Company Analysis of Everest Bank Ltd.

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

Table of Contents 1. Company Analysis... 1 1.1Overview... 1 1.2 BOD... 2 1.3 CEO s Profile:... 3 1.4 Management Team... 4 1.5 Network... 5 1.6 Products and Services... 7 2. Analysis... 8 2.1 Capital Structure... 8 2.2 Balance Sheet... 1 2.3 Profit & Loss Account... 16 2.4 Key Ratios... 27 3. Analysis... 33 3.1 Fundamental Analysis... 33

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 1997. 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

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

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

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

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

Branch Locations Inside Kathamandu valley Outside Kathmandu valley ATM Locations Inside Kathamandu valley Outside Kathmandu valley 64% 36% 53% 47% Network 8 53 5 Branches ATM Locations Extension counters Sharesansar.com 1. Company Analysis 6

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

2. Analysis 2.1 Capital Structure Authorized, Issued and Paid-up Capital: Particulars 213-14 212-13 Change % Authorized Capital 2 2 Issued Capital 1921.24 1761.13 9.9 Paid-up Capital 1921.24 1761.13 9.9 The bank has an authorized capital of Rs. 2 million. The issued capital and paid up capital of the bank is currently Rs.1921.24 million. The share capital of the company totals Rs.2137.39 million by including the proposed bonus shares of Rs.216.15 million of the FY 213-14.. Share Ownership Details: Share ownership 213-14 212-13 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

Shareholders holding.5% or more of the total shares: S.N Name % Units 1 B.K. Shrestha 9.19 1655588 2 Hotel Snow Lion P. Ltd. 9.32 16783 3 Maitra Dev Pathak 5.69 12542 4 Radha Shrestha 8.77 158282 5 Nepal Krishna Shrestha 9.3 1674647 6 Arun Man Sherchan 3.8 683947 7 Shanta Dev Pathak 2.33 41932 8 Kul Bir Singh Tuladhar 1 18979 9 Punjab National Bank, India 2 3611478 1 Pratik Kayastha.79 1434 Sharesansar.com 9

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: 213-14 Change % 212-13 211-12 21-11 29-1 Share Capital 2137.39 11.25% 1921.24 1761.13 1391.57 1273.61 Reserve & Surplus 3319.76 14.21% 296.61 2416.18 1721.98 1473.53 Total Equity 5457.15 13.3% 4827.84 4177.3 3113.55 2759.14 Debenture & Bonds 468.85.% 468.85 3 3 Total Assets 7445.8 7.16% 65741.15 55813.13 46236.21 41382.76 Quarterly: Q3 214 Change % Q3 213 Q2 214 Q1 214 Share Capital 2137.39 11.25% 1921.24 2137.39 2137.39 Reserve & Surplus 4513.64 13.19% 3987.55 49.99 371.9 Total Equity 6651.3 12.56% 598.79 6228.37 5848.29 Total Assets 86533.7 19.89% 72175.69 85164.1 7593.79 7 6 5 4 3 2 1 Shareholders Equity Reserve & Surplus Share Capital Sharesansar.com 1

Million Rs. Million Rs. 7 6 5 4 3 2 1 Shareholders Equity Q1 214 Q2 214 Q3 213 Q3 214 Reserve & Surplus Share Capital 1 8 Total Assets 6 4 2 29-1 21-11 211-12 212-13 213-14 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: 213-214 Change % 212-13 211-212 21-211 29-21 Deposit 6218.14 7.6% 5772.46 56.1 41127.91 36932.31 Liability Investments 654.19-29.79% 9263.86 7863.63 7743.93 58.31 Loans and Advances 47572.2 9.63% 43393.19 3591.97 3157.69 27556.36 Sharesansar.com 11

Million Rs. Million Rs. 8 Deposit Liability 7 6 5 4 3 2 1 29-1 21-11 211-12 212-13 213-14 Q3 214 Quarterly: Q3 214 Change % Q3 213 Q2 214 Q1 214 Deposit 7156.83 13.21% 62764.38 719.79 66164.77 Liability Investments 11794. 4.32% 1135.96 13574.8 8679.15 Loan and Advances 56494.79 11.55% 5643.9 5471.75 53553.18 72 Deposit Liability 7 68 66 64 62 6 58 Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 12

Million Rs. Million Rs. 8 Use of Funds 7 6 5 4 3 Investments Loans and Advances 2 1 29-1 21-11 211-12 212-13 213-14 Q3 214 8 Use of Funds 7 6 5 4 3 Investments Loans and Advances 2 1 Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 13

3 25 2 15 1 5 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

Loans and Advances Breakdown of Q3 214 4% 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

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: 213-14 Change % 212-13 211-12 21-11 29-1 Interest Income 5177.55 4.87% 4936.92 496. 4331.3 312.45 Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79 Net Interest Income 2918.81 5.84% 2757.74 286.66 1795.15 1529.66 Quarterly: Interest Income Interest Expenses Net Interest Income Q3 214 Change % Q3 213 Q2 214 Q1 214 359.52-3.82% 3733.19 238.59 125.66 152.49-12.21% 1711.54 998.48 493.49 288.3 3.28% 221.64 1382.11 712.18 6 Interest Income & Expenses 5 4 3 2 Interest Income Interest Expenses Net Interest Income 1 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 16

Million Rs. 4 Interest Income & Expenses 35 3 25 2 15 1 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 213-14 Change 212-13 211-12 21-11 29-1 % 588.94 4.63% 5552.4 5483.7 4728.82 35.77 Quarterly: Total Operating Income Q3 214 Change % Q3 213 Q2 214 Q1 214 2645.26 7.11% 2469.63 1725.54 882.65 Sharesansar.com 17

Million Rs. Million Rs. 7 Total Operating Income 6 5 4 3 Total Operating Income 2 1 29-1 21-11 211-12 212-13 213-14 Q3 214 3 Total Operating Income 25 2 15 1 5 Q1 214 Q2 214 Q3 213 Q3 214 Operating Income Breakdown: 213-14 Change % 212-13 211-12 21-11 29-1 Interest Income 5177.55 4.87% 4936.92 496. 4331.3 312.45 Commission & 254.88-4.47% 266.82 233.57 23.47 28.12 Discount Other Operating 39.48 24.1% 249.39 179.82 148.6 142.31 Income Exchange Fluctuation Income 67.3-32.23% 98.91 19.68 46.26 47.88 Sharesansar.com 18

Million Rs. Million Rs. 6 Operating Income Breakdown 5 4 3 2 Interest Income Commission & Discount Exchange Fluctuation Income Other Operating Income 1 29-1 21-11 211-12 212-13 213-14 Q3 214 Q3 214 Change % Q3 213 Q2 214 Q1 214 Interest Income 359.52-3.82% 3733.19 238.59 125.66 Commission & Discount 225.82 13.54% 198.89 167.6 89.38 Other Operating Income 282.6 41.48% 199.37 143.15 58.84 Exchange Fluctuation Income 49.35 -.77% 49.73 32.68 22.26 4. Operating Income Breakdown 35. 3. 25. 2. 15. 1. Interest Income Commission & Discount Exchange Fluctuation Income Other Operating Income 5.. Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 19

Million Rs. Operating Expenses: Total Operating Expenses 213-14 Change 212-13 211-12 21-11 29-1 % 347.87 6.82% 3249.29 3944.73 331.42 2228.68 45 Total Operating Expenses 4 35 3 25 2 15 1 5 Total Operating Expenses 29-1 21-11 211-12 212-13 213-14 Q3 214 Total Operating Expenses Q3 214 Change % Q3 213 Q2 214 Q1 214 8.81 2.37% 782.26 543.24 27.73 Sharesansar.com 2

Million Rs. 9 Total Operating Expenses 8 7 6 5 4 3 2 1 Q1 214 Q2 214 Q3 213 Q3 214 Operating Expenses Breakdown: 213-14 Change % 212-13 211-12 21-11 29-1 Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79 Staff Expenses 511.86 1.84% 431.81 352.5 293.13 226.36 Other Operating 544.3 6.83% 59.49 467.29 383.11 352.51 Expenses Loan Loss Provision 155.97 57.86% 98.81 252.5 98.3 77.1 Q3 214 Change % Q3 213 Q2 214 Q1 214 Interest Expenses 152.49-12.21% 1711.54 998.48 493.49 Staff Expenses 356.4.22% 355.26 242.81 134.55 Other Operating 36.25 4.2% 346.34 257.42 12.13 Expenses Loan Loss Provision 54.53 4.8% 8.66 43.2 34.4 Sharesansar.com 21

Million Rs. Million Rs. 35 Operating Expenses Breakdown 3 25 2 15 1 Interest Expenses Staff Expenses Other Operating Expenses Loan Loss Provision 5 29-1 21-11 211-12 212-13 213-14 18 Operating Expenses Breakdown 16 14 12 1 8 6 4 Interest Expenses Staff Expenses Other Operating Expenses Loan Loss Provision 2 Q1 214 Q2 214 Q3 213 Q3 214 Sharesansar.com 22

Million Rs. Million Rs. Operating Profit and Net Profit: 213-14 Change % 212-13 211-12 21-11 29-1 Operating Profit 2338.7 1.53% 232.75 1538.34 1418.4 1272.9 Net Profit 1549.7 5.34% 1471.12 19.56 931.3 831.77 25 Operating and Net Profit 2 15 1 Operating Profit Net Profit 5 29-1 21-11 211-12 212-13 213-14 Q3 214 Change % Q3 213 Q2 214 Q1 214 Operating Profit 1844.45 9.31% 1687.37 1182.3 611.92 Net Profit 1193.89 1.45% 18.95 771.23 391.14 2 18 16 14 12 1 8 6 4 2 Operating and Net Profit Q1 214 Q2 214 Q3 213 Q3 214 Operating Profit Net Profit Sharesansar.com 23

Million Rs. Loan Loss Provision: Loan Loss Provision 213-14 Change 212-13 211-12 21-11 29-1 % 155.97 57.86% 98.81 252.5 98.3 77.1 3 Loan Loss Provision 25 2 15 1 5 29-1 21-11 211-12 212-13 213-14 Q3 214 Change % Q3 213 Q2 214 Q1 214 Loan Loss Provision 84.53 4.8% 8.66 43.2 34.4 Sharesansar.com 24

Million Rs. Million Rs. 9. 8. 7. 6. 5. 4. 3. 2. 1.. Loan Loss Provision Q1 214 Q2 214 Q3 213 Q3 214 Write Back of Provision: Write Back of Provisions 213-14 Change % 212-13 211-12 21-11 29-1 89.73 115.59.88 15.35 56.34 83.55 Q3 214 Change % Q3 213 Q2 214 Write Back of Provision 25.44 332.86% 5.88 25.44 16 14 12 1 8 6 4 2 Write Back of Provision 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 25

Million Rs. 3 Write Back of Provision 25 2 15 1 5 Q2 214 Q3 213 Q3 214 Dividend History: 213-14 (%) Change % 212-13 (%) 211-12 (%) 21-11 (%) 29-1 (%) Cash Dividend 5 % 5 5 3 Bonus Shares 12 2% 1 3 1 3 Total Dividend 62.33% 6 3 6 6 7 Dividend History 6 5 4 3 Bonus Shares (%) Cash Div (%) 2 1 29-1 21-11 211-12 212-13 213-14 Sharesansar.com 26

Rs. 2.4 Key Ratios EPS: Earning Per Share 213-14 Change 212-13 211-12 21-11 29-1 % 86.4-6.36% 91.88 88.55 83.18 1.16 Q3 214 Change % Q3 213 Q2 214 Q1 214 Earning Per Share 55.86 -.72% 56.26 36.8 18.3 Earning Per Share (annualized) 74.48 -.72% 75.2 72.17 73.2 12 1 8 6 4 2 EPS 29-1 21-11 211-12 212-13 213-14 Q3 214 (annulized) EPS P/E ratio: 213-14 212-13 211-12 21-11 29-1 P/E ratio 3.58 17.32 11.67 13.15 16.27 Sharesansar.com 27

Rs. P/E Ratio P/E Ratio 3.58 28.64 16.27 13.15 11.67 17.32 29-1 21-11 211-12 212-13 213-14 Q3 214 Market Value per Share: Q3 214 Q3 213 Q2 214 Q1 214 213-14 212-13 211-12 21-11 29-1 Market Value per Share 2133 225 1982 1911 2631 1591 133 194 163 3 Market Value 25 2 15 1 Market Value 5 Sharesansar.com 28

% % CD Ratio: Q3 Q2 Q1 213-14 212-13 211-12 21-11 29-1 214 214 214 CD ratio (%) 79.17 78.9 78.9 78.1 76.57 73.22 76.98 76.24 8.% CD ratio 78.% 76.% 74.% 72.% 7.% 29-1 21-11 211-12 212-13 213-14 Q3 214 Capital to RWA ratio: 213-14 (%) 212-13 (%) 211-12 (%) 21-11 (%) 29-1 (%) Core Capital 9.35 9.31 9.61 8.46 8.39 Supplementary 1.8 2.28 1.41 1.96 2.38 Capital Total Capital Fund 11.15 11.59 11.2 1.42 1.77 14 12 1 8 6 4 2 Capital to RWA ratio 29-1 21-11 211-12 212-13 213-14 Core Capital Supplementary Capital Tota Capital Fund Sharesansar.com 29

Rs. Book Net worth: Total Net worth (million) Net worth per share 213-14 Change % 212-13 211-12 21-11 29-1 5337.1 14.34% 4667.8 417.3 3677.2 2757.1 296.3 1.64% 291.53 326.18 328.44 331.99 Total Net worth (million) Net worth per Share Q3 214 Change % Q3 213 Q2 214 Q1 214 6651.3 12.56% 598.79 6228.37 669.11 311.18 1.18% 37.55 291.4 283.95 34 Networth per share 33 32 31 3 29 Networth per share 28 27 Non-performing Loans: Nonperforming Loans to Total Loan 213-14 Change % 212-13 211-12 21-11 29-1 (%) (%) (%) (%) (%).97 56.45%.62.84.34.16 Sharesansar.com 3

Nonperforming Loans to Total Loan Q3 214 Change % Q3 213 Q2 214 Q1 214 (%) (%) (%) (%).63 1.61%.62.65.63 1.2% NPL to Total Loans 1.%.8%.6%.4%.2%.% 29-1 21-11 211-12 212-13 213-14 Q3 214 Return on Equity: Return on Equity 213-14 Change % 212-13 211-12 21-11 29-1 (%) (%) (%) (%) (%) 28.4-6.81% 3.47 26.11 29.91 3.15 Return on Equity (annualized) Q3 214 Change % Q3 213 Q2 214 Q1 214 (%) (%) (%) (%) 23.93-1.88% 24.39 24.76 26.75 Sharesansar.com 31

35.% 3.% 25.% 2.% 15.% 1.% 5.%.% Return on Equity 29-1 21-11 211-12 212-13 213-14 Q3 214 (annualized) Return on Assets: Return on Assets 213-14 Change % 212-13 211-12 21-11 29-1 (%) (%) (%) (%) (%) 2.2-1.69% 2.24 1.95 2.1 2.1 Return on Assets (annualized) Q3 214 Change % Q2 214 Q1 214 213-14 1.84-7.88% 2. 1.81 2.6 2.5% Return on Assets 2.% 1.5% 1.%.5%.% 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 32

Million Rs. 3. Analysis 3.1 Fundamental Analysis Interest Income and expenses: 6 Interest Income & Expenses 5 4 3 2 Interest Income Interest Expenses 1 29-1 21-11 211-12 212-13 213-14 The interest income is in an increasing trend as has been shown by the increase from Rs.312.45 million in 29-1 to Rs.5177.55 million in 213-14. The interest expenses were increasing till 211-12. It increased from Rs. 1572.79 million in 29-1 to Rs.2873.33 million in 211-12. But it decreased to Rs. 2179.18 Million in 212-13 which is a drop of 24.16%. The interest expense for the year 213-14 was Rs. 2258.74 million. The interest income and interest expenses during the period between 29-1 to 213-14 increased year on year by 13.66% and 9.47% respectively. Sharesansar.com 3. Analysis 33

Million Rs. Million Rs. 4 Interest Income & Expenses 35 3 25 2 15 1 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.238.59 million in Q2 214 to Rs.359.53 million in Q3 214. The interest income in Q3 213 was Rs.3733.19 million. The interest income in Q3 214 is 5.83% higher than in Q2 214 and 3.82% lower than in Q3 213. Deposit and Loans & Advances: 8 Deposit Liability 7 6 5 4 3 2 1 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 3. Analysis 34

Million Rs. Million Rs. 72 Deposit Liability 7 68 66 64 62 6 58 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.36932.31 million in deposits. It has been increasing ever since and stands at Rs.6218.14 million as of FY 213-14. This is a year on year growth of 13.88%. As of Q3 214, the bank has managed to collect Rs.7156.83 million as deposits. Compared to Q3 213, the bank s deposit collection has increased by 13.21%. 8 Use of Funds 7 6 5 4 3 Investments Loans and Advances 2 1 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 3. Analysis 35

Million Rs. 8 Use of Funds 7 6 5 4 3 Investments Loans and Advances 2 1 Q1 214 Q2 214 Q3 213 Q3 214 As of Q3 214, the bank has mobilized Rs.56494.79 million as Loans & Advances and Rs.11794. 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 Q3 214 4% 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

Million Rs. Million Rs. Operating Profit and Net Profit: 25 Operating and Net Profit 2 15 1 Operating Profit Net Profit 5 29-1 21-11 211-12 212-13 213-14 Q3 214 The operating profit of the bank has increased from Rs.1272.9 million in 29-1 to Rs.2338.7 million in 213-14. The bank posted an impressive 49.69% increase in operating profit in FY 212-13. The growth however, slowed to a meager 1.53% in FY 213-14. The net profit of the bank has also been constantly increasing throughout our review period. The net profit increased from Rs.831.77 million in 29-1 to Rs.1549.7 million in 213-14. This is year on year increase of 16.83%. Provision and Write Back: 3 Loan Loss Provision 25 2 15 1 5 Loan Loss Provision Write Back Net Write Back -5 29-1 21-11 211-12 212-13 213-14 Q3 214 Sharesansar.com 3. Analysis 37

% Million Rs. The loan loss provision of the bank was Rs.155.97 million as of FY 213-14. This is an increase of 57.85% compared to last year. The bank had a write back Rs.89.73 million in 213-14 compared to Rs..88 million in 212-13. Loan Loss Provision 9 8 7 6 5 4 3 2 1 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.84.53 million. The write back of provision amount however, has increased by 332.65% and reached Rs.25.44 million during the same period. CD Ratio: 8.% 78.% 76.% CD ratio 74.% 72.% 7.% 29-1 21-11 211-12 212-13 213-14 Q3 214 The CD ratio of the bank is below the NRB stipulated limit of 8%. The CD ratio in FY 213-14 was 78.1% and as of 3 rd quarter 214 it is increased to 79.17%. Sharesansar.com 3. Analysis 38

Million Rs. Equity and Returns: 25 Share capital Vs. Net Profit 2 15 1 5 Share Capital Net Profit Share capital and net profit of the bank are both increasing. The share capital has increased from Rs.1273.61 million to Rs.2137.39 million which is a year on year increase of 13.82%. The net profit too has increased from Rs.831.77 million to Rs.1549.7 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 213-14. 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.%.% 29-1 21-11 211-12 212-13 213-14 Q3 214 (annualized) Sharesansar.com 3. Analysis 39

% Dividends: 7 Dividend Composition 6 5 4 3 Bonus Shares (%) Cash Div (%) 2 1 29-1 21-11 211-12 212-13 213-14 7.% 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 213-14. The rate of dividends dropped to 3% in FY 211-12 and rose back to 6% in FY 212-13. 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

NPL: 1.2% NPL to Total Loans 1.%.8%.6%.4%.2%.% 29-1 21-11 211-12 212-13 213-14 Q3 214.66% 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 213-14 was.856%. The bank had an NPL of.62% in Q3 213. Sharesansar.com 3. Analysis 41

% Capital to RWA ratio: 14 12 1 8 6 4 2 Capital to RWA ratio 29-1 21-11 211-12 212-13 213-14 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 213-14. The core capital to RWA ratio is 9.35% and the supplementary capital to RWA ratio is 1.8%. Sharesansar.com 3. Analysis 42