Make your investment portfolio better: See the full picture of national level development banks; Kailas Bikas Bank leads in terms of net profit while Mahalaxmi Bikas Bank leads among four major indicators
Tue, Feb 20, 2018 12:23 PM on Latest, Exclusive, Financial Analysis, Featured, Stock Market,
- Dheerusha Tiwari
The further analysis has discarded NIDC and Tourism Development Bank for the convenience of the readers.
Net profit:
As per the net profit of second quarter of 2074/75, Kailash Bikas Bank Limited (KBBL) is in the lead with a profit of Rs 26.61 crore. Similarly, Muktinath Bikas Bank Limited (MNBBL) has the second highest net profit of Rs 26.44 crore in the same quarter. It is further followed by Mahalaxmi Development Bank Limited (MLBL) with a profit of Rs 20.54 crore. The bank with the least net profit is Kamana Sewa Bikas bank Limited (KSBBL) whose net profit amounts to Rs 13.60 crore.
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Paid up capital: The central bank of the country has directed these national level “B” categorized banks to meet the paid up capital requirement of at least 2.50 arba. Five of the banks namely, Mahalaxmi Development Bank Limited (MLBL), Jyoti Bikas Bank Limited (JBBL), Muktinath Bikas Bank Limited (MNBL), Garima Bikas Bank Limited (GBBL) and Kailash Bikas Bank Limited (KBBL) have already met the paid up capital requirement. Mahalaxmi Bikas Bank Limited has the highest paid up capital of Rs 2.63 arba. Similarly banks such as Om Development Bank Limited (ODBL), Kamana Sewa Bikas Bank Limited (KSBBL), Lumbini Bikas Bank Limited (LBBL), Gandaki Bikas Bank Limited (GDBL), Deva Bikas Bank Limited (DBBL) and ShangriLa Development Bank Limited (SADBL) are yet to meet the paid up capital requirement. Among these banks, SADBL has the leas paid up capital worth Rs 1.36 arba.
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Reserve and surplus: With the changes in paid up capital, the reserves and surplus of the banks are likely to be affected. In terms of reserves and surplus, Mahalaxmi Bikas bank is again maintaining its lead with a reserve of Rs 1.31 arba. Gandaki Bikas Bank Limited has maintained second position with Rs 1.14 arba reserve fund. The bank is further followed by Lumbini Bikas Bank Limited (LBBL) with Rs 1.01 arba in reserves. The bank with least reserve and surplus is Jyoti Bikas Bank Limited having a reserve of Rs 34 crores.
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Deposit collection: The national level development banks are going through a severe competition with each other. The banks have been trying their best to attract the deposit clients. As of the second quarter of FY 2074/75, Mahalaxmi Bikas Bank Limited has left behind all the other ten banks even in terms of deposits. The bank has collected deposits worth Rs 25.13 arba. Similarly, the bank is followed by Muktinath Bikas Bank Limited (MNBBL) and Gandaki Bikas Bank Limited (GDBL) with the collected deposit of Rs 21.74 arba and Rs 19.92 arba respectively. Jyoti Bikas Bank Limited and Deva Bikas Bank Limited have observed to be in the least position in terms of deposit with collected amount being Rs 13.46 arba and Rs 13.51 arba respectively.
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Loans and advances: As similar to other financial indicators except net profit, MahaLaxmi Bikas Bank Limited (MLBL) has maintained top position by floating Rs 20.82 arba as credit. As similar to the scenario of deposit, Muktinath Bikas Bank Limited (MNBBL) and Gandaki Bikas Bank Limited (GDBL) has maintained second and third position even in terms of loans and advances. MNBBL has floated a total of Rs 19.33 arba in loans while GDBL has floated Rs 17.56 arba in loans. Deva Bikas Bank Limited (DBBL) has the least loan portfolio of Rs 11.89 arba.
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Major indicators:
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The development banks such as ShangriLa Development Bank Limited (SADBL) and Gandaki Bikas Bank Limited (GDBL) which have not met the paid up capital requirement are seen in the leading position in terms of EPS. SADBL has an EPS of Rs 23.58 while GDBL has an EPS of Rs 22.18 respectively. Similarly, among the banks that have met the paid up capital requirement, Kailash Bikas Bank Limited (KBBL) has the highest EPS of Rs 21.11, Muktinath Bikas Bank Limited (MNBBL) has an EPS of Rs 20.40.
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The bank with the lowest P/E ratio as of 19th February, 2018 is ShangriLa Development Bank Limited with 7.97 times. Similarly, bank with the highest P/E ratio is Muktinath Bikas Bank limited (MNBBL) i.e. 21.57. times.
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The highest net worth per share among these development banks is Rs 161.73 of Gandaki Bikas Bank Limited (GDBL). Shangrila Development Bank Limited has the second highest net worth per share as of Q2 of FY 2074/75 i.e. Rs 153.89. The bank is further followed by Lumbini Bikas Bank Limited (LBBL) with the net worth of Rs 150.30 per share. Jyoti Bikas Bank Limited has the least net worth of Rs 113.26 per share.
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As of the LTP of 19th February, 2018, Muktinath Bikas Bank limited has the highest LTP of Rs 440. It is further followed by KBBL with a price of Rs 240. Similarly, GDBL stands at third position with a market price of Rs 240. Jyoti Bikas Bank Limited has the least market price of Rs 160. The market price has already been adjusted to the right share that these banks are providing. For example, Like KBBL, LBBL, SADBL, GDBL have already floated or in the process to issue right share. All these four bank’s book closure has adjusted in the market price but adjusted paid up capital has not been shown in their balance sheet. The details of capital plan of these banks along with the upcoming, ongoing and approved right share and bonus share has been attached below:
Om Development Bank Limited (ODBL) will be convening its 11thAnnual General Meeting (AGM) on Falgun 25, 2074 at Hotel Mount Kailash resort, Lakeside, Pokhara at 10:00 AM. The book closure date for the AGM has been set from Falgun 14 to Falgun 25, 2074. Thus, only those shareholders holding their shares till Falgun 13, 2074 i.e. one day ahead of the book closure date are eligible to participate in the AGM.
A full picture:
Finally the table below provides a full picture with major indicators of the 13 national development) banks (including the merged banks) as of the second quarter of FY 2074/75:
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Given the analysis, what opinions do you have on the development banks? Do you think the commercial banks and development banks have the same charm in the stock market? Although MLBL has a leading position among several indicators while KBBL is leading in terms of net profit, yet MNBBL has the highest market price. What say do you have on this? Please feel free to provide your observation of stock market. (Disclaimer: Any kind of information that is provided in the article should not be used as a sole advice or recommendation by investors in order to design their investment portfolio. So, before taking steps for any kind of the information, the investors are required to base their judgment on their own financial analysis, appropriateness of the information and seek independent financial advice. The information of the company has been taken from the authorized sources such as website of the company, NEPSE, financial reports and press releases of the companies so, any changes not updated in these may differ in the analysis.)
