See the performance of all 28 commercial banks as per their financial statement of Q3 FY2074/75; Rastriya Banijya Bank, NIB, Nabil and Nepal Bank lead on major indicators

- Amar Nath Shrestha

All 28 commercial banks have published their financial statements of their performance till Chaitra 2074 i.e. Q3 FY 2074/75. For the ease of investors and visitors of our site, we came out with news which summarizes all the major fundamental factors that one must go through before pouring their hard earned money. This article focuses on major factors like Capital, Reserves, Net profit, EPS, Net Worth and Price Earning (P/E) ratio.

Rastriya Banijya Bank, Nepal Investment Bank, Nabil Bank, Nepal Bank and Everest Bank have been able to be the top 5 highest profit makers until the end of third quarter. 

NOTE:

• Table is sorted in descending order i.e. highest capital being first.
• ADBL’s preference share capital is excluded.
• Net Profit highlighted with yellow represents highest among banks.

As per the minimum capital requirement directed by the Nepal Rastra Bank, commercial Banks must raise their paid up capital to NRs. 8 billion. The methods used by the banks for raising their capital to NRs. 8 billion are Mergers and Acquisition, issuing right shares, bonus shares and issuing Further Public Offering (FPO).

According to the third quarter report of the commercial banks, 22 of the commercial banks have been successful in meeting up the required capital. Nepal Investment Bank Limited (NIB) stands first raising its capital to NRs. 10.74 Arba. 6 of them are still in the process of meeting up the required capital. Mega Bank Limited (MEGA) has undergone in the merger process with Tourism Development Bank Limited (TDBL). It will meet its capital requirement after this merger process. Other five commercial banks will be issuing right shares, bonus shares, FPOs or may go into merger process for meeting up the capital requirement.

In terms of Reserve, NIB has highest reserve of Rs 10.98 arba which is followed by ADBL with reserve of Rs. 9.65 arba which is strongest part of these giant banks. CCBL with only Rs 1.21 arba has lowest reserve among 28 banks which signifies that it is the weakest bank in terms of reserve.

After meeting the capital requirement, most of the banks succeed to hike their net profit as well, but the growth with respect to capital increase seems unsatisfactory as growth of net profit is comparatively lower with respect to capital increase which directly results into diminish in Earning Per Share (EPS). The growth of the banks cannot be seen as only 4 commercial banks were successful to gain net profit more than NRs. 2 arba namely Nepal Investment Bank Limited (NIB), Rastriya Banijya Bank Limited (RBB), Nabil Bank Limited (NABIL) and Nepal Bank Limited (NBL). RBB is the only commercial bank not listed in Nepal Stock Exchange (NEPSE) but it stood on top of the table in terms of Net profit i.e. NRs. 3.08 arba. Civil Bank Limited (CBL) has earned lowest net profit of Rs 36 crore among the 28 commercial banks.

Note:

• Table is sorted in descending order i.e. highest EPS being first.
• The closing price provided in the financial reports is taken into consideration for the calculation of PE Ratio.
• MEGA Bank’s LTP before merger has been taken into consideration. Its adjusted P/E will be 29.47 times.

In terms of EPS, Rastriya Banijya Bank Limited (RBB), Nabil Bank Limited (NABIL) and Nepal Bank Limited (NBL) stood on top 3 with an annualized EPS of Rs. 47.88, Rs. 46.40 and Rs. 42.57 respectively in the third quarter of FY 2074/75. Nepal Investment Bank Limited (NIB)and NMB Bank Limited (NMB) have EPS greater than Rs. 30.

10 banks—namely Everest Bank Limited (EBL), Himalayan Bank Limited (HBL), Standard Chartered Bank Limited (SCB), Agriculture Development Bank Limited (ADBL), SBI Bank Limited (SBI), Prime Commercial Bank Limited (PCBL), Global IME Bank Limited (GBIME), Siddhartha Bank Limited (SBL), Sanima Bank Limited (SANIMA) and Bank of Kathmandu Limited (BOKL) were successful in maintaining EPS greater than Rs. 20. Similarly, 4 banks, Century Commercial Bank Limited (CCBL), Janata Bank Nepal Limited (JBNL), Mega Bank Limited (MEGA) and Civil Bank Limited (CBL) have EPS less than Rs. 10.

Nabil Bank Limited (NABIL) topped among 28 banks in terms of Net worth per share with Rs. 210.27 where it has P/E ratio of only 21.31 times and Nepal Investment Bank Limited (NIB) stood second with net worth per share of Rs. 202.18. Century Commercial Bank Limited (CCBL) stood at last with Net worth of Rs. 114.04. MEGA & SCB have highest PE ratio i.e. 47.33 times and 34.03 times in third quarter report of 2074/75.