Corporate Scorecard
Second Quarter Performance of Banks & Fincos (Quarter ending on 14.01.2008)

Banks and finance companies have brought out their six monthly reports for the fiscal year 2007-2008.

Commercial Banks

Most of the commercial banks have recorded an increase in their net profit during this period as compared to the corresponding period of last year.

Nepal Bangladesh Bank has reported the highest net profit increase (628.76%) in this period. This increase can be attributed to a reduction in the provision for possible losses as well as a write back of provision for possible losses. Laxmi Bank has also increased its net profit by 146.68%, apparently as a result of a significant increase in the interest income.

However, Nepal SBI Bank has recorded a decrease in its net profit by 9.37% due to increase in staff and other expenses. The net profit for government owned Nepal Bank Ltd. (under the management of Nepal Rastra Bank for the last six months) also has reduced by a noticeable 79.02% apparently because of massive reduction in the write back of provision for possible losses.

Among the recently established banks, Citizens Bank International and Global have earned net profits of Rs. 30.91 millions and Rs. 32.8 millions while Prime Bank and Bank Of Asia Nepal have incurred net losses of Rs. 8.63 millions and Rs. 1.4 millions, respectively.

Commercial Banks Interest Income Interest Expenses Net Profit/Net Loss 14.01.2008 14.01.2007 % Change 14.01.2008 14.01.2007 % Change 14.01.2008 14.01.2007 % Change Kumari Bank Ltd. 454292 341963 32.85 216190 178970 20.80 93215 58503 59.33 Nepal Investment Bank Ltd. 957440 739846 29.41 -438868 -328644 33.54 302415 222458 35.94 Nabil Bank 881585 727388 21.20 335969 252504 33.05 345210 329038 4.91 Nepal SBI Bank Ltd. 424923 385908 10.11 212883 212805 0.04 147329 162573 -9.38 Nepal Bank Ltd. 812360 818722 -0.78 362993 338047 7.38 69683 332201 -79.02 Standard Chartered Bank Nepal Ltd. 767719 696252 10.26 230051 199805 15.14 394810 348151 13.40 Prime Bank Ltd. 44781.14 - - 191148.39 - - -8632.43 - - Citizens Bank International Ltd. 157903.81 - - 95785.9 - - 30919.3 - - Himalayan Bank Ltd. 938973 812874 15.51 418436 361819 15.65 258200 226505 13.99 Lumbini Bank Ltd. 247041 226540 9.05 131412 126150 4.17 295300 217432 35.81 Machhapuchhre Bank Ltd. 358734 313971 14.26 196235 189930 3.32 84527 25313 233.93 Laxmi Bank Ltd. 319798 194238 64.64 180616 119967 50.55 60071 24351 146.69 Siddhartha Bank Ltd. 322577 199373 61.80 180951 116211 55.71 72245 39912 81.01 Everest Bank Ltd. 665800 533782 24.73 283463 245865 15.29 182276 123535 47.55 Nepal Industrial & Commercial Bank Ltd. 424096 345395 22.79 -230264 -208498 -10.44 121291 71816 68.89 Bank Of Kathmandu Ltd. 472450 383769 23.11 197287 166540 18.46 149121 112144 32.97 Nepal Bangladesh Bank Ltd. 370367 390606 -5.18 196647 245677 -19.96 578881 -109478 628.76 Rastriya Banijya Bank Ltd. 1080208 1022534.3 5.64 511362 457209 11.84 381541 630747 -39.50 Global Bank Ltd. 139433 - - 84522 - - 32810 - - Bank Of Asia Nepal Ltd 34446 - - 18017 - - 1490 - - Not in operation in the first half of last fiscal year.

Development Banks

Like commercial banks, most of the development banks have shown an increase in their net profit as compared to the corresponding period of the preceding year.

Long-established Nepal Development Bank has reduced its net loss by 75.47% while Sanima Bikas Bank has increased its net profit by 134.67% helped by a whopping 300.89% increase in its non-interest income. Similarly, Ace Development Bank has notably increased its non-interest income by 76.54% and its net profit has gone up by 21.22% in this period.

However, Development Credit Bank has shown a reduction in net profit by 7.02% due to increase in staff and other expenses. Garima Bikas Bank, Country Development Bank and Kamana Bikash Bank have incurred net losses of Rs. 0.612 million, Rs. 12.356 millions and Rs. 0.866 millions, respectively.

Some development banks have shown a remarkable leap from net loss in the same period last year to net profit. Muktinath Bikas Bank recorded the highest increase in net profit: 2478.56%.

Development Banks Interest Income Interest Expenses Net Profit/Net Loss 14.01.2008 14.01.2007 % Change 14.01.2008 14.01.2007 % Change 14.01.2008 14.01.2007 % Change Nepal DEP Bank Ltd. 42336 16086 163.19 23355 7465 212.86 3070 -2836 208.25 Muktinath Bikas Bank Ltd. 7821 - - 4362 4.6 94726.09 2037 -85.64 2478.56 Sanima Bikas Bank Ltd. 99534 51522 93.19 62347 28775 116.67 12039 5130 134.68 United Development Bank Ltd. 1799 8125 -77.86 1898 4021 -52.80 -45112 -10285 338.62 Business Development Bank Ltd. 21833 13501 61.71 12818 8184 56.62 5186 1560 232.44 Malika Vikas Bank Ltd. 28882 23699 21.87 17970 16816 6.86 6250 -837 -846.71 Development Credit Bank Ltd. 131194 116703 12.42 74769 64647 15.66 30286 32574 -7.02 Garima Bikas Bank Ltd. 88 - - 94 - - 612 - - Public Development Bank Ltd. 5575 2022.5 175.65 2057.81 693.9 196.56 452.96 361.7 25.23 Triveni Bikas Bank Ltd. 16311 6631 145.98 7665 3058 150.65 4868 1920 153.54 Nepal Development Bank Ltd. 38506 45504 -15.38 37944 51285 -26.01 -13872 -56570 -75.48 Country Development Bank Ltd. 820.91 - - 389.32 - - -123.56 - - Pashchimanchal Development Bank Ltd. 33359 17539 90.20 19942 11576 72.27 7786 1949 299.49 Ace Development Bank Ltd. 61739 43566 41.71 36545 24903 46.75 5912 4877 21.22 Gandaki Bikas Bank Ltd. 15932 7689 107.21 8981 3408 163.53 5099 3408 49.62 Himchuli Bikas Bank Ltd. 26872.99 9084.89 195.80 17299.65 5568.29 210.68 4793.73 1086.42 341.24 Siddhartha Development Bank Ltd. 39413 19307 104.14 21826 10845 101.25 7314 19307 104.14 21826 10845 101.25 7314 3395 115.43 Gurkha Development Bank Ltd. 71976 48479 48.47 36115 23474 53.85 8888 6267 41.82 Clean Energy Development Bank Ltd. 42298 5163 719.25 26908 2142 1156.21 1106 -8294 -113.33 Nepal CSI Development Bank Ltd. 24150 20831 15.93 16704 16914 -1.24 9088 -95854 109.48 Subechha Bikas Bank Ltd. 13826 7779 77.73 7133 4638 53.79 2420 -368 757.61 Kamana Bikash Bank Ltd. 405.99 - - 402.69 - - -866.05 - - Pashupati Development Bank Ltd. 11454 7833 46.22 5192 4817 7.78 1790 1001 78.82 Agricultural Development Bank Ltd 179660 1891603 -5.02 738498 801043 -7.80 395452 488642 -19.07

Finance Companies

Also the majority of the finance companies have reported an increase in their net profit in the first six months of the current fiscal year as compared to the corresponding period last year.

Nepal Housing & Merchant Finance has considerably increased its net profit by 369.82% despite reduction in the total operating income. The major reason for the profit increase seems to be due to the huge non-operating income and reduction in the provision for bad debt as well as increase in the write back of the provision made for bad debt. Royal Merchant Banking & Finance has also increased its net profit by a remarkable 366.97% supported by a 62.69% raise in the interest income. Also Union Finance, Imperial Financial Institution and NIDC Capital Markets have shown a noticeable increase in their net profit.

However, Prabhu Finance has incurred a net loss of Rs. 16.8 millions in this period due to heavy increase in the interest and non-interest expenses. In the case of United Finance and National Finance Ltd., the net profits have reduced by 18.25% and 77.42%, respectively. Unique Financial Institution has incurred a net loss of Rs. 10.16 millions in this period.

Other prominent companies in this category, such as Annapurna Finance, KIST Merchant Banking & Finance, Goodwill Finance, Nepal Share Markets & Finance, Lalitpur Finance have increased their net profit compared to the same period last year.

Finance Companies	Interest Income			Interest Expenses			Net Profit/Net Loss
	14.01.2008	14.01.2007	% Change	14.01.2008	14.01.2007	% Change	14.01.2008	14.01.2007	% Change
Narayani Finance Ltd.	34231	29657	15.42	19965	18249	9.40	7986	5193	53.78
Union Finance Ltd.	38413	30995	23.93	24406	23485	3.92	4951	1392	255.68
Annapurna Finance Company Ltd.	82384	61156	34.71	49004	34785	40.88	18448	14119	30.66
Gorkha Finance Ltd.	18745.1	14524.16	29.06	12619.93	9864.04	27.94	4123.06	2002.04	105.94
Imperial Financial Institution Ltd.	21378.4	10492	103.76	16202.63	7980	103.04	3963.77	1330	198.03
Nepal Finance Ltd.	26893	18597	44.61	14731	11005	33.86	12113	8687	39.44
Nepal Housing and Merchant Finance Ltd.	44214	42506	4.02	29272	25526	14.68	13874	2953	369.83
Central Finance Ltd.	14414	27728	-48.02	25956	17277	50.23	13727	8445	62.55
NIDC Capital Markets Ltd.	36809	29673	24.05	22847	21703	5.27	17306	4009	331.68
Shree Investment and Finance Co. Ltd.	40695.77	36633.32	11.09	26519.49	23762.29	11.60	10883.41	7915.22	37.50
Nepal Merchant Banking & Finance Ltd.	116668	95606	22.03	75713	56981	32.87	30095	25823	16.54
Unique Financial Institution Ltd.	2473.97	-	-	669.63	-	-	-10163.75	-	-
ICFC Bittiya Sanstha Ltd.	52188.55	36147.6	44.38	32101.25	18942.8	69.46	11311.79	7325.68	54.41
KIST Merchant Banking & Finance Ltd.	91702	53504	71.39	54960	27829	97.49	16587	12646	31.16
Prudential Bittiya Sanstha Ltd.	23731	14320	65.72	14390	7513	91.53	6823	4476	52.44

United Finance Ltd.	51897	34945	48.51	27096	18042	50.18	16840	20601	-18.26
International Leasing & Finance Co. Ltd.	81348.97	64826.97	25.49	55626.97	35919.51	54.87	17483.46	11230.05	55.68
Royal Merchant Banking & Finance Ltd.	39464	24257	62.69	24281	17962	35.18	7182	1538	366.97
Crystal Finance Ltd.	29166	27909	4.50	22438	20468	9.62	4722	3740	26.26
World Merchant Banking & Finance Ltd.	52871	47689	10.87	36635	30847	18.76	10820	8039	34.59
Prabhu Finance Company Ltd.	22879	13005	75.92	23428	7397	216.72	-16821	1517	-1208.83
Goodwill Finance Ltd.	28600.63	21627.51	32.24	19107.72	14207.73		28600.63	21627.51	32.24	19107.72	14207.73	34.49	8043.68	6484.28	24.05
Lumbini Finance & Leasing Co. Ltd.	41144	32508	26.57	21433	19212	11.56	17614	10279	71.36
Nepal Share Markets & Finance Ltd.	80357	66667	20.53	59736	49442	20.82	18995	16400	15.82
Lalitpur Finance Ltd.	61871	50506	22.50	36401	31807	14.44	28362	14511	95.45
National Finance Ltd.	31384	38342	-18.15	18006	17774	1.31	3590	15898	-77.42

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Currency & Money

Global Economy

• The Bank of England left interest rates unchanged at 5.50%,

• The Bank of Canada cut interest rates by 0.25% to 4.00%

• The ECB left interest rates unchanged at 4.0%

• The Federal Reserve cut interest rates twice by 75 bps and 50 bps to 3.00%.

The Federal Reserve held an emergency meeting ahead of the scheduled January meeting and announced a 75 bps cut in the Fed funds rate to 3.50% pa. The Fed also cut the discount rate by 75 bps. Regional Fed President Poole voted against the interest rate move with concerns that it was not justified ahead of regular meeting.

Even with an aggressive cut, markets were still pricing in the potential for a further cut in rates at the regular January 30th FOMC meeting.

The Fed cut rates for the second time in a week, this time by 50bps, providing further support for indices but sparking renewed anxiety about inflation and the state of the economy. However, the severity of the problems with job growth was not clear until the release of the non-farm payrolls report. In the month of January, non-farm payrolls fell for the first time in 4 years. The 17k jobs that were lost, makes it difficult to argue that the US economy is not already in a recession and as a result, the Federal Reserve will need to continue to lower interest rates.

World stocks tumbled, leading bond yields mostly lower, after an economic stimulus package announced by President George W. Bush left investors somewhat disappointed. Bush called for a package of tax cuts and other measures totaling around 1.0 percent of U.S. gross domestic product, or up to $150 billion, after weak recent reports on employment, retail sales, factory activity, and housing construction this month suggested the United States -- the world's largest economy --may be heading into recession. The package has ideas like tax rebates, incentives for businesses and extensions of unemployment insurance.

As widely expected, ECB left rates unchanged at 4.00%. Comments from ECB officials were generally mixed with President Trichet stating that the bank would need to react to a crisis situation. Most ECB members still took a tough stance on inflation, especially from Weber. The Spanish Finance Minister stated that some members of the ECB were considering a cut in interest rates.

BoE left rates unchanged at 5.50%. As usual, BoE did not issue a statement for keeping rates unchanged. Market continues to expect further rate cut from BoE in the near term. Market volatility was extremely high as major moves in the equity and bond markets spilled over into the currency markets. Global recession fears increased sharply before some composure returned.

EURO - USD The dollar gained support when global stock markets weakened sharply even though fears were triggered to a considerable extent over the US economy. The dollar strengthened to highs near 1.4350 against the Euro when risk aversion peaked, but the US currency then weakened sharply to lows beyond 1.4750.
GBP - USD Sterling remained under pressure amidst expectation of 25bp rate cut by BoE and weakened to lows below 1.94 against the US currency before a recovery back to 1.9820 as the dollar stumbled and risk aversion eased.
USD - JPY The dominance of risk conditions was illustrated by the fact that the yen strengthened to test the 105.0 level against the dollar before retreating to 107.80. The Euro also weakened sharply to near152.0 against the yen before recovering strongly to 159.
AUD - USD Despite a sharp sell-off in commodity prices, the Australian and New Zealand dollars extended their gains.
INR - USD The rupee came under pressure and weakened to as low as 39.78 after shares fell sharply. However, it strengthened back on expectations of capital inflows after the U.S. Federal Reserve's rate cuts. The Indian Rupee ended at 39.35/36 per dollar.

Gold & Commodities:

Gold prices hit a historic $936.92 per ounce as the yellow metal was also boosted by the weakness of the dollar. Crude oil prices rose after another steep US interest rate cut but fell down below $90.00 p.b on fears of a potential U.S. economic slowdown.

Call Money

The local market was hit hard by liquidity crunch in the month of January due to issuance of shares by Agriculture Development Bank (ADB) and half yearly revenue payment to the government. This resulted in inter-bank rate to go above 8.50% which is above SLF rate. Nepal Rastra Bank was seen supporting the higher rates through increase in Treasury Bills rate. Banks were under tremendous pressure to increase their deposit rates and most of the banks opted for the same. Though NRB injected NPR 4 bio in the market through Repo, banks are still facing liquidity crisis.

The Research Desk (Treasury@Nabilbank)

Disclaimer: Trading in the Forex market carries significant risk of loss of capital. Our recommendations/views above are without any liability on our part. The user of the information will solely be responsible for the actions taken by him/her. The above information has been circulated for the purpose of sharing of our views on the markets without any liability on the part of the presenter/Nabil Bank.

Weekly Movements in NEPSE

Week ending on	No. of Transa- ction	Weekly Trading (Rs. in million)	Overall NEPSE Index (weekly closing)	NEPSE Index by Sectors
				Com Banks	Finance Cos	Insurance Cos	Manu- facturing	Trading	Hotels	Devt. Banks	Others	Power
May 11	1717	85.0	518.28	651.30	435.71	558.39	329.42	155.21	235.27	444.11	696.07	-
May 18	2398	138.6	518.55	559.77	440.38	543.09	329.42	148.71	236.79	442.95	713.14	-
May 25	2976	174.6	525.05	567.51	444.09	540.60	330.70	155.21	237.94	448.40	727.26	-
May 31	1387	133.23	541.38	591.03	448.91	530.59	331.06	155.21	238.71	483.90	731.19	-
Jun 8	1903	219.12	552.06	604.39	456.64	534.17	339.49	155.21	235.36	487.13	743.71	-
Jun 15	1718	281.85	575.07	637.22	461.22	545.35	339.70	155.21	239.48	502.75	750.34	-
Jun 22	1513	270.28	583.44	646.01	462.43	562.40	339.70	155.21	242.17	501.75	775.17	-
Jun 29	1775	258.21	591.65	653.41 258.21	591.65	653.41	464.05	573.55	342.29	155.37	242.55	511.42	807.52	833.80
Jul 6	2314	496.20	613.47	681.89	466.83	592.74	346.43	155.37	242.55	517.93	818.12	836.46
Jul 13	2342	298.02	643.15	726.88	470.16	605.05	348.63	155.37	247.45	536.47	818.18	838.54
Jul 20	2998	393.94	679.90	758.89	-	-	-	-	-	-	-	-
Jul 27	2269	393.33	687.83	774.04	476.83	654.68	348.63	162.03	259.35	534.54	818.12	998.44
Aug 3	2878	301.42	693.23	778.09	486.27	657.48	348.63	162.03	258.41	507.19	818.12	1029.96
Aug 10	4467	463.0	723.32	810.09	503.05	657.43	347.54	162.03	268.22	523.49	818.12	1143.42
Aug 17	10293	278.0	705.69	782.55	513.92	653.37	347.54	162.03	274.35	542.05	818.12	1129.49
Aug 24	1079	193.0	725.86	810.82	520.09	652.57	347.74	162.08	274.54	539.74	818.12	1140.16
Aug 31	791	145.0	739.53	824.91	503.88	648.31	347.74	162.08	276.45	631.01	818.12	1187.91
Sep 7	352	928.0	796.34	883.95	590.20	646.89	347.74	162.03	277.79	675.52	812.12	1439.30
Sep 14	372	111.0	813.77	910.37	527.45	655.62	350.00	162.03	280.95	689.21	812.12	1405.25
Sep 21	445	135.0	879.96	1092.03	535.59	679.58	350.19	162.03	280.95	692.13	818.12	1413.83
Sep 28	474	156.0	878.35	984.86	544.88	691.84	350.19	162.03	281.72	732.40	818.12	1407.75
Oct 4	503	31.6	899.42	100.72	593.97	698.16	350.19	162.03	280.95	869.66	818.12	1373.64

Oct 11	169	46.0	866.73	948.63	637.95	714.83	350.19	162.03	289.72	914.53	818.12	1358.07
Oct 18	1053	18.0	861.37	936.27	652.34	711.54	350.19	162.03	281.14	947.91	818.12	1377.31
Oct 25	1486	27.0	887.59 </