CARE Nepal assigns Grade A- to “10.25% Sunrise Debenture 2083”; Ratings indicate low credit risk

CRNL has assigned "CARE-NP A-‟ rating to the proposed Subordinate Debenture “10.25% Sunrise Debenture 2083” issue of Sunrise Bank Limited (SBL). CRNL has also reaffirmed rating of "CARE-NP A-‟ assigned to Subordinate Debenture “10% Sunrise Debenture 2080” and Issuer Rating of "CARE-NP A- (Is)‟ assigned to Sunrise Bank Limited. Instruments with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instrument carries low credit risk. 

Key Rating Strength

1. Long track record, experienced promoters and management team
2. Adequate capitalisation
3. Diversified geographical coverage through branches
4. Growth in loans & advances and deposits
5. Growth in total income and net profit over the period
6. Diversified loan portfolio with regulatory compliance
7. Moderate CASA ratio
8. Moderate liquidity profile
9. Moderate deposits and advances concentration

Key Rating Weaknesses

1. Moderate asset quality
2. Intense Competition
3. Exposure to regulatory risk related to industry

About the Company

Sunrise Bank Limited (SBL) is “A” Class Licensed Institutions from Nepal Rastra Bank (NRB). It was incorporated on October 12, 2007 as 23rd Commercial Bank of Nepal. The bank is promoted by reputed entrepreneurs who are industrialist, businessman, engineers, and prominent person of Nepal. As on July 16, 2019, 51.10% of the total shares of SBL were held by the promoter whereas remaining 48.90% is held by the general public. The bank had acquired two “C” Class Financial Institution (Finance Company), Narayani

National Finance Limited (started joint operation from July 14, 2016) and NIDC Capital Markets Limited (started joint operations from 10 February 2017). NCM Merchant Banking Limited (a Merchant Banker), a subsidiary of the erstwhile NIDC Capital Markets Ltd., has become a subsidiary of SBL after the acquisition, which is now operating under a new name Sunrise Capital Limited. The bank has an asset size of Rs. 94,611 Mn as on July 16, 2019, which witnessed 14.46% growth over July 15, 2018 (Rs. 82,653 Mn). The market share of SBL in terms of deposit base was 2.75% as on Mid-July 2019; for the loan portfolio the market share stood at 2.83% as on Mid- July 2019 of industry (Class „A‟ Commercial Banks as per NRB data).