaudited Fourth Quarter Report, FY 2077/78

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Net Interest Income

In the fiscal year 2077/78, Muktinath Bikas Bank has earned the highest Rs. 270.45 crores in net interest income while Shangrila Development Bank has the net interest income of Rs 119.79 crores only.

The net interest income of the national level development banks of Nepal is presented in the table below:

Development Banks In Nepal	Net Interest Income (Rs.’crores’)
Garima Bikas Bank	193.65
Jyoti Bikas Bank	150.71
Kamana Sewa Bikas Bank	149.03
Lumbini Bikas Bank	122.1
Mahalaxmi Bikas Bank	156.73
Muktinath Bikas Bank	270.45
Shangrila Development Bank	119.79
Shine Resunga Development Bank	131.69

Source: Unaudited Fourth Quarter Report, FY 2077/78

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Operating Profit, Net Profit And Distributable Profit

Muktinath Bikas Bank also leads in operating profit, net profit and distributable profit. In the fiscal year 2077/78, Muktinath Bikas Bank has generated operating profit of Rs 163 crores, net profit of Rs 115.09 crores and the distributable profit of Rs 86.05 crores.

Shangrila Development Bank lags behind in operating profit, net profit and distributable profit with Rs 56.01 crores, Rs 41.69 crores and Rs 28.83 crores respectively.

The table below presents the operating profit, net profit and distributable profit of the national level development banks of Nepal.

Development Banks In Nepal	Operating Profit (Rs.’crores’)	Net Profit (Rs.’crores’)	Distributable Profit (Rs.’crores’)
Garima Bikas Bank	116.9	82.52	60.57
Jyoti Bikas Bank	106.02	74.16	60.3
Kamana Sewa Bikas Bank	71.96	70.02	43.45
Lumbini Bikas Bank	70.7	51.62	37.07
Mahalaxmi Bikas Bank	102.34	73.29	56.38
Muktinath Bikas Bank	163	115.09	86.05
Shangrila Development Bank	56.01	41.69	28.83
Shine Resunga Development Bank	75.67	51.45	37.89

Source: Unaudited Fourth Quarter Report, FY 2077/78

Non-Performing Loans (NPL) And Base Rate

Muktinath Bikas Bank also excels in Non-Performing Loans (NPL) with 0.25 percent. Mahalaxmi Bikas Bank has the greater NPL of 3.32 percent.

In terms of base rate, Shine Resunga Bikas Bank is ahead with 6.71 percent. Shangrila Development Bank has a higher base rate of 8.54 percent.

The non-performing loans (NPL) and base rate of the national level development banks of Nepal is shown in the table below:

Development Banks In Nepal	Non Performing Loans, NPL(%)	Base rate(%)
Garima Bikas Bank	0.72	8.17
Jyoti Bikas Bank	0.8	8.42
Kamana Sewa Bikas Bank	1.5	8.38
Lumbini Bikas Bank	2.13	8.18
Mahalaxmi Bikas Bank	3.32	7.28
Muktinath Bikas Bank	0.25	8.05
Shangrila Development Bank	1.4	8.54
Shine Resunga Development Bank	0.99	6.71

Source: Unaudited Fourth Quarter Report, FY 2077/78

Earnings Per Share (EPS) And Net-worth Per Share

Kamana Sewa Bikas Bank leads others in per share earnings (EPS) with Rs 26.40. Shine Resunga Development Bank has the lower Earnings Per Share of Rs 15.10.

Lumbini Bikas Bank has a higher per share net-worth of Rs 182.2 while Shangrila Development Bank has lower net-worth per share of Rs 135.81.

The table below shows the Earnings Per Share (EPS) and Net-worth Per Share of the national level development banks of Nepal.

Development Banks In Nepal	Earnings Per Share, EPS(Rs.)	Networth Per Share ( Rs.)
Garima Bikas Bank	22.45	144.01
Jyoti Bikas Bank	19.29	138.54
Kamana Sewa Bikas Bank	26.4	148.61
Lumbini Bikas Bank	17.76	182.2
Mahalaxmi Bikas Bank	21.93	164.75
Muktinath Bikas Bank	23.92	141.49
Shangrila Development Bank	15.23	135.81
Shine Resunga Development Bank	15.1	141.66

Source: Unaudited Fourth Quarter Report, FY 2077/78

Market Price Per Share And P/E Ratio

Looking into the share price, Muktinath Bikas Bank leads others with the share price of Rs 657 while Shangrila Development Bank has the lowest share price of Rs 424. Similarly, Lumbini Bikas Bank has a higher P/E ratio of 32.94 while Kamana Sewa Bikas Bank has P/E ratio of 21.97.

The share price and p/e ratio of the national level development banks of Nepal is presented in the table below:

Development Banks In Nepal	Market Price Per Share (Rs.) *	P/E Ratio
Garima Bikas Bank	544	24.23
Jyoti Bikas Bank	478	24.78
Kamana Sewa Bikas Bank	580	21.97
Lumbini Bikas Bank	585	32.94
Mahalaxmi Bikas Bank	445	20.29
Muktinath Bikas Bank	657	27.47
Shangrila Development Bank	424	27.84
Shine Resunga Development Bank	447	29.60

Source: Unaudited Fourth Quarter Report, FY 2077/78

* Market Price is of Ashad’s end, 2078 BS. At current, the market price as well as P/E ratio may vary.

Note :

The above figures are based on the un-audited quarterly report published by the respective companies. Investors are advised to take other things into consideration along with this report while making the investment decisions. The numbers may vary after the final audit.

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