1.Introduction:
Name: NMB Bank Limited
Business: Banking
Date of operation: 05.06.2008 (as commercial Bank)
C.E.O: Mr. Upendra Poudyal
Chairman: Mr Pawan Kumar Golyan
Branches(Including H.O): 21
ATMs: 23
Head Office: NMB Bhawan, Babarmahal, Kathmandu
Stock code (Nepse): NMB
2.Ownership Pattern:
Domestic Ownership: 87.33%
Other licensed Institutions: 11.01%
Other entities: 6.30%
Individuals: 70.02%
Foreign Ownership: 12.67%
NOTE: The pattern of ownership is based upon latest published annual report.
3.List of Prominent Shareholders:
Shareholders Shareholding in %
Yong Lian Realty, Malaysia 12.67
Karmachari Sanchaya Kosh 11.01
Nanda Kishor Rathi 5.15
M/S. Gayatri Investment & Management (P) Ltd. 4.26
Trilok Chand Agrawal 4.05
Purushtom Lal Shangai 3.85
Pawan Kumar Golyan 3.85
Atmaram Murarka 3.85
Santosh Rathi 3.07
Anant Kumar Golyan 2.05
Manju Tapadiya 1.58
Din Bandhu Agrawal 1.5
Balram Neupane 1.48
Narpat Singh Jain 1.37
Ashok Kumar Murarka 1.16
4.Equity Analysis:
52 Week High Price: 235
52 Week Low Price: 129
Last Trading Price(21.03.2012): 147
Paid-up Capital: 200 Cr.
Market Capitalization: 294 Cr.
EPS(annualized)*: 5.47
P/E Ratio*: 26.87
Net Worth per Share*: 113
P/B.V Ratio*: 1.3
Total trading days*: 53
Total number of transaction*: 314
*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
Total Assets 4,420,937,112 8,927,891,620 15,856,664,327 13,226,578,393 15,948,192,045
YOY Increase in Total Assets (%) - 101.95 77.61 -16.59 20.58
Total Deposit 1,296,388,884 1,661,604,750 6,877,907,436 10,110,689,731 12,866,221,928
YOY Increase in Total Deposits (%) - 28.17 313.93 47.00 27.25
Total loan Advance and Bill purchased 1,395,884,717 1,939,967,542 5,194,210,667 7,808,118,687 11,208,573,935
Net profit 75,138,054 72,822,042 62,952,777 159,870,490 221,504,774
YOY increase in NPAT (%) - -3.08 -13.55 153.95 38.55
Non performing Credit/Total Credit (%) 1.73 1.52 0.51 0.7 0.27
Weighted average interest rate spread (%) 3.58 2.41 3.58 3.19 3.18
No. of shares(No.) 2,000,000 10,000,000 14,246,000 15,015,000 20,000,000
No. of employees(No.) 34 54 126 159 189
6.Key Findings:
1. Based on FY 2067/68 comparison among 24 Commercial banks(25 at present) listed in Nepal Stock Exchange, NMB Bank ranks as follows:
Head Rank
By M-Cap 14th
By Operation date (as commercial bank) 23rd
By Deposit 20th
By Total Asset 20th
By Per share total assets value 19th
2. Ratio of total assets value to market capitalization for this bank comes around 5.8. The value of P/E ratio for this stock is around 26.87 whereas the ratio of price to book value nears around 1.3. All these three ratios we have taken as reference gives varied opinion. Looking at P/E, the stock might appear overvalued. On the contrary, the figure of price to book value ratio reveals that the stock is dearly priced and ratio of assets to M-Cap ratio suggests moderate pricing.
3. The latest published financial statement (as of second quarter 2068/69) reveals the following facts:
• Around 84.91% of total deposit is used to provide loan and advances.
• Around 13.56% of the total deposit is utilized for the Investment purpose.
• Around 9.87% of total deposit is foreign currency deposit.
• The ratio of its non-interest income to total operating income comes around 22.63%.
• The lending portfolio of the bank with sector wise exposure is presented below:
Head Exposure (%)
Real Estate Loan 11.94
Personal Home Loan
(Up to Rs. 100 lacs or less) 6.71
Margin Type Loan 2.69
O.D/ TR Loan/ WC Loan 32.25
Term Loan 11.59
Other Lending 34.81
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 and hefty rise in provisions. With 27.45% increase in interest income, the interest expenses has gone up by more than 37%, staff expenses up by around 24% and other operating expenses up by around 28%.
Growth in Deposit 25.81%
Growth in Total Lending 18.79%
Increase in provision for possible loss 5.55 times
Decrease in Net Profit 54.44%
5. Structure of paid-up Capital Over Years:
Financial Year Cumulative Paid Up Capital Remarks
2006-07(2063-64 BS) 199,540,600 Issuance of 30% Bonus Shares
2007-08 (2064-65 BS) 1,000,000,000 Issuance of 1:4 Right Shares
2008-09 (2065-66 BS) 1,424,641,350 Issuance of 10% Bonus Shares and 30% Right Shares
2009-10 (2066-67 BS) 1,651,650,000 Auction of 53,586.5 remaining right shares of financial year 2008-09 and public issue of 715,000 shares. Premium of both the shares are accounted for accordingly.
2010-11 (2067-68 BS) 2,000,000,000 Issuance of 10:21.09 right shares and auction of unsubscribed right shares.
6. The bank has been operating as commercial bank since mid of year 2008. However the bank and its management have the experience of more than one and half decade of successful operation of financial institution. Before being in operation as commercial bank, the bank has been in operation by the name of Nepal Merchant Banking & Finance Ltd. (Bittiya Sanstha) since 11-09-2053 (licensed by NRB in 04-09-2053).
7. The bank has opened a subsidiary company NMB capital Limited by investing 70% of the equity capital amounting to NPR 70 Million (7,00,000 promoter shares of Rs.100 each fully paid up). The board of the bank has recently approved to further invest 30% equity capital in NMB capital amounting Rs. 30 Million and make it a 100% owned subsidiary company of NMB Bank Limited.
8. The bank has been paying moderate returns to its shareholders over years. Because of regular capital dilution in past few years as shown in point 5, the payout doesn’t look very promising.
Year F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68
Cash Dividend on Share Capital 30 0 0 10 9
Bonus Share 0 10.53 0 0.53 0
Total Payout (Dividend + Bonus Share) 30 10.53 0 10.53 9
Name: NMB Bank Limited
Business: Banking
Date of operation: 05.06.2008 (as commercial Bank)
C.E.O: Mr. Upendra Poudyal
Chairman: Mr Pawan Kumar Golyan
Branches(Including H.O): 21
ATMs: 23
Head Office: NMB Bhawan, Babarmahal, Kathmandu
Stock code (Nepse): NMB
2.Ownership Pattern:
Domestic Ownership: 87.33%
Other licensed Institutions: 11.01%
Other entities: 6.30%
Individuals: 70.02%
Foreign Ownership: 12.67%
NOTE: The pattern of ownership is based upon latest published annual report.
3.List of Prominent Shareholders:
Shareholders Shareholding in %
Yong Lian Realty, Malaysia 12.67
Karmachari Sanchaya Kosh 11.01
Nanda Kishor Rathi 5.15
M/S. Gayatri Investment & Management (P) Ltd. 4.26
Trilok Chand Agrawal 4.05
Purushtom Lal Shangai 3.85
Pawan Kumar Golyan 3.85
Atmaram Murarka 3.85
Santosh Rathi 3.07
Anant Kumar Golyan 2.05
Manju Tapadiya 1.58
Din Bandhu Agrawal 1.5
Balram Neupane 1.48
Narpat Singh Jain 1.37
Ashok Kumar Murarka 1.16
4.Equity Analysis:
52 Week High Price: 235
52 Week Low Price: 129
Last Trading Price(21.03.2012): 147
Paid-up Capital: 200 Cr.
Market Capitalization: 294 Cr.
EPS(annualized)*: 5.47
P/E Ratio*: 26.87
Net Worth per Share*: 113
P/B.V Ratio*: 1.3
Total trading days*: 53
Total number of transaction*: 314
*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
Total Assets 4,420,937,112 8,927,891,620 15,856,664,327 13,226,578,393 15,948,192,045
YOY Increase in Total Assets (%) - 101.95 77.61 -16.59 20.58
Total Deposit 1,296,388,884 1,661,604,750 6,877,907,436 10,110,689,731 12,866,221,928
YOY Increase in Total Deposits (%) - 28.17 313.93 47.00 27.25
Total loan Advance and Bill purchased 1,395,884,717 1,939,967,542 5,194,210,667 7,808,118,687 11,208,573,935
Net profit 75,138,054 72,822,042 62,952,777 159,870,490 221,504,774
YOY increase in NPAT (%) - -3.08 -13.55 153.95 38.55
Non performing Credit/Total Credit (%) 1.73 1.52 0.51 0.7 0.27
Weighted average interest rate spread (%) 3.58 2.41 3.58 3.19 3.18
No. of shares(No.) 2,000,000 10,000,000 14,246,000 15,015,000 20,000,000
No. of employees(No.) 34 54 126 159 189
6.Key Findings:
1. Based on FY 2067/68 comparison among 24 Commercial banks(25 at present) listed in Nepal Stock Exchange, NMB Bank ranks as follows:
Head Rank
By M-Cap 14th
By Operation date (as commercial bank) 23rd
By Deposit 20th
By Total Asset 20th
By Per share total assets value 19th
2. Ratio of total assets value to market capitalization for this bank comes around 5.8. The value of P/E ratio for this stock is around 26.87 whereas the ratio of price to book value nears around 1.3. All these three ratios we have taken as reference gives varied opinion. Looking at P/E, the stock might appear overvalued. On the contrary, the figure of price to book value ratio reveals that the stock is dearly priced and ratio of assets to M-Cap ratio suggests moderate pricing.
3. The latest published financial statement (as of second quarter 2068/69) reveals the following facts:
• Around 84.91% of total deposit is used to provide loan and advances.
• Around 13.56% of the total deposit is utilized for the Investment purpose.
• Around 9.87% of total deposit is foreign currency deposit.
• The ratio of its non-interest income to total operating income comes around 22.63%.
• The lending portfolio of the bank with sector wise exposure is presented below:
Head Exposure (%)
Real Estate Loan 11.94
Personal Home Loan
(Up to Rs. 100 lacs or less) 6.71
Margin Type Loan 2.69
O.D/ TR Loan/ WC Loan 32.25
Term Loan 11.59
Other Lending 34.81
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 and hefty rise in provisions. With 27.45% increase in interest income, the interest expenses has gone up by more than 37%, staff expenses up by around 24% and other operating expenses up by around 28%.
Growth in Deposit 25.81%
Growth in Total Lending 18.79%
Increase in provision for possible loss 5.55 times
Decrease in Net Profit 54.44%
5. Structure of paid-up Capital Over Years:
Financial Year Cumulative Paid Up Capital Remarks
2006-07(2063-64 BS) 199,540,600 Issuance of 30% Bonus Shares
2007-08 (2064-65 BS) 1,000,000,000 Issuance of 1:4 Right Shares
2008-09 (2065-66 BS) 1,424,641,350 Issuance of 10% Bonus Shares and 30% Right Shares
2009-10 (2066-67 BS) 1,651,650,000 Auction of 53,586.5 remaining right shares of financial year 2008-09 and public issue of 715,000 shares. Premium of both the shares are accounted for accordingly.
2010-11 (2067-68 BS) 2,000,000,000 Issuance of 10:21.09 right shares and auction of unsubscribed right shares.
6. The bank has been operating as commercial bank since mid of year 2008. However the bank and its management have the experience of more than one and half decade of successful operation of financial institution. Before being in operation as commercial bank, the bank has been in operation by the name of Nepal Merchant Banking & Finance Ltd. (Bittiya Sanstha) since 11-09-2053 (licensed by NRB in 04-09-2053).
7. The bank has opened a subsidiary company NMB capital Limited by investing 70% of the equity capital amounting to NPR 70 Million (7,00,000 promoter shares of Rs.100 each fully paid up). The board of the bank has recently approved to further invest 30% equity capital in NMB capital amounting Rs. 30 Million and make it a 100% owned subsidiary company of NMB Bank Limited.
8. The bank has been paying moderate returns to its shareholders over years. Because of regular capital dilution in past few years as shown in point 5, the payout doesn’t look very promising.
Year F/Y 2063/64 F/Y 2064/65 F/Y 2065/66 F/Y 2066/67 F/Y 2067/68
Cash Dividend on Share Capital 30 0 0 10 9
Bonus Share 0 10.53 0 0.53 0
Total Payout (Dividend + Bonus Share) 30 10.53 0 10.53 9
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