COMMERZ AND TRUST BANK NEPAL LIMITED

Initial Public Offering (IPO) Name: Commerz And Trust Bank Nepal Ltd.  

• Issued Units: 6 million
• Per Unit Cost: NPR 100
• IPO Size: NPR 600 million
• Units Allotted for Staff: 0.3 million
• Size Allotted for Staff: NPR 30 million
• Units Allotted for Mutual Fund: 0.3 million
• Size Allotted for Mutual Fund: NPR 30 million
• Units Allotted for General Public: 5.4 million
• Size Allotted for General Public: NPR 540 million
• Opening Date: 2069/11/06
• Closing Date (Minimum): 2069/11/10
• Closing Date (Maximum): 2069/11/20
• Minimum Investment Units: 50 units
• Minimum Investment Amount: NPR 5000
• Maximum Investment Units: 1.5 million
• Maximum Investment Amount: NPR 150 million

Note: IPO applied for more than 50 units should be divisible by 10 and when applied for more than or equal to Rs 50,000, the payment should be made through account payee check. Issue Manager:

• Citizen Investment Trust
• Nabil Investment Banking Ltd.
• Civil Capital Market Ltd.
• Growmore Merchant Banker Ltd.

Introduction of Commerz and Trust Bank Nepal Limited Commerz and Trust Bank Nepal Ltd. (CTBN) was established under the Company Act, 2063 and Bank and Financial Institution Act, 2063. It started its operation as the 29th commercial bank of Nepal from 2067/06/04 after receiving a license from Nepal Rastra Bank as on 2067/05/24. It is founded by promoters with strong background in real estate, financial institutions, business, trade and industry who have come together to build a path for the economic development of the country. The Bank’s vision is to emerge as a leading financial service provider by becoming the premier choice of all the stakeholders. The Bank has been registered with an issued capital of NPR  3,000 million and paid up capital of NPR 1,400 million. The Bank firmly believes in developing a relationship with its stakeholders through delivering a state of the art banking services and creating value for its shareholders. The company registered office is situated in Kathmandu Metropolitan City, Ward No. 1, Tindhara, Kamaladi, Kathmandu which is also the Head office of the Bank. Apart from it, the Bank has been providing its services through another 13 branches disperse in the various areas of the country like Kathmandu, Lalitpur, Dhading, Pokhara, Terhathum, Jhapa, Gorkha, Biratnagar and Butwal etc. Altogether, there are 6 branches within the valley and rest 8 is situated outside of the valley.   Major shareholders of Commerz and Trust Bank Nepal Limited  

Name	Share units
Mrs. Sunita Shurekha	200,000
Mr. Durga Prasad Neupane	1,070,000
Mr. Uttam Kumar Nepal	395,000
Mrs. Sashi Kharel	422,030
Mr. Anil Kharel	205,000
Mr. Navaraj Nepal	223,810
Mrs. Prava Goyanka	467,770
Mr. Binod Kumar Bhimsaria	790,000
Mr. Kishor Silwal	311,000
Mrs. Manju Chhetri	506,000
Mr. Cabinet Shrestha	366,660
Mr. Shovakar Neupane	519,570
Mr. Tikaram Neupane	559,770
Mr. Bhawan Bhatt	300,000

  Board of Directors (BOD) of Commerz And Trust Bank Nepal Limited 1.    Mr. Shovakar Neupane, Chairman Educational Qualification: Graduate Work Experience: Chairman and Managing Director of Ambe Cement Pvt. Ltd and Ambe Steels Pvt. Ltd.,  Managing Director of Ambe Housing and Developers Pvt. Ltd. and Ambe International Pvt. Ltd., Director of Smart Food and Service Pvt. Ltd. 2.    Mr.  Anil Kharel, Member Educational Qualification: Graduate Work Experience: Chairman of Maruti Gas Pvt. Ltd., New Guheshwori Kastha Udhyog, Nepalese Housing and Land Development Pvt. Ltd., Managing Director of Jay Mata Guheshwori Housing and Land Development Pvt. Ltd. 3.    Mr. Cabinet Shrestha, Member Educational Qualification: Graduate Work Experience: Chairman of Agni Motors Pvt. Ltd., Balaju Auto Works Ltd., Moksh Live Pvt. Ltd., Chain Holding Pvt. Ltd., 9 Nepal Pvt. Ltd. And also has worked as vice president in Nepal Automobiles Dealers Association, Nepal Uhsu Association and Jawalakhel Youth Club. 4.    Mr. Pawan Kumar Bhimsaria, Member Educational  Qualification: Masters of Business Administration Work Experience: Has served as director of Himalayan White House International College and Siddhartha Hospital. Currently holds various positions in various organizations like the Nepal Russia Chamber of Commerce, Computer Association of Nepal, Nepal Thai Chamber of Commerce, Nepal Turkey Chamber of Commerce, etc. 5.    Mr. Sunil Ballav Pant,  Member Educational Qualification: Graduate Work Experience: Has worked for more than 23 years in the NLG Insurance Company Ltd. in the various positions, Chairman of Pay Point Services Pvt. Ltd. Management Team of Commerz And Trust Bank Nepal Limited Mr. Anal Raj Bhattarai (Chief Executive Officer) Qualification:  Chartered Accountant Work Experience: Has Auditing work experience in various organizations in Nepal and India. He also has banking experience of 14 years in the various high level positions. Mr. Janesh Shrestha (Senior Executive Officer) Qualification: Graduate Work Experience: 14 years of Banking experience. Mr. Sunil B. Malla (Executive Vice President) Qualification: Graduate Work Experience: 23 years of Banking experience. Mr. Mahesh Dhakal (Chief Finance Officer) Qualification: Chartered Accountant Work Experience: 10 years of Banking experience in Nepal Bank Limited. Mr. Deepesh Pradhan (Chief Business Banking) Qualification: Masters of Business Administration Work Experience: 10 years of Banking experience in Himalayan Bank Ltd. Mr. Raj Rimal (Chief Credit Officer) Qualification: Masters of Science/ Bachelors of Arts Work Experience: 9 years of Banking experience in Bank of Kathmandu Capital Structure of the Bank   Authorized Capital:                         NPR 3000.00 Million Issued Capital:                                 NPR 2000.00 Million Paid up Capital (Promoters):       NPR 1400.00 Million    FINANCIAL HIGHLIGHTS OF THE BANK

                                                                                                                   Figure in Rs “000”

Years	FY 2067/68	FY 2068/69	FY 2067/68 Second quarter	FY 2068/69 Second quarter	FY 2069/70 Second quarter
Paid up Capital	1,400,000	1,400,000	1,400,000	1,400,000	1,400,000
Reserve and Surplus	23,333	38,519	7,086	24,423	79,905

  Looking at the paid up capital and reserve figures CTBN promoter group has maintained 46.66% of the authorized capital of NPR 1,400 million. The growth in the reserve in the last two fiscal years has been impressive as it stands at 65.08%. Looking at the second quarter of this fiscal year, the bank is in the path of making higher growth than that of previous fiscal years as we can see through the second quarter’s comparison given above. With the growth in its reserve not only there are chances of cash dividend but the company’s authorized capital of NPR 3,000 million, provides an equal chance of distribution of bonus share as well in the future date.  

Years	FY   2067/68	FY   2068/69	FY 2067/68 Second quarter	FY 2068/69   Second quarter	FY 2069/70 Second quarter
CD Ratio	64.88%	72.12%	47.35%	74.94%	78.93%
Growth in Deposits (%)	-	154.52%	-	112.96%	104.57%
Growth in Loan and Advances (%)	-	126.76%	-	156.29%	94.67%

  The Credit to Deposit ratio of the company despite the sluggish economic condition of the country has improved in the last fiscal years. Being a new commercial bank, it has shown high growth of deposit and credit exposure, and has able to sustain CD ratio above par with the Banking average of this second quarter of FY 2069/70. However, the bank fails to meet the benchmark of 80% set by the NRB. From the table we can also see that the bank was able to sustain a more than 100% growth in deposits and loan & advances in the last fiscal year and maintain CD ratio above 70%. Similarly, looking at the second quarter report of this fiscal year, the bank still has maintained healthy growth in both deposit and loan & advances. The drop down in the percentage is mainly because of the increasing size of its deposit and loan & advance base. Currently, the deposit and loan & advances size of the bank is NPR 8.39 billion and NPR 7.86 billion respectively.

Years	FY 2067/68	FY 2068/69	FY 2067/68 Second quarter	FY 2068/69 Second quarter	FY 2069/70 Second quarter
Operating Profit before provision (in Rs 000)	64,031	53,785	26,891	18,229	93,093
Growth in Operating Profit Before Provision (%)	-	-16.00%	-	-32.21%	410.69%
Net write back (in Rs 000)	-27613	-28878	-15756	-16516	-28058
Net write back/loan  (%)	-1.12%	-0.52%	-1.00%	-0.41%	-0.36%
Net profit (In Rs 000)	22,765	15,187	7,086	1,090	41,386
Growth in Net Profit (%)	-	-33.29%		-84.62%	3696.88%

  The operating profit before provision in the last FY 2068/69 was lower than the preceding FY 2067/68. The decline was mainly because of the increase in the interest expenses from 51% to 72%. Likewise the growth in the manpower and the bank branches also lead to the increment in other operating expenses resulting in a plunge in the operating profit before provision by 16%. However, looking at the current second quarter report the bank has significant growth in operating profit before provision by 410.69%. As the bank has lowered its interest on deposit, resulting in higher spread for the bank, its interest expenses have come down which has made it possible for the bank to sustain such a heavy growth. Now, if we look at the net write back figures, the bank has not been able to make a positive write back in its short history. But, looking at the net write back/loan, the bank has lowered its exposure from one percent lower level indicating a sound loan portfolio of the bank. As we can also see in the given table, that the net profit of the bank in the FY 2068/69 took a dive compared to the FY 2067/68 by 33.29%. However, looking at the second quarter of the current fiscal year, the bank has able to make an astounding growth in thousands i.e. by 3696.88% compared to a corresponding second quarter. Thus, we can observe that FY 2068/69 was not one of the remarkable business years for the bank. But, the current second quarter figures and numbers show that the bank is in the path of making healthy growth than that of the preceding two fiscal years.

Years	FY 2067/68	FY 2068/69	FY 2067/68 Second quarter	FY 2068/69 Second quarter	FY 2069/70 Second quarter
Net Worth (Rs.)	101.67	102.75	100.51	101.74	105.71
EPS (Rs.)	1.63	1.08	1.01	0.16	5.91
ROA	0.55%	0.19%	0.41%	0.04%	0.79%
ROE	1.60%	1.06%	1.01%	0.15%	5.59%

  If we look at the Net Worth figures, the company’s Net worth has grown steadily from the date of establishment of the bank. Now, looking at the comparison of the second quarterly report data, the bank has made a huge jump in its Net worth in the  second quarter of current FY 2069/70. Similarly, the EPS also has made a significant climb in this second quarter compared to the corresponding previous quarterly reports. Likewise ROA and ROE, has also increased higher than that of the corresponding previous second quarters which all indicates a healthy performance in the recently ended 2nd quarterly financial statement of the bank. Overall, we can conclude that the bank has been able to maintain a sound loan portfolio over the time and currently enjoying higher interest spread in the present market scenario. In general, the bank performance in the second quarter of the current fiscal year has been impressive enough. With this we shall anticipate even greater performance of the bank in the days ahead. At the IPO investment point of view, we think it would be a good opportunity to invest in the CTBN bank share. Moreover, there will not be many commercial bank’s IPO in the pipeline in the future. Hopefully, the consensus among political parties and a timely election poll would lead to the even brighter days head for the overall investors in Nepal capital market.   OFFICIAL WEBSITE OF THE BANK:http://www.ctbanknepal.com   FOR INFORMATION  ON FORM SUBMISSION COUNTERS: Click here