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PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS SANJEEV MANANDHAR GENERAL MANAGER PRIME BANK.

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Presentation on theme: "PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS SANJEEV MANANDHAR GENERAL MANAGER PRIME BANK."— Presentation transcript:

1 PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS SANJEEV MANANDHAR GENERAL MANAGER PRIME BANK

2 What is Banking Business? Banking business is managing various risks in much efficient fashion to trade off between risks and return;Banking business is managing various risks in much efficient fashion to trade off between risks and return;

3 Financial market of Commercial Banks :2065/66 Total commercial banks:26Total commercial banks:26 Total Deposits: 528 billionTotal Deposits: 528 billion Total Loans: 433 billionTotal Loans: 433 billion Average deposit growth: 19%Average deposit growth: 19% Average credit growth: 24%Average credit growth: 24%

4 CAMELS The six important areas, commonly referred to as the “CAMELS,” for analysis are:The six important areas, commonly referred to as the “CAMELS,” for analysis are: Capital adequacy;Capital adequacy; Asset quality;Asset quality; Management competence and commitment;Management competence and commitment; Earnings capability;Earnings capability; Liquidity; andLiquidity; and Sensitivity to market riskSensitivity to market risk

5 PERFORMANCE ANALYSIS Financial Status of Financial Institutions and where it stands today with other Banks;Financial Status of Financial Institutions and where it stands today with other Banks; Deposit market of Nepal Vis-a- vis Financial InstitutionDeposit market of Nepal Vis-a- vis Financial Institution Credit market of Nepal Vis-a – vis Financial InstitutionCredit market of Nepal Vis-a – vis Financial Institution Credit market of Nepal as per Geographical locations;Credit market of Nepal as per Geographical locations;

6 Various Risks in banks Banking business, by its nature operates under various risks:Banking business, by its nature operates under various risks: –Credit Risks –Operational Risks; –Market risks; –Liquidity risks; –System Risks; –Accounting Risks; –Legal Risks; –Reputations risks;

7 CREDIT ANALYSIS ANNUAL GROWTH;ANNUAL GROWTH; NON PERFORMING ASSETS;NON PERFORMING ASSETS; ECONOMIC AND GEOGRAPHICAL CONCENTRATION;ECONOMIC AND GEOGRAPHICAL CONCENTRATION; COLLATERAL QUALITY;COLLATERAL QUALITY; DOCUMENTATION QUALITY;DOCUMENTATION QUALITY; RECOVERY OF INTEREST AND PRINCIPAL;RECOVERY OF INTEREST AND PRINCIPAL;

8 Loan Growth of Banks

9

10 DEPOSIT ANALYSIS ANNUAL GROWTH;ANNUAL GROWTH; DEPOSIT CONCENTRATION;DEPOSIT CONCENTRATION; DEPOSIT COMPOSITION;DEPOSIT COMPOSITION; –FIXED DEPOSIT; –SAVING DEPOSIT; –CURRENT DEPOSIT; –CALL DEPOSIT; COST OF DEPOSIT;COST OF DEPOSIT;

11 Deposit structure of Banks Savings 192B Fixed 92 B Current 50B Others 38B

12 Deposit Growth of Banks

13 LIQUIDITY RISKS DOES THE FINANCIAL INSTITUTIONS HAVE PERFORMED GAP ANALYSIS;DOES THE FINANCIAL INSTITUTIONS HAVE PERFORMED GAP ANALYSIS; DOES THE FINANCIAL INSTITUTIONS HAVE ENOUGH INVESTMENT IN LIQUID ASSETS;DOES THE FINANCIAL INSTITUTIONS HAVE ENOUGH INVESTMENT IN LIQUID ASSETS; DOES THE FI’S HAS REASONABLE CREDIT DEPOSIT RATIO;DOES THE FI’S HAS REASONABLE CREDIT DEPOSIT RATIO; DOES THE FI HAS A CAPACITY TO REPLACE MATURING HUGE FIXED DEPSOTIS AND WITHDRAWAL OF CALL DEPOSITS;DOES THE FI HAS A CAPACITY TO REPLACE MATURING HUGE FIXED DEPSOTIS AND WITHDRAWAL OF CALL DEPOSITS;

14 INVESTMENT ANALYSIS DOES THE FI HAS ENOUGH INVESTMENTS IN TREASURY BILLS AND GOVERNMENT BANKS;DOES THE FI HAS ENOUGH INVESTMENTS IN TREASURY BILLS AND GOVERNMENT BANKS; WHAT ARE OTHER INVESTMENTS MADE BY THE FI;WHAT ARE OTHER INVESTMENTS MADE BY THE FI;

15 ANALYSIS OF INCOME STATEMENT INTEREST YIELD;INTEREST YIELD; COST OF FUND;COST OF FUND; NET INTEREST INCOME COMPARED TO RISKS ASSETS;NET INTEREST INCOME COMPARED TO RISKS ASSETS; OTHER INCOME vs INTEREST INCOME;OTHER INCOME vs INTEREST INCOME; OPERATING EXPENSES vs DEPOSIT/LOANS;OPERATING EXPENSES vs DEPOSIT/LOANS; STAFF COST vs DEPOSIT/LOANS;STAFF COST vs DEPOSIT/LOANS; NET PROFIT vs PAID UP CAPITAL;NET PROFIT vs PAID UP CAPITAL; GROWTH TREND OF INCOMES AND EXPENDITURE;GROWTH TREND OF INCOMES AND EXPENDITURE; EXTRAORDINARY ITEMS;EXTRAORDINARY ITEMS;

16 248 billion good loan market of Nepal

17 BILLION GOOD CREDIT MARKET Jhapa 2.5 B BRT 20 B Jpur 2.5 B BRJ 25 B PKR 6.25 B Sngr 8 B NPJ 2.5 B Mngr/Dgd 3.75 B KTM 125 B 20% Source : NRB Reports/estimates etc. GEOGRAPHICAL DISTRIBUTION OF LOANS H’da 2.5 B

18 Where PCBL stands: Deposits

19 Where PCBL Stands: Loans

20 Growth of PCBL Particulars PCBL Growth Average Industry Growth Deposits123%19% Loans92%24% Net Profits 406%

21 COMPARITIVE PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion ParticularsPCBLBOA Growth Growth Deposit % % Loans % % Net Profit % %

22 PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion ParticularsNabilNIBL Growth Growth Deposit % % Loans % % Net Profit % %

23 PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion ParticularsKumariLaxmi Growth Growth Deposit % % Loans % % Net Profit % %


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