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PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS

PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS. SANJEEV MANANDHAR GENERAL MANAGER PRIME BANK. What is Banking Business?. Banking business is managing various risks in much efficient fashion to trade off between risks and return;. Financial market of Commercial Banks :2065/66.

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PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS

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  1. PERFORMANCE ANALYSIS OF FINANCIAL INSTITUTIONS SANJEEV MANANDHAR GENERAL MANAGER PRIME BANK

  2. What is Banking Business? • Banking business is managing various risks in much efficient fashion to trade off between risks and return;

  3. Financial market of Commercial Banks :2065/66 • Total commercial banks:26 • Total Deposits: 528 billion • Total Loans: 433 billion • Average deposit growth: 19% • Average credit growth: 24%

  4. CAMELS • The six important areas, commonly referred to as the “CAMELS,” for analysis are: • Capital adequacy; • Asset quality; • Management competence and commitment; • Earnings capability; • Liquidity; and • Sensitivity to market risk

  5. PERFORMANCE ANALYSIS • Financial Status of Financial Institutions and where it stands today with other Banks; • Deposit market of Nepal Vis-a- vis Financial Institution • Credit market of Nepal Vis-a – vis Financial Institution • Credit market of Nepal as per Geographical locations;

  6. Various Risks in banks • Banking business, by its nature operates under various risks: • Credit Risks • Operational Risks; • Market risks; • Liquidity risks; • System Risks; • Accounting Risks; • Legal Risks; • Reputations risks;

  7. CREDIT ANALYSIS • ANNUAL GROWTH; • NON PERFORMING ASSETS; • ECONOMIC AND GEOGRAPHICAL CONCENTRATION; • COLLATERAL QUALITY; • DOCUMENTATION QUALITY; • RECOVERY OF INTEREST AND PRINCIPAL;

  8. Loan Growth of Banks

  9. DEPOSIT ANALYSIS • ANNUAL GROWTH; • DEPOSIT CONCENTRATION; • DEPOSIT COMPOSITION; • FIXED DEPOSIT; • SAVING DEPOSIT; • CURRENT DEPOSIT; • CALL DEPOSIT; • COST OF DEPOSIT;

  10. Deposit structure of Banks Others 38B Current 50B Fixed 92 B Savings 192B

  11. Deposit Growth of Banks

  12. LIQUIDITY RISKS • DOES THE FINANCIAL INSTITUTIONS HAVE PERFORMED GAP ANALYSIS; • DOES THE FINANCIAL INSTITUTIONS HAVE ENOUGH INVESTMENT IN LIQUID ASSETS; • DOES THE FI’S HAS REASONABLE CREDIT DEPOSIT RATIO; • DOES THE FI HAS A CAPACITY TO REPLACE MATURING HUGE FIXED DEPSOTIS AND WITHDRAWAL OF CALL DEPOSITS;

  13. INVESTMENT ANALYSIS • DOES THE FI HAS ENOUGH INVESTMENTS IN TREASURY BILLS AND GOVERNMENT BANKS; • WHAT ARE OTHER INVESTMENTS MADE BY THE FI;

  14. ANALYSIS OF INCOME STATEMENT • INTEREST YIELD; • COST OF FUND; • NET INTEREST INCOME COMPARED TO RISKS ASSETS; • OTHER INCOME vs INTEREST INCOME; • OPERATING EXPENSES vs DEPOSIT/LOANS; • STAFF COST vs DEPOSIT/LOANS; • NET PROFIT vs PAID UP CAPITAL; • GROWTH TREND OF INCOMES AND EXPENDITURE; • EXTRAORDINARY ITEMS;

  15. 248 billion good loan market of Nepal

  16. 250 BILLION GOOD CREDIT MARKET GEOGRAPHICAL DISTRIBUTION OF LOANS Mngr/Dgd 3.75 B 20% PKR 6.25 B NPJ 2.5 B KTM 125 B Sngr 8 B H’da 2.5 B BRJ 25 B Jhapa 2.5 B Jpur 2.5 B BRT20 B 17 Source : NRB Reports/estimates etc.

  17. Where PCBL stands: Deposits

  18. Where PCBL Stands: Loans

  19. Growth of PCBL

  20. COMPARITIVE PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion

  21. PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion

  22. PERFORMANCE OF OTHER BANKS (2065/66) Rs in Billion

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