Performance of Commercial Banks as of Q3-FY65/66

Sunday - 10th May, 2009 | ResCon

Research @ ResCon:

The Accumulated Net Profit summary of the Commercial Bank Group is given below.

Up to Q3 of 2064/65:                              Rs 4.373 billion
Average Net Profit at Q3 2064/65:          Rs 284.310 million

Up to Q3 of 2065/66:                              Rs 6.255 billion
Average Net Profit at Q3 2065/66:          Rs 198.770 million

Increment in Net Profit:                          232%

Please note that the table below comprises of figures of all the commercial banks (listed, not listed and government-owned banks) except for Citizens Bank, Nepal Bangladesh Bank and Rastriya Banijya Bank (these banks are yet to publish their financial statements).

  1. The 3rd Quarter of FY 2065/66 unaudited Net Profit figures of Commercial Bank group clearly show that commercial banks, in general, performed well in this quarter as compared to corresponding quarter of the previous year.

  2. On an average, commercial banks’ profit advanced by 232% this quarter. The group accumulated Rs 6.255 billion in net profit this quarter compared to Rs 4.373 billion net profit in the corresponding previous year quarter.

  3. The net profit of each bank is 198.770 million on an average.

  4. Bank of Asia’s, Prime Commercial Bank and Sunrise have highest net profit advancement. Their profit figures have exceptionally increased by 1812%, 1811% and 536% respectively over the corresponding previous quarter.

  5. Machhapuchchhre, Nepal Credit and Commerce and Lumbini banks are the only banks that have profit figures in the negative zone.

Amount in Rs/million

#

Company FY 2065/66
(Up to 3rd Qtr)
FY 2064/65
(Up to 2nd Qtr)
Change
1 Bank of Asia Nepal  32.032 1.675 1812%
2 Prime Commercial Bank  93.034 4.868 1811%
3 Sunrise Bank  66.157 -15.177 536%
4 Nepal Bank  876.57 338.512 159%
5 KIST Bank  51.105 20.39 151%
6 DCBL Bank  74.361 31.362 137%
7 Global  Bank  58.456 31.096 88%
8 Nepal SBI Bank  225.182 144.45 56%
9 Siddhartha Bank  161.22 107.311 50%
10 Everest Bank  447.909 299.4 50%
11 Laxmi Bank  139.972 94.828 48%
12 NIC Bank  251.307 174.952 44%
13 Bank of Kathmandu  332.963 238.376 40%
14 Nepal Investment Bank  650.84 475.551 37%
15 Himalayan Bank  543.006 429.248 27%
16 Nabil Bank  658.622 531.762 24%
17 Kumari Bank  176.9 144.948 22%
18 Standard Chartered Bank  711.011 596.691 19%
19 NMB Bank  55.937 53.454 5%
20 Lumbini Bank  317.08 319.334 -1%
21 NCC Bank  291.533 306.007 -5%
22 Machhapuchchhre Bank  39.649 43.945 -10%
Total 6,254.85 4,372.98 5099%
Average 284.31 198.77 232%

Such a phenomenal growth in Quarter to Quarter net profit indicates that our commercial banks are performing well amidst the global financial crisis. However, the challenge now is to sustain the growth and stability during these recessionary times.

ResCon Tip-Off:

We know that there exists a strong positive correlation between Earnings and Market Share Price figures. That is, if earnings’ figure of a company increases, the share price of the company will increase too. But in case of the Nepalese commercial banks, we are not seeing the same phenomenon. In spite of better performance, the share prices of most of the commercial banks are down.

If you are someone who follows Warren Buffett, you will certainly know that the market price of a company must always address the fundamentals of that company. In our case, there are some good commercial banks which are undervalued currently. These banks’ share prices will definitely go up in the future. All you need to do is put on your thinking cap and choose the correct one.
Well if you think you need some professional help, let us know.