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2015
Sharesansar.com
5/5/2015
Company Analysis of Everest Bank Ltd.
Table of Contents 1.0 Company Analysis ................................................................................................................................... 1
1.1Overview .............................................................................................................................................. 1
1.2 BOD ..................................................................................................................................................... 2
1.3 CEO’s Profile: ....................................................................................................................................... 3
1.4 Management Team ............................................................................................................................. 4
1.5 Network .............................................................................................................................................. 5
1.6 Products and Services ......................................................................................................................... 7
2.0 Analysis ................................................................................................................................................... 8
2.1 Capital Structure ................................................................................................................................. 8
2.2 Balance Sheet .................................................................................................................................... 10
2.3 Profit & Loss Account ........................................................................................................................ 16
2.4 Key Ratios .......................................................................................................................................... 27
3.0 Analysis ................................................................................................................................................. 33
3.1 Fundamental Analysis ....................................................................................................................... 33
Sharesansar.com | 1.0 Company Analysis 1
1.0 Company Analysis
1.1Overview
Everest Bank Limited (EBL) was established in 1994 and started its operations with its first branch at
Naya Baneshwar Katmandu.
EBL joined hands with Punjab National Bank (PNB), the largest public sector bank in India as its joint
venture partner in India in 1997.
Punjab National Bank (PNB), joint venture of Everest bank holds 20% equity.
The bank has 53 Branches, 74 ATM Counters, 5 extension counter & 22 Revenue Collection across the
country.
The bank has received the following awards:
The bank has been conferred with the "Best Managed Commercial Bank" by ASIAN PAINT
NEWBIZ Award 2013.
The bank adjudged as "Number 1 Bank" under CAMELS (along with Customer Base & Branch
Network) rating conducted by KAROBAR national daily (a leading business media house of
Nepal).
The bank has been conferred with “Bank of the Year 2006, Nepal” by the Banker, a publication
of financial times, London.
The bank was bestowed with the “NICCI Excellence award” by Nepal India chamber of
commerce for its spectacular performance under finance sector.
EBL was one of the first banks to introduce Any Branch Banking System (ABBS) in Nepal.
EBL introduced branchless banking system first time in Nepal to cover unbanked sector of Nepalese
society through biometric machine.
EBL is the first bank to introduce agro-specialized branch "KRISHI UDHYAM BIKASH SAKHA" at Rajbiraj.
Sharesansar.com | 1.0 Company Analysis 2
1.2 BOD
S.N Name Position
1 Mr. B.K.Shrestha Chairman
2 Mr.Ved K.Shrestha Director
3 Mr.Arun Man Sherchan Director
4 Dr. Bal Gopal Baidya Director
5 Mr. B.M.Panda Director
6 Dr. Rakesh Gupta Director
7 Shiva Sharan K.C Public Director
8 Navin Bhakta Shrestha Public Director
Sharesansar.com | 1.0 Company Analysis 3
1.3 CEO’s Profile: A.K. Ahluwalia
AK Ahluwalia assumed office as the CEO of Everest Bank Ltd. on July 1,2013.
Ahluwalia has more than 32 years of banking experience at Punjab National Bank India and has held the
post of deputy general manager in Punjab National Bank India.
Ahluwalia has key expertise in credit and recovery.
Sharesansar.com | 1.0 Company Analysis 4
1.4 Management Team
S.N Name Position
1 Mr. A.K.Ahluwalia Chief Executive Officer
2 Mr. A.K.Bansal Deputy General Manager
3 Mr. Rajesh Gautam Deputy General Manager
4 Mr. Promod Raj Sharma Company Secretary
5 Mr. Rajan Kayasthya Head of Department (Accounts)
6 Mr.Keshab Raj Poudel Head of Department (Credit)
7 Mr. Anil Karki Head of Department
(Correspondent Banking and
Remittance)
8 Mr. Mahesh Bajracharya Head of Department (General
Administration)
9 Mr.Kumar Joshi Head of Department (Human
Resource)
10 Mr.Purna Bahadur Shrestha Head of Department (Inspection)
11 Mr. Bijay Kumar Gautam Head of Department (IT)
12 Mr. Dharama Prasad Gauli Head of Department (Legal)
13 Mr. Yadav Bhandari Head of Department (Treasury)
14 Mr. Ranjan Khadka Head of Department (Marketing)
15 Mr. Dev Ranjan Dangal Head of Department (Planning
and Development)
Sharesansar.com | 1.0 Company Analysis 5
1.5 Network
The bank has 53 branches and 80 ATMs(38 inside the valley and 42 outside the valley). The bank has
19 branches inside Kathmandu valley and 34 branches outside Kathmandu valley. It has 5 extension
counters as well.
INSIDE VALLEY OUTSIDE VALLEY
Bagbazar Branch Baglung Branch
Bagdol Branch Besisahar Branch
Baneshwar Branch(main branch) Bhairahwa Branch
Balaju Branch Bhojpur Branch
Bhaktapur Branch Biratnagar Branch
Chabahil Branch Birgunj Branch
Newroad Branch Birtamod Branch
Golfutar Branch Butwal Branch
Gongabu Branch Chandranigahapur Branch
Gwarko Branch Dhading Branch
Kalimati Branch Dhangadi Branch
Kirtipur Branch Duhabi Branch
Lagankhel Branch Gorkha Branch
Lazimpath Branch Gularia Branch
Maitidevi Branch Itahari Branch
Phulchowk Branch ICD(Dry Pot)
Satungal Branch Hetauda Branch
Teku Branch Janakpur Branch
Thamel Branch Krishnanagar Branch
Kushma Branch
Lekhnath Branch
Lumbini Branch
Narayangarh Branch
Nepalgunj Branch
Pokhara Branch
Rajbiraj Branch
Sandhikharka Branch
Simara Branch
Surkhet Branch
Syanja Branch
Tatopani Branch
Taulihawa Branch
Tikapur Branch
Tulsipur Branch
Sharesansar.com | 1.0 Company Analysis 6
36%
64%
Branch Locations
Inside Kathamandu valley
Outside Kathmandu valley
47% 53%
ATM Locations
Inside Kathamandu valley
Outside Kathmandu valley
53
80
5
Branches ATM Locations Extension counters
Network
Sharesansar.com | 1.0 Company Analysis 7
1.6 Products and Services
* Interest rates are subject to changes.
Sharesansar.com | 2.0 Analysis 8
2.0 Analysis
2.1 Capital Structure
Authorized, Issued and Paid-up Capital:
Particulars 2013-14 (millions)
2012-13 (millions)
Change %
Authorized Capital 2000 2000 0
Issued Capital 1921.24 1761.13 9.09
Paid-up Capital 1921.24 1761.13 9.09
The bank has an authorized capital of Rs. 2000 million. The issued capital and paid up capital of the bank
is currently Rs.1921.24 million. The share capital of the company totals Rs.2137.39 million by including
the proposed bonus shares of Rs.216.15 million of the FY 2013-14..
Share Ownership Details:
Share ownership 2013-14 2012-13
Domestic Ownership 80% 80%
Foreign Ownership 20% 20%
Total 100% 100%
Public 69.14% 69.27%
Promoters 30.36% 30.73%
Total 100% 100%
69%
31%
Share Ownership Details (2013-14)
Public Promoters
Sharesansar.com | 9
Shareholders holding 0.5% or more of the total shares:
S.N Name % Units
1 B.K. Shrestha 9.19 1655588
2 Hotel Snow Lion P. Ltd. 9.32 1678030
3 Maitra Dev Pathak 5.69 1025402
4 Radha Shrestha 8.77 1580282
5 Nepal Krishna Shrestha 9.3 1674647
6 Arun Man Sherchan 3.8 683947
7 Shanta Dev Pathak 2.33 419032
8 Kul Bir Singh Tuladhar 1 180979
9 Punjab National Bank, India 20 3611478
10 Pratik Kayastha 0.79 143004
Sharesansar.com | 10
2.2 Balance Sheet Share capital and Reserve & Surplus:
Shows the amount of share capital, the amount it has as reserve and surplus and the overall size of its
balance sheet.
Annual:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Share Capital 2137.39 11.25% 1921.24 1761.13 1391.57 1273.61
Reserve & Surplus 3319.76 14.21% 2906.61 2416.18 1721.98 1473.53
Total Equity 5457.15 13.03% 4827.84 4177.30 3113.55 2759.14
Debenture & Bonds 468.85 0.00% 468.85 0 300 300
Total Assets 70445.08 7.16% 65741.15 55813.13 46236.21 41382.76
Quarterly:
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Share Capital 2137.39 11.25% 1921.24 2137.39 2137.39
Reserve & Surplus 4513.64 13.19% 3987.55 4090.99 3710.90
Total Equity 6651.03 12.56% 5908.79 6228.37 5848.29
Total Assets 86533.07 19.89% 72175.69 85164.10 75930.79
0
1000
2000
3000
4000
5000
6000
7000
Mill
ion
Rs.
Shareholders Equity
Reserve & Surplus
Share Capital
Sharesansar.com | 11
Deposits and Investments:
Shows the deposit amount the bank has collected from the general public and the amount it has
mobilized as Investments and Loans & Advances.
Annual:
2013-2014 (millions)
Change %
2012-13 (millions)
2011-2012 (millions)
2010-2011 (millions)
2009-2010 (millions)
Deposit Liability
62108.14 7.60% 57720.46 50006.10 41127.91 36932.31
Investments 6504.19 -29.79% 9263.86 7863.63 7743.93 5008.31
Loans and Advances
47572.02 9.63% 43393.19 35910.97 31057.69 27556.36
0
1000
2000
3000
4000
5000
6000
7000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Shareholders Equity
Reserve & Surplus
Share Capital
0
20000
40000
60000
80000
100000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Total Assets
Sharesansar.com | 12
Quarterly:
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Deposit Liability
71056.83 13.21% 62764.38 70019.79 66164.77
Investments 11794.00 4.32% 11305.96 13574.08 8679.15
Loan and Advances
56494.79 11.55% 50643.09 54701.75 53553.18
0
10000
20000
30000
40000
50000
60000
70000
80000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Deposit Liability
58000
60000
62000
64000
66000
68000
70000
72000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Deposit Liability
Sharesansar.com | 13
0
10000
20000
30000
40000
50000
60000
70000
80000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Use of Funds
Investments
Loans and Advances
0
10000
20000
30000
40000
50000
60000
70000
80000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Use of Funds
Investments
Loans and Advances
Sharesansar.com | 14
0
5000
10000
15000
20000
25000
30000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Loans and Advances Breakdown
Realstate Loan
Home/Housing Loan (personalhome loan upto 60 lacs or less)#
Margin Type loan
Term Loan
Overdraft Loan/TR Loan/ WC Loan
Others
Sharesansar.com | 15
4%
15% 1%
19%
47%
14%
Loans and Advances Breakdown of Q3 2014
Real Estate loan
Home/Housing Loan (personalhome loan upto 60 lacs or less)
Margin Type loan
Term Loan
Overdraft Loan/TR Loan/ WCLoan
Others
Sharesansar.com | 16
2.3 Profit & Loss Account
Interest Income and Interest Expenses:
Shows the amount of interest income and interest expenses of the company. Interest income is the
primary source of income of a bank and interest expense its primary expenditure.
Annual:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Interest Income 5177.55 4.87% 4936.92 4960.00 4331.03 3102.45
Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79
Net Interest Income 2918.81 5.84% 2757.74 2086.66 1795.15 1529.66
Quarterly:
Q3 2014 (millions)
Change % Q3 2013 Q2 2014 (millions)
Q1 2014 (millions)
Interest Income
3590.52 -3.82% 3733.19 2380.59 1205.66
Interest Expenses
1502.49 -12.21% 1711.54 998.48 493.49
Net Interest Income
2088.03 3.28% 2021.64 1382.11 712.18
0
1000
2000
3000
4000
5000
6000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Interest Income & Expenses
Interest Income
Interest Expenses
Net Interest Income
Sharesansar.com | 17
Operating Income:
Shows the total income generated by the bank from its regular operations.
Annual:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Total Operating Income
5808.94 4.63% 5552.04 5483.07 4728.82 3500.77
Quarterly:
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Total Operating Income
2645.26 7.11% 2469.63 1725.54 882.65
0
500
1000
1500
2000
2500
3000
3500
4000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Interest Income & Expenses
Interest Income
Interest Expenses
Net Interest Income
Sharesansar.com | 18
Operating Income Breakdown:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Interest Income 5177.55 4.87% 4936.92 4960.00 4331.03 3102.45
Commission & Discount
254.88 -4.47% 266.82 233.57 203.47 208.12
Other Operating Income
309.48 24.10% 249.39 179.82 148.06 142.31
Exchange Fluctuation Income
67.03 -32.23% 98.91 109.68 46.26 47.88
0
1000
2000
3000
4000
5000
6000
7000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Total Operating Income
Total Operating Income
0
500
1000
1500
2000
2500
3000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Total Operating Income
Sharesansar.com | 19
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Interest Income 3590.52 -3.82% 3733.19 2380.59 1205.66
Commission & Discount 225.82 13.54% 198.89 167.60 89.38
Other Operating Income 282.06 41.48% 199.37 143.15 58.84
Exchange Fluctuation Income
49.35 -0.77% 49.73 32.68 22.26
0
1000
2000
3000
4000
5000
6000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Operating Income Breakdown
Interest Income
Commission & Discount
Exchange Fluctuation Income
Other Operating Income
0.00
500.00
1000.00
1500.00
2000.00
2500.00
3000.00
3500.00
4000.00
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Operating Income Breakdown
Interest Income
Commission & Discount
Exchange Fluctuation Income
Other Operating Income
Sharesansar.com | 20
Operating Expenses:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Total Operating Expenses
3470.87 6.82% 3249.29 3944.73 3310.42 2228.68
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Total Operating Expenses
800.81 2.37% 782.26 543.24 270.73
0
500
1000
1500
2000
2500
3000
3500
4000
4500
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Total Operating Expenses
Total Operating Expenses
Sharesansar.com | 21
Operating Expenses Breakdown:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79
Staff Expenses 511.86 10.84% 431.81 352.05 293.13 226.36
Other Operating Expenses
544.30 6.83% 509.49 467.29 383.11 352.51
Loan Loss Provision 155.97 57.86% 98.81 252.05 98.30 77.01
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Interest Expenses 1502.49 -12.21% 1711.54 998.48 493.49
Staff Expenses 356.04 0.22% 355.26 242.81 134.55
Other Operating Expenses
360.25 4.2% 346.34 257.42 102.13
Loan Loss Provision 54.53 4.80% 80.66 43.02 34.04
0
100
200
300
400
500
600
700
800
900
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Total Operating Expenses
Sharesansar.com | 22
0
500
1000
1500
2000
2500
3000
3500
2009-10 2010-11 2011-12 2012-13 2013-14
Mill
ion
Rs.
Operating Expenses Breakdown
Interest Expenses
Staff Expenses
Other Operating Expenses
Loan Loss Provision
0
200
400
600
800
1000
1200
1400
1600
1800
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Operating Expenses Breakdown
Interest Expenses
Staff Expenses
Other Operating Expenses
Loan Loss Provision
Sharesansar.com | 23
Operating Profit and Net Profit:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Operating Profit 2338.07 1.53% 2302.75 1538.34 1418.40 1272.09
Net Profit 1549.70 5.34% 1471.12 1090.56 931.30 831.77
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Operating Profit 1844.45 9.31% 1687.37 1182.30 611.92
Net Profit 1193.89 10.45% 1080.95 771.23 391.14
0
500
1000
1500
2000
2500
2009-10 2010-11 2011-12 2012-13 2013-14
Mill
ion
Rs.
Operating and Net Profit
Operating Profit
Net Profit
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Operating and Net Profit
Operating Profit
Net Profit
Sharesansar.com | 24
Loan Loss Provision:
2013-14 (millions)
Change %
2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Loan Loss Provision
155.97 57.86% 98.81 252.05 98.30 77.01
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Q1 2014 (millions)
Loan Loss Provision 84.53 4.80% 80.66 43.2 34.04
0
50
100
150
200
250
300
2009-10 2010-11 2011-12 2012-13 2013-14
Mill
ion
Rs.
Loan Loss Provision
Sharesansar.com | 25
Write Back of Provision:
2013-14 (millions)
Change % 2012-13 (millions)
2011-12 (millions)
2010-11 (millions)
2009-10 (millions)
Write Back of Provisions
89.73 101500.59 0.88 150.35 56.34 83.55
Q3 2014 (millions)
Change % Q3 2013 (millions)
Q2 2014 (millions)
Write Back of Provision 25.44 332.86% 5.88 25.44
0.00
10.00
20.00
30.00
40.00
50.00
60.00
70.00
80.00
90.00
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Loan Loss Provision
0
20
40
60
80
100
120
140
160
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Write Back of Provision
Sharesansar.com | 26
Dividend History:
2013-14 (%)
Change %
2012-13 (%)
2011-12 (%)
2010-11 (%)
2009-10 (%)
Cash Dividend 50 0% 50 0 50 30
Bonus Shares 12 20% 10 30 10 30
Total Dividend 62 0.33% 60 30 60 60
0
5
10
15
20
25
30
Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Write Back of Provision
0
10
20
30
40
50
60
70
2009-10 2010-11 2011-12 2012-13 2013-14
Dividend History
Bonus Shares (%)
Cash Div (%)
Sharesansar.com | 27
2.4 Key Ratios
EPS:
2013-14 Change %
2012-13 2011-12 2010-11 2009-10
Earning Per Share
86.04 -6.36% 91.88 88.55 83.18 100.16
Q3 2014 Change % Q3 2013 Q2 2014 Q1 2014
Earning Per Share 55.86 -0.72% 56.26 36.08 18.30
Earning Per Share (annualized)
74.48 -0.72% 75.02 72.17 73.20
P/E ratio:
2013-14 2012-13 2011-12 2010-11 2009-10
P/E ratio 30.58 17.32 11.67 13.15 16.27
0
20
40
60
80
100
120
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annulized)
Rs.
EPS
EPS
Sharesansar.com | 28
Market Value per Share:
Q3 2014
Q3 2013
Q2 2014
Q1 2014
2013-14 2012-13 2011-12 2010-11 2009-10
Market Value per Share
2133 2205 1982 1911 2631 1591 1033 1094 1630
16.27 13.15
11.67 17.32
30.58
28.64
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
P/E Ratio
P/E Ratio
0
500
1000
1500
2000
2500
3000
Rs.
Market Value
Market Value
Sharesansar.com | 29
CD Ratio:
Q3 2014
Q2 2014
Q1 2014
2013-14 2012-13 2011-12 2010-11 2009-10
CD ratio (%) 79.17 78.9 78.9 78.01 76.57 73.22 76.98 76.24
Capital to RWA ratio:
2013-14 (%)
2012-13 (%)
2011-12 (%)
2010-11 (%)
2009-10 (%)
Core Capital 9.35 9.31 9.61 8.46 8.39
Supplementary Capital
1.80 2.28 1.41 1.96 2.38
Total Capital Fund
11.15 11.59 11.02 10.42 10.77
70.00%
72.00%
74.00%
76.00%
78.00%
80.00%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
%
CD ratio
0
2
4
6
8
10
12
14
2009-10 2010-11 2011-12 2012-13 2013-14
%
Capital to RWA ratio
Core Capital
Supplementary Capital
Tota Capital Fund
Sharesansar.com | 30
Book Net worth:
2013-14 Change % 2012-13 2011-12 2010-11 2009-10
Total Net worth (million)
5337.1 14.34% 4667.8 4017.3 3677.2 2757.1
Net worth per share
296.30 1.64% 291.53 326.18 328.44 331.99
Q3 2014 Change % Q3 2013 Q2 2014 Q1 2014
Total Net worth (million)
6651.03 12.56% 5908.79 6228.37 6069.11
Net worth per Share
311.18 1.18% 307.55 291.40 283.95
Non-performing Loans:
2013-14 (%)
Change % 2012-13 (%)
2011-12 (%)
2010-11 (%)
2009-10 (%)
Non-performing Loans to Total Loan
0.97 56.45% 0.62 0.84 0.34 0.16
270
280
290
300
310
320
330
340
Rs.
Networth per share
Networth per share
Sharesansar.com | 31
Q3 2014 (%)
Change % Q3 2013 (%)
Q2 2014 (%)
Q1 2014 (%)
Non-performing Loans to Total Loan
0.63 1.61% 0.62 0.65 0.63
Return on Equity:
2013-14 (%)
Change % 2012-13 (%)
2011-12 (%)
2010-11 (%)
2009-10 (%)
Return on Equity
28.40 -6.81% 30.47 26.11 29.91 30.15
Q3 2014 (%)
Change % Q3 2013 (%)
Q2 2014 (%)
Q1 2014 (%)
Return on Equity (annualized)
23.93 -1.88% 24.39 24.76 26.75
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
NPL to Total Loans
Sharesansar.com | 32
Return on Assets:
2013-14 (%)
Change % 2012-13 (%)
2011-12 (%)
2010-11 (%)
2009-10 (%)
Return on Assets
2.20 -1.69% 2.24 1.95 2.01 2.01
Q3 2014 Change % Q2 2014 Q1 2014 2013-14
Return on Assets (annualized)
1.84 -7.88% 2.00 1.81 2.06
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annualized)
Return on Equity
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Return on Assets
Sharesansar.com | 3.0 Analysis 33
3.0 Analysis
3.1 Fundamental Analysis Interest Income and expenses:
The interest income is in an increasing trend as has been shown by the increase from Rs.3102.45 million
in 2009-10 to Rs.5177.55 million in 2013-14. The interest expenses were increasing till 2011-12. It
increased from Rs. 1572.79 million in 2009-10 to Rs.2873.33 million in 2011-12. But it decreased to Rs.
2179.18 Million in 2012-13 which is a drop of 24.16%. The interest expense for the year 2013-14 was Rs.
2258.74 million.
The interest income and interest expenses during the period between 2009-10 to 2013-14 increased
year on year by 13.66% and 9.47% respectively.
0
1000
2000
3000
4000
5000
6000
2009-10 2010-11 2011-12 2012-13 2013-14
Mill
ion
Rs.
Interest Income & Expenses
Interest Income
Interest Expenses
Sharesansar.com | 3.0 Analysis 34
The quarterly analysis of the company shows that its interest income has increased from Rs.2380.59
million in Q2 2014 to Rs.3590.53 million in Q3 2014. The interest income in Q3 2013 was Rs.3733.19
million. The interest income in Q3 2014 is 50.83% higher than in Q2 2014 and 3.82% lower than in Q3
2013.
Deposit and Loans & Advances:
0
500
1000
1500
2000
2500
3000
3500
4000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Interest Income & Expenses
Interest Income
Interest Expenses
Net Interest Income
0
10000
20000
30000
40000
50000
60000
70000
80000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Deposit Liability
Sharesansar.com | 3.0 Analysis 35
The deposit collection by the bank has been increasing throughout our review period. In FY 2009-10, the
bank collected Rs.36932.31 million in deposits. It has been increasing ever since and stands at
Rs.62108.14 million as of FY 2013-14. This is a year on year growth of 13.88%. As of Q3 2014, the bank
has managed to collect Rs.71056.83 million as deposits. Compared to Q3 2013, the bank’s deposit
collection has increased by 13.21%.
58000
60000
62000
64000
66000
68000
70000
72000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Deposit Liability
0
10000
20000
30000
40000
50000
60000
70000
80000
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Use of Funds
Investments
Loans and Advances
Sharesansar.com | 3.0 Analysis 36
As of Q3 2014, the bank has mobilized Rs.56494.79 million as Loans & Advances and Rs.11794.00 million
as Investments. The bank has mobilized 4% of the total loans and advances in Real Estate Loans, 15% in
Home/Housing Loans, 1% in Margin Type Loans, 19% in Term Loans, 47% in Overdraft Loans and 14% in
other sectors.
0
10000
20000
30000
40000
50000
60000
70000
80000
Q1 2014 Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Use of Funds
Investments
Loans and Advances
4%
15% 1%
19%
47%
14%
Loans and Advances Breakdown of Q3 2014
Real Estate loan
Home/Housing Loan (personalhome loan upto 60 lacs or less)
Margin Type loan
Term Loan
Overdraft Loan/TR Loan/ WCLoan
Others
Sharesansar.com | 3.0 Analysis 37
Operating Profit and Net Profit:
The operating profit of the bank has increased from Rs.1272.09 million in 2009-10 to Rs.2338.07 million
in 2013-14. The bank posted an impressive 49.69% increase in operating profit in FY 2012-13. The
growth however, slowed to a meager 1.53% in FY 2013-14.
The net profit of the bank has also been constantly increasing throughout our review period. The net
profit increased from Rs.831.77 million in 2009-10 to Rs.1549.7 million in 2013-14. This is year on year
increase of 16.83%.
Provision and Write Back:
0
500
1000
1500
2000
2500
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Operating and Net Profit
Operating Profit
Net Profit
-50
0
50
100
150
200
250
300
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
Mill
ion
Rs.
Loan Loss Provision
Loan Loss Provision
Write Back
Net Write Back
Sharesansar.com | 3.0 Analysis 38
The loan loss provision of the bank was Rs.155.97 million as of FY 2013-14. This is an increase of 57.85%
compared to last year. The bank had a write back Rs.89.73 million in 2013-14 compared to Rs.0.88
million in 2012-13.
Comparing Q3 2013 and Q3 2014, the bank’s loan loss provision has increased by 4.80% and reached
Rs.84.53 million. The write back of provision amount however, has increased by 332.65% and reached
Rs.25.44 million during the same period.
CD Ratio:
The CD ratio of the bank is below the NRB stipulated limit of 80%. The CD ratio in FY 2013-14 was
78.01% and as of 3rd quarter 2014 it is increased to 79.17%.
0
10
20
30
40
50
60
70
80
90
Q2 2014 Q3 2013 Q3 2014
Mill
ion
Rs.
Loan Loss Provision
Loan Loss Provision
Write Back
Net Write Back
70.00%
72.00%
74.00%
76.00%
78.00%
80.00%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
%
CD ratio
Sharesansar.com | 3.0 Analysis 39
Equity and Returns:
Share capital and net profit of the bank are both increasing. The share capital has increased from
Rs.1273.61 million to Rs.2137.39 million which is a year on year increase of 13.82%. The net profit too
has increased from Rs.831.77 million to Rs.1549.7 million which is a year on year increase of 16.83%.
The ROE of the bank has also increase from 14.80% in 2009-10 to 18.09% in 2013-14. As of Q3 2014, the
bank’s ROE stands at 18.99% and its ROA stands at 1.50%. The bank had an NPL of 15.11% in
0
500
1000
1500
2000
2500
Mill
ion
Rs.
Share capital Vs. Net Profit
Share Capital
Net Profit
0.00%
5.00%
10.00%
15.00%
20.00%
25.00%
30.00%
35.00%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annualized)
ROE and ROA
Return on Equity
Return on Asset
Sharesansar.com | 3.0 Analysis 40
Dividends:
The bank has distributed an average of 54.4% dividend rate during our review period of FY 2009-10 to FY
2013-14. The rate of dividends dropped to 30% in FY 2011-12 and rose back to 60% in FY 2012-13.
The bank has distributed cash dividends at an average rate of 36% and bonus shares at an average arate
of 18.4%.
0
10
20
30
40
50
60
70
2009-10 2010-11 2011-12 2012-13 2013-14
Dividend Composition
Bonus Shares (%)
Cash Div (%)
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
%
Dividend History
Dividends
Sharesansar.com | 3.0 Analysis 41
NPL:
The NPL of the bank is at 0.63% as of the 3rd quarter of 2014. The average NPL of the bank during FY
2009-10 to FY 2013-14 was 0.856%. The bank had an NPL of 0.62% in Q3 2013.
0.00%
0.20%
0.40%
0.60%
0.80%
1.00%
1.20%
2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014
NPL to Total Loans
0.60%
0.61%
0.62%
0.63%
0.64%
0.65%
0.66%
Q1 2014 Q2 2014 Q3 2013 Q3 2014
NPL to Total Loans
Sharesansar.com | 3.0 Analysis 42
Capital to RWA ratio:
The Capital to RWA ratio or Capital Adequacy Ratio (CAR) of the bank is at 11.15% as of 2013-14. The
core capital to RWA ratio is 9.35% and the supplementary capital to RWA ratio is 1.8%.
0
2
4
6
8
10
12
14
2009-10 2010-11 2011-12 2012-13 2013-14
%
Capital to RWA ratio
Core Capital
Supplementary Capital
Tota Capital Fund
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