Agricultural Dev. Bank's branch earns 12.3 million in 6 months

The Agricultural Development Bank, Kawasoti Branch, made more than Rs. 12.3 million profits during the first quarter of the current fiscal year, said Branch Manager Sombilash Devkota. He said the farmers visit the bank for banking services due to its minimum interest rate offer compared to other private banks. He said the bank was providing loan at 12 per cent interest rates to the farmers which, he said, is lower than other banking institutions. Similarly, the bank collected Rs. 13.3 million deposits during the same period of this fiscal year. The Kawasoti branch of the bank has provided loans to as many as 1,472 local customers.

Source:
tht

Nepse lists over four million-unit shares in a week

Nepse added 4.1 million unit of shares including rights, ordinary and bonus of Sunrise Bank, Sahayogi Bikas Bank and Nepal Finance during the last week before the festival of Tihar. The secondary market saw 6883 transactions of 102 companies worth Rs 124.53 million that is 8.75 per cent higher than a week ago. Similarly, domination of the Class-A companies has also come down to 39.56 per cent as they saw Rs 49.2 million transation only.

However, the Nepse could not perform any better than a week ago as the Nepse gained only 0.06 point to close the market at 424.96 points from the Sunday morning's opening of 424.90 points. The sensetive index gained 0.27 point to close at 104.19 points. Commercial banks, insurance and finance sub-groups surged but hydropower and development banks lost, whereas manufacturing, hotels, and trading groups didnot witness any changes in their indices.

Merchant Finance topped the chart with the highest transation amount and share units that saw Rs 17.5 million worth trading of its 906-unit of shares. Similarly, Agriculture Development Bank Nepal topped the chart with 906 trading. Meanwhile, the year on year Nepse has declined by 35.6 per cent to 404.43 points in mid September, according to the central bank. It stood at 628.34 points in the same period last year. Similarly, sensitive index stood at 98.94 point in mid September against 160.79 points in the same period last year. The float index ¿ calculated on the basis of closing price of August 24, 2008, as base market value ¿ remained at 37.15 in mid September, a contraction of 37.8 per cent compared to same period last year. The market capitalisation also decreased by 25 per cent to Rs 330 billion in the first two months of the current fiscal year. "The ratio of market capitalisation to GDP stood at 28 per cent," the central bank said, adding that the ratio was 45.9 per cent in the same period last year. Of the total market capitalisation, bank and financial institutions stood with highest share of 71.5 per cent followed by manufacturing and processing companies (2.4 per cent), hotels (1.6 per cent), business entities (0.5 per cent), hydropower (4.8 per cent) and other economic sectors (19.3 per cent).

Total paid up capital of the listed companies stood at Rs 86.34 billion in mid September ¿ an increase of 35.6 per cent over the period of one year. This increase was largely due to the additional listing of securities. As at mid September, Nepse listed securities worth Rs 12.39 billion (ordinary share of Rs 4.62 billion, bonus share of Rs 226.5 million, right share of Rs 2.56 billion and government securities of Rs 4.99 billion). The total number of listed companies stood at 180 in mid September compared to 159 in the same period last year. Among them, 148 are banks and financial institutions (including insurance companies), followed by 18 production and processing industries, four hotels, business entities and hydropower firms each and two firms in other groups.

Source:
tht

ADBL's IPO oversubscribed by 150%

The initial public offering (IPO) of Agricultural Development Bank Ltd (ADBL) has been oversubscribed by one and a half times till Tuesday, the third day of the issue. Siddhant Raj Pandey, Chief Executive Officer of Ace Development Bank - the issue manager for the largest ever IPO in the country, told media persons that about 55,000 people have subscribed for shares worth Rs 1.4 billion till Tuesday evening. "The warm response from the public despite liquidity crunch and sluggish stock market has encouraged us. We have found equal response to the issue both in the capital and other parts of the country," Pandey said. He said application for shares worth Rs 390 million was collected by ADBL´s branches in the capital alone. "Most of the payments for applications were made through banking system in the capital, while home deposits were used in rural areas," he added. He said applications for subscription will be closed from Wednesday evening. ADBL has issued IPO of 9.6 million units of shares worth Rs 960 million from Sunday. Bank officials and the issue manager have claimed that the banks share will be oversubscribed by five times due to sound financial performance of the bank. A total of 288 outlets have been set up to collect applications across the country. With the new issues, total stake for public in the largest commercial bank in terms of branch network will increase to 44.14 percent. The bank issued 14.14 percent shares -- 4.52 million units-- to its debtors on December 10, 2007 in a bid to gradually divest the bank´s share to public.

Source: myrepublica.com

ADBL ready to issue largest ever IPO

The Agricultural Development Bank Limited (ADBL) has said that it is set to issue ordinary shares as soon as the Securities Board of Nepal (SEBON) gives the go-ahead. The bank said on Tuesday that it had already fixed the sales and issue manager and the collection centers for share applications.

"We are just waiting for SEBON's final decision," said chief executive officer Shyam Singh Pandey at a press meet held to publicize the bank's achievements in the last fiscal year. The ADBL has appointed Ace Development Bank as issue manager and underwriter. The share issue worth Rs. 960 million will be the largest ever in the country's history. SEBON said that it was at the final stage of giving its approval to the ADBL's share issue. "It should not take long for the approval to come," said SEBON chairman Surbir Poudel.

Pandey added that the bank would be modernising its service by installing core banking system which would allow it to start any branch banking system. "We have already signed the purchase agreement with the vendor Timenos, Singapore, and the company is working to install the system," he said. The Asian Development Bank has been providing assistance to ADBL for its restructuring and modernization.

The Asian Development Bank has provided US$ 6.5 million to the ADBL to purchase the core banking system software. The ADBL said that it was also planning to start foreign exchange, letter of credit (LC) and online banking services besides expanding its ATM network throughout the country. "We have already established a treasury department in order to work on the bank's short-term investment, foreign exchange and liquidity management," said Pandey.


Source:
ekantipur.com

Companies eye to float 50m units of shares

A total of 23 companies have sought approval from Securities Board of Nepal (SEBON) - the capital market regulator - to issue over 47.5 million units of rights and ordinary shares worth over Rs 4.75 billion to increase their capital base. According to SEBON, nine finance companies, eight development banks, five commercial banks and a company from others group have lodged application for issuing shares. As per existing provision, companies have to get approval from SEBON and Nepal Rastra Bank, the central bank, for the rights issue, bonus and ordinary shares after a proposal to this effect is endorsed by general assembly of the companies.

Under the finance group, Investa Finance, Valley Finance, Capital Merchant Banking and Finance, Shubhalaxmi Finance, Siddhartha Finance, Suryadarshan Finance, Zenith Finance, Merchant Finance and Yeti Finance have sought permissions for issuing shares. Of them, five have sought approval for rights issue, while four have lodged applications for ordinary shares issue.

Similarly, Muktinath Bikash Bank, Sewa Bikash Bank, Nilgiri Bikash Bank, Western Development Bank, City Development Bank, Paschimanchal Development Bank, Subhechha Bikash Bank and Triveni Bikash Bank have also approached SEBON for approval. Five of them have approached SEBON for ordinary issue, while remaining three have sought permission for rights issue.

Likewise, Agriculture Development Bank, Kumari Bank, NMB Bank Ltd and Citizens Bank International have also registered their applications for rights as well as ordinary issue, whereas City Homes Ltd of others group has approached SEBON for initial public offering (IPO). Meanwhile, SEBON has already granted permission to 21 companies for issuing shares as of mid-November. They will together issue over 48.80 million units of ordinary shares and rights shares worth Rs 4880.26 million.

Seven of the companies getting approval are finance companies, while nine are development banks, three insurance companies and two commercial banks. Similarly, seven development banks have got nod from the SEBON to issue ordinary shares.

Share prices mostly go up in the market in response to the announcement of rights and bonus shares. However, share prices in the Nepal Stock Exchange has gone down sharply following the announcements as number of investors did not increase to the extent of the number of shares that entered into the market.

"Limited number of brokers and confinement of their services only to the Capital and lack of institutional investment in the share market have badly affected the development of share market," SEBON Chairman Surbir Paudel told myrepublica.com on Wednesday. "Because of this fact, most of the small investors have suggested us to convert promoters share into ordinary shares by not more than two percent a year."

Source:

myrepublica.com

Door opens for Agricultural Dev. Bank IPO

The Agricultural Development Bank Limited (ADBL) has named its issue manager Ace Development Bank as underwriter of its ordinary share issue. It has opened door for ADBL to get approval from Securities Board of Nepal for issuing shares.

The ADBL is working to issue ordinary shares worth Rs. 960 million which is the largest ever initial public offering (IPO) in the country. "The ADBL board on Nov. 10 decided to award the job of underwriting the ADBL's shares to Ace as its quoted fee was lower than its rival NMB Bank," said a senior ADBL official. Ace had quoted Rs. 775,000 against Rs. 960,000 by NMB, added the official.

The underwriter promises to purchase the shares if the public doesn't buy them in the amount desired by the issuing company. Although the bank had called for quotations from seven merchant bankers including Elite Merchant Banking, Citizen Investment Trust, Vibor Development Bank, NIDC Capital Markets and Development Credit Bank besides Ace and NMB, these two were the only takers for the underwriting contract. SEBON, the regulatory body of the stock market, had delayed giving permission to the ADBL to go for an IPO for its failure to have its shares underwritten as per the SEBON directive. The SEBON had also sought more disclosure about its financial status.

As per the directive, any company going for an IPO should ensure underwriting of half of the total shares to be issued. Only companies that have received a license from the board can underwrite the shares. The ADBL had difficulty finding merchant bankers to underwrite its shares worth a whopping Rs. 480 million with the central bank preventing B and C class financial institutions from underwriting more than 20 and 10 percent respectively of the primary shares. Nepal Rastra Bank (NRB) resolved the problem by issuing a fresh directive on Oct. 30 freeing all classes of financial institutions from this restriction. "We could not have been able to underwrite the shares as per the SEBON directive if NRB had not issued a new directive removing the barrier on underwriting," said Siddhant Raj Pandey, chief executive officer of Ace. "The provision of underwriting 50 percent of the total shares is worthless as it only increases the expenses of the issuing bank."


ADBL officials also said that they would have been compelled to pay a higher fee for underwriting as only a few merchant bankers could compete in the bidding process as per the earlier NRB directive. ADBL officials said that the bank's board would decide to approach SEBON within a day or two after meeting the required criteria. SEBON spokesman Niraj Giri said that the ABDL was most likely to get its approval the next time as it had ensured underwriting as per SEBON directives. "The disclosure related prerequisites are not so big problems," he added. The ADBL is issuing 30 percent of the shares to the public. With this IPO, the stake of the government in the ADBL will remain at 55.86 percent. The bank issued 14.14 percent of its shares to the public two years ago, especially to those who had been clients of the ADBL once.

Source: 
ekantipur.com

Banks drop in Non-Performing Loan

Kantipur Report
KATHMANDU, Sept 7 - The commercial banks are doing fine by and large in terms of reduction in their Non-Performing Loan (NPL) in the previous fiscal year, according to the central bank.
While 16 of the 25 banks witnessed a drop in their NPL, three saw it rising, states a recent report of Nepal Rastra Bank (NRB).
Financial institutions with NPL hovering below five percent are considered sound.
The NPL of Nabil, Machhapuchhre and Development Credit Bank Limited went up slightly but it is still manageable with Nabil having 0.8 percent at the lowest and Machhapuchhre with 2.8 percent at the highest.
The rise and fall of the NPL in case of Global Bank, Citizens Bank, Prime Bank, Sunrise Bank and Bank of Asia could not be assessed as they have not reported their their NPL status to the
central bank either in the last fiscal year or the previous year or both years.
NIC bank's NPL remained constant at 0.9 percent in both years.
NCC bank has been able to reduce its NPL significantly last year from 16.36 percent to 2.7 percent during the 12-month period.
Chief Executive Officer of NCC Bank Ratna Raj Bajracharya said recovery of loans from some major groups - including the N.B. group, which is also the promoter of the NCC bank - was the principal reason behind sharp decline in the NPL of NCC.
"The Harisiddhi Brick Factory owned by N.B Group itself had owed the bank five percent NPL," he said. "We acquired its lands as a part of recovery." The bank was to recover loans of Rs. 330 million from Harisiddhi.
The bank also acquired
the lands owned by Tribeni Distillery to recover around Rs. 60 million loans last year, Bajracharya said.
"We will reduce the NPL to one percent within the next six months," he said.
There are still five banks whose NPL level is higher than five percent: Nepal Bank Limited, Rastriya Banijya Bank, Nepal Bangladesh Bank, Lumbini Bank and Agriculture Development Bank.
RBB CEO Janardan Acharya said they would reduce the NBL below five percent within
the next two years. The government owned bank has still 15.7 percent NPL which represents
Rs. 4.9 billion.
"We have plans to recover around Rs. 2.5 billion this year and recovery of the remaining amount in the next year," he said. The bank recovered Rs. 2.4 billion in the last fiscal year.NPL Change in TOp 20 Banks
2007/08 2008/09
Bank NPL (%) NPL (%)
NBL 8.05 5.9
RBB 21.63 15.7
Nabil 0.79 0.8
NIBL 1.12 0.8
StanChart 0.92 0.7
HBL 2.36 2.2
NSBI 3.65 2.0
NBBL 31.11 19.3
Everest 0.64 0.5
BoK 1.76 1.3
NCC 16.36 2.7
NIC 0.90 0.9
Lumbini 14.87 9.1
MBL 1.04 2.8
Kumari 1.35 0.4
Laxmi 0.13 0.1
Siddhartha 0.60 0.5
ADBL 10.40 8.8
DCBL 1.26 1.6
NMB 1.52 0.5

Bank deposits surge 30pc despite slump

Kantipur Report
KATHMANDU, Sept 3 - Deposits in the country's commercial banks increased by an astounding Rs. 128.7 billion in the last fiscal year. Buoyed by a constant growth in remittances, total deposits in Nepal's 25 commercial banks reached Rs. 555.14 billion, a 30.18 percent increment from the previous year.
The fourth quarterly report of Nepal Rastra Bank (NRB) shows that, along with deposits, lending and net profits of commercial banks have also increased significantly. According to the central bank's report, banks in the country have maintained growth despite the global economic crisis.
The NRB report shows that lending and net profits have increased by 29.61 percent and 33.09 percent respectively. The commercial banks provided loans and advances amounting to Rs. 384.31 billion against Rs. 296.51 billion provided by the 25 banks in the last fiscal year.
According to the unedited financial figures of the central bank, Rastriya Banijya Bank (RBB) collected the highest amount of deposits of Rs. 68.09 billion. Nepal Investment Bank (NIB) was close behind with Rs. 46.69 billion. Its deposits surged by 35.52 percent in the last fiscal year. NIB leads private banks in terms of deposits.
NRB's report also shows that NIB is the largest lender among the commercial banks. In the last fiscal year, the bank provided loans and advances worth Rs. 36.82 billion.
The Agricultural Development Bank, Nepal (ADB/N), RBB and Nabil Bank issued loans amounting to Rs. 32.56 billion, Rs. 31.60 billion and Rs. 27.58 billion respectively. The commercial banks jointly earned a net profit of Rs. 14.14 billion during the period against Rs. 10.63 billion last year. Among the 26 banks, five commercial banks have recorded over Rs. 1 billion in net profits in the last fiscal year.
Nepal Bangladesh Bank declared the highest net profit amounting to Rs. 2.47 billion, followed by RBB and ADB/N which posted net profits of Rs. 2.03 billion and Rs. 1.23 billion respectively. The profits of these three banks improved significantly due to write back of their non-performing loans.
Nabil Bank is the leader among private banks in terms of net profit with Rs. 1.03 billion followed by Standard Chartered Bank.Top Ten in terms of lending
Banks
Nepal Investment Bank 36.82
ADB/N 32.56 Rastriya Banijya Bank 31.60
Nabil Bank 27.58 Himalayan Bank 25.51
Everest Bank 24.46 Nepal Bank 19.48
Nepal SBI Bank 15.13 Bank of Kathmandu 14.94
Kumari Bank 14.59

Top Ten in terms of deposits Banks
Rastriya Banijya Bank 68.09
Nepal Investment Bank 46.69
Nepal Bank 44.62
Nabil Bank 37.34
Standard Chartered Bank 35.87
ADB/N 35.15
Himalayan Bank 34.74
Everest Bank 33.32
Nepal SBI Bank 27.95
Bank of Kathmandu 18.08

Commercial banks reduce NPA

KATHMANDU: The Non-Perfoming Assets (NPA) of commercial banks have come down. NPA is one of the key indicators that gaue the financial strength of any bank or financial institution.“By the end of the fiscal year 2006-07, the NPA of A-class commercial banks was 10.3 per cent, which came down to 6.3 per cent by the end of the fiscal year 2007-08,” said the Monetary Policy 2009-10.The NPA decreased to 4.9 per cent by April 13, 2009, according to the unaudited report of the commercial banks.Of the total 25 commercial banks then, except three government and semi-government commercial banks — Nepal Bank Ltd (NBL), Rastriya Banijya Bank (RBB) and Agriculture Development Bank Ltd (ADBL) — 22 commercial banks’ NPA is at 2.4 per cent, the eighth Monetary Policy said. NBL and RBB — by the end of the fiscal year 2007-08 — had 12.4 per cent and 21.7 per cent NPA respectively. They further reduced their NPA to 8.6 per cent and 18 per cent respectively by April 13, 2009. They have succeeded in reducing the NPA under the Financial Sector Reform Programme which had categorically said them to reduce the NPA.However, the number of commercial banks, development banks and finance companies has also increased. Currently, there are 26 commercial banks, 63 development banks, 78 finance companies, 12 micro-finance companies — making it a grand total of 173 banks and financial companies.By April 13, 2009 — the end of fiscal year 2008-09 — the total number of branches of commercial banks also increased to 681 from 555. Within six months, 126 new branches of commercial banks were added, according to the policy that has stated that regionwise the branches of commercial banks stood at 127 in Eastern Development Region, 337 in Central Development Region, 135 in Western Development Region, 51 in Mid-Western Development Region and 31 in Far-Western Development Region.Though commercial banks claim that they are moving towards rural areas, their reach through branches is less in the hilly region. According to the report, the populace in Western Development Region has little access to commercial banks. “The urban-centric banks should go to rural areas,” NRB governor Bijaya Nath Bhattarai said during his reinstating ceremony the other day.
What is NPA?
KATHMANDU: Non-Performing Assets (NPA) is a classification used by financial institutions that refer to loans in jeopardy of default. Once the borrower has failed to make the interest or principal payments for 90 days the loan is considered NPA and also known as Non-Performing Loan (NPL). Non-performing assets are problematic for financial institutions since these institutions depend on interest payments for income. Troublesome pressure from the economy can often lead to a sharp increase in financial institutions’ NPA and often results in massive write-downs. — HNS