"10% Prabhu Bank Debenture, 2084" rated BBB by CARE Ratings Nepal; Debenture added to SEBON pipeline

"10% Prabh...

CARE Ratings Nepal Limited (CRNL) has assigned „CARE-NP BBB‟ rating to the new proposed Subordinated Debenture “Prabhu Bank Debenture 2084” issue of Prabhu Bank Limited (PBL). The instruments with this rating are considered to have moderate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instruments carry moderate credit risk. 

Key Rating Strength

  • Experienced promoters and management team
  • Comfortable CASA ratio with lower cost of deposits as compared to industry
  • Diversified and geographical coverage through branches
  • Consistent growth in Loans & Advances and Deposits
  • Considerable growth in total income and net profit over the period
  • Moderate liquidity profile
  • Diversified sector wise loan portfolio with regulatory compliance
  • Diversified investment portfolio

Key Rating Weaknesses

  • Moderate capitalization as per existing requirement, however needs improvement to meet new regulatory requirements
  • Weak asset quality parameters as compared to industry
  • High portfolio concentration among top depositors and borrower groups
  • Intense competition
  • Exposure to regulatory risk related to industry

About the Bank

Prabhu Bank Limited (PBL) an “A” Class Licensed Institution from Nepal Rastra Bank (NRB), listed in Nepal Stock Exchange is one of the mid-sized private sector banks in Nepal. It was incorporated on June 19,

2001 as Kist Bank Ltd. Later it was merged with three other bank and financial institutions (BFIs) namely Prabhu Bikash Bank Ltd., Zenith Finance Ltd. and Gaurishankar Development Bank Ltd. as on September 15, 2014 and the name of the bank was changed to Prabhu Bank Ltd. Following the aforesaid merger PBL acquired another BFI, Grand Bank Nepal Ltd. on February 04, 2016. Current shareholding pattern of the Bank constitutes of promoters holding 55% of the shares while remaining 45% is held by the general public. The major promoters of the bank are Mrs. Tara Kumari Thakali Bhattachan (5.08%), M/s Prabhu Group Private Limited (4.93%). The bank reported PAT of Rs. 1,784 Mn on an asset size of Rs. 138 Bn as on July 16, 2019.

Further, PBL reported PAT of Rs. 628 Mn during Q1FY20.

Source: https://careratingsnepal.com/

Read the full report here.