Agriculture Dev Bank brings down NPL to 6pc as of mid Dec

KATHMANDU, JAN 21 -

Agricultural Development Bank Limited (ADBL) has improved its financial health by reducing its non-performing loans (NPL) to 6 percent as of mid-December from 9 percent at the end of fiscal 2011-12. An NPL level of less than 5 percent is considered good as per international standards.

Speaking at ADBL’s 46th anniversary celebration, chief executive officer Tej Bahadur Budhathoki said the bank recovered principal worth Rs 20.09 billion as of mid-December which is 14.42 percent higher than the rate of recovery in the last fiscal year.

He added that the bank achieved a recovery rate of 83.62 percent during the first five months of the current fiscal year, up 6.7 percent compared to the last fiscal.

According to ADBL, its lending amounts to Rs 22.25 billion and deposit collection stands at Rs 43.89 billion, indicating a very high level of liquidity available with the bank. Against this backdrop, the bank has planned to increase lending to Rs 50.57 billion and increase deposits to Rs 50.12 billion.

CEO Budhathoki said that the bank was planning to issue shares worth Rs 162.5 million to its employees. The share issue will bring down the government’s stake in the bank to 50.78 percent. He added that the bank would reopen all its branches which were displaced during the conflict. “A majority of them have already been reopened, and efforts are on to restore the rest,” said Budhathoki.

ADBL has been providing any branch banking service (ABBS) at 170 of its branches. Budhathoki said that it planned to provide full banking services including ATM, foreign exchange, ECC and swift from most of its branches.

The bank has installed core banking system Temenos-24 technology, which enables it to start online banking service, at 60 of its offices. “The technology will be installed at 125 offices by the end of the current fiscal year,” he said.

Budhathoki added that the bank had been supporting the government’s effort to provide social security allowance through it, and that it had also been providing loans under the Youth Self-Employment Programme. He said that the bank would increase its lending to agriculture such as livestock, vegetable and fruit farming and renewable energy to support the government’s efforts in these areas.

Meanwhile, addressing the anniversary function, Finance Minister Barsha Man Pun lauded the bank’s contribution to commercialization of agriculture and industrialization of the country. He added that the bank had also been supporting the government’s effort to provide employment in rural areas, particularly the programmes targeted at the poor.

Source: The Kathmandu Post