NIC Asia Bank Ltd - Fundamental Analysis of FY 2070/71

एनआइसि एशिया बैंक लिमिटेडको विश्लेषण
पूँजी, जगेडा, निक्षेप तथा लगानी
चुक्ता पूँजी २ अरब ३१ करोड १५ लाख ५२ हजार, डिबेन्चर ५० करोड, जगेडामा २ अरब ८९ करोड १३ लाख ३० हजार, निक्षेप ४४ अरब ९८ करोड २८ लाख ५५ हजार, कर्जा लगानी ३६ अरब ३१ करोड १३ लाख ४४ हजार र अन्य लगानी ६ अरब ४८ करोड ५३ लाख ७१ हजार रहेको छ |

NIC Asia proposes 20% cash dividend

NIC Asia has proposed 20 percent cash dividend to the shareholders from the net profit it earned in the last fiscal year 2069/70.

The BoD meeting of the bank held yesterday took the decision to this effect. The decision, however, is subject to the approval of Nepal Rastra Bank and the upcoming AGM of the commercial bank.

NIC ASIA offers share loan scheme at 10.5% interest; up to 70% financing

NIC ASIA Bank has come up with an attractive share loan scheme targeting investors in the stock market at just 10.5 percent interest rate.

“We provide loan against shares of listed companies up to 70 percent against shares on the basis of 180 days of weighted average price or the prevailing price, whichever is lower,” Bhumika Thapa of NIC ASIA . “It only takes three to five days to process the loan.”

Victims demand auction of properties of Oriental Builders at market price

The depositors of Oriental Cooperative have demanded auction of the properties of the cooperative at prevailing market price, alleging that NIC Asia Bank was trying to auction the properties in an “unjust” manner.

The depositors of the cooperative in crisis claim that the bank is trying to auction the properties of Oriental Builders, a subsidiary of the cooperatives, so as just to recover its loan.

Nepse Wrap up (Review period 4th Aug to 8th Aug, 2013)

The joyful and exciting bullish ride of the market came to halt this week as the secondary market of Nepal found itself in wait and watch condition.

Following more than 50 points surge within one month time, the investors were in a row to book their profit between the levels of 440 to 450 leading to a sluggish market scenario.

Mergers of Banks & financial institutions gain momentum

The merger policy introduced by the central bank two years back has been successful as almost one-fourth of the financial institutions have opted for mergers since then.

Since April 2011, when Nepal Rastra Bank (NRB) introduced the Merger Bylaws, 43 financial institutions have merged so far and 13 more are in the process of merging.

Big bank aren't willing to merge: Tulasi Gautam (CEO of MBL)

He said that the first thing that parties entering merger must be clear about is the objective behind the merger. In many cases there is a lack of clarity when it comes to the objective, said Gautam.

Other issues that crop up during the merger process are electing representatives on the board of directors, selecting the executive head, fixing the share swap ratio and reorganizing the staff.

NIC ASIA 40% Bonus and 40% Cash, Good bonus share of Global IME

As per the reliable source, i have just found out that the BOAN 50% left out paid up capital i.e. Rs 100 crores (approx) will be given as bonus share to the shareholders of the NIC Asia Limited.

Nic Asia will also distribute profit from the profit they have made till the Asad end to its shareholders.
NRB has made it compulsory that the left out capitalized capital will be disbursed as a bonus share to the merged institution.

Investors confidence pushes Nepse up 7.55 points

Along with northbound share prices, transaction volume in the stock exchange surged by 84 per cent as the investors are betting for the better days to come, this week –July 21 to 25.

The benchmark index rose by 7.55 points as the more investors are coming in with expectation of better return. The transaction volume that stood at Rs 393.5 million last week surged to Rs 724.6 as of this week.

Nepse Wrap up ( Review period 21st July to 25th July, 2013 )

The murky environment in Nepse came to an end post the timely announcement of the full budget. This week accompanied by the favorable monetary policy brought by the Nepal Rastra bank (NRB), the market confidence even climbed a further height.

The local bourse this week advance to four months high of 535.72 levels on 21st July, 2013, before coming to settle at 529.07 levels on 25th July, 2013. Compared to prior week’s closing level, the market index rallied by 7.54 points.

NIC Asia Bank provides financial support for upgradation of Ghat in Biratnagar-10

NIC foundation — charity arm of NIC Asia Bank — has provided financial support worth
Rs 51,000 to Shamshan Subyabasthapan Samiti, Biratnagar-10, Hatkhola, Morang district for proper management and upgradation of Ghat. Branch manager of Biratnagar Branch of NIC Asia Santosh Rathi handed over the support amount to the chairman of the Samiti Beni Gopal Mundara amid a programme organised at the branch premises on Tuesday. NIC Foundation has been working in the community to help bring about constructive changes in the society.
src THT

Expert views - Profitable Companies for long term investment.

I have always been advocating for long term investment. I would advise you to atleast hold for a period of 3-5 years and invest in those scripts which have been constantly providing dividends to its shareholders i.e. companies with good dividend history to make sure that you get returns on your investment for the duration of time you hold. Also make sure that the companies are the ones with high growth prospects, keeping in mind to diversify your portfolio.

Here is my list of companies that would be profitable in the long term:

Nepse index up six per cent in six days as share prices increase.

Due to the possibility of better returns in the fiscal year, the stock market index surged by 14.19 points, even bringing the circuit breakers into action.

The benchmark index at Nepal Stock Exchange has reached 535.72 points — a jump of almost 30 points in the last six trading days. With expectations of handsome dividends in the new fiscal year, investors are bidding high for shares.

No. of banks, financial institutions & micro-finance by six

With mergers going on, the number of banks and financial institutions and micro-finance institutions reduced by six in the last fiscal year. At the end of the last fiscal, the number of A, B, C and D class financial institutions decreased to 207 from the previous fiscal’s 213.
Likewise, in the fiscal year 2012-13, the number of branches of commercial banks was 1,486, up from the 1,425 in the previous fiscal. The branches of development banks increased to 764 from the earlier year’s 687. The branches of finance companies decreased to 242, down from 292, thanks to mergers. Branches of micro-finance institutions also increased to 634 from 550.

Stock Investors regain faith due to timely budget

The first week (July 14 to 18) of the new fiscal year saw the stock market pushing for new heights, boosting investor confidence.

The full budget which was announced on schedule last week has signalled better economic conditions which helped investors regain faith in the share market. Moreover, financial institutions started providing margin financing for share purchases since the beginning of the fiscal year. In the last two months of the previous year, financial institutions had slowed down in issuing short-term loans against shares due to the need to provision one per cent of the loan in the year-end balance sheet. But with the new fiscal year, they have resumed margin financing.

Nepse index crosses 520 points.

The stock market index swished past 520 points today, as investors with loads of cash went on a buying spree.

“The beginning of the fiscal year, which has flushed investors with margin financing, has contributed to higher transaction levels and surge in share prices,” pointed out share analyst Rabindra Bhattarai.

Banks and financial institutions were limiting credit flow in the last few months of the fiscal year 2012-13 due to Nepal Rastra Bank’s rule that makes it mandatory for banking institutions to set aside one per cent of the total loan for loan loss provisioning.

NEPSE ended this FY closing at 518.27, gaining 128.55 pts, or 32.99% over the last fiscal closing.

Fiscal year 2069/70 augured well for the secondary market of Nepal as its performance fared better than the last year’s.

Though the market entered the year in a battered condition, with political gloom hanging over the country following the dissolution of Constituent Assembly, several factors like margin lending, mutual fund, Central Depository System (CDS), dividend payout ratio of the companies and other factors salvaged the performance of the local bourse.

The market ended its fiscal 2069/70 run closing at 518.27, gaining 128.55 points, or 32.99 percent, over the last fiscal closing.

NIC Asia shares likely to hit trading floor on Asar 30; price may hover close to SBI, NIB shares

NIC Asia shareholders who have been anxiously waiting for the trading in the bank’s shares to open have a reason to cheer.

Nepal Rastra Bank has already given its approval for trading in the shares of NIC Asia, formed after the merger between NIC Bank and Bank of Asia Nepal. Now, the bank’s shares will hit the trading floor as soon as the market regulator SEBON gives a green signal.

As NIC Asia officials have said that they are trying their best to get the trading started by the end of this month, the trading is expected to begin from Sunday.

Raising capital requirement of banks and financial institutions

As soon as the banking sector regulator's intention of raising capital requirement of banks and financial institutions became evident last week, Sanjib Subba updated his Facebook status saying: "We[should] target [raising paid-up capital of commercial banks to] Rs 5 billion in the next three years and Rs 10 billion in the next 5-7 years [from the existing Rs 2 billion]."

The pointer made by the CEO of National Banking Training Institute seems timely, considering the money squeeze that flares up in the banking sector every now and then.

Earlier this year, the banking sector felt the credit squeeze a couple of times following shortfalls in government spending, lower growth in remittance income and relocation of deposits from banks to government coffers due to seasonal tax payments.

The result: the average short-term interbank rate ¿ the rate of interest at which banks lend money to each other -- jumped to as high as 6.79 percent in mid-February from as low as 0.6 percent in January. The rates then moderated to 1.85 percent in the last week of March, but only to rise to 6.8 percent in the last week of April.

NIC Asia Bank Ltd comes into operation

Financial institutions need to hold back on demanding more facilities to get merged as merger itself provides opportunities for business expansion, according to the central bank governor.

During the inauguration of NIC Asia Bank Ltd ¿ the merged entity of Bank of Asia Nepal and NIC Bank ¿ Nepal Rastra Bank (NRB) governor Dr Yubaraj Khatiwada said, "Mergers are meant to make the merged entity competitive and able to run the business cost-effectively, and banks should not feel like they are doing it for the central bank."

NIC Asia Bank ¿ that became fully operational today ¿ is the first commercial bank that has been formed through a merger between two class `A' financial institutions in the history of the Nepali banking system. "Not only has the bank become a trendsetter in terms of merger between big institutions, it has also become a systemically important bank in the financial system due to its size," the governor said.

Following the merger, NIC Asia Bank now serves more than 270,000 customers with deposits worth Rs 38 billion and loans worth Rs 33 billion.

It will from now on provide banking services through its 53 branches. It has paid up capital of Rs 2.31 billion, however, its capital base is around Rs five billion, including reserve and retained earnings. Dr Khatiwada also informed that the time had come for banks to increase their capital further. "Though higher capital does not guarantee better performance, it makes banks more sturdy and infuses confidence in them," he said.

NIC Bank and Bank of Asia, which had started the merger procedure in May 2012, were granted Letter of Intent for merger by the central bank on July 23, 2012. The Office of Company Registrar granted the final approval for the two banks to merge on May 14, this year. NRB had specifically suggested the banks that had numerous common directors and common promoters to get merged.

"We, at first, had sought a strategic partnership from foreign banks but could not find one due to the policy volatility of Nepal," said CEO of NIC Asia Bank Sashin Joshi, adding that the merger was not an easy process. He also pointed out the need for better facilities and clear legal provisions that will make mergers more attractive for other banks.

"There is a merger guideline to guide the financial institutions to opt for mergers, but if there were legal provisions that facilitated acquisition then the Nepali financial sector would see more financial institutions that are smaller or in trouble being acquired by larger and able ones," said Joshi.

Nepal Stock Exchange that had halted trading of the banks due to the merger procedure since the last one year, will resume the trading of the new NIC Asia Bank soon. Shareholders of Bank of Asia Nepal will be issued new share certificates equivalent to one share of NIC Asia Bank for two shares of Bank of Asia Nepal. The due diligence audit of the banks had determined 1:2 share swap ratio between NIC Bank and Bank of Asia Nepal.
Source: nepalsharemarket