NIBL plans to start micro finance company

KATHMANDU, JAN 11: 

The 26th AGM of Nepal Investment Bank Ltd (NIBL) has approved five per cent cash dividend (Rs 150.64 million) and 25 per cent stock dividend (Rs 753.23 million) from the profits of last fiscal year.

“NIBL is awaiting approval from Nepal Rastra Bank (NRB) to set up a microfinance company,” said chief executive of the bank Jyoti Prakash Pandey. 

The bank that has a paid up capital of more than Rs 3.76 billion — including proposed bonus shares — from its initial paid up capital of Rs 30 million is one the leading banks in the country, he said, adding it has the highest paid up capital among private sector banks in the country and is almost twice the minimum paid up capital prescribed by NRB. “It has also strengthened foundation and credibility of NIBL.”

The last fiscal year 2011-12 was yet another challenging year for the bank and the banking industry as a whole, he said, adding that the bank was able to post satisfactory results despite the challenges.

The bank’s total assets, deposits and lending increased by 12.7 per cent, 13.7 per cent and 2.4 per cent to Rs 65.75 billion, Rs 57.01 billion and Rs 42.90 billion, respectively.

Likewise, it posted a robust growth of 40.6 per cent to reach Rs 10.64 billion in total investments. However, owing to surplus liquidity in the market, returns on investments are very low which have adversely affected the bank’s interest income, Pandey added. “Despite a fall in net interest income by Rs 14.8 million (Rs 2.16 billion against Rs 2.18 billion a year back), the operating profit before provision posted a growth of Rs 49.8 million, mainly due to an increase in fee based and exchange income and tight control on overheads.”

However, due to the increase in loan loss provision on real estate loans, net profit declined by 11.7 per cent to Rs 1.03 billion against Rs 1.17 billion last year, he added. The capital adequacy ratio (CAR) and credit deposit ratio (LCY deposit with equity) are maintained at comfortable levels of 11.1 per cent and 72.4 per cent.

The central bank has asked banks to maintain a minimum CAR of 10 per cent and CD ratio — LCY deposit with equity — of not more than 80 per cent. “Our returns on paid up capital and return on shareholders’ fund stand at 34.5 per cent and 20.1 per cent, respectively,” Pandey said, adding that the market share in deposits and lending stands at 6.6 per cent and seven per cent, respectively.

Chairman of the bank Prithivi Bahadur Pandé, who was also the CEO of the bank, resigned from the post of CEO on July 16, and Jyoti Prakash Pandey, who was GM, was appointed as CEO by the board.

Rated Nepal (A) for the third consecutive year by Indian Credit Rating Agency, an affiliate of Moody’s Investor Group, the bank has a branch network of 41 and one extension counter along with 68 ATMs.

Source: THT