Debenture of Prime Commercial Bank rated A- by CARE Ratings Nepal; Bank issuing debentures worth Rs 3.5 arba

CARE Ratings Nepal Limited (CRNL) has assigned CARE-NP A- (Is) rating to Prime Commercial Bank Limited (PCBL). 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

CARE-NP A- rating to the new proposed Subordinated Debenture issue of PCBL. 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, experienced promoters and management team
• Adequate capitalization as per existing requirement, however needs improvement to meet new regulatory requirements
• Diversified and geographical coverage through branches
• Consistent growth in Loans & Advances and Deposits
• Considerable growth in total income and net profit over the period
• Moderate liquidity profile
• Diversified sector wise loan portfolio with regulatory compliance
• Diversified investment portfolio

Key Rating Weaknesses

• Moderate asset quality, although better than industry average
• Concentration towards corporate portfolio
• Low CASA deposits maintained with declining trend
• High portfolio concentration among top depositors and borrower groups
• Intense competition
• Exposure to regulatory risk related to industry

About the Bank

PCBL is an “A” Class Licensed Institution from Nepal Rastra Bank (NRB), listed in Nepal Stock Exchange is one of the mid-sized private sector bank in Nepal. It was incorporated on July 17, 2007 as 21st commercial bank in Nepal and started commercial operation from September, 2007. The bank reported PAT of Rs.2,199 Mn on an asset size of Rs.102 Bn as on July 16, 2019. Further, PCBL reported PAT of Rs.660 Mn during

Q1FY20. PCBL has undergone multiple acquisition in the past and is in process of acquiring Kailash Bikas

Bank Limited and Lalitpur Finance Limited. In past, PCBL acquired Biratlaxmi Bikas Bank Ltd and Country Development Bank Limited during FY17 and recently acquired Kankai Bikas Bank Limited during Q1FY20.

Source: https://careratingsnepal.com/

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