Nepal SBI Bank's insight analysis by JMI
24, Feb 2012

Introduction

Name:

Nepal SBI Bank Limited

Business:

Banking

Date of operation

07.07.1993

Managing Director

Mr. Alok Kumar Sharma

 

Chairman:

Mrs. Hasana Sharma

 

Branches

50

 

Point of Representation:

59

 

ATMs:

73

 

Corporate Office:

Hattisar, Kathmandu, Nepal

 

Stock code (Nepse):

SBI

 

 

Ownership Pattern

Domestic Ownership

44.95%

Other Institutions

15.01%

General public

29.94%

Foreign Ownership

55.05

 

NOTE: The pattern of ownership is based upon latest published annual report.

                       

List of some Prominent Shareholders

Shareholders

Shareholding %

SBI India

55.05%

Employees Provident Fund

15.01%

Note: The Shareholding pattern is extracted from Annual report of F/Y2067/68.

 

Equity Analysis

52 Week High Price:

Rs. 645

52 Week Low Price:

Rs. 400

Last Trading Price(16.02.2012):

Rs. 416

Paid-up Capital:

Rs. 210.2966 Cr.

Market Capitalization:           

Rs. 874.83 Cr.

EPS(annualized)*:

Rs. 19.47

P/E Ratio*:

21.37

Net Worth per Share*:

Rs. 146.65

P/B.V Ratio*:

2.84

Total trading days*:

51 days

Total traded shares*:

 42,300 Shares

*Based on unaudited second Quarter 2068/69.

 

Performance Highlights

Particulars

2063/64

2064/2065

2065/2066

2066/2067

2067/2068

Total Shares (before bonus issue)

6,477,984

8,745,278

8,745,278

16,536,239

18,693,033

Total Assets (NRS Lacs)

139012.01

171874.45

309166.82

380476.79

460882.35

YOY increase in Total assets (%)

6.64

23.64

79.88

23.07

21.13

Deposits (NRS Lacs)

114,452.86

137,153.95

279,572.21

348,964.24

424,154.43

YOY increase in Deposit (%)

4.03

19.83

103.84

24.82

21.55

Non-performing assets (%)

4.56

3.83

2.02

1.48

1.1

Net Profit (NRS Lacs)

2,549.09

2,477.71

3,163.73

3,917.42

4,645.65

YOY Increase in NPAT (%)

117.87

-2.80

27.69

23.82

18.59

Employees

189

249

323

465

505

Branch offices

15

15

32

43

50

 

Key Findings

1.      Based on FY 2067/68 comparison among 24 Commercial banks listed in Nepal Stock Exchange, this bank ranks as follows:

Head

Rank

By M-Cap

6th

By Operation date

7th

By Deposit

4th

By Total Asset

6th

By Per share total assets value

4th

 

2.      Ratio of total assets value to market capitalization for this bank comes around 6.28 and price to book value ratio below 3 suggests that the stock is dearly priced. However, the annualized value of P/E above 20 doesn't support our dear price assumption.

 

3.      The latest published financial statement (as of second quarter 2068/69) reveals the following facts:

·         Around 44.98% of total deposit is used to provide loan and advances.

·         Around 35.99% of the total deposit is utilized for the Investment purpose.

·         Around 36.16% of total deposit is foreign currency deposit.

·         The ratio of its non-interest income to total operating income comes around 32.79%.

·          The lending portfolio of the bank with sector wise exposure is presented below:

 

Head

Exposure (%)

Real Estate Loan

6.44%

Personal Home Loan

(Up to Rs. 100 lacs or less)

9.69%

Margin Type Loan

0.009%

O.D/ TR Loan/ WC Loan

58.97%

Term Loan

5.07%

Other Lending

19.82%

 

4.      The performance of the bank in 2nd Quarter 2068/69 as compared to same period in the previous year shows healthy growth in size of balance sheet. However increase in provisions and rising cost of fund results to a nominal growth in profit.

Growth in Deposit

27.52%

Growth in Total Lending

16.66%

Increase in provision for possible loss

64.40%

Increase in Net Profit

1.21%

 

5.       Proper diversification of assets is seen in the books of the bank. The bank can be considered highly conservative as compared to its peers in allocation of its assets portfolio with less than 50% allocated as lending and advances and with good proportion of Investment. Such conservative banking approach could be proven more fruitful during adverse economic scenario leaving a larger space for survival.

 

6.       Most of the Shareholders in the bank are the institutional bodies, and more importantly the major shareholder being SBI India, the largest bank by asset size in India; investor can expect the superb performance and proper risk diversification which is consistently being delivered by this bank.

 

7.       No individual shareholder (Public) holding more than 0.5% of total shares of the company is found on going through the latest published annual report. In addition to this, Out of total shareholders by numbers, more than 90% of shareholders hold less than 500 shares of the company. This ensures good float and fair pricing.

 

8.       The bank has been consistently paying healthy returns to its shareholders over years. The pattern of payment for last five years is shown below:

Year

2062/63

2063/2064

2064/2065

2065/2066

2066/2067

2067/2068

Bonus share on Share Capital (%)

0

35

0

40

12.5

12.5

Cash Dividend on Share Capital (%)

5

12.59

0

2.11

5

5

Total payout (%)

5

47.59

0

42.11

17.5

17.5

 


Regards,

Business Bureau

Jamb Technologies

 

 

Disclaimer: The key information like Income statements, Balance sheets figures, and technical analysis is presented as per the available data. Investment in the specific company through conclusion and Interpretation of discussion will be at the risk of the investor. However information and figures presented is assumed to be true and in "As Is" basis.

 

 




Source:
Jamb Market Insights (JMI)
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