The CAMELS rating of the commercial bank of Nepal has been recently conducted. In the rating, the top 4 spots have been occupied by the banks with foreign investments while Sanima Bank which consists investment from NRN stands in the fifth spot. The rating is done as per the financial data of the second quarter of the current fiscal year.
Standard Chartered Bank has stood the best among all other banks. It has the investment of Standard Chartered Bank London and Standard Chartered Bank Australia. Similarly, Punjab National Bank’s joint venture, Everest Bank stood in the second position. The third and fourth positions were secured by Nabil Bank and Nepal SBI Bank respectively.
Standard Chartered Bank was in the top in the previous year as well. CAMELS ratings are assigned based on a ratio analysis of the financial statement combined with on-site examinations made by a designated supervisory regulator. The components assessed to provide the ratings are Capital Adequacy (C), Assets (A), Management Capability (M), Earnings (E), Liquidity (L) and Sensitivity (S).
In the current fiscal year, the banks have been competing to float loans as well as to generate deposits due to which their Credit to Core Capital-cum-Deposit (CCD) ratio has increased. The banks with government investment i.e. Nepal Bank and Rastriya Banijya Bank have followed the top 5 banks because of their controlled CCD ratio. Nepal Rastra Bank had shown leniency in the CCD ratio calculation by making modifications in the monetary policy.
| Banks |
Capital Adequacy |
Non-performing loans |
Return on Equity |
CCD ratio |
Average Score
|
| Standard Chartered Bank |
100
|
96.6 |
56.9 |
42.1 |
73.9 |
| Everest Bank |
78.4 |
95 |
62.5 |
48.3 |
71.1 |
| Nabil Bank |
63.1 |
77.4 |
87.1 |
47 |
68.7 |
| Nepal SBI Bank |
75 |
97.4 |
56.2 |
45.9 |
68.6 |
| Sanima Bank |
65.5 |
99.4 |
60.7 |
42 |
66.9 |
| Nepal Bank |
82.1 |
35.4 |
95.4 |
49.4 |
65.6 |
| Rastriya Banijya Bank |
57.1 |
37.8 |
100 |
61.8 |
64.2 |
| Nepal Investment Bank |
65.4 |
77.6 |
65.2 |
43.1 |
62.8 |
| NMB Bank |
65.3 |
76 |
62.8 |
46.8 |
62.7 |
| Machhapuchchhre Bank |
78.4 |
93.4 |
34.8 |
40.9 |
61.9 |
| NIC Asia |
69.1 |
94.8 |
37.7 |
43.6 |
61.3 |
| Mega Bank |
92.6 |
80.8 |
30.3 |
41.3 |
61.2 |
| Century Commercial Bank |
92.7 |
80.2 |
23.8 |
47.9 |
61.1 |
| Himalayan Bank |
61.9 |
73.6 |
63 |
41.4 |
60 |
| Prime Commercial Bank |
63.8 |
71.4 |
50.5 |
45 |
57.7 |
| Kumari Bank |
72.4 |
67.8 |
39.6 |
46.4 |
56.5 |
| Citizens Bank |
75.2 |
61.2 |
44.6 |
45.2 |
56.5 |
| Global IME Bank |
57.2 |
67.8 |
56.2 |
44.6 |
56.4 |
| Siddhartha Bank |
62.1 |
70 |
49.6 |
43.3 |
56.3 |
| Laxmi Bank |
67.3 |
74.2 |
36.1 |
44.1 |
55.4 |
| Sunrise Bank |
71.3 |
67 |
40.5 |
42.7 |
55.4 |
| Bank of Kathmandu Lumbini |
77.3 |
62.8 |
34.7 |
41.5 |
54.1 |
| Nepal Bangladesh Bank |
71.4 |
70.6 |
28 |
41.7 |
52.9 |
| Janata Bank |
84.4 |
47 |
20.6 |
43.7 |
48.9 |
| Agricultural Development Bank |
77.9 |
21 |
31.4 |
40.8 |
42.8 |
| Civil Bank |
91.8 |
9.6 |
21.6 |
47.8 |
42.7 |
| Prabhu Bank |
56.2 |
17.6 |
47 |
49.5 |
42.6 |
| NCC Bank |
56.2 |
19.2 |
32.6 |
47 |
38.8 |
The 4 bases have been assessed for providing the rating to the banks. For each of the category 100 points have been allocated and the banks have been given the scores as per their performance. For example, the bank with no non-performing loan would be given 100 points, so the ratings have been given in the similar way in the non-performing loan category.
Similarly, bank with 50% CCD ratio would be given 100 points and the banks providing 30% return on the shareholders equity would be give full points. The capital adequacy ratio should be 20% or more as per the directive of Rastra Bank.
As per this rating, the bank with the Best Assets Quality is Sanima Bank and the bank with the best Capital Adequacy Ratio is Standard Chartered Bank. Likewise, Rastriya Banijya Bank stood the best in CCD Ratio as well as in providing the highest Return on Equity.
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