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

Kist starts talks programme

"Success cannot be attained in one go, everyone needs to work hard with an optimistic attitude and have a strong determination to acquire the goals they set for themselves," said Ambica Shrestha, president of Dwarika's Hotels and Resorts during a talk programme organised by Kist Bank here today. The first Kist talk programme also honoured Shrestha for her contribution to economic development as well as conservation of Nepali and Newari heritage. 

Starting from today, Kist Bank will be having these talk programs once every month for this fiscal year for young entrepreneurs. Kist talk is an initiative taken by Kist Bank as an attempt to bring excellence in the skills and dexterity of young and amateur entrepreneurs. "We will be organising such programmes every month and are looking for it to be a stepping stone towards further innovative ideas towards enriching the new generation of entrepreneurs," said Kamal Prasad Gyawali, managing director of KIST Bank.

KIST talk aims to be an opportunity to bring theoretical knowledge into the practical exercise by which significant personalities would be addressing audiences with their knowledge and sharing experiences that they have encountered on their path towards business success.

Source:
tht

KIST Bank to raise paid up capital to Rs 5 billion

The eighth annual general meeting of KIST Bank Ltd held Saturday endorsed the special proposal of the management to raise the paid up capital of the bank to Rs 5 billion from existing Rs 2 billion. 

To attain it, the AGM has further agreed upon the management´s proposal to go for rights issue in a ratio of 1:1.5 within this fiscal year, states a press release.

During the AGM, the bank also awarded its three best clients and also best performing staffs under six different categories. On the occasion, Chairman of the bank Rajendra Shakya also announced a ´KIST Bank Chairman Revolving Fund´, providing Rs 500,000 in it personally.

According to the release, the interest income of the fund will be used for conferring awards to the top scoring sons and daughters of bank employees at SLC, + 2 and Bachelors level examinations.


Source:
myrepublica.com

KIST Bank in Thamel and Kalanki

KIST Bank Ltd. has expanded its branches to Thamel and Kalanki of Kathmandu Distict. The Bank opened its Thamel and Kalanki branches on Friday 6th November, 2009.
The branches were inaugurated by chairman of KIST Bank, Rajendra Shakya. These are the 38th and 39th branchs of the bank. With two new branches, the bank has total of 14 branches inside Kathmandu valley and 25 branches outside the valley.

KIST is further planning to extend its branches in Dang, Gongabu, Syambhu, Maharajgunj Kausaltar, Hetauda, Ghorahi and other places to reach the total number of branches to 50 in the current fiscal year, read the release.

Nepse rebounds: Investors cheers loud

Finally, the hope rebounds in home equity market even with the diminutive surge. After eighth consecutive plunge, Nepse bounce back with spurring gains amid the caution over political dispute and weak investor's sentiment. The benchmark index added marginal of 0.21 points or 0.04 percent to close at 567.27 on Monday, discounting bearish crawl in previous sessions.

"I am glad Nepse rose today, even though it rose with fewer points it has break the declining trend" said Shankar Agrawal, an investor in secondary market.

Banking scrip plays an eminent role for the secondary market's up leg with a motivating gain of 3.04 points or 0.57 percent to 538.56 after nonstop slide. However, the gains were restricted by hefty decline in hydro by 22.79 points or 2.75 percent to 806.30, followed by 6.50 points plummets in development bank to 632.80. Finance slid 2.55 points to 604.33; others edge down 1.17 points to 623.88 while insurance remained unchanged.

The slight uptick in demand of key commercial bank led domestic blue chip or sensitive index to drop maximum points amid the hefty decline in development bank and hydro sector. 14 commercial banks, 37 finance companies, 15 development bank, 10 insurance companies and one each from hydropower and manufacturing companies are included in sensitive index. Sensitive index closed at 140.88 down 0.16 points or 0.11 percent. However, float Index an indicator of performance of ordinary shares in the market rose 0.06 points to 54.18.

Merely 55 companies registered their presence in the secondary market with 22 gainers and 25 losers. The A-D ratio was maintained at .88. All in all 77843 shares traded today via 734 transactions. Moreover, Rs. 52874530 turnover was realized along with Rs.399841.82 million market capitalizations. Yesterday, 219125 units' shares traded today via 877 transactions to Rs. 84204608 turnover along with Rs.399699.38 million market capitalizations.

The top five standouts of the day are LUBL(8%), BOK( 4.84%), NBB( 4.78%), KIST( 4.53%), STFL(4.33%). Whereas, ACEDBL(-7.53%), PRFL( -7.27%), CHCL( -5.95%), PSDBL( -5.8%), ILFC( -4.84%). comprised of the top five losers.

Market down over investors' worry

The Nepse index (-3.82%) witnessed yet another week of depression as IPOs lured investors toward the primary market. The increase in the inter-banking lending rate has also discouraged investors from borrowing. In addition, the Maoist party´s disclosure of its nation-wide protest plans further deflated investor confidence. Signs of stability, the market exhibited last week did not last with the announcements of bonus and cash dividend from some of the major companies. 

The Commercial Banking sub-index (-5.91%) descended as major banks like Everest Bank (-Rs 320) which is experiencing post-book closure price readjustment, NIC Bank (-Rs 101) which declared 15% bonus shares, Siddhartha Bank (-Rs 88) which declared 10% cash dividend, Siddhartha Development Bank (-Rs 5) which declared 5% cash dividend, all shed prices. Losses of API Finance (-Rs 55) which started trading last week, and the post-book closure readjustment in the share price of Nepal Express Finance (-Rs70) caused losses in the Finance sub-index (-1.63%) despite Merchant Finance (+Rs 103) and General Finance (+Rs 20) efforts to recoup the losses. Swawalamban Vikas Bank´s (+Rs 28) share prices appreciated but with losses in the majority of the development banks, the sector index (-1.55%) declined. Shikhar Insurance (-Rs 6) and Lumbini General Insurance (-Rs 8) posted declines to drag the Insurance sector down (-0.49%). The ´Others´ sub-index (-0.92%) plunged as Nepal Telecom (-Rs 10) shed value. The only sector to defy the market downtrend was the Hydropower sector sub-index (+0.98%) through the appreciation of Chilime Hydropower (+Rs 32).

Among other highlights, Bank of Kathmandu (-Rs 35) declared lucrative benefits of 40% bonus shares and 7.37% cash dividend. Kumari Bank (-Rs 59) and Kist Bank (-Rs 27) closed their books for 10% bonus shares, and 3.50% cash dividend respectively on October 30 which will impact the market next week. Shree Investment Finance also closed its book for 20% bonus shares and 5.26% cash dividend on October 23. Asian Life Insurance´s IPO offering was halted on 30 October because its offer price violates the Company Act. Civil Merchant Bittiya Sanstha (+Rs 6), United Insurance, Sagarmatha Merchant and Finance (-Rs 3) are selling 730 units, 25,575 units and 40,790 units respectively of their unsubscribed right shares. The market volume (Rs 276,356,647) has strengthened; however, the current downtrend is substantiated by signals from technical analysis tools.

 REPUBLICA 

Book Closure: KIST Bank

The BOD meeting of the company dated 2066-07-05 has decided to hold Annual General Meeting on 14^th November 2009 (2066 Kartik 28) where it will propose 1:1.5 Right Share and 3.50% Cash Dividend. After the issue of proposed right share the company will hold of Rs. 5 billion paid up capital and will be the first bank with titanic paid up capital in Nepalese Financial Institutions. The company has announced book closure for it upcoming AGM from 2066 Kartik 13 to 18.

According to the fourth quarter financial report of the bank, it has earned Rs. 88.376 million net profit and Rs. 136.863 millions as operating profit. It has Rs. 2 billions as paid up capital and holds Rs. 113.832 millions in its reserve and surplus. Likewise, the bank has NPL to total loan 0.20 percent and total loan loss provision to NPL stands at 546.90 percent.

Kist Bank's 34th and 35th Branch

Kist Bank Ltd. has expanded its braches at Mahendaranagar and Dhangadhi letting total of 35^th branches. The inaugurations of branches were done by Chief District Officer (CDO) of Kanchanpur district, Khusmakar Dhakal. The bank which will soon open its branches at Butwal and Kalimati target for 50 branching hub within this fiscal year.The bank has posted Rs. 88.376 million net profit and Rs. 136.836 million operating profit as per the fourth quarter financial report of fiscal year 2065/66. Earlier, the BOD meeting held on 23rd September 2009 (2066 Aswin 7) has decided to propose 3.50 percent cash dividend to its shareholders from the profit of fiscal year 2065/66.

Source: Jamb News Service

Standard Chartered Bank's book closure drags Nepse down by 23.69 points

REPUBLICA
KATHMANDU, Oct 6: In an unprecedented case seen in Nepal´s capital market, shareholders of Standard Chartered Bank (SCB) lost Rs 1,440 per share in a single trading day on Tuesday, prompting Nepal Stock Exchange (Nepse) index to shed 23.69 points.
Price of SCB shares dropped to Rs 3,960 per share from previous close of Rs 5,400 on Tuesday´s trading, where 200 units of bank´s shares changed hands. Book close cutoff date, the day after which company will not handle any transfer of shares requests until benefits dividends or bonus issues are transferred, of the bank on Monday and new pricing from Tuesday pushed down the price sharply.
SCB, one of the largest profit making private banks, has announced 50 percent bonus share and Rs 50 per share as cash dividend to its shareholders.
The huge loss in the share price of SCB pushed down the benchmark Nepse by 3.72 percent or 23.69 points to close at 613.18 points. During previous two trading sessions, Nepse had recorded marginal gains after weeklong Dashain holidays.
Sensitive index, an indicator of trading of Class A category companies, shed 8.61 points or 5.24 percent at the end of Tuesday´s trading session. Banking, the dominant trading group in Nepal´s capital market, lost whopping 39.28 points to drop at 604.24 points in its sub-index with the loss in the share prices of major banks, including Standard Chartered Bank, NMB Bank, Bank of Kathmandu and KIST Bank.
Development Bank and Hydro Power groups also saw their sub-indices slip by 2.3 points and 7.8 points to 666.54 points and 814.77 points respectively. However, Finance and Insurance groups registered marginal gains of 0.89 points and 1.48 points to close at 638.03 and 608.52 points respectively at the end of Tuesday´s session.
Total turnover reached Rs 6.07 million with 163,259 units of shares and 58 scrips changing hands through 695 transactions on Tuesday. Total market capitalization -- total worth of listed shares -- has reached Rs 429.90 billion.

KIST Bank’s new schemes

KATHMANDU: KIST Bank has two schemes for rural people and for schools and colleges. The Gaunle Bachat Niskshep Yojana will give rural people in VDCs access to banking. They can open an account with Rs 100 at 6.5 per cent interest and debit card, SMS banking, inter-branch transactions free. Also, KIST will collect the fees of schools and colleges and provide overdraft up to Rs 2,00,000 to solve financial problems of schools and colleges. KIST Bank donated three tents worth Rs 40,500 to ‘Shantika Lagi Sarangi’ and one tent worth Rs 13,500 to cycling duo Rajendra Sapkota and Rupak Khadaka as part of its corporate social responsibility. — HNS

Kist Bank in Birgunj

KATHMANDU: Kist Bank opened its 31st branch in Birjung. MD Kamal Prasad Gyawali inaugurated the branch on Thursday. New branch will help export and import business, he said. It is planning to open 50 branches within the fiscal year 2009-10. — HNS