Excel's profit to rise by almost 1.5 times by Q4; expect over 25% bonus shares

ShareSansar, May 16:

Excel Development Bank Limited, one of the best class ‘B’ BFIs, has stated that its net profit will exceed Rs 6 crore, which will be around 144 percent growth, by the end of the current fiscal year 2070/71. This will entail not less than 25 percent bonus share and or cash dividend to the shareholders.

It is a huge achievement consider the fact that the development bank’s paid-up capital has just reached Rs 15 crore that too after floating 50 percent bonus share to the shareholders from the profit it earned in the last fiscal year 2069/70.

It may also be noted that Excel, which is headquartered at Anarmani in Jhapa district, had posted a net profit of Rs 4.10 crore in the third quarter, which was double the net profit it posted in the last fiscal year.

Talking to ShareSansar over the phone today, Chief Executive Officer of the development bank Dinesh Kumar Pokharel informed that they would most probably issue only bonus share for the current fiscal year as well, owing to the tight capital adequacy ratio.

“The central bank does not allow us to give cash dividend until we meet 12 percent capital adequacy ratio. If we could have floated 35 percent right share as we had planned within the current fiscal year then we would have been in a position to offer cash dividend as well,” he explained.

The development bank with 12 branches all over eastern Nepal has very good market hold in key markets in the region.

Explaining why Excel has not been able to float the right share endorsed by its last AGM, Pokharel said that the process has been slightly delayed owing to promoter share conversion process.

“We are in the process of converting 70 percent of the promoter shares into 51 percent. The right shares can only be issued after that,” he said. “We hope that we will be able to float the right shares in four months time.”

Planning merger with Kalinchowk

Pokharel further informed that Excel is mulling over merger with Kalinchowk Development Bank Limited based in Charikot of Dolakha district.

“We have held several rounds of talks with Kalinchowk Development Bank, and plan to hold more negotiations in days to come,” he said, adding that the talks were heading in the positive direction.

He further said that though some bigger BFIs, including commercial banks were interested in its merger/ acquisition, Excel was not interested in such deals.

“We won’t even merge with bigger BFIs—forget being acquired by them,” Pokharel clarified. “We will only seek merger with BFIs smaller than us so that we can expand our base and service without compromising our identity.”