See which commercial banks are superiors than Industry (Exclusive Study)
Fri, Sep 23, 2016 3:33 PM on Latest, Exclusive, Financial Analysis, Featured, Company Analysis, Stock Market,
Investors have a different set of fundamental factors or indicators to consider while evaluating banks financial performance. ShareSansar has compared the major indicators of all commercial banks with its industrial average and found which banks are superiors than the industry.
We have considered following major 5 indicators:
Deposits
Deposits are the most common and always the cheapest source of loanable funds for banks. Likewise, deposit growth gives investors a sense of how much lending a bank can do. The large amounts of deposits help the banks make more profit by mobilizing it in different productive sectors. Therefore the efficiency and growth of banks lies heavily upon its capacity to attract higher deposits from public and institutional sectors. During the review period of fiscal year 2072/73, the banking industry was able to increase its total deposits by 21 percent. Out of total 28 banks, 10 commercial banks were found to be ahead of industry.
Loan and Advances
The growth of loan is very important for revenue growth of the banking sectors. The average growth of loan and advances of overall banking industry is 27 percent where 11 banks were found to be superiors than industry. NMB Bank has outstanding growth of 97 percent in loan and advances.
Net Interest Income
Net Interest Income (NII) is the difference between revenues generated by interest-bearing assets and the cost of servicing (interest-burdened) liabilities. Net Interest Income reflects the income from core business activities. NII of commercial banks have increased by 25% during the review period where 17 banks were superior to industry.
Operating Profit
The profit banks earn from operation related activities are known as Operating Profit. It’s very essential for bank to earn good amount of operating profit. During the review period, the banks were able to increase its average operating profit by 60 percent. Out of 28 commercial banks, just 10 commercial banks have better growth than industry.
Net Profit
Net Profit is the residual income of a company after adding all the revenue and subtracting all expenses and losses for the review period. During the review period; the commercial banks net profit increased by 36 percent where 20 commercial banks were ahead of industry average.
Loan and Advances
The growth of loan is very important for revenue growth of the banking sectors. The average growth of loan and advances of overall banking industry is 27 percent where 11 banks were found to be superiors than industry. NMB Bank has outstanding growth of 97 percent in loan and advances.
Net Interest Income
Net Interest Income (NII) is the difference between revenues generated by interest-bearing assets and the cost of servicing (interest-burdened) liabilities. Net Interest Income reflects the income from core business activities. NII of commercial banks have increased by 25% during the review period where 17 banks were superior to industry.
Operating Profit
The profit banks earn from operation related activities are known as Operating Profit. It’s very essential for bank to earn good amount of operating profit. During the review period, the banks were able to increase its average operating profit by 60 percent. Out of 28 commercial banks, just 10 commercial banks have better growth than industry.
Net Profit
Net Profit is the residual income of a company after adding all the revenue and subtracting all expenses and losses for the review period. During the review period; the commercial banks net profit increased by 36 percent where 20 commercial banks were ahead of industry average.
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