Research @ ResCon:

The Accumulated Net Profit summary of the Commercial Bank Group is given below.

Up to Q4 of 2065/66:                              Rs 11.600 billion
Average Net Profit at Q4 2064/65:          Rs 552.400 million

Up to Q4 of 2064/65:                              Rs 8.422 billion
Average Net Profit at Q4 2064/65:          Rs 350.930 million

Increment in Net Profit:                          114%

Please note that the table below comprises of figures of all the commercial banks (listed, not listed and government-owned banks) except for DCBL, Sunrise & Lumbini (these banks are yet to publish their financial statements).

1. The 4th Quarter of FY 2065/66 unaudited Net Profit figures of Commercial Bank group clearly show that commercial banks, in general, performed well this quarter as compared to corresponding quarter of the previous year.

2. On an average, commercial banks’ profit advanced by 114% this year. The group accumulated Rs 11.600 billion in net profit this quarter compared to Rs 8.422  billion net profit in the corresponding previous year.

3. The net profit of each bank is 552.40 million on an average.

4. Bank of Asia’s, Prime Commercial Bank and Nepal Bangladesh Bank have highest net profit advancement. Their profit figures have exceptionally increased by 1279%, 406% and 209% respectively over the corresponding previous quarter.

5. NMB Bank, Nepal Credit and Commerce and Global banks are the only banks that have profit figures in the negative zone.

6. Nepal Bangladesh Bank has posted the highest net profit amount of Rs 2.472 billion. Other followers are Rastriya Banijya Bank, Nabil Bank and Standard Chartered Bank respectively.

Amount in Rs/million

#	Company	FY 2065/66 (Upto 4th Qtr)	FY 2064/65 (Upto 3rd Qtr)	Change
1	Bank of Asia Nepal	61.51	4.461	1279%
2	Prime Commercial Bank	141.777	28.007	406%
3	Nepal Bangladesh Bank	2472.19	800.408	209%
4	KIST Bank	88.376	47.271	87%
5	Citizen Bank	95.81	54.841	75%
6	Laxmi Bank	186.169	120.031	55%
7	Siddhartha Bank	215.602	143.173	51%
8	Kumari Bank	258.462	174.93	48%
9	Everest Bank	624.068	451.218	38%
10	Nabil Bank	1031.05	746.468	38%
11	Nepal SBI Bank	334.35	247.771	35%
12	Nepal Investment Bank	914.575	696.732	31%
13	Nepal Industrial & Commercial Bank	316.646	243.058	30%
14	Bank of Kathmandu	461.507	361.499	28%
15	Standard Chartered Bank	1028.28	818.921	26%
16	Himalayan Bank	742.425	635.869	17%
17	Rastriya Banijya Bank	2032.23	1770.554	15%
18	Machhapuchchhre Bank	92.935	85.016	9%
19	NMB Bank	61.339	72.822	-16%
20	Nepal Credit & Com. Bank	410.621	498.755	-18%
21	Global  Bank	30.488	61.234	-50%
22	DCBL Bank	N/A	58.749	N/A
23	Sunrise Bank	N/A	-27.209	N/A
24	Lumbini Bank	N/A	327.649	N/A
Total		11,600.41	8,422.23	2392%
Average		552.4	350.93	114%

Such a phenomenal growth in Quarter to Quarter net profit indicates that our commercial banks are performing well amidst the global financial crisis. However, the challenge now is to sustain the growth and stability during these recessionary times.

ResCon Tip-Off:

We know that there exists a strong positive correlation between Earnings and Market Share Price figures. That is, if earnings’ figure of a company increases, the share price of the company will increase too. But in case of the Nepalese commercial banks, we are not seeing the same phenomenon. In spite of better performance, the share prices of most of the commercial banks are down.

If you are someone who follows Warren Buffett, you will certainly know that the market price of a company must always address the fundamentals of that company. In our case, there are some good commercial banks which are undervalued currently. These banks’ share prices will definitely go up in the future. All you need to do is put on your thinking cap and choose the correct one.
Well if you think you need some professional help, let us know.