ICRA rates Century Commercial Bank’s IPO below-average

Nepal’s only credit rating agency — ICRA Nepal — has assigned Century Commercial Bank’s proposed Initial Public Offering a rating of below-average. The bank is offering ordinary shares worth Rs 920 million to public in near future.

ICRA Nepal has pointed out the grading is constrained by bank’s limited track record, lack of diversity in earnings, low seasoning of credit book and inferior deposit profile compared to class ‘A’ banking industry systemic average, low profitability, competition from other commercial banks and uncertain operating environment that banks in Nepal are currently facing.

 Nonetheless, its plus factors are the bank is a class ‘A’ commercial bank, has lower exposure to real estate sector compared to systemic average, and comfortable assets quality indicators so far. Century is going to be last commercial bank to issue shares to public. -  THT