26th AGM

PRESS STATEMENT Kathmandu, January 10th 2013. Nepal Investment Bank Limited (NIBL) is proud to announce its 26th Annual General Meeting.  Since its establishment, with a paid up capital of NPR 30 million, the bank has been successful in delivering maximum returns to its shareholders and proved itself to one the leading banks in Nepal, and since achieved a paid up capital of more than NPR 3.76 billion (including proposed bonus shares).   This proves to be the highest paid up capital amongst the private sector banks in the country, and is almost twice the minimum paid up capital prescribed by Nepal Rastra Bank; which strengthened the foundation and the credibility of NIBL.

 

Brief Review of Bank’s Performance of FY 2068-69

The Fiscal year 2068-69 was yet another challenging year for NIBL and the banking industry as a whole.  However, in spite of these challenges, the bank was able to post satisfactory results. Total assets, deposits and lending of the Bank grew by 12.7%, 13.7% and 2.4% to reach NPR 65.75 billion, NPR 57.01 billion and NPR 42.90 billion respectively. Total investments posted a robust growth of 40.6% to reach NPR 10.64 billion. However, owing to surplus liquidity in the market, the returns on investments are very low which have adversely affected the bank’s interest income. Despite fall in net interest income by NPR 14.8 million (this year NPR 2.16 billion against last year’s NPR 2.18 billion), the operating profit before provision posted a growth of NPR 49.8 million mainly due to increase in fee based and exchange income and tight control on overheads. However, due to increase in loan loss provision on real estate loans, the net profit declined by 11.7% to reach NPR 1.03 billion against last year’s net profit of NPR 1.17 billion.

The capital adequacy ratio and credit deposit ratio (LCY deposit with equity) are maintained at comfortable levels of 11.1% and 72.4% respectively. Nepal Rastra Bank requires banks to maintain minimum CAR of 10% and CD ratio (LCY deposit with equity) of not more than 80%.

Our return on paid-up capital and return on shareholders’ fund stand at 34.5% and 20.1% respectively. Our market share in deposits and lending stands at 6.6% and 7.0% respectively. Due to entrance of new players, there has been some shrinkage in our market share. NIBL, however, is still a dominant player and leader in the market.

 

 

Changes made in the Board of Directors and reasons therefore:

There were no changes in Board of Directors during the year. The Chairman, Mr. Prithivi B. Pandé, who was also the Chief Executive Officer (CEO) of the Bank, resigned from the post of CEO w.e.f Shrawan 1, 2069. Mr. Jyoti Prakash Pandey, who was General Manager, was appointed as the CEO by the Board w.e.f Shrawan 1, 2069.

However, post year-end, Mr. Nidan Raj Lamichhane had been nominated as director by Rastriya Beema Sansthan in place of Mr. Omkar Nidhi Tiwari due to his.retirement. Mr. Lamichhane also retired from Rastriya Beema Sansthan, thereafter, Miss Mathura Dali was appointed as director representing Rastriya Beema Sansthan.

Similarly, Mr. Surendra Bahadur Singh, public director of the Bank, resigned from the Board of Directors with effect from Mangsir 29, 2069 (December 14 2012).

Rastriya Banijya Bank has not nominated any director on the Board of the Bank in compliance with the directive of Nepal Ratsra Bank dated Shrawan 10, 2067.

 

The Amount Recommended for Distribution as Dividend:

The 383rd meeting of the Board of Directors of the Bank has proposed 5% cash dividend (NPR 150,646,210) and 25% stock dividend (NPR 753,231,050) from the profits of the Bank on the Bank’s paid up capital.

 

Other Matters:

New Branches, Products and Services during FY 2068-69:

 

Branch Network: The bank continued its focus on improving the performance and service quality of our branch networks. In our effort to strengthen customer relationship we have developed a Customer Relationship Management (CRM) module. Currently we have 41 branches and one extension counter along with 68 ATM networks. Our branch network covers remote districts such as Kailali, Jumla in the West to Solukhumbu and Jhapa in the East.

 

Ebanking: NIBL has the highest base of eBanking clients in the country with more than 30,000 users. Through eBanking our clients can buy eTickets and holiday pakages (myTrip2nepal.com), purchase network equipments (networkstore.com), make payments for Broadlink Wi-fi and Broadtel recharges, purchase bidding vouchers (nepalbid.com), purchase website domains (ohodomain.com) and purchase deals online (sastodeal.com) with our online partners. Our eBanking clients can  make payments for ADSL, landline bills and pre-paid and postpaid lines (Nepal Telecom GSM and CDMA) online and though ATMs. Additionally, our eBanking facilities include trade of commodities online with Commodities Future Exchange (CFX) and domestic remittance of funds to more than 1000 agent locations for NIBL customers. We have added new e-commerce services which include online subscription of newspapers. All these services are available at all times.

 

Cards: We have over 400,000 cardholders in our bank and have issued 60,000 cards on behalf of our members. As pioneers in the card market in Nepal, NIBL has taken a proactive role in consistently providing our customers with new products and services in the card market. In addition to NIBL's 68 ATMs we have 86 NPN (National Payment Network) member ATMs and 313 VISA associate member ATMs in our network. We have 37 financial institutions in our Card Network of which 8 are Visa members and 29 NPN members.

 

Other Achievements: We have maintained our credit rating of Nepal [A] for a third consecutive year, undertaken by the Indian Credit Rating Agency (ICRA), an affiliate of Moody’s Investor Group. This reflects our strong creditworthiness and our position as the first and only bank in Nepal to have a credit rating, thereby adding additional transparency for our shareholders and regulators.

 

Human Resources: We have a total of 883 staff members who are committed to the mission and values of the Bank. Of the total staff strength, 42% are female staffers and 120 staff members have completed more than 10 years of service at NIBL. The Bank is committed to invest in people through our learning programs designed to increase capabilities of our staff to enable them to deliver superior performance; and NIBL will always endeavor to attract and retain skilled and motivated workforce that cater to the needs of our stakeholders.

 

Corporate Social Resonsibility (CSR): NIBL has been a trendsetter in promoting a variety of social causes in Nepal. Our annual marathon is a joint platform to raise funds for heritage conservation as well as to promote healthy living. The funds from the marathon will be used towards restoration project of Bhai Deghah Temple, which is a 16th century stucture at Patan Durbar Square that collapsed in the great earthquake of 1934 A.D. (1900 B.S.). Additionally, NIBL extended financial support to the Nepal Youth Business Foundation, construction of Adarsa Multipurpose Campus of Syangza, water supply project in Bhurungkhel, construction of Traffic Police Office at Durbarmarg and the construction of international standard tennis court by All Nepal Lawn Tennis Association. The bank has been assisting some students for their primary education through Pahad association as part of our CSR ethos to help those in need.

 

Future Plans: The Bank intends to open few new branches and deploy more in the coming year. We will be rolling out new products and services to penetrate the market and provide financial solutions for mass consumers by providing maximum convenience through the use of technology and innovative payment mechanisms. Branchless banking would enable NIBL to promote banking services in rural areas. The Bank is working to introduce new products in the card business, a loyalty card in our pipeline.We intend on expanding our remittance market and optimizing our use of technology. NIBL is awaiting approval from Nepal Rastra Bank to set up a Microfinance company. Lastly, as one of the leading banks in the country, our long term efforts for growth and delivery of quality services continue.

 

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