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    Nepal Breaking NewsEconomy | FinancePerformance of the Development Bank in the First Quarter Is Summarized

    Performance of the Development Bank in the First Quarter Is Summarized

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    With economic activity being stalled for a lengthy period of time, it is without a doubt that the Financial Institutions are facing a difficult situation. It is possible that financial institutions’ primary business revenue would be impacted as a result of the monetary policy lowering the interest rate threshold. During the previous quarter, we were able to observe the impact of decreasing the interest rate bar. Some financial institutions, on the other hand, have managed to improve their profitability throughout this period.

    In Nepal, are several different types of banks. For the sake of this research, however, we shall be examining the financial performance of “B” class financial institutions; specifically, Development Banks In the NEPSE, there are now 16 development banks that are publicly traded.

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    Eight development banks are national level banks, and the remaining eight development banks are regional level banks. are a total of sixteen development banks.

    So let us examine the performance of B-class financial institutions in further detail.

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    Profit after tax:

    A quarterly report from Muktinath Bikas Bank Limited (MNBBL) revealed that the bank had earned Rs. 34.56 crores in net profit for the period under review, which was the highest of any bank in the country. The Mahalaxmi Bikas Bank Limited (MLBL) finishes in second position in terms of profit, with a total of Rs. 23.05 crores in the bank’s earnings. With a net profit of Rs. 21.79 crores, Jyoti Bikas Bank Limited (JBBL) takes third place in the list of top banks in India.

    Three banks recorded a negative net profit, while five banks reported a decrease in net profit as compared to the same quarter the previous year, according to the Bank of England.


    Paid-Up Capital (also known as paid-in capital):

    Among all the development banks, Muktinath Bikas Bank Limited (MNBBL) has the highest paid-up capital, amounting to Rs. 4.81 Arba, which is the highest in the industry.

    Jyoti Bikas Bank Limited (JBBL) is the second-largest bank in terms of paid-up capital, with Rs. 3.84 Arba in cash on hand.


    Reserves and surpluses are defined as:

    The amount of money that a corporation retains from its profits in order to foster future growth is referred to as a reserve.

    Lumbini Bikas Bank Limited (LBBL) has recorded the greatest and surplus, totaling Rs. 2.53 Arba. This is the highest sum reported by any bank. LBBL is followed by Mahalaxmi Bikas Bank Limited (MLBL), which has a reserve of Rs. 2.39 Arba, according to the Reserve Bank of India. A reserve of 2.31 Arba has been set up by Muktinath Bikas Bank Limited (MNBBL) to secure the third position.

    Nine development banks have reported amounts that are below the industry average, out of the total number of development banks.


    Share premium, retained earnings, and are included in the reserve and surplus calculations.

    Customers’ deposits are as follows:

    Muktinath Bikas Bank Limited (MNBBL), a B-class institution, has topped the list with a total deposit of Rs. 97.17 Arba, the highest amount recorded. After that comes Garima Bikas Bank Limited (GBBL), which has a total deposit of Rs. 64.72 Arba, which is the last bank on the list. With a total deposit of Rs. 48.82 Arba, Jyoti Bikas Bank Limited (JBBL) has won the third spot in the ranking.

    The entire development bank has received a total deposit of Rs. 4.48 Kharba, which is a little amount compared to other banks.

    Loans and advances are two types of credit.

    The entire amount of loans and advances made by development banks through the first quarter of 2078/2079 was Rs. 3.93 Kharba.

    A total of Rs. 85.04 Arba has been disbursed by Muktinath Bikas Bank Limited (MNBBL), the bank with the largest amount of loans disbursed. Garima Bikas Bank Limited (GBBL) has disbursed a total of Rs. 55.99 Arba in loan proceeds as a result of the list. Jyoti Bikas Bank Limited (JBBL) has disbursed a loan of Rs. 47.56 Arba, putting it in third place in terms of loan disbursement.


    Net interest income (net interest income):

    Net interest income (NII) is the primary source of revenue for a financial institution, and it is derived by subtracting the cost of deposits from the income from loans and advances.

    Muktinath Bikas Bank Limited (MNBBL) is the most profitable bank in terms of net interest income, earning a total of Rs. 83.77 crores in 2013.

    Garima Bikas Bank Limited (GBBL) earns Rs. 56.42 crores in net interest income, placing it in second place among Indian banks. Followed by GBBL is Jyoti Bikas Bank Limited (JBBL), which generated a net interest income of Rs. 50.41 crores in fiscal year 2015.

    Comprehensive Income as a whole:

    Total comprehensive income recorded by Muktinath Bikas Bank Limited (MNBBL) was the highest in terms of total comprehensive income, amounting to Rs. 31.99 crores, making it the company with the highest total comprehensive income. MNBBL is followed by Mahalaxmi Bikas Bank Limited (MLBL), which had a total comprehensive income of Rs. 23.05 crores in the fiscal year ended March 31, 2018. Jyoti Bikas Bank Limited (JBBL) has reported the third-highest total income, amounting to Rs. 17.04 crores, placing it in third place overall.


    The most important ratios are as follows:

    Earnings per share (in dollars):

    Lumbini Bikas Bank Limited (LBBL) ranked first in terms of annualized earnings per share (EPS), with a figure of Rs. 29.34 per share.

    Muktinath Bikas Bank Limited (MNBBL) has the second highest annualized earnings per share, with Rs. 28.73 per share, behind only Muktinath Bikas Bank Limited (MNBBL). Similarly, Mahalaxmi Bikas Bank Limited (MLBL) is ranked third in terms of earnings per share (EPS), with an EPS of Rs. 27.59 per share.


    Net worth per share is as follows:

    Lumbini Bikas Bank Limited (LBBL) has the greatest net value per share, with Rs. 187.05 per share, according to the company’s financial statements. With a net worth per share of Rs. 171.65 per share, Mahalaxmi Bikas Bank Limited (MLBL) is the next largest bank in the country. Similarly, Kamana Sewa Bank Limited (KSBBL) declared a net value of Rs. 151.83 per share, making it the third-highest in terms of net worth in the country.


    Price to earnings per share (at the end of the third quarter):

    The price-to-earnings ratio (P/E ratio) investors how much they are paying for each rupee of earnings generated by a company. The lower the price-to-value ratio, the better the bargain.

    Lumbini Bikas Bank Limited (LBBL) has the lowest price-to-earnings ratio of 17.62 times, which is the lowest in the industry. This means that you are paying Lumbini Bikas Bank Limited Rs.17.62 for every Rupee of revenue earned by the bank. Mahalaxmi Bikas Bank Limited (MLBL) disclosed a price-to-earnings ratio of 21.13 times, which may be the second-best deal in the market. This is followed by Jyoti Bikas Bank Limited (JBBL), which has a price-to-earnings ratio of 21.66.

    However, one should constantly analyze the firm’s fundamentals, and if they discover that the fundamentals are poor, then is a valid justification for the lower valuation of the company.


    (Investors are encouraged to take the current market price into consideration when calculating the PE ratio.)

    Non-Performing Loan: A loan that does not pay back its principal and interest.

    Non-performing loan is a term used to describe the risk associated with credit that a bank has extended to its customers. Increased non-performing loans (NPL) imply that the bank is at risk.

    Muktinath Development Bank Limited (MNBBL) has the lowest non-performing loan ratio, with an NPL of 0.23 percent, according to the NPL ratio table. With a non-performing loan (NPL) ratio of 0.68 percent, Jyoti Bikas Bank Limited (JBBL) comes in second place.

    Five of the eight banks that make up the National Level Bank have NPLs that are lower than the national average. Furthermore, out of the eight Regional Level Banks, five of them reported NPL levels that were lower than the industry average.

    When developing their own analytical model, it is necessary to compute the industry average.


    NOTE: Rather than focusing on a single quarter’s worth of NPL data, investors should consider the overall trajectory of the loan portfolio. The rise in nonperforming loans (NPL) indicates that banks are losing their focus on loan underwriting.

    Capital Adequacy Ratio: This ratio how well a company’s capital is being used.

    Corporate Development Bank Limited (CORBL) has the greatest Capital Adequacy Ratio (CAR) of 93.68 percent, making it the most financially secure of the financial institutions studied. With a CAR of 42.40 percent, the Narayani Development Bank Limited (NABBC) is the next most profitable bank.


    The table below, in its whole, presents a comprehensive overview of the primary indicators of 16 development banks as of the first quarter of fiscal year 2078-2079.


    When we look at the data published by all of the development banks in this quarter, it is clear that the banks have moved on from the previous scenario and are persuaded that they must adjust to the new normal and adopt a strategy that is appropriate for the current circumstances. According to stated data, most businesses have been able to maintain their profitability even after the second wave of COVID-19 was implemented. However, it is critical for investors to take into consideration the current scenario and understand how the banks have been developing plans to sustain their operations and drive their businesses forward.



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