Company Analysis of Everest Bank Ltd.

Transcription

1 215 Company Analysis of Everest Bank Ltd. Sharesansar.com 5/5/215

2 Table of Contents 1. Company Analysis Overview BOD CEO s Profile: Management Team Network Products and Services Analysis Capital Structure Balance Sheet Profit & Loss Account Key Ratios Analysis Fundamental Analysis... 33

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4 1. Company Analysis 1.1Overview Everest Bank Limited (EBL) was established in 1994 and started its operations with its first branch at Naya Baneshwar Katmandu. EBL joined hands with Punjab National Bank (PNB), the largest public sector bank in India as its joint venture partner in India in Punjab National Bank (PNB), joint venture of Everest bank holds 2% equity. The bank has 53 Branches, 74 ATM Counters, 5 extension counter & 22 Revenue Collection across the country. The bank has received the following awards: The bank has been conferred with the "Best Managed Commercial Bank" by ASIAN PAINT NEWBIZ Award 213. The bank adjudged as "Number 1 Bank" under CAMELS (along with Customer Base & Branch Network) rating conducted by KAROBAR national daily (a leading business media house of Nepal). The bank has been conferred with Bank of the Year 26, Nepal by the Banker, a publication of financial times, London. The bank was bestowed with the NICCI Excellence award by Nepal India chamber of commerce for its spectacular performance under finance sector. EBL was one of the first banks to introduce Any Branch Banking System (ABBS) in Nepal. EBL introduced branchless banking system first time in Nepal to cover unbanked sector of Nepalese society through biometric machine. EBL is the first bank to introduce agro-specialized branch "KRISHI UDHYAM BIKASH SAKHA" at Rajbiraj. Sharesansar.com 1. Company Analysis 1

5 1.2 BOD S.N Name Position 1 Mr. B.K.Shrestha Chairman 2 Mr.Ved K.Shrestha Director 3 Mr.Arun Man Sherchan Director 4 Dr. Bal Gopal Baidya Director 5 Mr. B.M.Panda Director 6 Dr. Rakesh Gupta Director 7 Shiva Sharan K.C Public Director 8 Navin Bhakta Shrestha Public Director Sharesansar.com 1. Company Analysis 2

6 1.3 CEO s Profile: A.K. Ahluwalia AK Ahluwalia assumed office as the CEO of Everest Bank Ltd. on July 1,213. Ahluwalia has more than 32 years of banking experience at Punjab National Bank India and has held the post of deputy general manager in Punjab National Bank India. Ahluwalia has key expertise in credit and recovery. Sharesansar.com 1. Company Analysis 3

7 1.4 Management Team S.N Name Position 1 Mr. A.K.Ahluwalia Chief Executive Officer 2 Mr. A.K.Bansal Deputy General Manager 3 Mr. Rajesh Gautam Deputy General Manager 4 Mr. Promod Raj Sharma Company Secretary 5 Mr. Rajan Kayasthya Head of Department (Accounts) 6 Mr.Keshab Raj Poudel Head of Department (Credit) 7 Mr. Anil Karki Head of Department (Correspondent Banking and Remittance) 8 Mr. Mahesh Bajracharya Head of Department (General Administration) 9 Mr.Kumar Joshi Head of Department (Human Resource) 1 Mr.Purna Bahadur Shrestha Head of Department (Inspection) 11 Mr. Bijay Kumar Gautam Head of Department (IT) 12 Mr. Dharama Prasad Gauli Head of Department (Legal) 13 Mr. Yadav Bhandari Head of Department (Treasury) 14 Mr. Ranjan Khadka Head of Department (Marketing) 15 Mr. Dev Ranjan Dangal Head of Department (Planning and Development) Sharesansar.com 1. Company Analysis 4

8 1.5 Network The bank has 53 branches and 8 ATMs(38 inside the valley and 42 outside the valley). The bank has 19 branches inside Kathmandu valley and 34 branches outside Kathmandu valley. It has 5 extension counters as well. INSIDE VALLEY Bagbazar Branch Bagdol Branch Baneshwar Branch(main branch) Balaju Branch Bhaktapur Branch Chabahil Branch Newroad Branch Golfutar Branch Gongabu Branch Gwarko Branch Kalimati Branch Kirtipur Branch Lagankhel Branch Lazimpath Branch Maitidevi Branch Phulchowk Branch Satungal Branch Teku Branch Thamel Branch OUTSIDE VALLEY Baglung Branch Besisahar Branch Bhairahwa Branch Bhojpur Branch Biratnagar Branch Birgunj Branch Birtamod Branch Butwal Branch Chandranigahapur Branch Dhading Branch Dhangadi Branch Duhabi Branch Gorkha Branch Gularia Branch Itahari Branch ICD(Dry Pot) Hetauda Branch Janakpur Branch Krishnanagar Branch Kushma Branch Lekhnath Branch Lumbini Branch Narayangarh Branch Nepalgunj Branch Pokhara Branch Rajbiraj Branch Sandhikharka Branch Simara Branch Surkhet Branch Syanja Branch Tatopani Branch Taulihawa Branch Tikapur Branch Tulsipur Branch Sharesansar.com 1. Company Analysis 5

9 Branch Locations Inside Kathamandu valley Outside Kathmandu valley ATM Locations Inside Kathamandu valley Outside Kathmandu valley 64% 36% 53% 47% Network Branches ATM Locations Extension counters Sharesansar.com 1. Company Analysis 6

10 1.6 Products and Services * Interest rates are subject to changes. Sharesansar.com 1. Company Analysis 7

11 2. Analysis 2.1 Capital Structure Authorized, Issued and Paid-up Capital: Particulars Change % Authorized Capital 2 2 Issued Capital Paid-up Capital The bank has an authorized capital of Rs. 2 million. The issued capital and paid up capital of the bank is currently Rs million. The share capital of the company totals Rs million by including the proposed bonus shares of Rs million of the FY Share Ownership Details: Share ownership Domestic Ownership 8% 8% Foreign Ownership 2% 2% Total 1% 1% Public 69.14% 69.27% Promoters 3.36% 3.73% Total 1% 1% Share Ownership Details (213-14) Public Promoters 31% 69% Sharesansar.com 2. Analysis 8

12 Shareholders holding.5% or more of the total shares: S.N Name % Units 1 B.K. Shrestha Hotel Snow Lion P. Ltd Maitra Dev Pathak Radha Shrestha Nepal Krishna Shrestha Arun Man Sherchan Shanta Dev Pathak Kul Bir Singh Tuladhar Punjab National Bank, India Pratik Kayastha Sharesansar.com 9

13 Million Rs. 2.2 Balance Sheet Share capital and Reserve & Surplus: Shows the amount of share capital, the amount it has as reserve and surplus and the overall size of its balance sheet. Annual: Change % Share Capital % Reserve & Surplus % Total Equity % Debenture & Bonds % Total Assets % Quarterly: Q3 214 Change % Q3 213 Q2 214 Q1 214 Share Capital % Reserve & Surplus % Total Equity % Total Assets % Shareholders Equity Reserve & Surplus Share Capital Sharesansar.com 1

14 Million Rs. Million Rs Shareholders Equity Q1 214 Q2 214 Q3 213 Q3 214 Reserve & Surplus Share Capital 1 8 Total Assets Q3 214 Deposits and Investments: Shows the deposit amount the bank has collected from the general public and the amount it has mobilized as Investments and Loans & Advances. Annual: Change % Deposit % Liability Investments % Loans and Advances % Sharesansar.com 11

15 Million Rs. Million Rs. 8 Deposit Liability Q3 214 Quarterly: Q3 214 Change % Q3 213 Q2 214 Q1 214 Deposit % Liability Investments % Loan and Advances % Deposit Liability Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 12

16 Million Rs. Million Rs. 8 Use of Funds Investments Loans and Advances Q Use of Funds Investments Loans and Advances 2 1 Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 13

17 Loans and Advances Breakdown Q1 214 Q2 214 Q3 213 Q3 214 Realstate Loan Home/Housing Loan (personal home loan upto 6 lacs or less)# Margin Type loan Term Loan Overdraft Loan/TR Loan/ WC Loan Others Sharesansar.com 14

18 Loans and Advances Breakdown of Q % Real Estate loan 14% 15% 1% Home/Housing Loan (personal home loan upto 6 lacs or less) 19% Margin Type loan 47% Term Loan Overdraft Loan/TR Loan/ WC Loan Others Sharesansar.com 15

19 Million Rs. 2.3 Profit & Loss Account Interest Income and Interest Expenses: Shows the amount of interest income and interest expenses of the company. Interest income is the primary source of income of a bank and interest expense its primary expenditure. Annual: Change % Interest Income % Interest Expenses % Net Interest Income % Quarterly: Interest Income Interest Expenses Net Interest Income Q3 214 Change % Q3 213 Q2 214 Q % % % Interest Income & Expenses Interest Income Interest Expenses Net Interest Income Q3 214 Sharesansar.com 16

20 Million Rs. 4 Interest Income & Expenses Interest Income Interest Expenses Net Interest Income 5 Q1 214 Q2 214 Q3 213 Q3 214 Operating Income: Shows the total income generated by the bank from its regular operations. Annual: Total Operating Income Change % % Quarterly: Total Operating Income Q3 214 Change % Q3 213 Q2 214 Q % Sharesansar.com 17

21 Million Rs. Million Rs. 7 Total Operating Income Total Operating Income Q Total Operating Income Q1 214 Q2 214 Q3 213 Q3 214 Operating Income Breakdown: Change % Interest Income % Commission & % Discount Other Operating % Income Exchange Fluctuation Income % Sharesansar.com 18

22 Million Rs. Million Rs. 6 Operating Income Breakdown Interest Income Commission & Discount Exchange Fluctuation Income Other Operating Income Q3 214 Q3 214 Change % Q3 213 Q2 214 Q1 214 Interest Income % Commission & Discount % Other Operating Income % Exchange Fluctuation Income % Operating Income Breakdown Interest Income Commission & Discount Exchange Fluctuation Income Other Operating Income 5.. Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 19

23 Million Rs. Operating Expenses: Total Operating Expenses Change % % Total Operating Expenses Total Operating Expenses Q3 214 Total Operating Expenses Q3 214 Change % Q3 213 Q2 214 Q % Sharesansar.com 2

24 Million Rs. 9 Total Operating Expenses Q1 214 Q2 214 Q3 213 Q3 214 Operating Expenses Breakdown: Change % Interest Expenses % Staff Expenses % Other Operating % Expenses Loan Loss Provision % Q3 214 Change % Q3 213 Q2 214 Q1 214 Interest Expenses % Staff Expenses % Other Operating % Expenses Loan Loss Provision % Sharesansar.com 21

25 Million Rs. Million Rs. 35 Operating Expenses Breakdown Interest Expenses Staff Expenses Other Operating Expenses Loan Loss Provision Operating Expenses Breakdown Interest Expenses Staff Expenses Other Operating Expenses Loan Loss Provision 2 Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 22

26 Million Rs. Million Rs. Operating Profit and Net Profit: Change % Operating Profit % Net Profit % Operating and Net Profit Operating Profit Net Profit Q3 214 Change % Q3 213 Q2 214 Q1 214 Operating Profit % Net Profit % Operating and Net Profit Q1 214 Q2 214 Q3 213 Q3 214 Operating Profit Net Profit Sharesansar.com 23

27 Million Rs. Loan Loss Provision: Loan Loss Provision Change % % Loan Loss Provision Q3 214 Change % Q3 213 Q2 214 Q1 214 Loan Loss Provision % Sharesansar.com 24

28 Million Rs. Million Rs Loan Loss Provision Q1 214 Q2 214 Q3 213 Q3 214 Write Back of Provision: Write Back of Provisions Change % Q3 214 Change % Q3 213 Q2 214 Write Back of Provision % Write Back of Provision Q3 214 Sharesansar.com 25

29 Million Rs. 3 Write Back of Provision Q2 214 Q3 213 Q3 214 Dividend History: (%) Change % (%) (%) (%) 29-1 (%) Cash Dividend 5 % Bonus Shares 12 2% Total Dividend 62.33% Dividend History Bonus Shares (%) Cash Div (%) Sharesansar.com 26

30 Rs. 2.4 Key Ratios EPS: Earning Per Share Change % % Q3 214 Change % Q3 213 Q2 214 Q1 214 Earning Per Share % Earning Per Share (annualized) % EPS Q3 214 (annulized) EPS P/E ratio: P/E ratio Sharesansar.com 27

31 Rs. P/E Ratio P/E Ratio Q3 214 Market Value per Share: Q3 214 Q3 213 Q2 214 Q Market Value per Share Market Value Market Value 5 Sharesansar.com 28

32 % % CD Ratio: Q3 Q2 Q CD ratio (%) % CD ratio 78.% 76.% 74.% 72.% 7.% Q3 214 Capital to RWA ratio: (%) (%) (%) (%) 29-1 (%) Core Capital Supplementary Capital Total Capital Fund Capital to RWA ratio Core Capital Supplementary Capital Tota Capital Fund Sharesansar.com 29

33 Rs. Book Net worth: Total Net worth (million) Net worth per share Change % % % Total Net worth (million) Net worth per Share Q3 214 Change % Q3 213 Q2 214 Q % % Networth per share Networth per share Non-performing Loans: Nonperforming Loans to Total Loan Change % (%) (%) (%) (%) (%) % Sharesansar.com 3

34 Nonperforming Loans to Total Loan Q3 214 Change % Q3 213 Q2 214 Q1 214 (%) (%) (%) (%) % % NPL to Total Loans 1.%.8%.6%.4%.2%.% Q3 214 Return on Equity: Return on Equity Change % (%) (%) (%) (%) (%) % Return on Equity (annualized) Q3 214 Change % Q3 213 Q2 214 Q1 214 (%) (%) (%) (%) % Sharesansar.com 31

35 35.% 3.% 25.% 2.% 15.% 1.% 5.%.% Return on Equity Q3 214 (annualized) Return on Assets: Return on Assets Change % (%) (%) (%) (%) (%) % Return on Assets (annualized) Q3 214 Change % Q2 214 Q % % Return on Assets 2.% 1.5% 1.%.5%.% Q3 214 Sharesansar.com 32

36 Million Rs. 3. Analysis 3.1 Fundamental Analysis Interest Income and expenses: 6 Interest Income & Expenses Interest Income Interest Expenses The interest income is in an increasing trend as has been shown by the increase from Rs million in 29-1 to Rs million in The interest expenses were increasing till It increased from Rs million in 29-1 to Rs million in But it decreased to Rs Million in which is a drop of 24.16%. The interest expense for the year was Rs million. The interest income and interest expenses during the period between 29-1 to increased year on year by 13.66% and 9.47% respectively. Sharesansar.com 3. Analysis 33

37 Million Rs. Million Rs. 4 Interest Income & Expenses Interest Income Interest Expenses Net Interest Income 5 Q1 214 Q2 214 Q3 213 Q3 214 The quarterly analysis of the company shows that its interest income has increased from Rs million in Q2 214 to Rs million in Q The interest income in Q3 213 was Rs million. The interest income in Q3 214 is 5.83% higher than in Q2 214 and 3.82% lower than in Q Deposit and Loans & Advances: 8 Deposit Liability Q3 214 Sharesansar.com 3. Analysis 34

38 Million Rs. Million Rs. 72 Deposit Liability Q1 214 Q2 214 Q3 213 Q3 214 The deposit collection by the bank has been increasing throughout our review period. In FY 29-1, the bank collected Rs million in deposits. It has been increasing ever since and stands at Rs million as of FY This is a year on year growth of 13.88%. As of Q3 214, the bank has managed to collect Rs million as deposits. Compared to Q3 213, the bank s deposit collection has increased by 13.21%. 8 Use of Funds Investments Loans and Advances Q3 214 Sharesansar.com 3. Analysis 35

39 Million Rs. 8 Use of Funds Investments Loans and Advances 2 1 Q1 214 Q2 214 Q3 213 Q3 214 As of Q3 214, the bank has mobilized Rs million as Loans & Advances and Rs million as Investments. The bank has mobilized 4% of the total loans and advances in Real Estate Loans, 15% in Home/Housing Loans, 1% in Margin Type Loans, 19% in Term Loans, 47% in Overdraft Loans and 14% in other sectors. Loans and Advances Breakdown of Q % Real Estate loan 14% 15% 1% Home/Housing Loan (personal home loan upto 6 lacs or less) 19% Margin Type loan 47% Term Loan Overdraft Loan/TR Loan/ WC Loan Others Sharesansar.com 3. Analysis 36

40 Million Rs. Million Rs. Operating Profit and Net Profit: 25 Operating and Net Profit Operating Profit Net Profit Q3 214 The operating profit of the bank has increased from Rs million in 29-1 to Rs million in The bank posted an impressive 49.69% increase in operating profit in FY The growth however, slowed to a meager 1.53% in FY The net profit of the bank has also been constantly increasing throughout our review period. The net profit increased from Rs million in 29-1 to Rs million in This is year on year increase of 16.83%. Provision and Write Back: 3 Loan Loss Provision Loan Loss Provision Write Back Net Write Back Q3 214 Sharesansar.com 3. Analysis 37

41 % Million Rs. The loan loss provision of the bank was Rs million as of FY This is an increase of 57.85% compared to last year. The bank had a write back Rs million in compared to Rs..88 million in Loan Loss Provision Q2 214 Q3 213 Q3 214 Loan Loss Provision Write Back Net Write Back Comparing Q3 213 and Q3 214, the bank s loan loss provision has increased by 4.8% and reached Rs million. The write back of provision amount however, has increased by % and reached Rs million during the same period. CD Ratio: 8.% 78.% 76.% CD ratio 74.% 72.% 7.% Q3 214 The CD ratio of the bank is below the NRB stipulated limit of 8%. The CD ratio in FY was 78.1% and as of 3 rd quarter 214 it is increased to 79.17%. Sharesansar.com 3. Analysis 38

42 Million Rs. Equity and Returns: 25 Share capital Vs. Net Profit Share Capital Net Profit Share capital and net profit of the bank are both increasing. The share capital has increased from Rs million to Rs million which is a year on year increase of 13.82%. The net profit too has increased from Rs million to Rs million which is a year on year increase of 16.83%. The ROE of the bank has also increase from 14.8% in 29-1 to 18.9% in As of Q3 214, the bank s ROE stands at 18.99% and its ROA stands at 1.5%. The bank had an NPL of 15.11% in 35.% ROE and ROA 3.% 25.% 2.% 15.% 1.% Return on Equity Return on Asset 5.%.% Q3 214 (annualized) Sharesansar.com 3. Analysis 39

43 % Dividends: 7 Dividend Composition Bonus Shares (%) Cash Div (%) % Dividend History 6.% 5.% 4.% 3.% 2.% Dividends 1.%.% The bank has distributed an average of 54.4% dividend rate during our review period of FY 29-1 to FY The rate of dividends dropped to 3% in FY and rose back to 6% in FY The bank has distributed cash dividends at an average rate of 36% and bonus shares at an average arate of 18.4%. Sharesansar.com 3. Analysis 4

44 NPL: 1.2% NPL to Total Loans 1.%.8%.6%.4%.2%.% Q % NPL to Total Loans.65%.64%.63%.62%.61%.6% Q1 214 Q2 214 Q3 213 Q3 214 The NPL of the bank is at.63% as of the 3 rd quarter of 214. The average NPL of the bank during FY 29-1 to FY was.856%. The bank had an NPL of.62% in Q Sharesansar.com 3. Analysis 41

45 % Capital to RWA ratio: Capital to RWA ratio Core Capital Supplementary Capital Tota Capital Fund The Capital to RWA ratio or Capital Adequacy Ratio (CAR) of the bank is at 11.15% as of The core capital to RWA ratio is 9.35% and the supplementary capital to RWA ratio is 1.8%. Sharesansar.com 3. Analysis 42