Performance of Development Banks as of Q3-FY65/66

Sunday - 17th May, 2009 | ResCon

Research @ ResCon:

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

Up to Q2 of 2064/65:                            Rs 848.41 million
Average Net Profit at Q2 2064/65:        Rs 26.51 million

Up to Q2 of 2065/66:                            Rs 1,338.63 million
Average Net Profit at Q2 2065/66:        Rs 41.83 million

Increment in Net Profit:                        597%

Please note that the report comprises of the figures of all the development banks, which have published their financial results (listed and non-listed), except for two listed banks - Nepal Dev. Bank and Nirdhan Utthan Bank and some other non-listed banks (these banks are yet to published their financial statements).

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

  2. On an average, development banks’ profit advanced by 597% this quarter. The group accumulated Rs 1,338.63 million in net profit this quarter compared to Rs 848.41million net profit in the corresponding previous year quarter.

  3. The net profit of each bank is 41.83 million on an average.

  4. Corporate, City, Malika and Miteri Dev Bank have highest net profit advancement. Their profit figures have exceptionally increased by 9,398%, 1,483%, 1,351% and 1,168% respectively over the corresponding previous quarter.

  5. Triveni Bikas Bank is the only bank that has profit growth figure in the negative zone.

Amount in Rs/million

#

Company FY 2065/66
(Up to 3rd Qtr)
FY 2064/65
(Up to 3rd Qtr)
Change
1 Corporate Dev. Bank  11.398 0.12 9398%
2 City Dev. Bank  7.549 -0.546 1483%
3 Malika Bikash Bank  20.291 1.398 1351%
4 Miteri Dev. Bank  1.496 0.118 1168%
5 Diyalo Bikas Bank  3.74 -0.729 613%
6 Country Dev. Bank  7.647 1.131 576%
7 Kamana Dev. Bank  5.278 -1.355 490%
8 Narayani Dev. Bank  14.218 3.017 371%
9 Bishwa Bikash Bank  4.972 -1.874 365%
10 Shangrila Dev. Bank  8.226 -3.306 349%
11 Public  Dev. Bank  7.222 1.684 329%
12 Gorkha Dev. Bank  29.057 8.339 248%
13 Pashupati Dev. Bank  10.838 3.264 232%
14 Clean Energy Dev. Bank  11.388 3.546 221%
15 Business Dev. Bank  40.102 12.904 211%
16 Subekchhkya Bikas Bank  6.494 2.138 204%
17 Ace Dev. Bank  31.903 11.402 180%
18 Gandaki Dev. Bank  19.057 7.062 170%
19 Professional Dev. Bank  0.354 -0.533 166%
20 Paschimanchal Bikash Bank 14.664 5.997 145%
21 Biratlaxmi Dev. Bank  5.713 2.38 140%
22 Annapurna Bikash Bank  22.501 9.952 126%
23 Siddhartha Dev. Bank  31.389 14.828 112%
24 Sahayogi Vikas Bank  9.883 4.893 102%
25 Sanima Vikash Bank  38.759 20.196 92%
26 Swabalamwan Bikash Bank  17.973 10.641 69%
27 Bageshowori Dev. Bank  7.408 4.859 52%
28 Himchuli Bikash Bank  12.328 8.219 50%
29 Vibor Dev. Bank  -12.057 -22.98 48%
30 Agriculture Dev. Bank  904.471 704.277 28%
31 Infrastructure Dev. Bank  37.502 30.306 24%
32 Triveni Bikas Bank   6.869 7.064 -3%
Total 1,338.63 848.41 19111%
Average 41.83 26.51 597%

Such a phenomenal growth in Quarter to Quarter net profit indicates that our development banks are performing well amidst the global financial crisis. Boom in realty sector, good inflow of remittance, increased exposure to hydropower sector, quality of loans (those not deemed "BAD") in portfolio, focus on SMEs are some of the key factors that have played vital roles in improving the profit figures of these banks. However, the challenge now is to sustain the growth and stability during these recessionary times.

The net profit growth on Quarter to Quarter as of second quarter (Exclusive Analysis @ ResCon) showed that the development bank group’s profit had increased by 191% on an average. Find the report here.

Last week we had performed a research on the profit figures of commercial banks and it also showed the similar story.

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.