Company Analysis of Everest Bank Ltd. -...

2015

Sharesansar.com

5/5/2015

Company Analysis of Everest Bank Ltd.

Table of Contents 1.0 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

2.0 Analysis ................................................................................................................................................... 8

2.1 Capital Structure ................................................................................................................................. 8

2.2 Balance Sheet .................................................................................................................................... 10

2.3 Profit & Loss Account ........................................................................................................................ 16

2.4 Key Ratios .......................................................................................................................................... 27

3.0 Analysis ................................................................................................................................................. 33

3.1 Fundamental Analysis ....................................................................................................................... 33

Sharesansar.com | 1.0 Company Analysis 1

1.0 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 20% 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 2013.

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 2006, 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.


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


1.3 CEO’s Profile: A.K. Ahluwalia

AK Ahluwalia assumed office as the CEO of Everest Bank Ltd. on July 1,2013.

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.


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)

10 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)


1.5 Network

The bank has 53 branches and 80 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 OUTSIDE VALLEY

Bagbazar Branch Baglung Branch

Bagdol Branch Besisahar Branch

Baneshwar Branch(main branch) Bhairahwa Branch

Balaju Branch Bhojpur Branch

Bhaktapur Branch Biratnagar Branch

Chabahil Branch Birgunj Branch

Newroad Branch Birtamod Branch

Golfutar Branch Butwal Branch

Gongabu Branch Chandranigahapur Branch

Gwarko Branch Dhading Branch

Kalimati Branch Dhangadi Branch

Kirtipur Branch Duhabi Branch

Lagankhel Branch Gorkha Branch

Lazimpath Branch Gularia Branch

Maitidevi Branch Itahari Branch

Phulchowk Branch ICD(Dry Pot)

Satungal Branch Hetauda Branch

Teku Branch Janakpur Branch

Thamel 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


36%

64%

Branch Locations

Inside Kathamandu valley

Outside Kathmandu valley

47% 53%

ATM Locations

Inside Kathamandu valley

Outside Kathmandu valley

53

80

5

Branches ATM Locations Extension counters

Network


1.6 Products and Services

* Interest rates are subject to changes.

Sharesansar.com | 2.0 Analysis 8

2.0 Analysis

2.1 Capital Structure

Authorized, Issued and Paid-up Capital:

Particulars 2013-14 (millions)

2012-13 (millions)

Change %

Authorized Capital 2000 2000 0

Issued Capital 1921.24 1761.13 9.09

Paid-up Capital 1921.24 1761.13 9.09

The bank has an authorized capital of Rs. 2000 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 2013-14..

Share Ownership Details:

Share ownership 2013-14 2012-13

Domestic Ownership 80% 80%

Foreign Ownership 20% 20%

Total 100% 100%

Public 69.14% 69.27%

Promoters 30.36% 30.73%

Total 100% 100%

69%

31%

Share Ownership Details (2013-14)

Public Promoters

Sharesansar.com | 9

Shareholders holding 0.5% 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 1678030

3 Maitra Dev Pathak 5.69 1025402

4 Radha Shrestha 8.77 1580282

5 Nepal Krishna Shrestha 9.3 1674647

6 Arun Man Sherchan 3.8 683947

7 Shanta Dev Pathak 2.33 419032

8 Kul Bir Singh Tuladhar 1 180979

9 Punjab National Bank, India 20 3611478

10 Pratik Kayastha 0.79 143004

Sharesansar.com | 10

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:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Share Capital 2137.39 11.25% 1921.24 1761.13 1391.57 1273.61

Reserve & Surplus 3319.76 14.21% 2906.61 2416.18 1721.98 1473.53

Total Equity 5457.15 13.03% 4827.84 4177.30 3113.55 2759.14

Debenture & Bonds 468.85 0.00% 468.85 0 300 300

Total Assets 70445.08 7.16% 65741.15 55813.13 46236.21 41382.76

Quarterly:

Q3 2014 (millions)

Change % Q3 2013 (millions)

Q2 2014 (millions)

Q1 2014 (millions)

Share Capital 2137.39 11.25% 1921.24 2137.39 2137.39

Reserve & Surplus 4513.64 13.19% 3987.55 4090.99 3710.90

Total Equity 6651.03 12.56% 5908.79 6228.37 5848.29

Total Assets 86533.07 19.89% 72175.69 85164.10 75930.79

0

1000

2000

3000

4000

5000

6000

7000

Mill

ion

Rs.

Shareholders Equity

Reserve & Surplus

Share Capital


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:

2013-2014 (millions)

Change %

2012-13 (millions)




Deposit Liability

62108.14 7.60% 57720.46 50006.10 41127.91 36932.31

Investments 6504.19 -29.79% 9263.86 7863.63 7743.93 5008.31

Loans and Advances

47572.02 9.63% 43393.19 35910.97 31057.69 27556.36

0

1000

2000

3000

4000

5000

6000

7000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Shareholders Equity

Reserve & Surplus

Share Capital

0

20000

40000

60000

80000

100000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Total Assets


Quarterly:

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)

Deposit Liability

71056.83 13.21% 62764.38 70019.79 66164.77

Investments 11794.00 4.32% 11305.96 13574.08 8679.15

Loan and Advances

56494.79 11.55% 50643.09 54701.75 53553.18

0

10000

20000

30000

40000

50000

60000

70000

80000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Deposit Liability

58000

60000

62000

64000

66000

68000

70000

72000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Deposit Liability


0

10000

20000

30000

40000

50000

60000

70000

80000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Use of Funds

Investments

Loans and Advances

0

10000

20000

30000

40000

50000

60000

70000

80000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Use of Funds

Investments

Loans and Advances


0

5000

10000

15000

20000

25000

30000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Loans and Advances Breakdown

Realstate Loan

Home/Housing Loan (personalhome loan upto 60 lacs or less)#

Margin Type loan

Term Loan

Overdraft Loan/TR Loan/ WC Loan

Others


4%

15% 1%

19%

47%

14%

Loans and Advances Breakdown of Q3 2014

Real Estate loan

Home/Housing Loan (personalhome loan upto 60 lacs or less)

Margin Type loan

Term Loan

Overdraft Loan/TR Loan/ WCLoan

Others


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:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Interest Income 5177.55 4.87% 4936.92 4960.00 4331.03 3102.45

Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79

Net Interest Income 2918.81 5.84% 2757.74 2086.66 1795.15 1529.66

Quarterly:

Q3 2014 (millions)

Change % Q3 2013 Q2 2014 (millions)

Q1 2014 (millions)

Interest Income

3590.52 -3.82% 3733.19 2380.59 1205.66

Interest Expenses

1502.49 -12.21% 1711.54 998.48 493.49

Net Interest Income

2088.03 3.28% 2021.64 1382.11 712.18

0

1000

2000

3000

4000

5000

6000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Interest Income & Expenses

Interest Income

Interest Expenses

Net Interest Income


Operating Income:

Shows the total income generated by the bank from its regular operations.

Annual:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Total Operating Income

5808.94 4.63% 5552.04 5483.07 4728.82 3500.77

Quarterly:

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)


2645.26 7.11% 2469.63 1725.54 882.65

0

500

1000

1500

2000

2500

3000

3500

4000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.


Interest Income

Interest Expenses

Net Interest Income


Operating Income Breakdown:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Interest Income 5177.55 4.87% 4936.92 4960.00 4331.03 3102.45

Commission & Discount

254.88 -4.47% 266.82 233.57 203.47 208.12

Other Operating Income

309.48 24.10% 249.39 179.82 148.06 142.31

Exchange Fluctuation Income

67.03 -32.23% 98.91 109.68 46.26 47.88

0

1000

2000

3000

4000

5000

6000

7000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.



0

500

1000

1500

2000

2500

3000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.



Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)

Interest Income 3590.52 -3.82% 3733.19 2380.59 1205.66

Commission & Discount 225.82 13.54% 198.89 167.60 89.38

Other Operating Income 282.06 41.48% 199.37 143.15 58.84


49.35 -0.77% 49.73 32.68 22.26

0

1000

2000

3000

4000

5000

6000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Operating Income Breakdown

Interest Income




0.00

500.00

1000.00

1500.00

2000.00

2500.00

3000.00

3500.00

4000.00

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Operating Income Breakdown

Interest Income





Operating Expenses:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Total Operating Expenses

3470.87 6.82% 3249.29 3944.73 3310.42 2228.68

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)


800.81 2.37% 782.26 543.24 270.73

0

500

1000

1500

2000

2500

3000

3500

4000

4500

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.




Operating Expenses Breakdown:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Interest Expenses 2258.74 3.65% 2179.18 2873.33 2535.88 1572.79

Staff Expenses 511.86 10.84% 431.81 352.05 293.13 226.36

Other Operating Expenses

544.30 6.83% 509.49 467.29 383.11 352.51

Loan Loss Provision 155.97 57.86% 98.81 252.05 98.30 77.01

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)

Interest Expenses 1502.49 -12.21% 1711.54 998.48 493.49

Staff Expenses 356.04 0.22% 355.26 242.81 134.55


360.25 4.2% 346.34 257.42 102.13

Loan Loss Provision 54.53 4.80% 80.66 43.02 34.04

0

100

200

300

400

500

600

700

800

900

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.



0

500

1000

1500

2000

2500

3000

3500

2009-10 2010-11 2011-12 2012-13 2013-14

Mill

ion

Rs.

Operating Expenses Breakdown

Interest Expenses

Staff Expenses


Loan Loss Provision

0

200

400

600

800

1000

1200

1400

1600

1800

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Operating Expenses Breakdown

Interest Expenses

Staff Expenses


Loan Loss Provision


Operating Profit and Net Profit:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Operating Profit 2338.07 1.53% 2302.75 1538.34 1418.40 1272.09

Net Profit 1549.70 5.34% 1471.12 1090.56 931.30 831.77

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)

Operating Profit 1844.45 9.31% 1687.37 1182.30 611.92

Net Profit 1193.89 10.45% 1080.95 771.23 391.14

0

500

1000

1500

2000

2500

2009-10 2010-11 2011-12 2012-13 2013-14

Mill

ion

Rs.

Operating and Net Profit

Operating Profit

Net Profit

0

200

400

600

800

1000

1200

1400

1600

1800

2000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.


Operating Profit

Net Profit


Loan Loss Provision:

2013-14 (millions)

Change %

2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Loan Loss Provision

155.97 57.86% 98.81 252.05 98.30 77.01

Q3 2014 (millions)


Q2 2014 (millions)

Q1 2014 (millions)

Loan Loss Provision 84.53 4.80% 80.66 43.2 34.04

0

50

100

150

200

250

300

2009-10 2010-11 2011-12 2012-13 2013-14

Mill

ion

Rs.

Loan Loss Provision


Write Back of Provision:

2013-14 (millions)

Change % 2012-13 (millions)

2011-12 (millions)

2010-11 (millions)

2009-10 (millions)

Write Back of Provisions

89.73 101500.59 0.88 150.35 56.34 83.55

Q3 2014 (millions)


Q2 2014 (millions)

Write Back of Provision 25.44 332.86% 5.88 25.44

0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

80.00

90.00

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Loan Loss Provision

0

20

40

60

80

100

120

140

160

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Write Back of Provision


Dividend History:

2013-14 (%)

Change %

2012-13 (%)

2011-12 (%)

2010-11 (%)

2009-10 (%)

Cash Dividend 50 0% 50 0 50 30

Bonus Shares 12 20% 10 30 10 30

Total Dividend 62 0.33% 60 30 60 60

0

5

10

15

20

25

30

Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Write Back of Provision

0

10

20

30

40

50

60

70

2009-10 2010-11 2011-12 2012-13 2013-14

Dividend History

Bonus Shares (%)

Cash Div (%)


2.4 Key Ratios

EPS:

2013-14 Change %

2012-13 2011-12 2010-11 2009-10

Earning Per Share

86.04 -6.36% 91.88 88.55 83.18 100.16

Q3 2014 Change % Q3 2013 Q2 2014 Q1 2014

Earning Per Share 55.86 -0.72% 56.26 36.08 18.30

Earning Per Share (annualized)

74.48 -0.72% 75.02 72.17 73.20

P/E ratio:

2013-14 2012-13 2011-12 2010-11 2009-10

P/E ratio 30.58 17.32 11.67 13.15 16.27

0

20

40

60

80

100

120

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annulized)

Rs.

EPS

EPS


Market Value per Share:

Q3 2014

Q3 2013

Q2 2014

Q1 2014

2013-14 2012-13 2011-12 2010-11 2009-10

Market Value per Share

2133 2205 1982 1911 2631 1591 1033 1094 1630

16.27 13.15

11.67 17.32

30.58

28.64

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

P/E Ratio

P/E Ratio

0

500

1000

1500

2000

2500

3000

Rs.

Market Value

Market Value


CD Ratio:

Q3 2014

Q2 2014

Q1 2014

2013-14 2012-13 2011-12 2010-11 2009-10

CD ratio (%) 79.17 78.9 78.9 78.01 76.57 73.22 76.98 76.24

Capital to RWA ratio:

2013-14 (%)

2012-13 (%)

2011-12 (%)

2010-11 (%)

2009-10 (%)

Core Capital 9.35 9.31 9.61 8.46 8.39

Supplementary Capital

1.80 2.28 1.41 1.96 2.38

Total Capital Fund

11.15 11.59 11.02 10.42 10.77

70.00%

72.00%

74.00%

76.00%

78.00%

80.00%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

%

CD ratio

0

2

4

6

8

10

12

14

2009-10 2010-11 2011-12 2012-13 2013-14

%

Capital to RWA ratio

Core Capital


Tota Capital Fund


Book Net worth:

2013-14 Change % 2012-13 2011-12 2010-11 2009-10

Total Net worth (million)

5337.1 14.34% 4667.8 4017.3 3677.2 2757.1

Net worth per share

296.30 1.64% 291.53 326.18 328.44 331.99

Q3 2014 Change % Q3 2013 Q2 2014 Q1 2014

Total Net worth (million)

6651.03 12.56% 5908.79 6228.37 6069.11

Net worth per Share

311.18 1.18% 307.55 291.40 283.95

Non-performing Loans:

2013-14 (%)

Change % 2012-13 (%)

2011-12 (%)

2010-11 (%)

2009-10 (%)

Non-performing Loans to Total Loan

0.97 56.45% 0.62 0.84 0.34 0.16

270

280

290

300

310

320

330

340

Rs.

Networth per share

Networth per share


Q3 2014 (%)

Change % Q3 2013 (%)

Q2 2014 (%)

Q1 2014 (%)

Non-performing Loans to Total Loan

0.63 1.61% 0.62 0.65 0.63

Return on Equity:

2013-14 (%)

Change % 2012-13 (%)

2011-12 (%)

2010-11 (%)

2009-10 (%)

Return on Equity

28.40 -6.81% 30.47 26.11 29.91 30.15

Q3 2014 (%)

Change % Q3 2013 (%)

Q2 2014 (%)

Q1 2014 (%)

Return on Equity (annualized)

23.93 -1.88% 24.39 24.76 26.75

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

NPL to Total Loans


Return on Assets:

2013-14 (%)

Change % 2012-13 (%)

2011-12 (%)

2010-11 (%)

2009-10 (%)

Return on Assets

2.20 -1.69% 2.24 1.95 2.01 2.01

Q3 2014 Change % Q2 2014 Q1 2014 2013-14

Return on Assets (annualized)

1.84 -7.88% 2.00 1.81 2.06

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annualized)

Return on Equity

0.00%

0.50%

1.00%

1.50%

2.00%

2.50%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Return on Assets


3.0 Analysis

3.1 Fundamental Analysis Interest Income and expenses:

The interest income is in an increasing trend as has been shown by the increase from Rs.3102.45 million

in 2009-10 to Rs.5177.55 million in 2013-14. The interest expenses were increasing till 2011-12. It

increased from Rs. 1572.79 million in 2009-10 to Rs.2873.33 million in 2011-12. But it decreased to Rs.

2179.18 Million in 2012-13 which is a drop of 24.16%. The interest expense for the year 2013-14 was Rs.

2258.74 million.

The interest income and interest expenses during the period between 2009-10 to 2013-14 increased

year on year by 13.66% and 9.47% respectively.

0

1000

2000

3000

4000

5000

6000

2009-10 2010-11 2011-12 2012-13 2013-14

Mill

ion

Rs.


Interest Income

Interest Expenses


The quarterly analysis of the company shows that its interest income has increased from Rs.2380.59

million in Q2 2014 to Rs.3590.53 million in Q3 2014. The interest income in Q3 2013 was Rs.3733.19

million. The interest income in Q3 2014 is 50.83% higher than in Q2 2014 and 3.82% lower than in Q3

2013.

Deposit and Loans & Advances:

0

500

1000

1500

2000

2500

3000

3500

4000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.


Interest Income

Interest Expenses

Net Interest Income

0

10000

20000

30000

40000

50000

60000

70000

80000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Deposit Liability


The deposit collection by the bank has been increasing throughout our review period. In FY 2009-10, the

bank collected Rs.36932.31 million in deposits. It has been increasing ever since and stands at

Rs.62108.14 million as of FY 2013-14. This is a year on year growth of 13.88%. As of Q3 2014, the bank

has managed to collect Rs.71056.83 million as deposits. Compared to Q3 2013, the bank’s deposit

collection has increased by 13.21%.

58000

60000

62000

64000

66000

68000

70000

72000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Deposit Liability

0

10000

20000

30000

40000

50000

60000

70000

80000

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Use of Funds

Investments

Loans and Advances


As of Q3 2014, the bank has mobilized Rs.56494.79 million as Loans & Advances and Rs.11794.00 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.

0

10000

20000

30000

40000

50000

60000

70000

80000

Q1 2014 Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Use of Funds

Investments

Loans and Advances

4%

15% 1%

19%

47%

14%

Loans and Advances Breakdown of Q3 2014

Real Estate loan

Home/Housing Loan (personalhome loan upto 60 lacs or less)

Margin Type loan

Term Loan

Overdraft Loan/TR Loan/ WCLoan

Others


Operating Profit and Net Profit:

The operating profit of the bank has increased from Rs.1272.09 million in 2009-10 to Rs.2338.07 million

in 2013-14. The bank posted an impressive 49.69% increase in operating profit in FY 2012-13. The

growth however, slowed to a meager 1.53% in FY 2013-14.

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 2009-10 to Rs.1549.7 million in 2013-14. This is year on year

increase of 16.83%.

Provision and Write Back:

0

500

1000

1500

2000

2500

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.


Operating Profit

Net Profit

-50

0

50

100

150

200

250

300

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

Mill

ion

Rs.

Loan Loss Provision

Loan Loss Provision

Write Back

Net Write Back


The loan loss provision of the bank was Rs.155.97 million as of FY 2013-14. This is an increase of 57.85%

compared to last year. The bank had a write back Rs.89.73 million in 2013-14 compared to Rs.0.88

million in 2012-13.

Comparing Q3 2013 and Q3 2014, the bank’s loan loss provision has increased by 4.80% 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:

The CD ratio of the bank is below the NRB stipulated limit of 80%. The CD ratio in FY 2013-14 was

78.01% and as of 3rd quarter 2014 it is increased to 79.17%.

0

10

20

30

40

50

60

70

80

90

Q2 2014 Q3 2013 Q3 2014

Mill

ion

Rs.

Loan Loss Provision

Loan Loss Provision

Write Back

Net Write Back

70.00%

72.00%

74.00%

76.00%

78.00%

80.00%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

%

CD ratio


Equity and Returns:

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 14.80% in 2009-10 to 18.09% in 2013-14. As of Q3 2014, the

bank’s ROE stands at 18.99% and its ROA stands at 1.50%. The bank had an NPL of 15.11% in

0

500

1000

1500

2000

2500

Mill

ion

Rs.

Share capital Vs. Net Profit

Share Capital

Net Profit

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014(annualized)

ROE and ROA

Return on Equity

Return on Asset


Dividends:

The bank has distributed an average of 54.4% dividend rate during our review period of FY 2009-10 to FY

2013-14. The rate of dividends dropped to 30% in FY 2011-12 and rose back to 60% in FY 2012-13.

The bank has distributed cash dividends at an average rate of 36% and bonus shares at an average arate

of 18.4%.

0

10

20

30

40

50

60

70

2009-10 2010-11 2011-12 2012-13 2013-14

Dividend Composition

Bonus Shares (%)

Cash Div (%)

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

%

Dividend History

Dividends


NPL:

The NPL of the bank is at 0.63% as of the 3rd quarter of 2014. The average NPL of the bank during FY

2009-10 to FY 2013-14 was 0.856%. The bank had an NPL of 0.62% in Q3 2013.

0.00%

0.20%

0.40%

0.60%

0.80%

1.00%

1.20%

2009-10 2010-11 2011-12 2012-13 2013-14 Q3 2014

NPL to Total Loans

0.60%

0.61%

0.62%

0.63%

0.64%

0.65%

0.66%

Q1 2014 Q2 2014 Q3 2013 Q3 2014

NPL to Total Loans


Capital to RWA ratio:

The Capital to RWA ratio or Capital Adequacy Ratio (CAR) of the bank is at 11.15% as of 2013-14. The

core capital to RWA ratio is 9.35% and the supplementary capital to RWA ratio is 1.8%.

0

2

4

6

8

10

12

14

2009-10 2010-11 2011-12 2012-13 2013-14

%

Capital to RWA ratio

Core Capital


Tota Capital Fund

Company Analysis of Everest Bank Ltd. -...

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