Consider these information before applying for “10.25% NIC Asia Debenture 2083/84” ; Rs 4.4 arba worth of debentures open for application from Shrawan 06, 2076

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Company profile

NIC Asia Bank Limited (NIC Asia) is one of the top 5 “A” Class (Commercial) banks of Nepal in terms of Interest Income, Net Interest Income, Deposits and Advances as on April 14, 2019. The 93.68% of the total shareholding of the Bank is held by individual general public and 6.32% by corporate entities as on July 16, 2018; among which 51% belongs to promoter group shares and 49% belongs to general public.

NIC Asia has certified by ISO 9001:2008 Certificate for Quality System on Commercial Banking Activities. The Bank has two wholly owned subsidiary companies operating in Nepal namely NIC Asia Capital Limited (undertake merchant banking activities) and NIC Asia Laghubitta Bittiya Sanstha Limited (microfinance business).

The paid-up capital of NICA stands at Rs 8.83 arba and reserve and surplus stands at Rs 5.5 arba as of third quarter of fiscal year 2075/76. It has recorded the profit of Rs 2.73 arba upto the third quarter of 2075/76.

The bank currently has 292 branches, 52 extension counters and 315 ATM terminals in operation all over the nation.

Objective

About the issue

NIC Asia Bank Limited (NICA) has opened the issue of its “NIC Asia Debenture 2083/84” from Shrawan 6, 2076 to Bhadra 3, 2076.

NIC Asia is issuing 44 lakh units debenture at par value of Rs.1000 each to raise debt worth Rs.4.4 Arba with the maturity of 10 years. Out of the total issue 17,60,000 units (40% of the issue) are for the general public while remaining 26,40,000 units (60% of the issue) will be privately placed.

The debenture will be providing 10.25% return on the investment which will be paid semi-annually and this debenture matures in 10 years.

CRNL has assigned “CARE-NP A” rating to the new proposed Subordinated Debenture “NIC ASIA Debenture 2083/84” issue of NIC Asia Bank Limited (NIC Asia) worth Rs 4.4 arba. The instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instruments carry low credit risk.

Capital structure

Shareholding structure

Primary shareholders

Board of Directors

Management Team

*There are 2,580 employees in total.

Rating

CRNL has assigned “CARE-NP A” rating to the new proposed Subordinated Debenture “NIC ASIA Debenture 2083/84” issue of NIC Asia Bank Limited (NIC Asia). The instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instruments carry low credit risk.

Key Rating Strength

Long track record of operations, experienced promoters and management team
Adequate capitalization
Moderation in assets quality during 9MFY19, although GNPL% is at low level
Diversified and high geographical coverage through branches
Consistent growth in Deposits and Loans & Advances
Considerable growth in total income over the period, however, net profit declined during FY18
Increased overall financial performance & profitability during 9MFY19
Diversified loan portfolio with focus on Retail and SME portfolio
Improving CASA Ratio
Comfortable liquidity profile
Moderate although declining deposits concentration