NBB urges NRB to revise its balance sheet

ShareSansar, Sept 9:

Nepal Bangladesh Bank (NBB) has urged the Nepal Rastra Bank to approve its revised balance sheet for the last fiscal year, so as to adjust the recovery of its bad debts.  

“We have already sent our revised balance sheet to the central bank for its approval,” an official at NBB told ShareSansar on Monday. “If the balance sheet is revised then we will be in a position to propose at least 15 to 20 percent dividend for the last fiscal year.”

NBB has made such a request as the final balance sheet it submitted to the central bank at the end of the last fiscal year does not reflect the purchase of a bulk of the share owned by NB Group, the promoters, by Bangladesh-based IFIC Bank on September 1.

The transfer of the stake from the NB Group members, which has been blacklisted by the central bank, to IFIC has brought NBB’s Non-Performing Loan to below 2 percent—from above 3 percent.

Following the deal with IFIC, NBB has been able to write back a huge portion of bad debts and thereby increase its net profit.

NBB wants its balance sheet revised also because the central bank has just decided to allow the banking and financial institutions, which were in crisis during the last fiscal year, not to make the provision for loss regarding inter-bank lending, loans and other claims for that period.

NB Group had officials transferred 2.91 million unit shares to Bangladesh-based IFIC Bank so as to pay back the Group’s outstanding principle and interest at the different banks, including NBB.

Earlier, in the last fiscal year financial report, the bank had published NPL of 3.14% but with write off of bad loans of NB Group, the NPL has come to dip by more than one percent.

NB Group’s exit from the bank has already started to surge its share price. Expectations of improved corporate governance and loan recovery have pushed the share price of the bank to more than Rs 350 which was being traded at Rs 120 a year ago.