Know the deviation of Net Profit between unaudited and audited reports of commercial banks; it is risky to blindly trust only unaudited reports
Sun, Jul 22, 2018 10:47 AM on Exclusive, Stock Market, Latest,
~ Rishab Agrawal
In Nepal, all the listed companies mandatorily publish their quarterly financial reports which have not undergone audit. Before the year end, these companies appoint an auditor who then audits the books of accounts of the company and presents it to the board of directors. This audit report is used to publish the annual report of the company which gives a true and fair view of the audited financials of the company.
Share sansar brings to you the comparative data between audited and unaudited net profits of some listed commercial banks based on annual reports of FY 2073/74 to keep you informed about the condition of financial management of some commercial banks.
|
S.No |
Name of the Bank |
Net Profit (FY 73/74) |
Deviation |
Overvalued/ Undervalued |
|
|---|---|---|---|---|---|
|
Unaudited |
Audited |
||||
|
1 |
Citizen Bank Limited |
1,210,178,000 |
1,077,963,000 |
10.93% |
- |
|
2 |
Prabhu Bank |
1,751,577,000 |
1,597,953,000 |
8.77% |
- |
|
3 |
Agriculture Development Bank |
2,776,705,000 |
2,565,220,000 |
7.62% |
- |
|
4 |
Sunrise Bank Limited |
1,220,000,000 |
1,176,089,000 |
3.60% |
- |
|
5 |
Nepal Bank Limited |
3,219,561,000 |
3,117,893,760 |
3.16% |
- |
|
6 |
Siddhartha Bank Limited |
1,418,006,000 |
1,386,176,000 |
2.24% |
- |
|
7 |
Prime Commercial Bank |
1,500,174,000 |
1,467,943,000 |
2.15% |
- |
|
8 |
Global IME Bank |
2,038,187,000 |
2,006,160,000 |
1.57% |
- |
|
9 |
Nepal Investment Bank Limited |
3,160,069,000 |
3,114,131,140 |
1.45% |
- |
|
10 |
Nepal Bangladesh Bank |
1,200,382,000 |
1,200,382,000 |
0.00% |
= |
|
11 |
Nepal SBI Limited |
1,522,856,000 |
1,523,238,000 |
0.03% |
+ |
|
12 |
Himayalan Bank Limited |
2,176,450,000 |
2,178,235,000 |
0.08% |
+ |
|
13 |
Machhapuchchhre Bank Limited |
1,301,030,858 |
1,302,483,429 |
0.11% |
+ |
|
14 |
Mega Bank Limited |
319,129,000 |
319,765,000 |
0.20% |
+ |
|
15 |
NIC Asia Bank |
1,469,672,000 |
1,473,466,000 |
0.26% |
+ |
|
16 |
Sanima Bank Limited |
1,300,158,000 |
1,304,203,000 |
0.31% |
+ |
|
17 |
Laxmi Bank Limited |
1,002,477,000 |
1,006,624,000 |
0.41% |
+ |
|
18 |
Nabil Bank Limited |
3,620,821,000 |
3,645,279,751 |
0.68% |
+ |
|
19 |
Everest Bank Limited |
1,981,698,000 |
2,006,248,000 |
1.24% |
+ |
|
20 |
Standard Chartered Bank |
1,381,953,000 |
1,421,596,000 |
2.87% |
+ |
|
21 |
Bank of Kathmandu |
1,239,075,000 |
1,312,353,000 |
5.91% |
+ |
|
22 |
Century Commercial Bank Limited |
447,499,000 |
501,366,000 |
12.04% |
+ |
|
23 |
Janata Bank Limited |
541,600,000 |
633,126,000 |
16.90% |
+ |
|
Average Deviation |
3.59% |
||||
The above data shows that the unaudited figures have been either undervalued or overvalued as compared to the audited figures.
Commercial Banks are expected to be the soundest institutions when it comes to financial management but the data above proves that an investor cannot expect bullseye accuracy from unaudited reports. Although, it reviews the managements’ efforts to keep the deviation as minimum as possible, it shows to what extent they have failed. It is highly recommended that the investors tally the unaudited figures with the audited ones once they are published for an accurate analysis of the organization they are about to invest in.
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