CARE Ratings Nepal assigns AA- to 10.25% Subordinated Debenture of Everest Bank; Issuer rating of AA- reaffirmed

CARE Ratings Nepal Limited (CRNL) has assigned „CARE-NP AA-‟ rating to the new proposed Subordinated Debenture “10.25% Subordinated Debenture Program” issue of Everest Bank Limited (EBL). The instruments with this rating are considered to have high degree of safety regarding timely servicing of financial obligations, in

Nepal. Such instruments carry very low credit risk. CRNL has also reaffirmed the issuer rating of “CARE-NP AA- (Is)” assigned to EBL. Issuers with this rating are considered to offer high degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry very low credit risk.    

Key Rating Strength

• Long track record of the bank backed by institutional promoter
• Experienced directors and management team
• Strong capitalization level
• Diversified and geographical coverage through branches
• Consistent growth in Loans & Advances and Deposits
• Considerable growth in total income and net profit over the period
• Strong asset quality, better than industry average on a sizeable asset base
• Lower cost of funds in the industry
• Moderate liquidity profile
• Diversified loan portfolio with regulatory compliance
• Moderate CASA ratio although declining over the period
• Diversified investment portfolio

Key Rating Weaknesses

• High portfolio concentration in top borrower groups and depositors
• Intense competition
• Exposure to regulatory risk related to industry

About the Bank

Everest Bank Limited (EBL) an “A” class licensed institution from Nepal Rastra Bank (NRB), listed in Nepal Stock Exchange is one of leading private sector bank in Nepal. It was incorporated on October 16, 1994, in joint venture with Punjab National Bank (PNB) of India. Current shareholding pattern of the Bank constitutes of promoters holding 69.22% of the shares (including PNBs 20.03%) while remaining 30.78% is held by the public. The bank reported PAT of Rs.3,054 Mn on an asset size of Rs.169 Bn as on July 16, 2019 as against PAT of

Rs.2,582 Mn on an asset size of Rs.144 Bn as on July 16, 2018. Further, EBL reported PAT of Rs.691 Mn during Q1FY20.

Source: careratingsnepal.com