CARE Ratings Nepal Limited (CRNL) has assigned the issuer rating of“CARE-NP A+ (Is)” to Rastriya Banijya Bank Limited (RBB). Issuers with this rating are considered to offer adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such issuers carry low credit risk. CRNL has also assigned rating of „CARE-NPA+‟ to the proposed Subordinated Debentures issue of RBB. The instruments with this rating are considered to have adequate degree of safety regarding timely servicing of financial obligations, in Nepal. Such instruments carry low credit risk.
Key Rating Strength
- Long track record, ownership and expected support by Government of Nepal and experienced management team
- Adequate capitalization
- Diversified and geographical coverage through branches
- Diversified loan portfolio, concentration towards Retail and SME portfolio
- Strong CASA ratio with lowest cost of funds in the industry
- Considerable growth in total income and net profit over the period
- Comfortable Moderate deposits concentration and low advances concentration liquidity profile
Key Rating Weaknesses
- Weak Asset quality with high GNPL Level
- Intense competition
- Exposure to regulatory risk related to industry
About the Bank
Rastiya Banijya Bank Limited was incorporated by Government of Nepal (GoN) on January 23, 1966 as Rastriya Banijya Bank under the provisions of Rastriya Banijya Bank Act 1965. Later, pursuant to Companies Act 2063, the entity was converted to public limited company and was renamed as Rastriya Banijya Bank Limited (RBB). RBB is “A” Class Licensed Institutions from Nepal Rastriya Bank (NRB) and comes under the purview of Banks & Financial Institutions Act (BAFIA) with 99.97% share held by various ministries of Government of Nepal. The bank reported PAT of Rs. 5,047 Mn on an asset size of Rs. 226 Bn as on July 16, 2019. Further, RBB reported PAT of Rs. 3,066 Mn during 9MFY20. The Bank has one wholly owned subsidiary RBB Merchant Banking Limited which was incorporated in January 29, 2016 and is licensed by the Securities Board of Nepal (SEBON) to undertake Merchant Banking and Investment Banking services.
For detailed rating, click here