1.Introduction:
Name: Nepal Bangladesh Bank limited
Business: Banking
Date of operation: 1994-06-05
C.E.O: Mr. Gyanendra Prasad Dhungana
Chairman: Mr. Pushparaj Raj Karnikar
Branches(Including H.O): 19
ATMs: 17
Head Office: New Baneswor, Kathmandu
Stock code (Nepse): NBB
2.Ownership Pattern:
Domestic Ownership: 75.21%
-Other licensed Institutions: -
-Other entities: 15.81%
-Public: 49%
NOTE: The pattern of ownership is based upon latest published annual report 2066/67.
3.List of Prominent Shareholders:
Shareholders Shareholding in %
M/s Bank Asia Ltd., Bangladesh 1 4.88%
M/s IFIC Bank Ltd., Bangladesh 9 .92%
M/s Capital Investment and Securities Pvt. Ltd. 7 .87%
M/s Manaslu Investment Pvt. Ltd. 7.81%
Mr. Laxmi Bahadur Shrestha 3 .50%
Mr. Jit Bahadur Shrestha 3 .30%
Mr. Purna Bahadur Shrestha 2 .26%
Mr. Nabin Shrestha 1 .44%
M/s Bipul Developers Pvt. Ltd. 1 .34%
Mr. Babu Kaji Shrestha 1 .18%
Mrs. Rama Gyawali 1 .01%
M/s Bagmati Investment Pvt. Ltd. 0.81%
Note: The Shareholding pattern is extracted from Annual report of F/Y2066/67.
4.Equity Analysis:
52 Week High Price: Rs. 184
52 Week Low Price: Rs. 101
Last Trading Price(03.05.2012): Rs. 159
Paid-up Capital: Rs.200.94 Cr.
Market Capitalization: Rs. 319.49Cr.
EPS(annualized)*: Rs. 10.23
P/E Ratio*: 15.54
Net Worth per Share*: Rs. 117.15
P/B.V Ratio*: 1.36
Total trading days*: 49 Days
Total Shares Traded*: 183,850
*Based on unaudited second Quarter 2068/69.
5.Performance Highlights:
Particulars F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68 (Unaudited)
Total Assets (Rs. 'Cr.) 725.45 939.1 1196.46 1253.1 1593.2
YOY Increase in Total Assets (%) - 29.45 27.40 4.73 27.14
Net worth (Rs. 'Cr.) 262.08 219.51 111.62 213.93 226.12
Total Deposits (Rs. 'Cr.) 938.59 1088.37 999.77 1005.22 1151.17
YOY Increase in Total Deposits (%) - 15.96 -8.14 0.55 14.52
Total loan Advance and Investments (Rs.'Cr.) 440.9 545.78 640.49 780.95 1023.75
Net profit (Rs. 'Cr.) -106.16 59.65 215.81 102.13 41.55
Non performing Assets/Total Credit (%) 39.76% 31.73% 19.80% 6.47% 18.20%
Weighted average interest rate spread (%) 4.90% 3.95% 8.09% 5.56% 4.96%
No. of shares('000) 7200 7441 18603 18603 20093
No. of employees(No.) 396 403 367 358 N/A
6.Key Findings:
1. Based on FY 2067/68 comparison among 25 Commercial banks listed in Nepal Stock Exchange, Nepal Bangladesh Bank ranks as follows:
Head Rank
By M-Cap 22nd
By Operation date 6th
By Deposit 21st
By Total Asset 21st
By Per share total assets value 21st
2. Ratio of total assets value to market capitalization for this bank comes around 5.5 suggests that the stock is fairly priced. This is further supported by price to book value ratio of around 1.36 and P/E ratio of around 15.54.
3. The latest published financial statement (as of second quarter 2068/69) reveals the following facts:
• Around 83.09% of total deposit is used to provide loan and advances.
• Around 27.69% of the total deposit is utilized for the Investment purpose.
• Around 1.48% of total deposit is foreign currency deposit.
• The ratio of its non-interest income to total operating income comes around 39.97%.
• The lending portfolio of the bank with sector wise exposure is presented below:
Head Exposure (%)
Real Estate Loan 8.12%
Personal Home Loan
(Up to Rs. 100 lacs or less) 4.52%
Margin Type Loan -
O.D/ TR Loan/ WC Loan 49.56%
Term Loan 13.73%
Other Lending 24.07%
4. The performance of the bank in 2nd Quarter 2068/69 as compared to same period in the previous year shows good increase in the size of balance sheet. However profit has fallen down substantially which shall be attributed mainly to the increase in cost of fund of the bank, low interest rate spread and increase in provision for possible loss
Growth in Deposit 26.98%
Growth in Total Lending -6.32%
Increase in provision for possible loss 300.84%
Increase in Net Profit -63.94%
5. Under section 86 of NRB Act, 2002, the management of the bank is under control and being operated by the team assigned by Central bank. With stepping in of NRB controlled management into the bank the non-performing assets of bank has fallen down substantially from 39.76% in F/Y 2063/64 to 18.20% in F/Y 2067/68. The health of the bank is in the process of continuous improvement. Efforts are made to recover most of other bad debts associated with the founder promoters of the bank. The recovery of such loan would bring the bank back to its good health.
6. Since last few years the bank has been able to book good profit with recovery of bad loans and thus able to change its negative net worth into positive net worth. The comparative data is presented hereunder:
Particulars F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68 (Unaudited) Q2 2068/69 (annualized)
Nonperforming Assets/Total Credit (%) 39.76% 31.73% 19.80% 6.47% 18.20% 18.58%
Reserve and Surplus (Rs. 'Cr.) -334.4 -293.56 -74.81 273.26 200.94 200.94
Net Profit/Total assets (%) - 6.35% 18.04% 8.15% 2.60% 1.17%
7. Despite reserve and surplus appearing positive in the face of balance sheet, the distributable reserve of the bank is still negative. During year end 2066/67, the value of such distributable reserve was negative by Rs.84.96 Cr. With aggregate value of reserve and surplus now equal to paid-up capital of the bank, the negative distributable reserve would now continue to decline with the greater pace than before through netting off the most of the profit generated by the bank. Our rough calculation shows that, in case the bank is able to generate the return in form of net profit post tax of around 1.5% to its total assets size, the bank would be able to pay dividend to its shareholders three years from this F/Y end. More important to notice is the fact that, bank in case being able to reduce its nonperforming assets to single digit; the shareholders would be able to enjoy dividends from any profit generated by the bank post such recovery.
8. The last time, NBB has paid dividends to its shareholders is from the profit of F/Y 2057/58 (2000/2001) distributing a total return of 55%, 50% as bonus issue and 5% as cash dividend. Since then, the bank has not been able to pay return of any kind to its shareholders.
Name: Nepal Bangladesh Bank limited
Business: Banking
Date of operation: 1994-06-05
C.E.O: Mr. Gyanendra Prasad Dhungana
Chairman: Mr. Pushparaj Raj Karnikar
Branches(Including H.O): 19
ATMs: 17
Head Office: New Baneswor, Kathmandu
Stock code (Nepse): NBB
2.Ownership Pattern:
Domestic Ownership: 75.21%
-Other licensed Institutions: -
-Other entities: 15.81%
-Public: 49%
NOTE: The pattern of ownership is based upon latest published annual report 2066/67.
3.List of Prominent Shareholders:
Shareholders Shareholding in %
M/s Bank Asia Ltd., Bangladesh 1 4.88%
M/s IFIC Bank Ltd., Bangladesh 9 .92%
M/s Capital Investment and Securities Pvt. Ltd. 7 .87%
M/s Manaslu Investment Pvt. Ltd. 7.81%
Mr. Laxmi Bahadur Shrestha 3 .50%
Mr. Jit Bahadur Shrestha 3 .30%
Mr. Purna Bahadur Shrestha 2 .26%
Mr. Nabin Shrestha 1 .44%
M/s Bipul Developers Pvt. Ltd. 1 .34%
Mr. Babu Kaji Shrestha 1 .18%
Mrs. Rama Gyawali 1 .01%
M/s Bagmati Investment Pvt. Ltd. 0.81%
Note: The Shareholding pattern is extracted from Annual report of F/Y2066/67.
4.Equity Analysis:
52 Week High Price: Rs. 184
52 Week Low Price: Rs. 101
Last Trading Price(03.05.2012): Rs. 159
Paid-up Capital: Rs.200.94 Cr.
Market Capitalization: Rs. 319.49Cr.
EPS(annualized)*: Rs. 10.23
P/E Ratio*: 15.54
Net Worth per Share*: Rs. 117.15
P/B.V Ratio*: 1.36
Total trading days*: 49 Days
Total Shares Traded*: 183,850
*Based on unaudited second Quarter 2068/69.
5.Performance Highlights:
Particulars F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68 (Unaudited)
Total Assets (Rs. 'Cr.) 725.45 939.1 1196.46 1253.1 1593.2
YOY Increase in Total Assets (%) - 29.45 27.40 4.73 27.14
Net worth (Rs. 'Cr.) 262.08 219.51 111.62 213.93 226.12
Total Deposits (Rs. 'Cr.) 938.59 1088.37 999.77 1005.22 1151.17
YOY Increase in Total Deposits (%) - 15.96 -8.14 0.55 14.52
Total loan Advance and Investments (Rs.'Cr.) 440.9 545.78 640.49 780.95 1023.75
Net profit (Rs. 'Cr.) -106.16 59.65 215.81 102.13 41.55
Non performing Assets/Total Credit (%) 39.76% 31.73% 19.80% 6.47% 18.20%
Weighted average interest rate spread (%) 4.90% 3.95% 8.09% 5.56% 4.96%
No. of shares('000) 7200 7441 18603 18603 20093
No. of employees(No.) 396 403 367 358 N/A
6.Key Findings:
1. Based on FY 2067/68 comparison among 25 Commercial banks listed in Nepal Stock Exchange, Nepal Bangladesh Bank ranks as follows:
Head Rank
By M-Cap 22nd
By Operation date 6th
By Deposit 21st
By Total Asset 21st
By Per share total assets value 21st
2. Ratio of total assets value to market capitalization for this bank comes around 5.5 suggests that the stock is fairly priced. This is further supported by price to book value ratio of around 1.36 and P/E ratio of around 15.54.
3. The latest published financial statement (as of second quarter 2068/69) reveals the following facts:
• Around 83.09% of total deposit is used to provide loan and advances.
• Around 27.69% of the total deposit is utilized for the Investment purpose.
• Around 1.48% of total deposit is foreign currency deposit.
• The ratio of its non-interest income to total operating income comes around 39.97%.
• The lending portfolio of the bank with sector wise exposure is presented below:
Head Exposure (%)
Real Estate Loan 8.12%
Personal Home Loan
(Up to Rs. 100 lacs or less) 4.52%
Margin Type Loan -
O.D/ TR Loan/ WC Loan 49.56%
Term Loan 13.73%
Other Lending 24.07%
4. The performance of the bank in 2nd Quarter 2068/69 as compared to same period in the previous year shows good increase in the size of balance sheet. However profit has fallen down substantially which shall be attributed mainly to the increase in cost of fund of the bank, low interest rate spread and increase in provision for possible loss
Growth in Deposit 26.98%
Growth in Total Lending -6.32%
Increase in provision for possible loss 300.84%
Increase in Net Profit -63.94%
5. Under section 86 of NRB Act, 2002, the management of the bank is under control and being operated by the team assigned by Central bank. With stepping in of NRB controlled management into the bank the non-performing assets of bank has fallen down substantially from 39.76% in F/Y 2063/64 to 18.20% in F/Y 2067/68. The health of the bank is in the process of continuous improvement. Efforts are made to recover most of other bad debts associated with the founder promoters of the bank. The recovery of such loan would bring the bank back to its good health.
6. Since last few years the bank has been able to book good profit with recovery of bad loans and thus able to change its negative net worth into positive net worth. The comparative data is presented hereunder:
Particulars F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68 (Unaudited) Q2 2068/69 (annualized)
Nonperforming Assets/Total Credit (%) 39.76% 31.73% 19.80% 6.47% 18.20% 18.58%
Reserve and Surplus (Rs. 'Cr.) -334.4 -293.56 -74.81 273.26 200.94 200.94
Net Profit/Total assets (%) - 6.35% 18.04% 8.15% 2.60% 1.17%
7. Despite reserve and surplus appearing positive in the face of balance sheet, the distributable reserve of the bank is still negative. During year end 2066/67, the value of such distributable reserve was negative by Rs.84.96 Cr. With aggregate value of reserve and surplus now equal to paid-up capital of the bank, the negative distributable reserve would now continue to decline with the greater pace than before through netting off the most of the profit generated by the bank. Our rough calculation shows that, in case the bank is able to generate the return in form of net profit post tax of around 1.5% to its total assets size, the bank would be able to pay dividend to its shareholders three years from this F/Y end. More important to notice is the fact that, bank in case being able to reduce its nonperforming assets to single digit; the shareholders would be able to enjoy dividends from any profit generated by the bank post such recovery.
8. The last time, NBB has paid dividends to its shareholders is from the profit of F/Y 2057/58 (2000/2001) distributing a total return of 55%, 50% as bonus issue and 5% as cash dividend. Since then, the bank has not been able to pay return of any kind to its shareholders.
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