Investment Bank: Healthy Profit

At a time when the nation’s economy is suffering and the banks in the country are struggling, Nepal Investment Bank has posted a healthy profit and is distributing the dividends to its shareholders

Jan. 27, 2013, 5:45 p.m. Published in Magazine Issue: Vol: 06 No. -15 Jan 25- 2013 (Magh 12, 2069)

When the Nepalese bankers led by Prithvi Bahadur Pande took the most successful French managed Indo-Suez Bank, many raised their eyebrow as to whether the team would retain its credibility and financial performance. After almost 15 years, Prithvi Bahadur Pande, the son of renowned late Bhim Bahadur Pande, has shown that the Nepalese banks are competent and capable at par with their international counterparts.

In the last five years, Nepal has been passing through a very critical political situation, with prolonged uncertainty and chaos affecting the whole financial situation, Nepal Investment Bank solidly survived all the storms.

Nepal Investment Bank Limited (NIBL), one of the major financial institutions in Nepal, is distributing five percent cash dividends and 25 percent bonus shares to its shareholders from the profit generated in the last fiscal year that ended in mid-July 2012.

Although Pande has given up his active day to day involvement in the bank, NIBL retains its speed of success that he achieved.  After taking over the role as the Chief Executive Officer (CEO) from Prithvi Pande some time back, Jyoti  Prakash Pandey has also proven his records of success as the chief of NIBL.

According to a decision, approved during the 26th Annual General Meeting (AGM) of the bank, it will distribute NRs 150.64 million as cash dividends, along with stock dividends worth of NRs 753.23 million.

The last fiscal year proved to be a real struggle for many banks and many witnessed huge problems, but even in such tough times, Nepal Investment Bank Limited remained nearly free from problems and achieved decent results.

The profits that Nepal Investment Bank posted has shown that if a bank is run well, it cannot only survive in the most difficult of circumstances, but also thrive by earning profits.

From the initial paid-up capital of NRS 30 million, the Investment Bank now has a paid up capital of more than NRs 3.76 billion, which includes the proposed bonus shares.

“NIBL has the highest paid up capital among private sector banks in the country and has almost twice the minimum paid up capital prescribed by NRB,” said chief executive officer Jyoti Prakash Pandey.

The net profit of the bank, however, declined by 11.7 per cent to NRs 1.03 billion. The decline in profits of the bank are due to losses on realty sector, as the banks of the country are still recovering from the realty disaster, which once engulfed the whole banking sector of the country.

The capital adequacy ratio (CAR) is at 11.1 percent while the credit deposit ratio (LCY deposit with equity) is at 72.4 per cent.

The total deposits of the bank increased by 13.7 percent and reached NRs 57.01 billion, while the total lending of the bank increased by 2.4 percent to NRS 42.9 billion in the last fiscal year.

The bank has not only achieved success commercially but has also been active in fulfilling its corporate social responsibilities. The Investment Bank organizes annual marathon race for some social cause.

Likewise, the bank is also trying to set up a micro finance company subject to the permission from the NRB. “NIBL is awaiting approval from Nepal Rastra Bank (NRB) to set up a microfinance company,” said Pandey.

An affiliate of Moody’s Investor Group, the Investment Bank managed to expand its total assets by 12.7 percent to NRs 65.75 billion.

During the period, it posted a growth of 40.6 per cent to reach NRs 10.64 billion in total investments. 

The Investment Bank has some 41 branches and one extension counter. The bank is providing automated services to its customers from its 68 ATMs.

The bank is also rated Nepal (A) for the third consecutive year by Indian Credit Rating Agency. In the past 26 years, the bank has paid around NRs 2.5 billion as dividends to its shareholders.

“The performance showed the credibility of the bank and the bank will always focus on providing quality banking services to its customers,” Pandey said.

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