Standard Chartered Bank Nepal Secures Fifth Consecutive Triple 'A' Rating from ICRA Nepal

Fri, Mar 29, 2024 2:29 PM on Latest, Company Analysis,

Standard Chartered Bank Nepal has once again achieved the prestigious Triple A rating from ICRA Nepal, marking the fifth consecutive year of this esteemed recognition. This AAA rating, pronounced as ICRA NP issuer rating triple A, signifies the highest level of safety and assurance that the bank can meet its financial obligations punctually. I

The rating is based on a meticulous evaluation of Standard Chartered Bank's financial indicators, including its Capital to Risk-Weighted Assets Ratio (CRAR) and non-performing loans (NPL). Remarkably, the bank's NPL stands at a commendable low of 1.60 percent, significantly below the industry average of 3.63 percent. This underscores the bank's prudent risk management practices and commitment to maintaining sound asset quality.

Moreover, ICRA Nepal considers the bank's extensive operational history since 1987 and its strong parentage as a ~70% subsidiary of the Standard Chartered Group. The bank's healthy deposit profile, characterized by a high share of low-cost deposits, has enabled it to maintain the lowest cost of funds in the industry, a significant strength. Additionally, the bank's competitive positioning, supported by its global brand reputation and cost-effective funding, further solidifies its financial standing.

Standard Chartered Bank Nepal's profitability indicators also stand out, with a return on assets (ROA) and return on net worth (RoNW) of 2.32% and approximately 11% respectively in H1FY2024, surpassing industry averages. These factors collectively contribute to the bank's strong financial position, as affirmed by ICRA Nepal.

While acknowledging the bank's strengths, ICRA Nepal also highlights certain challenges, including high portfolio concentration risks and exposure to operational and regulatory risks inherent in the industry. Nonetheless, the reconfirmation of the AAA rating for five consecutive years underscores the bank's unwavering commitment to excellence and its dedication to serving its stakeholders.