Commercial banks raise home loans rate

More than half a dozen commercial banks have hiked home loan rates by as much as 1.5 percentage points - a move which will disappoint borrowers deeply, citing increase in cost of capital. Banks like NMB Bank, Global Bank, Nepal Industrial and Commercial (NIC) Bank and KIST Bank have enforced the new rates from the new fiscal year, starting from Sunday this week. Following the change, NIC Bank´s home loans rate has jumped to as high as 16.49 percent. Similarly, rate of NMB Bank also stands at over 16 percent, while that of KIST Bank has gone up to the range of 14 to 16 percent.

The fresh hike has also jacked up the industry average rate of home loans to just over 16 percent. So far, the industry average rate was over 15 percent. "We had to raise the rates mainly because the central bank´s directives sought us to close the interest rate gap between different savings schemes to 2 percent or less. This raised our cost of capital," said Upendra Paudel, chief executive of NMB Bank. The central bank has asked the banks and financial institutions to bridge the gap in rate between different savings products, mainly as bankers, while luring fresh deposits, offered higher rates to new depositors only, leaving old accounts holders deprived of due interest return.

Banks were offering as high as 10 percent interest return to new depositors, whereas older depositors were offered as low as 3 percent. "This is not fair. The banks must bridge the gap to 2 percent or less," NRB had said in its directives. Though a few banks had instantly complied with the directives, most of the BFIs are just gearing up to implement it. As a result, sources told Republica that more banks may follow the suit and raise lending rates because they are ´left with no choice´ as they have raised the rate of minimal interest rate to bridge the gap.

"As liquidity problem has not faded away in a large number of banks, they cannot lower the higher rates. And the unwanted raise of lower savings rate has gone up to increase cost of capital," said the source. Interestingly, the latest hike in lending rate has come contrary to what Nepal Bankers´ Association (NBA) had announced about a month ago. With the ease in liquidity in leading banks, NBA had said they have lowered the interest return to corporate clients by as much as a percentage point. "We believe this will eventually lead to drop in lending rates," NBA president Ashok Rana had told Republica then.

Source:
myrepublica

Commercial banks' Q2 NPA almost doubles

The Non-Performing Assets (NPA) of commercial banks seem to have almost doubled in the second quarter of the current fiscal year. According to the unaudited financial figures of the second quarter of the current fiscal year, the average ratio of NPA to the performing loans in the second quarter of the current fiscal year is at 0.88 per cent which was 0.48 per cent in the corresponding quarter of the previous fiscal year.

The slowdown in realty and housing sector can be accounted for the surge in NPA of the commercial banks this season. The bankers have been suggesting the central bank Nepal Rastra Bank (NRB) to relax the ceiling on housing and real estate lending, citing the slowdown in realty to have affected the performance of banks as most of the commercial banks' loan portfolio is dominated by these sectors.

Among the unaudited financial statements released by the twelve commercial banks Bank of Asia Nepal (BoAN), Kumari Bank Ltd (KBL), Kist Bank Ltd (KIST), Siddhartha Bank Ltd (SBL), Global Bank Ltd (GBL), Laxmi Bank Ltd (LBL), Citizens International Bank Ltd (CZBL) and Prime Bank Ltd (PBL) are the commercial banks expected to report an increased NPA for the second quarter in comparison to that of corresponding quarter in the previous fiscal year. Standard Chartered Bank (SCBL), Nepal SBI Bank (SBI) and DCBL Bank Ltd (DCBL) are expected to report a drop in NPA in the review.

NPAs are one of the key indicators that gauge the financial strength of any bank or financial institution. NPAs for banks are nothing but loans gone sour. It is a loan that can not be recovered from the customer within stipulated time, especially those exceeding 90 days of the predetermined period. The NPA does not yield any income to the banks in the form of principal and interest payments. NPAs eat into the income of the financial institutions as the primary source of income of financial institutions are the interest payments by borrowers.

Source:
tht

Global Bank's Pensioners’ account

KATHMANDU: Global Bank Ltd has introduced pension account from Monday targeting former government and corporate job-holders. Under the savings account, depositors will get 9 per cent interest per month on their deposit. — HNS

Benchmark Nepse lost 6.38 points

Kathmandu,16-Nov-09
Jamb Daily News Service

The vague and shabby stock market at home nation has again landed out of the green terrain getting back to its so called favorite red zone. The market downstairs has primarily been triggered by pessimism over the political clash as the threat of third phase protest from opposition party UCPN-Moist is sizzling on turmoil of consensus. Likewise, new regulation about the conversion of promoter's shares into ordinary shares has also played a vital role in prevailing negativity of the share market. At this scenario, investors are on dubious situation to trade in the market.

The benchmark Nepse index plunged down hefty of 6.38 points or (-1.13%) on Monday to 560.56 led by banking stocks. Yesterday, the market had surged diminutive of 1.08 points or 0.19 percent to 566.94.

The sectoral indexes lost across the board with the hydro sector as the exception. The downward spiral was fronted by others index (-10.57, -1.74%) as scrip price of Nepal Telecom performed poorly. Likewise, banking scrip that accounted the hefty trade volume in secondary market edge down 6.66 points or (-1.22%) to 538.07 fronted by weak demand in scrip of Kumari Bank (Rs. 540, -Rs. 42), Global Bank (Rs. 450, -Rs. 19), Bank of Kathmandu (Rs. 1440, -Rs. 60) along with other. Development bank was down 9.62 points or (1.54%) to 614.86, finance slid 1.59 points to 599.95 while hydro rose marginal of 1.35 points.

Today, International Leasing and Fin. Co. Ltd. announced it book closure for a day on 24th November 2009 (2066 Mangsir 9) for the purpose of issuing 1:2.1 right share, the BOD meeting of Siddhartha Bank (Rs. 704, +Rs. 24) proposed 15% bonus share as earlier decision of the board to provide 10% cash dividend was not approved by NRB. Similarly, the ninth Annual General Meeting of Kumari Bank held on Sunday declared 10 percent bonus shares and decided to redeem the existing promoter share to 51% by selling 19% of promoter's share to public.

Dragged down in scrip price of most of the financials stocks dented the Sensitive index. At the close of session, 78 scrip domestic blue chip slump 1.33 points or (-0.94%) to 140.62. Sensex consist 14 commercial banks, 37 finance companies, 15 development bank, 10 insurance companies and one each from hydropower and manufacturing companies. Similarly, float Index an indicator of performance of ordinary shares in the market lost 0.64 points to 53.53.

Merely 56 companies registered their presence in the secondary market with 13 gainers and 38 losers. The A-D ratio was maintained at 0.34. All in all 100476 shares traded today via 1042 transactions. Moreover, Rs. 56879894 turnover was realized along with Rs.411106.27 million market capitalizations. Yesterday, 85924 units' shares traded via 1077 transactions amounting to Rs. 40295008 turnover along with Rs.414856.82 million market capitalizations.

The top five standouts of the day are GFL(9.01%), ABBL( 4.44%), SBL( 3.53%), BLDBL( 3.45%), GFCL(3.39%). Whereas, KBL(-7.22%), ACEDBL( -5.32%), GDBNL( -4.95%), GBL( -4.05%), BOK( -4%). comprised of the top five losers.

Global Bank's 22nd Branch at Dhangadi

Global Bank Limited has opened its 22nd branch in Dhangadi and commenced its operation from 5th November 2009 (2066 Kartik 19). However, the formal inauguration of the branch and ATM service is scheduled after a few days. The bank is planning to open its new branches and ATM in Chettrapati, Balaju, New Baneshwor, Kupondole, Thimi, Bhairahawa and Illam.

According to the fourth quarter financial report of the bank, it has earned Rs. 30.488 million net profit for fiscal year 2065/66 along with Rs. 64.750 million operating profit. It has 1 billion paid up capital and holds Rs. 22.621 million in its reserve and surplus. The bank has also decided to propose 2:1 rights share for its capital increment.

Nepse nose leap down to floor

Investors stampeded to sell at the same time led the scrip prices in a downward spiral at Nepal Stock Exchange. The sole secondary market is running out of hope on dreary investors' confidence. After Tihar holiday, Nepse leap down to floor for all trading sessions which indicates the weak sentiments prevailed among the investors on various grim news floated around the stock market. Today, the benchmark Nepse index rolled down 11.13 points or 1.92 percent to 567.06, its lowest close since 19th June 2009 (567.28 points).

Floating of new shares after right and bonus issues along with IPOs has increased the supply pressure in the market. On the other, declaration of street protest by opposition party U-CPNL (Moist) has dented the hope of peace and security and investment atmosphere nationwide and stock market is no more exception.

Better than expected earnings and encouraging dividends failed to provide the glimmer of hope to boost the market sentiments and now the question is lingering in everyone's mind is, why the market is plunging down ? and how and when will be market budge up to sun shine?

The shabby investors drew their hands from most of the scrip to lend fright situation in most of the secotral indices. Commercial banks, mostly traded scrip at sole secondary market plummet 16.67 points or 3.02 percent to 535.52. Machapuchchhre Bank (Rs. 305, -9.76%), Global Bank (Rs. 458, -8.40%), Nepal Investment Bank (Rs. 778, -7.38) were the biggest losers in commercial banks including key banks as Standard Chartered (Rs. 3500, -Rs. 83), Nabil Bank (Rs. 2646, -Rs. 54), Bank of Kathmandu (Rs. 1445, -Rs. 70) and so on.

Likewise, development bank slid 7.51 points or 1.16 percent to 639.30 fronted by loss in share price of Sanima Bikas Bank (Rs. 530, -3.64%) and Infrastructure Development Bank (Rs. 418, -3.24%). Finance lost 7.32 points or 1.19 percent to 606.88, while dropped down in share price of Nepal Telecom led others index to retreat by 3.52 points or 0.56 percent. However, insurance rose diminutive of 0.05 points to 606.35 and hydro remained unchanged.

"Everyone knows scrip prices at secondary market has already slid too much yet investors are selling on that low price, which points out the market is ruling out by depressing outlook of investors rather than any fundamentals of companies", said Nilesh Shakya (an investor in stock market).

Sensitive index, 78 scrip domestic blue chip ended losing 3.53 points or (-2.44%) to close at 141.04 as most of the scrip price traded below previous close. Sensex consists, 14 commercial banks, 37 finance companies, 15 development bank, 10 insurance companies and one each from hydropower and manufacturing companies. Similarly, float Index an indicator of performance of ordinary shares in the market fell 1.14 points to 54.12.

Merely 62 companies registered their presence in the secondary market with 7 gainers and 48 losers.The A-D ratio was maintained at .15. All in all 219125 shares traded today via 877 transactions. Moreover, Rs. 84204608 turnover was realized along with Rs.399699.38 million market capitalization.

The top five standouts of the day are PFCL(1.85%), PFL( 1.82%), LGIL( 1.55%), SBI( 1.2%), PSDBL(1.01%). Whereas, MBL(-9.76%), GBL( -8.4%), NIB( -7.38%), SBL( -6.07%), ILFC( -5.94%). comprised of the top five losers.

Global Bank at Thamel

Global Bank Limited opened its 21 branch with ATM counter at Thamel, Kathmandu on Sunday. The branch was inaugurated by Chandra Prasad Dhakal, chairman of the bank. The new branch will provide all the modern banking services to its customers, states press release of the bank. The bank is planning to aid its branches and ATM counters at Chhetrapati, Balaju, New Baneshwor, Kupandol within the Kathmandu Valley.

The GBL has already decided to provide 2:1 rights share for its capital increment. According to the fourth quarter financial report of the bank, it has earned Rs. 30.488 million net profit for fiscal year 2065/66 along with Rs. 64.750 million operating profit. It has 1 billion paid up capital and holds Rs. 22.621 million in its reserve and surplus.

Global Bank’s Family Account

KATHMANDU: Global Bank Ltd has introduced Family Savings Plan (Pariwar Bachat Yojana) offering 10 per cent interest on fixed deposit. The plan is available in 19 branches of the bank for three months to promote a savings culture, it stated. The plan entitles free of cost Visa debit card, good-for-payment cheque and 30 per cent discount on locker, 50 per cent discount on travel cheque and education loan processing fee. — HNS

Global Bank in Dhulabari

KATHMANDU, Sept 2: Global Bank Limited (GBL)´s new branch in Dhulabari of Jhapa started its operation from Wednesday. The bank also plans to provide ATM service from the branch within a few days. According to a press statement issued by the bank, the bank is also planning to extend its network to Dhapasi and Thamel in Kathmandu soon.
The bank, which recently signed a deal with Nepal Telecom to make payments of NT´s PSTN (or landline) and mobile phone bills through different channels of the bank, said it also preparing to provide other payment services for its clients.
The payment channels include payment through the bank´s counters and internet banking service for paying PSTN bills and mobile phone bills. Mobile phone bills can also be paid from the individual client´s mobile phone set, the bank said.

NEPSE makes another downfall

KATHMANDU, Aug 26 - The Nepal Stock Exchange (NEPSE) Tuesday lost 14.47 points on the trading floor. The sensitive index also decreased by 4.8 points.
A majority of the sub-indices on NEPSE saw a decline on Tuesday. The banking sector lost the most by shedding 23.42 points followed by the insurance, finance and development bank sectors which went down by 1.66 points, 1.07 points and 0.58 point respectively.
The share market witnessed a total turnover of Rs. 86.36 million with 123,722 shares being traded. Shares of 55 companies changed hands on NEPSE.
Among the 21 commercial banks listed on NEPSE, Laxmi Bank posted the biggest growth with its stock rising by 6 points while Nabil Bank lost the most on the trading floor by shedding 290 points.
Similarly, among the 10 development banks whose shares were traded on NEPSE, Ace Development Bank witnessed the highest increase of 11 points while Triveni Bikas Bank dropped 14 points.
Among the 15 finance companies on NEPSE, ICFC Bittiya Sansthan was the highest gainer with an increase of 9 points in its share price. NIDC Capital Markets lost 22 points.
The top five winners on NEPSE were Ace Development Bank with a 2.33 percent rise in its stock price followed by ICFC Bittiya Sansthan, DCBL Bank, Butwal Power Company and Chilime Hydropower Company. Similarly, the top five losers on Tuesday were Nepal Investment Bank which fell by 9.92 percent followed by Kumari Bank, Nabil Bank, Global Bank and Nepal Bangladesh Bank.
Butwal Power Company topped the chart in terms of turnover with Rs. 10.18 million. - Kantipur Report