ANNUAL REPORT

2022/23

SUSTAINABILITY
for a Resilient Future

ANNUAL REPORT 2022/23 1

 NABIL HAS A STRONG FOUNDATION DEEPLY
ROOTED IN ITS GLORIOUS PAST. THE STRONG
ROOTS HAVE HELPED US TO CONFIDENTLY
BRANCH OUT IN MULTIPLE DIRECTIONS, AND
SPEARHEAD GROWTH IN THE NEPALI BANKING
INDUSTRY. WE HAVE BEEN SUCCESSFUL
AS A BANK, BUT OUR JOURNEY TOWARDS
SUSTAINABILITY HAS JUST BEGUN.

SUSTAINABILITY
for a Resilient Future
AT NABIL, WE UNDERSTAND THAT WE NEED
TO TREAD AS LIGHTLY AS POSSIBLE AS WE CAN
ON THIS PLANET TO SAFEGUARD HUMANITY’S
COMMON FUTURE. THIS REALIZATION GUIDES
OUR BANKING MODEL WHICH PRIORITIZES
PROTECTING THE ENVIRONMENT, MINIMIZING
SOCIAL RISKS, PROTECTING HUMAN RIGHTS
AND PROMOTING GOOD GOVERNANCE
THROUGH FINANCIAL INCLUSION, ECONOMIC
EMPOWERMENT OF WOMEN & MARGINALIZED
COMMUNITIES, CAPACITY BUILDING AND
COLLABORATIVE PARTNERSHIPS. ENVIRONMENTAL,
SOCIAL AND GOVERNANCE CONSIDERATIONS
HAVE BEEN EMBEDDED IN ALL OUR POLICIES AND
ACTIONS BECAUSE WE BELIEVE IN RUNNING
A SOCIALLY RESPONSIBLE BUSINESS WITH THE
LIGHTEST POSSIBLE ENVIRONMENTAL FOOTPRINT
WHILE DELIVERING EXCELLENT VALUE TO
STAKEHOLDERS.

2 NABIL BANK LIMITED

ANNUAL REPORT 2022/23 ANNUAL REPORT 2022/23 5
ABBREVIATIONS NBBL Nepal Bangladesh Bank Limited SBU Strategic Business Unit
NBV Net Book Value SDG Sustainable Development Goals
NCI Non-Controlling Interest SEBON Security Board of Nepal
NEPSE Nepal Stock Exchange SIM Standing Instruction Manual
ABBS Any Branch Banking Services EM Equity Multiplier
NFRS Nepal Financial Reporting Standards SLR Statutory Liquidity Ratio
ABC Policy Anti-Bribery and Anti-Corruption Policy EPG Electronic Payment Gateway
NGO Non-Governmental Organizations SME Small and Medium-sized Enterprises
AC Audit Committee EPS Earnings Per Share
NKK Nabil Kisan Karja SoCE Statement of Changes in Equity
ACM Audit Committee Meeting ESDD Environmental and Social Risk Due
NPL/NPA Non-Performing Loans/ SoCF Statement of Cash Flow
ADB Asian Development Bank Diligence
Non-Performing Assets SOCI Statement of Other
ADS Active Directory System ESG Environmental, Social and Governance
NRB Nepal Rastra Bank Comprehensive Income
AGM Annual General Meetings ESMS Environmental and Social Risk
NRF Nabil Bank Limited Retirement Fund SoFP Statement of Financial Position
ALCO Asset Liability Committee Management System
NSA Nepal Standard on Auditing SOLs Service Outlet Locations
ALMC Asset Liability Management Committee ESRM Environmental and Social
NSO National Statistics Office SoPL Statement of Profit or Loss
AML/CFT Anti-Money Laundering/Combating Risk Management
NSSE Nabil School of Social Entrepreneurship SSA Social Security Allowance
the Financing of Terrorism EVA Economic Value Added
NUK Nabil Udhyamshil Karja SWOT Strength Weakness Opportunity Threat
APIs Application Programming Interface FD Fixed Deposit
OCR Office of Company Registrar TAT Turn Around Time
ASB Accounting Standards Board FDI Foreign Direct Investment
OI Operation In-charge TBO Treasury Back Office
BFIs Bank and Financial Institutions FPO Further Public Offering
ORMC Operation Risk Management Committee TBR Treasury Bill Rate
BI Business Intelligence FVTOCI Fair Value through Other
PBT Profit Before Tax TDS Tax Deducted at Source
BLB Branchless Banking Comprehensive Income
PCAF Partnership for Carbon TFO Treasury Front Office
BM Branch Manager FVTPL Fair Value through Profit and Loss
Accounting Financials TMO Treasury Middle Office
BNPL Buy Now Pay Later FY Fiscal Year
PE Ratio Price Earnings Ratio TSCFP Trade and Supply Chain Finance Program
BOD Board of Directors GDP Gross Domestic Product
POS Terminals Point of Sale Terminals UFL United Finance Limited
BOP Balance of Payment GGGI Global Green Growth Institute
PPE Property, Plant and Equipment VAPT Vulnerability Assessment and
BPA Business Process Automation GHG Greenhouse Gas
PSPs Payment Service Providers Penetration Testing
BPM Business Process Management GNP Gross National Product
RMC Risk Management Committee WACC Weighted Average Cost of Capital
CAD Credit Administration Department H2H Host to Host
ROA Return on Assets WC Working Capital
CAGR Compounded Annual Growth Rate HR Human Resource
ROCE Return on Capital Employed
CAPM Capital Asset Pricing Model HRA Human Resources Accounting
ROE Return on Equity
CAR Capital Adequacy Ratio IASB International Accounting Standards Board
RWE Risk Weighted Exposure
CBFIN Confederation of Banks and Financial ICAAP Internal Capital Adequacy
Institutions Nepal Assessment Process
CBS Core Banking System ICAN Institute of Chartered Accountants
CBU Contractor Business Unit of Nepal
CCASA Current, Call and Saving Accounts IIRC International Integrated Reporting Council
CCC Customer Care Center IMF International Monetary Fund
CD Ratio Credit to Deposit Ratio INGO International Non-Governmental
CEO Chief Executive Officer Organizations
CET Common Equity Tier IPF Infrastructure and Project Financing
COBP Continuity of Business Plan IRO Inland Revenue Office
COO Chief Operating Officer ISO Information Security Officer
CPI Consumer Based Price Index IVR Interactive Voice Response
CRO Chief Risk Officer KMP Key Management Personnel
CRR Cash Reserve Ratio KYC Know Your Customer
CRSSF Committee Relating to Staff Services LC Letter of Credit
and Facilities LD Ratio Liquid Assets to Deposit Ratio
CSR Corporate Social Responsibility MAN Management Association of Nepal
DBO Defined Benefit Obligation MF Micro-Finance
DBP Defined Benefit Plan MFIs Micro-Finance Institutions
DCEO Deputy Chief Executive Officer MIS Management Information System
DCP Defined Contribution Plan MRMD Market Risk Management Division
DDSL Direct Deprived Sector Lending MSME Micro, Small and Medium Enterprises
DPS Dividend Per Share MTM Mark to Market
DRS Disaster Recovery Site NAS Nepal Accounting Standard
EB Extended Banking NAV Net Asset Value
EIR Effective Interest Rate NBA Non-Banking Assets
Index of Tables of Integrated Report Page No. Index of Tables of Integrated Report Page No.

Table No. Name Table No. Name

NABIL OVERVIEW Table 63: Economic Value Added 125

Table 1: World Economic Outlook 27 Table 64: Movement in NPA and Corresponding Provision 126
Table 2: Macro-Economic Indicators 27 Table 65: Details of Restructured Loans 126
Table 3: Effectiveness of Fiscal Policy 2022/23 33 Table 66: Sector wise NPA 126
Table 4: Policy Rates Related to Monetary Operation 34
Table 5: Nabil Heroes 55 SUSTAINABILITY REPORT
Table 67: Workplace Diversity 134
MANAGEMENT REPORT Table 68: List of BLB Agents 136
Table 6: Five Year Trend Analysis (Bank’s Financial Position) 86 Table 69: Sector wise Lending 139
Table 7: Five Year Trend Analysis (Loans and Advances) 87 Table 70: Financial & Digital Literacy Initiatives 143
Table 8: Impairment Loss Provision per NRB Directive 89 Table 71: Bank's Investment in CSR Activities in the Reporting Period 145
Table 9: Five Year Trend Analysis (Loans and Advances to Customer and BFIs Presented in SOFP) 89 Table 72: Absolute Emissions from Infrastructure & Project Financing Portfolio (other than Energy) 150
Table 10: Product Wise Loan and Advances 90
Table 11: Collateral Wise Loan and Advances 90 PRODUCTS AND SERVICES
Table 12: Directed Sector Lending 90 Table 73: SME and MF Exposure 171
Table 13: Lending to Agriculture Sector 91 Table 74: Accounts Opened via nBank 184
Table 14: Lending on Hydropower/Energy Sector 91 Table 75: Number of Users 184
Table 15: Lending to Micro, Cottage, Small and Medium Industries 91 Table 76: No. and Volume of Transactions 184
Table 16: Total Deprived Sector Lending 91
Table 17: Subsidized Loan 92 SEGMENT INFORMATION
Table 18: Loan Trend of Industry vs. Nabil Bank 92 Table 77: Profit or Loss, Assets and Liabilities (Operating Segments) 194
Table 19: Weighted Average Yield on Loan 92 Table 78: Reconciliations of Reportable Segments 195
Table 20: Investment in Subsidiaries and Associates 92
Table 21: Five Year Trend Analysis (Investments in Subsidiaries and Associates) 93 SHAREHOLDER'S INFORMATION
Table 22: Income Avenues from Investment 93 Table 79: Shareholding Structure 198
Table 23: Weighted Average Yield on Investment 94 Table 80: No. of Shareholders and Shareholding Range 198
Table 24: PPE & Intangible Assets 94 Table 81: Regression Analysis of Share Price of the Bank against Selected Variables 206
Table 25: Five Year Trend Analysis (Asset size) 95
Table 26: Five Year Trend Analysis (Deposit) 95 DISCLOSURE OF ACCOUNTING POLICIES
Table 27: Currency Wise Deposit 95 Table 82: Investment in Subsidiaries 212
Table 28: Deposit Mix and Market Share of Nabil Bank 96 Table 83: Investment in Equity Measured at FVTOCI 213
Table 29: Deposit Mix Industry 96 Table 84: Investment Securities Measured at Amortized Cost 213
Table 30: Mix of FD and CACASA: Nabil Bank vs. Industry 96 Table 85: Fair Value Measurement 214
Table 31: Weighted Average Cost of Fund 97 Table 86: Applicable Reporting Standards 215
Table 32: Debentures Issued by the Bank 98
Table 33: Borrowings and Debentures presented in SoFP 98 HUMAN RESOURCE
Table 34: Five Year Trend Analysis (Shareholder's Fund) 98 Table 87: Human Capital Valuation 230
Table 35: Movement in Share Capital 98 Table 88: Trainings Conducted During FY 2079/80 232
Table 36: Movement in Retained Earning 99 Table 89: Female Representation 232
Table 37: Five Year Trend Analysis (Bank’s Financial Performance) 101 Table 90: Province/Unit Composition 233
Table 38: Five Year Trend Analysis (Net Interest Income) 101 Table 91: Retention Ratio after Maternity Leave 233
Table 39: Five Year Trend Analysis (Net Fee and Commission Income) 103 Table 92: Service Period wise Classification 233
Table 40: Five Year Trend Analysis (Breakdown of Fee and Commission Income) 103 Table 93: Age wise Classification 233
Table 41: Five Year Trend Analysis (Breakdown of Fee and Commission Expenses) 103 Table 94: Number of Staff Hired from Lateral Hiring 233
Table 42: Five Year Trend Analysis (Net Trading Income) 104 Table 95: Number of New Recruits 233
Table 43: Five Year Trend Analysis (Other Operating Income) 104 Table 96: Performance appraisal 2078/79 235
Table 44: Five Year Trend Analysis (Impairment Charge) 104 Table 97: Performance appraisal 2079/80 235
Table 45: Five Year Trend Analysis (Personnel Expense) 105
Table 46: Five Year Trend Analysis (Other Operating Expense) 106 RISK MANAGEMENT AND CONTROL ENVIRONMENT
Table 47: Breakdown of Office Administration Expenses 107 Table 98: Compliance with Single Obligor Limits 269
Table 48: Five Year Trend Analysis (Non-Operating Income) 107 Table 99: Compliance with Single Obligor Limits (Margin Lending) 269
Table 49: Five Year Trend Analysis (Non-Operating Expense) 107 Table 100: Exposure in Margin Lending 269
Table 50: Five Year Trend Analysis (Income Tax Expense) 107 Table 101: Concentration of Top Borrowers 269
Table 51: Regulatory Ratios 108 Table 102: Concentration of Real Estate Loans 269
Table 52: Five Year Trend Analysis (Distributable Profit) 111 Table 103: Sector wise Loans and Advances 270
Table 53: Five Year Trend Analysis (CAR) 111 Table 104: Proportion of Credit Risk to Total RWE 270
Table 54: Market Share of the Bank (Based on No. of Customers) 112 Table 105: Proportion of Operation Risk to Total RWE 272
Table 55: Bank's Outreach and Customer Base 112 Table 106: Resource Mobilization 272
Table 56: Quarterly Comparison of Unaudited Statement of Profit and Loss 113 Table 107: Structural Liquidity Statement 273
Table 57: Quarterly Comparison of Unaudited Statement of Financial Position 114 Table 108: Interest Rate Risk Monitoring Table 274
Table 58: Horizontal Analysis 115 Table 109: Market Risk Exposure 276
Table 59: Vertical Analysis 117 Table 110: Proportion of Foreign Exchange Risk to Total RWE 276
Table 60: DuPont Analysis 121 Table 111: Compliance with Regulatory Parameters 277
Table 61: Components of Value Addition 124 Table 112: RWE Under all 11 Credit Risk Categories 279
Table 62: Value Utilized 124 Table 113: RWE for Credit Risk, Market Risk and Operational Risk 279
Table 114: Capital Adequacy Calculation 279
Index of Graphs and Charts Page No. Index of Graphs and Charts Page No.

MACROECONOMIC OUTLOOK REVIEW OF COMPANY'S PERFORMANCE

Consumer Price Index 28 Loan and Advances to Customers and BFIs (Gross Value) 88
Installed Capacity of Hydro Electricity 28 Provision for Losses on Lending Portfolio 88
GDP 28 Currency Wise Loan and Advances 89
Share in GDP 28 Growth Rate of Loan (Based on Gross Outstanding Portfolio) 92
Foreign Trade 29 Investments 93
BOP 29 Deposit (Nabil Vs Industry) 96
Structure of Interest Rates 30 CACASA Mix 97
NEPSE Index 30 Retail vs Institutional Deposit 97
Tourist Arrival 30 Net Interest Income 102
Remittance 31 Net Fee and Commission Income 102
Per Capita GDP and GNI 31 Trend - Personnel & Other Operating Expenses 105
Percentage of GDP 31 Depreciation and Amortization 106
Net Profit 108
FINANCIAL HIGHLIGHTS
Major Financial Highlights 36 GRIEVANCE HANDLING MECHANISM OF THE BANK
Deposits 37 Inbound Calls Flow 162
Loans 37 Number of Queries in Major Issues Handled during the year 162
Shareholders Fund 37 Chatbot Report 163
Total Assets 37 Handled Viber Messages 163
Total Income 38 Total Handled Mail 164
Revenue Composition Volume 38 Total Ticket Raised 164
Operating Expenses 38
Operating Expenses to Income Ratio 39 SHAREHOLDER'S DASHBOARD
Average Interest Earning Assets 39 EPS 200
Operating Expenses Mix 39 ROA 200
Total Operating Income 39 ROE 200
Net Profit 40 Dividend Payout Ratio 200
ROE 40 Price Earning Ratio 201
ROA 40 Net Assets 201
Return on Capital Employed 40 Shareholders Fund 201
Operating Profit to Paid up Capital 41 Earnings Yield 201
Profit per Employee 41 Distributable Profit per Share 202
Net Interest Income to Operating Profit Ratio 41 Distributable Profit 202
Deposit per Employee 41 Book Networth per Share 202
Loan per Staff 42 Dividend History 202
Deposit per Branch 42 Nabil Share Price vs NEPSE Index 203
Loan per Branch 42 NEPSE Index Vs Banking Sub Index 203
Profit per Branch 42
Cost to Income Ratio 43 HUMAN RESOURCE DYNAMICS
Average Cost on Deposit and Borrowing 43 Total Work Force Classification 232
CRR 43 Gender Composition 232
LD Ratio 43
CD Ratio Based on NRB Formula 44
Composition of Capital Adequacy Ratio (CAR) 44
Dividend Coverage Ratio 44
Dividend Payout Ratio 44
Market Price per Share 45
Earnings per Share 45
Dividend per Share 45
Market Capitalization 45
PE Ratio 46
Average Yeild on Loan 46
Asset Value per Share 46
Financial Leverage Ratio 46
Debt Equity Ratio 47
Total Provision Coverage Ratio 47
CONTENTS 3. Sustainability Report

Bank’s Contribution to National Economy 130

Contribution of Bank Towards Employee Health and Safety 131

INTEGRATED REPORT
Sustainability Report 2022/23 132
Corporate Social and Environmental Policy 146
Carbon Disclosure Report 149
Corporate Social Responsibility 154
Business Ethics and Anti Corruption Measures 158

1. Nabil Overview Grievance Handling Mechanism of the Bank

Nabil Customer Care Center
160
161
Company Profile 20
Vision, Mission, Value Statement and Code of Conduct 21
Non-Financial Highlights 23
Organization Structure 24 4. Products and Services
Macro Economic Outlook 26
Financial Highlights 36 SBU Wise Briefing of Products and Services 168
Drivers of Nabil 48 Social Media Presence of Nabil 180
Success Stories 56 Nabil Bank in Digital Front 181
Milestones 60
Awards and Recognition 62
Credit Rating 63

5. Segment Information
General Information 194
2. Management Report Measurement and Reconciliation 194

Chairman's Message 73
CEO 's Message 76
Strategic Direction 80 6. Shareholder’s Information
SWOT Analysis of the Bank 81
Reporting Framework 82 Structure of Share Capital 198
Review of Company’s Performance 84 Representation in the Board of Director's 198
Vertical and Horizontal Analysis 115 Notice of Annual General Meeting 198
DuPont Analysis 120 Shareholders Enquiries and Communication 198
Statement of Value Added 122 Taxation on Dividends 199
Economic Value Added 125 Shareholder's Dashboard 200
Disclosure Pertaining to NPA 126 Redressal of Investors' Complaints 204
Share Price Sensitivity Analysis 206

7. Disclosure of Accounting Policies

Classification and Valuation of Investment as per Regulatory Guideline 210
Compliance Statement of Applicable Reporting Standards 215
Extent of Compliance with the National Standards (NAS/NFRS) 216
8. Human Resource FINANCIAL REPORT
Succession Planning 230
Independent Certification 230
Human Capital Valuation 230
Remuneration and Benefits 231 1. Financial
Statements of 288
Human Resource Dynamics 232 Nabil Bank Limited
Performance Management System 234

2. Financial
Statements of 410
9. Corporate Governance Nabil Investment Banking Limited
(Subsidiary)
The Board of Directors 236
Board Level Committees 238
Management Level Committees 243
Disclosure of Information Under Section 109(4) of Companies Act 2006 245
Disclosure under Securities Registration and Issuance Regulation, 2016 248
3. Financial
Statements of 428

Disclosure Under the Directive Related to Corporate Governance

Nabil Stock Dealer Limited
for Listed Companies, 2074 249 (Subsidiary)
Policy for Maintenance and Backup of Records 257
Communication with Stakeholders and Other Stakeholders 258

Nabil's Management Team 444

Nabil's Office Network 447

10. Risk Management

and Control Environment
Description of Risk Management and Control Environment Framework 264
Risk Control & Mitigation Methodology and Disclosure of Risk Reporting 268
Internal Capital Adequacy Assessment Process (ICAAP) 278
 An integrated report is a concise

REPORT
INTEGRATED communication about how an
organization's strategy, governance,
performance, and prospects, in the context
of its external environment, lead to the
creation, preservation, or erosion of value
over the short, medium, and long term. An
integrated report aims to explain how an
organization's actions influence its value
over short, medium, and long-term periods.
It emphasizes being concise yet thorough
disclosure about creating value, considering
different timeframes and adopting a holistic
approach to information presentation.

The bank has attempted to uphold transparency with its

stakeholders by providing a comprehensive overview of
both its financial and non-financial standings and their
impact on its value. In terms of its financial position,
the bank has outlined the basis for financial statement
preparation, conducted a thorough five-year trend
analysis illustrating value creation over time, highlighted
its profitability metrics, and emphasized compliance with
regulatory requirements.

Turning to the non-financial aspects, the bank has

articulated its forward-looking strategy, effective corporate
governance structure, inclusive of analysis on both external
and internal environments through tools such as SWOT
and DuPont analysis. Additionally, the bank has outlined
its commitment to sustainability aligning with Sustainable
Development Goals (SDGs), detailing its initiatives through
Corporate Social Responsibility (CSR), Environmental and
Social Risk Management Framework (ESRM), Financial
Literacy Programs, Green Financing Strategy through
disclosure of greenhouse gas emission (GHG Emission) as
per Partnership for Carbon Accounting Financials (PCAF)
as well as its dedicated efforts towards customer care and
grievance resolution. This holistic approach underscores
the bank's dedication to the well-being of its employees,
customers, environment and its wider impact within the
community.

16 NABIL BANK LIMITED ANNUAL REPORT 2022/23 17

 CRISP

CUSTOMER
FOCUSED
Nabil Bank since its inception
has focused on partnering with
customers and helping meet
their banking needs. The Bank
recognizes that its role towards
customers goes beyond just
financial transactions and thus
has extended its purview of
banking towards sustainable
banking which involves
mitigation of risk that arise
from environmental, social and
governance aspects.

18 NABIL BANK LIMITED ANNUAL REPORT 2022/23 19

 Nabil Bank Limited is a public limited company. It was
NABIL OVERVIEW incorporated on 11 May 1984 under the then Companies
Act, 1964 as Nepal’s first joint-venture bank. It is a VISION MISSION VALUE STATEMENT
class “A” licensed institution, regulated under the Banks As the nation’s first joint To be the 'Bank of In order to achieve our
and Financial Institutions Act, 2017. Nabil commenced venture Bank, we will 1st Choice' of all our Mission and consistently
banking operations on 12 July 1984 and has its registered consistently surge together stakeholders move closer to the attainment
ahead providing the entire of our Vision, each and every
office at Nabil Center, Tindhara, Durbarmarg. It is listed gamut of financial services member of Team Nabil is
on the Nepal Stock Exchange. across all demographic strata committed to work within our
and geographic regions set of Core Values. We are
of the nation, constantly all committed to be C.R.I.S.P.
The bank provides full-fledged commercial banking services including
evolving to better ourselves, or Customer focused,
financial intermediation, trade finance services, remittance, treasury,
so as to always serve our Result oriented, Innovative,
cards and digital banking, agency services and other ancillary banking
stakeholders better. Synergistic and
services to a diverse clientele comprising of individuals, corporations,
multinational agencies, state owned enterprises, local level governments, Professional, every
public sector companies, developmental aid agencies, embassies, non- day in everything
governmental organizations (NGOs) and international NGOs. we do.

Subsidiaries and Associates of Nabil Bank Ltd.

NAME OF COMPANY STATUS OWNERSHIP AS PRINCIPAL ACTIVITIES
AT 16-JUL-2023

Nabil Investment Subsidiary 60.00% Merchant banker licensed by the

Banking Ltd. Securities Board of Nepal
Nabil Stock Dealer Subsidiary 100.00% Securities broker and stock dealer
Ltd. licensed by the Securities Board of
Nepal and Nepal Stock Exchange
NADEP Laghubitta Associate 25.00% Microfinance Institution under class “D”
Bittiya Sanstha Ltd. licensed institution by Nepal Rastra Bank

Nabil Investment Banking Limited is a public limited company that

was incorporated on 7 February 2010 under the Companies Act, 2006.
It is a merchant banker licensed under the Securities Businessperson
(Merchant Banker) Regulations, 2008. It commenced commercial
operations on 26 May 2010 and operates from its registered office at
Central Plaza, Narayanchaur, Naxal. The company is not listed. Nepal
Bangladesh Capital Ltd., a merchant banker, which was a wholly owned
subsidiary of Nabil merged with Nabil Investment Banking Limited
during the reporting period.

The bank also has a wholly owned subsidiary, Nabil Stock Dealer
Limited, a public limited company. It was incorporated on 19 July 2021
with paid up capital of NPR 1.52 billion and operates its office from I.J.
Plaza, Durbarmarg. The company is a full-service securities broker and
dealer licensed by the Securities Board of Nepal (SEBON) and the Nepal
Stock Exchange (NEPSE). The company is not listed. Nabil Securities
Ltd. and NBBL Securities Ltd., two wholly owned subsidiaries of Nabil,
merged to form one entity during the reporting period.

20 NABIL BANK LIMITED ANNUAL REPORT 2022/23 21

 CODE OF CONDUCT BANK’S NETWORK &
NON FINANCIAL HIGHLIGHTS
The “Nabil Bank Limited Code of Conduct” includes
As of 16th July, 2023
the following major provisions:
n Bank officials are expected to conduct themselves in an honest,
responsible, and professional manner.
n All Bank employees should be extremely careful when taking
sensitive information out of the Bank’s premises. 2,235
n Information must be shared only on a “need to know principle.” Number of staffs
n Bank’s policy is to be fair to all of its customers and
stakeholders.
n No Bank officer should directly or indirectly lobby any legislative
or executive body.
298 2 Million+
ATM No. of Deposit
n Bank employees are prohibited serving as trustees, officers,
Accounts
or advisors or for any other position for outside for-profit
organizations, constitutions or bodies unless approved by CEO 19
or the Board. 265 Extension
Branches Counters
n The records, data, and information owned, used, and managed
by Bank must be accurate and complete at all times.
n Bank officials are prohibited from self-dealing or otherwise 67K+ 0.7 Million+
trading on their positions with the Bank or accepting from one No. of Loan Debit Card Users
doing or seeking to do business with the Bank, a business Accounts
opportunity not available to other persons or that is made
available because of such officials’ position with the Bank.
4K+ 170+
n Employees must retain records for the appropriate period International
POS Terminals
(as specified by law, policy, convention, or business need) Correspondents
to enable Bank to respond to questions that may arise from
audits, regulatory inspection/investigation, tax reviews, legal
proceedings, and other actions.
441 [ICRANP-IR]AA-@
Credit Rating of
Training Programs
the Bank
Conducted

15K+ 22.33
QR Terminals Million CSR
Investment in
Current year

1.14 Million+ 40K+ 46,748

Mobile Banking Users Credit Card Training
Users Participants

22 NABIL BANK LIMITED ANNUAL REPORT 2022/23 23

 ORGANIZATIONAL
STRUCTURE

BOARD OF DIRECTORS
Company Secretariat

Risk Management Committee Related to

AML Committee Audit Committee
Committee Staff Services & Facility

Chief Executive Officer Assets & Liability Internal Audit Dept

Committee & Vigilance

Executive Committee Integrated Risk Management Strategy Committee

Committee(IRMC)
CRO‐ Integrated Risk
Management
DCEO
Strategy DCEO DGM International Service and
Banking & Operation
Credit Risk DCEO Sr.DCEO Contractor Business Excellence
Monitoring
Finance
Mid Policy Framework nBank
Treasury Front
Corporate Banking SME, Micro Finance Corporate
Information Security

Media Relation Research & Development/

Retail Digital Banking International Business/
Economic Analysis
National Corporate Transaction Expansion
Treasury Mid Office Retail Loan
Banking
CSR/Government
Relation NABIL 2025 Information Technology
Remittance
Project/Infrastructure
Operation Risk/AML‐CFT Sustainable Credit
dit
Banking Business Approver
Appro
prover
Human Resources Digital Development
Contractor Business

Compliance
Service & Operation
HR Strategy Excellence Subsidiaries/MFIs
Liability
Credit Control
HR Cost Optimization Operations Sustainable Banking
Wholesale Liability Development

National Corporatre Legal

a
Performance Mapping
& Infrastructure Retail Liability

HR Development Corporate Communicatio

Communication
on
Province
ce Business
SME/Mid‐Corporate All Province Managers/
Unit/ Branding
Cluster Heads/
Branch Managers rs

HR Operation
Retail/Consumer

Recovery & Collections

24 NABIL BANK LIMITED ANNUAL REPORT 2022/23 25

 Table 1: World Economic Outlook chain disruptions, and heightened investor uncertainty
(REAL GDP, ANNUAL PROJECTION have not spared the economy.
PERCENT CHANGE) 2022 2023 2024

The global economy has continued to recover

MACRO ECONOMIC
OUTLOOK
World Output 3.5 3.0 2.9
Domestically, economy has been grappling with the
Advanced Economies 2.6 1.5 1.4
slowly from the blows of the pandemic, United States 2.1 2.1 1.5 fallouts of the COVID-19 pandemic, which had made
tourism, remittances, and small businesses vulnerable.
Russia’s invasion of Ukraine, and the cost-of- Euro Area 3.3 0.7 1.2
Japan 1.0 2.0 1.0 The conflict has added another layer of uncertainty
living crisis. In retrospect, the resilience has United Kingdom 4.1 0.5 0.6 that could exacerbate inflationary pressures, currency
been remarkable. Despite the disruption of Canada
Other Advanced Economies
3.4
2.6
1.3
1.8
1.6
2.2
volatility, and fiscal constraints. The escalation of
energy and food markets by the war, and the Emerging Market and Developing 4.1 4.0 4.0 hostilities in the region has heightened uncertainty and
Economies volatility in global financial markets, impacting both
unprecedented tightening of global monetary Emerging and Developing Asia 4.5 5.2 4.8
investor sentiment and commodity prices, particularly
conditions to combat high inflation, the global China
India
3.0
7.2
5.0
6.3
4.2
6.3 oil and gas.
economy has slowed, but not stalled. But ASEAN-5 5.5 4.2 4.5
Nepal 5.6 0.8 5.0 Tourism and remittances, trade and currency pressures,
the growth remains slow and uneven, with Emerging and Developing Europe 0.8 2.4 2.2 and balance of payment were badly affected.
growing global divergences. Latin America and the Caribbean 4.1 2.3 2.3
Remittance inflows, a crucial component of Nepal's
Middle East and Central Asia 5.6 2.0 3.4
Sub-Saharan Africa 4.0 3.3 4.0 economy, remained resilient, providing some stability
According to latest projections of International Monetary Emerging Market and Middle-Income 4.0 4.0 3.9 amidst external uncertainties. However, there have
Economies
Fund (IMF) (World Economic Outlook), global growth will been concerns about the sustainability of remittance
Low-Income Developing Countries 5.2 4.0 5.1
slow from 3.5 percent in 2022 to 3 percent in 2023 and growth in the long term. Tourism was badly hit during
Source: imf.org/publications/weo
2.9 percent in 2024, a 0.1 percentage point downgrade the pandemic and the conflict has added to the woes
for 2024 from the July projections. This is below the as the travelers have become more cautious about the
historical average. political and geopolitical conflicts around.
NEPAL’S ECONOMIC CONTEXT
Nepal’s economy faces challenges that are Nepal imports almost all petroleum products which
Fiscal buffers have eroded in many countries, with compounded by geopolitical tensions, including the
elevated debt levels, rising funding costs, slow in down is why increase in global crude oil prices has led to
Ukraine-Russia conflict. The global repercussions higher import bills, widening of the trade deficit and
growth, and an increasing mismatch between the of the conflict such as rising energy prices, supply
growing demands on the state and available resources. depletion of foreign currency reserves.
This has left many countries more vulnerable to crises, Table 2: Macro Economic Indicators
which demands a renewed focus on managing fiscal
MACRO ECONOMIC INDICATORS FY 2022/23 FY 2021/22 FY 2020/21 FY 2019/20 FY 2018/19
risks. Despite the tightening of monetary policy, financial
conditions have also eased in many countries. The Average Consumer Price Inflation (%) 7.74 6.32 3.60 6.15 4.63
Merchandise Exports (% change) -21.4 41.7 44.4 0.6 19.4
danger is of a sharp repricing of risk, especially for Merchandise Exports (NPR In Billion) 157.14 200.03 141.12 97.71 97.11
emerging markets, that would appreciate the US dollar Merchandise Imports (% change) - 16.1 24.7 28.7 -15.6 13.9
further, trigger capital outflows, and increases borrowing Merchandise Imports (NPR In Billion) 1611.73 1920.45 1539.84 1196.8 1418.54
Trade deficit (%) -15.5 23.0 27.3 -16.8 13.05
costs and debt distress. Trade deficit (NPR In Billion) 1454.59 1720.42 1398.71 1099.09 1321.43
Remittance (% change) 21.2 4.8 9.8 -0.5 16.5
Nepalese Rupee against US Dollar (% change) -2.79 -6.64 1.1 -9.1 -0.02
In recent times, the world has been going through a Gross foreign exchange reserves (NPR In Billion) 1539.36 1226.12 1244.63 1401.84 1038.92
tense and tragic situation: Russia’s invasion of Ukraine. Weighted Average Base Rate (%) 10.03 9.54 6.86 8.50 9.57
Beyond the headlines and military maneuvers, this Stock Market Capitalization (NPR In Billion) 3082.52 2869.34 4010.96 1792.76 1567.50
Broad Money (M2)(% change) 11.4 6.8 21.8 18.1 15.8
conflict has had far-reaching economic consequences Narrow Money (M1)(% change) -0.1 -9.7 22.6 17.8 8.6
worldwide. The conflict has disrupted the supply chains. Domestic Credit (% change) 8.7 14.5 27.1 14.0 24.0
Domestic Credit to Private Sector (% change) 4.6 13.3 26.3 12.6 19.1
Russia is a major exporter of oil and gas, while Ukraine Total Exports (% change) -21.4 41.7 44.4 0.6 19.4
contributes significantly to global wheat and corn exports. Total Imports (% change) -16.1 24.7 28.7 -15.6 13.9
The short supply of these critical commodities has caused Gross Forex Reserves (% change) 26.6 -13.1 -0.2 34.9 -5.8
Government Revenue (% change) -9.3 14.1 16.0 0.2 15.5
prices to surge affecting both households and businesses. Government Expenditure (% change) 9.1 9.5 9.7 -1.7 2.1

26 NABIL BANK LIMITED ANNUAL REPORT 2022/23 27

 MAJOR
MACRO ECONOMIC
INDICATORS

Consumer Price Index Installed Capacity of Hydro Electricity Foreign Trade

% Megawatt NPR in Billion

EXPORTS IMPORTS

157
49 1,612
2,538 2022/23 361
8.6 2 223 1,028
8.16 107
7.7 2,075
6.8 200 1,920
6.6 44 2021/22 456
5.9 6.15 6.3 1 265 1,200
5.7 1,458 155
4.64 4.6 5 1,318 141 1,540
1,175 34 2020/21 334
3.6 1 234 972
3.09 106
2.5 98 1,197
26 1 2019/20 280
182 735
70
97 1,419
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 32 2018/19 295
2 206 918
63
Overall Index
Food and Beverage
Non-food and Services India China Others Total

GDP Share in GDP BOP

NPR in Billion % Percent Change

41.7
44.4
34.9

28.7

26.6
5,381

24.7
4,934

19.4
4,353

16.0
15.5
13.9

14.1
3,859 3,889 60.06 60.42 60.38 61.24 62.43

9.5

9.1
9.7
2.1

0.6

0.2
15.02 13.37 13.82 14.09 13.45

—1.7

—0.2
—5.8
291 346 24.92 26.21 25.8 24.67 24.12
207 242 253

—9.3
—13.1
—15.6

—16.1
—21.4
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23

2018/19 2019/20 2020/21 2021/22 2022/23

Gross Value Addition by Financial Sectors
Agriculture Industry Service
Gross Domestic Product
Total Exports Total Imports Gross Forex Reserves Government Revenue Government Expenditure

MAJOR MACRO ECONOMIC INDICATORS contd.

28 NABIL BANK LIMITED ANNUAL REPORT 2022/23 29

 MAJOR MACRO ECONOMIC INDICATORS contd.

Structure of Interest Rates Remittance Per Capita GDP & GNI

% NPR in Billion $

1,340
1,337
1,221

1,230
12.3

1,229
12.13

1,220
1,186

1,180
1,162
11.62

1,139
1,110
961 1007
10.11 10.03 21.2
9.57 9.54 879 875
8.5 8.43
7.41 7.86 16.5
6.60 6.86
6.01 6.99 9.8
4.76
4.52
4.12 2.98
4.8
0.35 —0.5
2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 2018 2019 2020 2021 2022

Per Capita GDP Per Capita GNI

Remittance Percent Change

Interbank Rate Weighted Average Deposit Rate

Base Rate Weighted Average Lending Rate

NEPSE Index Tourist Arrival Percentage of GDP

Points in ‘000 %

38.93
36.76

35.38

34.87
22.79 34.24
307.3

32.14
30.78

29.95
2,883.4 1,173 1,197

22.5 28.26

27.03
22.08

22.68
20.42
2,097.1
615
2,009.5
1,259 24.8
1,362.4 2.1

4.05
230 —34.4

3.24

2.92
2.51
2.52
—80.8 151
2018 2019 2020 2021 2022 2018/19 2019/20 2020/21 2021/22 2022/23

2018/19 2019/20 2020/21 2021/22 2022/23 Export Import

Tourist Arrival Percent Change
Remmittance Trade Balance

30 NABIL BANK LIMITED ANNUAL REPORT 2022/23 31

 ECONOMIC The global economic slowdown, political upheavals FISCAL POLICY HIGHLIGHTS: THE PRIORITIES OF FISCAL POLICY WERE:

OUTLOOK
Fiscal policy for the FY 2022-23 had the following n Transformation of the agriculture sector,
and geopolitical tensions all have affected the Nepali
objectives for attaining stability, productivity, n Increment of production and productivity,
economy. The pandemic directly hit tourism and employment growth, inclusive development, self- n Generation of employment and alleviation of
commodity markets, and the Russia-Ukraine war reliance and economic prosperity. poverty,
n Achieve high and sustainable economic growth by n Local economic development based on
disrupted supply chains and triggered inflation. Supply
building a production-based economy, innovation,
chain problems caused an increase in demand and n Generate employment and alleviate poverty n Human resource development,
short supply, hence the high inflation. Shortage of through integrated mobilization of available n Infrastructure development and capital formation,

crude-oil was a major contributor to the price hike, natural resources, human resources, capital and n Hydropower generation, transmission line
technology, expansion and rural electrification,
particularly in Nepal, which imports all petroleum
n Ensure macroeconomic stability by maintaining n Industrial development, investment promotion and
products. The high prices have begun easing. However, financial discipline and keeping inflation within recovery of the tourism sector,
the inflationary risk remains owing to uncertainties in the desired limit, n Environmental protection, disaster management
n Establish federalism as a vehicle of prosperity by and risk reduction of climate change,
energy prices, the ongoing Russia-Ukraine war and
transferring means and resources to the provinces n Effective public service and promotion of good
the likelihood of the government easing up policies to and local levels, and governance, and
overcome the recession. n Build the basis of a balanced, inclusive, self- n Scientific research and development.
reliant, and socialism-oriented economy through
economic and social transformation.
The National Statistics Office (NSO) has estimated economic
growth of 2.16 percent at basic price, and 1.86 percent
at producer's price for 2022/23. The budget for 2023/24
has aimed to attain 6 percent growth. The Government of
Nepal allocated Rs. 302.07 billion for capital expenditure Table 3: Effectiveness of Fiscal Policy 2022/23
and the budget has also outlined broader plans for NPR. In Billion
DESCRIPTION FOR THE FY 2022/23 FOR THE FY 2023/24
economic reforms. Following the 26 June 2023 agreement
BUDGETED FIGURES ACTUAL FIGURES ACHIEVEMENT BUDGETED FIGURES
with India allowing Nepal to sell an additional 300MW
electricity, the country can now export 952 MW of electricity. Revenue
This will contribute towards reducing the trade deficit with 1. Revenue 1,403 957 68.21% 1,423
India thereby supporting the domestic economy to gain a) Tax Revenue 1,295 866 66.82% 1,305
momentum. b) Non-Tax Revenue 108 92 84.93% 117
2. Grants 55 21 38.40% 50
3. Other Receipts 0 53 0
The Government has announced the 2023 to 2033 as
Total Receipts 1,459 1,032 70.73% 1,472
the Visit Nepal decade. There has also been expansion of
Expenditure
tourism infrastructures like hotels, and airports which will a. Recurrent 1,183 1,006 85.00% 1,142
result in further expansion in the sector. Similarly, the decline b. Capital 380 234 61.44% 302
in interest rates that followed external sector improvements c. Financing 230 190 82.58% 307
are expected to increase in private demand, and thereby Total Expenditure 1,794 1,430 79.69% 1,751
expanding economic activities.
Source: Fcgo.gov.np/daily-budgetary-analysis

32 NABIL BANK LIMITED ANNUAL REPORT 2022/23 33

 Fiscal policy 2023/24 emphasises on Specific priorities articulated in the
increasing the base for high economic fiscal policy are:
growth by expanding investment from n Development of agriculture, energy, and
government, private, and cooperative tourism.
sectors, developing economic and n Promotion of investment, industrial
social infrastructure, and increasing development, and trade balance.
production, productivity, and employment n Advancement of the social sector and
opportunities while considering the enhancement of social security.
challenges and opportunities. n Construction of high-quality physical
infrastructure.
Objective of Fiscal Policy FY n Promotion of digital and green
2023/24: economy.
n To attain broad, sustainable, and n Protection of the environment, climate
inclusive growth by invigorating the change mitigation, and disaster
economy. management.
n To ensure qualitative social n Development of human resources and
development, along with security and job creation.
justice. n Reform of the financial sector.
n To boost the morale of the private n Strengthening of fiscal federalism and
sector by creating an investment- enhancement of service delivery.
friendly environment, and to alleviate n Reform in the public finance
poverty by generating income and management system.
employment opportunities.
n To maintain macroeconomic stability. The monetary policy for FY 2023/24
n To fortify federalism and uphold good seeks to make the economy resilient by
governance. maintaining price and external sector
n To augment the effectiveness of stability, while enhancing domestic
public expenditure through budgetary production capacity by channeling
reforms. financial resources to the productive
sector.

Table 4: Policy Rates Related to Monetary Operation

In %
DESCRIPTION FY 2022/23 FY 2021/22 CHANGES

Standing Liquidity Facility Rate 7.50 7.00 0.50

Deposit Collection Rate 4.50 4.00 0.50
Repo Rate 6.50 5.50 1.00
Weighted Average Lending Rate 12.30 11.62 0.68
Weighted Average Deposit Rate 7.86 7.41 0.45
Weighted Average Treasury Bill Rate (91 days) 6.35 10.66 -4.31
Weighted Average Interbank Rate 2.98 6.99 -4.01

34 NABIL BANK LIMITED ANNUAL REPORT 2022/23 35

 FINANCIAL HIGHLIGHTS

Major Financial Highlights Deposits Loans

USD in Million 72 NPR in Billion NPR in Billion

55
52
49 49 339
403 311
42
39
38 330
33
29 207
228
193 154
164 134
136 114

2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year
Total Operating Profit Net Profit
Annual Growth Rate for FY 2022-23: 22.18% Annual Growth Rate for FY 2022-23: 9.28%
CAGR of Five Years: 24.25% CAGR of Five Years: 24.47%

Major Financial Highlights

Shareholders Fund Total Assets
3,281

USD in Million
3,659
3,066

NPR in Billion NPR in Billion

2,576

2,581
2,441

2,427

57
53
481
1,977

1,911
1,829

1,732
1,605

420
1,495

1,280

34
1,215

291
26
23 238
21 201
161
433
414
285
215
211

2019 2020 2021 2022 2023

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Deposit Loan Total Assets Shareholders Fund Year Year

Annual Growth Rate for FY 2022-23: 7.42% Annual Growth Rate for FY 2022-23: 14.62%
CAGR of Five Years: 22.55% CAGR of Five Years: 24.48%

36 NABIL BANK LIMITED ANNUAL REPORT 2022/23 37

 FINANCIAL HIGHLIGHTS contd.

Total Income Revenue Composition Volume Operating Expenses to Income Ratio Average Interest Earning Assets
NPR in Billion NPR in Billion % NPR in Billion

0.6 403
51 0.4
0.5
2.9 0.9
0.9 0.6 5.0
0.7
36 0.7 4.1 1.0 278
1.5 2.8 4.4 1.1
5.6
0.5 0.4 0.6 3.0 226
0.6 1.5
0.5 0.5 2.8
0.4
1.2 1.2
186
21 1 11.5 17.8 160
19 7.2 7.0 8.1 12.9
17 11.1 10.8 16.2 7.3 8.9 134
6
13
Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022* 2023
Year Year

Net Interest Income Net Trading Income Depreciation & Amortisation

Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022 2023
Year Net Fee and Commission Income Other Operating Income Other Operating Expenses Personnel Expenses Year

Total Income = Interest Income + Fee and Commission Income + Net Trading Operating Income= Net Interest Income + Net fee and Commission Income + Net *Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile Average Interest Earning Asset = Average volume of loan, Government securities,
Income + Other Operating Income + Non-Operating Income Trading Income + Other Operating Income Nepal Bangladesh Bank Ltd Treasury Bills, and Placements with other banks and financial institutions
*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile *Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
Nepal Bangladesh Bank Ltd Nepal Bangladesh Bank Ltd

Operating Expenses Operating Expenses Mix Total Operating Income

NPR in Billion % NPR in Billion

5.1 5.9 3.6 3.1 8.4 7.6

0.50
0.52 21.5
23.3 26.8 33.1 22.9 26.8 23.3
0.14 1.53
1.66 15.8
0.12 1.05
0.17
0.12 11.7
0.78 1.05 71.6 67.3 63.3 74.1 64.7 69.0
0.56 9.3 9.1
8.2

1.73 1.95 2.01 3.41 4.01 4.53

Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022* 2023
Year Year

Depreciation & Amortisation Depreciation & Amortisation

Base 2019 2020 2021 2022* 2023
Other Operating Expenses Personnel Expenses Other Operating Expenses Personnel Expenses Year

*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile *Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile Annual Growth Rate for FY 2022-23: 35.89%
Nepal Bangladesh Bank Ltd Nepal Bangladesh Bank Ltd CAGR of Five Years: 21.13%

*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
Nepal Bangladesh Bank Ltd

38 NABIL BANK LIMITED ANNUAL REPORT 2022/23 39

 FINANCIAL HIGHLIGHTS contd.

Net Profit ROE Operating Profit to Paid Up Capital Profit per Employee
NPR in Billion % % NPR in Million

6.4 70.3
20.9 66.9
3.9 3.9
5.2 17.8 3.5
4.5 50.4 3.1
4.2 15.2 2.9
3.9 44.9
3.5 2.4
13.6 11.7 35.2

33.4
9.8

Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022* 2023
Year Year Year Year

Annual Growth Rate for FY 2022-23: 22.67% ROE for FY 2021-22 including the profit of NPR 0.96 Billion before the acquisition *Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile *Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
CAGR of Five Years: 9.97% of erstwhile Nepal Bangladesh Bank Limited was 10.19%. Nepal Bangladesh Bank Ltd Nepal Bangladesh Bank Ltd

*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
Nepal Bangladesh Bank Ltd

ROA Return on Capital Employed Net Interest Income Deposit per Employee
% % to Operating Profit Ratio NPR in Million
%

186.6
2.6 27.4 179 180
26.1 171
152 155
2.3 137.1 151.4 135
1.7 110.7 129.7
1.4 17.3 118.8
1.6 18.3 14.6
1.2
12.9

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year Year

ROA for FY 2021-22 including the profit of NPR 0.96 Billion before the acquisition Return on capital employed = Profit before income tax/
of erstwhile Nepal Bangladesh Bank Ltd. was 1.27% (Shareholder’s fund and Debt)
*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
Nepal Bangladesh Bank Ltd

FINANCIAL HIGHLIGHTS contd.

40 NABIL BANK LIMITED ANNUAL REPORT 2022/23 41

 FINANCIAL HIGHLIGHTS contd.

Loan per Staff Deposit per Branch Cost to Income Ratio Average Cost of Deposit and Borrowing
NPR in Million NPR in Million % %

2,005 87
163 86
152 1,838 81
146 76 7.8
136 1,636 1,689
1,521 70 79
124 1,427
113
5.4
5.0 5.8
4.1
4.4

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year Year

Loan per Branch Profit per Branch CRR LD Ratio

NPR in Million NPR in Million % %

54 11.2
1,629 52
1,535 10.1 29.2
27.0 27.9
1,304 1,531 25.5
1,281
1,344 34
29 6.9 23.5 22.8
24
23

4.8
3.7 4.1

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022* 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year Year

*Figure for FY 2021/22 includes combined figures of Nabil Bank Ltd and erstwhile
Nepal Bangladesh Bank Ltd

FINANCIAL HIGHLIGHTS contd.

42 NABIL BANK LIMITED ANNUAL REPORT 2022/23 43

 FINANCIAL HIGHLIGHTS contd.

CD Ratio Based on NRB Formula Composition of Market Price per Share Earnings per Share
% Capital Adequacy Ratio (CAR) NPR NPR
%

13.1

13.1
12.8

12.5
12.5
89.8

11.8
13
1359 51.8

11.4
50.6

10.7

10.7

10.8
79.2

10.2
73.9 72.9 87.1
68.1 921 33.6
800 36.2
824 23.7
765

2.4

2.3

2.3
2.1
1.2

1.1
599.20
18.6
Base 2019 2020 2021 2022 2023
Year

Core Capital Supplementary Capital

Base 2019 2020 2021 2022 2023 Total Capital Fund Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year

Dividend Coverage Ratio Dividend Payout Ratio Dividend per Share Market Capitalization
% % NPR NPR in Billion

215.2 161.0
201.4
188.2
38
35
34 34
152.5 30
148.7 97.5
113.2
142.3

88.4
102.6 65.6 67.2 70.6
62.1 77.3
46.5
11 60.9

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year Year

Dividend Coverage Ratio= Net Profit/Dividend approved for the year Dividend Payout Ratio= Dividend per Share/Earning per Share

FINANCIAL HIGHLIGHTS contd.

44 NABIL BANK LIMITED ANNUAL REPORT 2022/23 45

 FINANCIAL HIGHLIGHTS contd.

PE Ratio Average Yeild on Loan Debt Equity Ratio

Times % %

44.2 13.9 32.5

40.5
11.4 11.4 11.0

10.3
9.4
18.6 25.3
21.2
15.8 7.9 11.4

6.2
0.3 0

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year

Asset Value per Share Financial Leverage Ratio Total Provision Coverage Ratio
NPR Times %

291.6
2,354 8.9
8.6
2,232 8.2 8.2 8.2
2,104 7.6 235.5
2,001
1,839
1,778
223.5
203.4

156.0

114.4

Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023 Base 2019 2020 2021 2022 2023
Year Year Year

Total Provision Coverage Ratio= Total Provision/Non-Performing Assets

46 NABIL BANK LIMITED ANNUAL REPORT 2022/23 47

 DRIVERS OF NABIL BOARD OF DIRECTORS Sitting from Left to Right Standing from Left to Right
MR. UPENDRA PRASAD POUDYAL, CHAIRMAN MR. PRAVIN TIBREWALA, DIRECTOR MR. MALAY MUKHERJEE, DIRECTOR
MRS. ASHA RANA ADHIKARY, DIRECTOR MR. NIRVANA KUMAR MR. ANANTA POUDYAL, DIRECTOR
CHAUDHARY, DIRECTOR MR. A.R.M. NAZMUS SAKIB, DIRECTOR

48 NABIL BANK LIMITED ANNUAL REPORT 2022/23 49

 PROFILE OF
DIRECTORS

MR. UPENDRA MR. NIRVANA KUMAR MR. MALAY MR. ANANTA MRS. ASHA RANA MR. PRAVIN MR. A.R.M.
PRASAD POUDYAL CHAUDHARY MUKHERJEE POUDYAL ADHIKARY TIBREWALA NAZMUS SAKIB
CHAIRMAN BOARD MEMBER BOARD MEMBER BOARD MEMBER BOARD MEMBER BOARD MEMBER BOARD MEMBER

Represents Promotor Represents Promotor Represents Promotor Represents Public Independent Director Represents Public Represents Promotor
Shareholders Shareholders Shareholders Shareholders Mrs. Asha Rana Adhikary, Shareholders Shareholders
Mr. Upendra Prasad Mr. Nirvana Kumar Mr. Malay Mukherjee, 68, Mr. Ananta Poudyal, aged 64, possesses 36 Mr. Pravin Tibrewala, 35, Mr. A. R. M. Nazmus Sakib,
Poudyal, 65, is an MBA Chaudhary, 42, was has a Master of Science 34, holds a Master’s years of experience in holds MBA Degree in 64, has been appointed
from Tribhuvan University. educated in Doon, degree and is a senior degree in International the banking sector. This accounting and finance as a representative of
He brings to Nabil Harrow, Massachusetts banking executive with Relations specializing includes the experience of from Pokhara University IFIC Bank, a promoter
his extensive banking Institute of Technology extensive knowledge in International Trade & commercial banks, joint and a Bachelor’s degree shareholder of the
experience with Standard (MIT) and London Business in credit analysis, risk Diplomacy from Monash venture banks, government in accounting and Bank. He has a long
Chartered Bank (Nepal) School (LBS) and is the management and University, Australia, and banks and even a bank finance from University bureaucratic experience as
Limited (1986 to 2000 Managing Director of technology development. a Bachelor's in Business in USA, where she served of Bradford, United a Joint Secretary/Additional
AD) and with NMB Bank Chaudhary Group. He He was the CEO and Administration from in various executive and Kingdom. Mr. Tibrewala Secretary in Finance Division
Limited from (2000 to is an entrepreneur and MD of IFCI Limited and Kathmandu University. leading positions. She is an entrepreneur with of Ministry of Finance of the
2017 AD). He has a well- a philanthropist. He is Chairman of different holds a Master’s Degree vast experience of working Government of the People’s
rounded knowledge and the Vice Chair of the companies under the He is an energetic in Business Administration in different business Republic of Bangladesh. He
experience of all aspects Chaudhary Foundation. IFCI Group. He had entrepreneur known for and is a recipient of environment. has a post-graduate degree
of banking, particularly As Vice Chair of the also held the position of his global and innovative Gold Medals for being in botany from the University
in project finance and Chaudhary Foundation, Executive Director at the approaches to business the topper in Nepal. Her of Dhaka, Bangladesh and
international banking. He he supports education, Central Bank of India development and policy knowledge is also shaped also has a M.Sc. degree in
has held the presidency healthcare, and disaster from September 2012 to building. Currently, Mr. by various banking courses development finance from
of Nepal Bankers’ relief efforts. He has December 2013. Poudyal is a member of attended in India, Hong University of Birmingham,
Association from January been recognized for his Mr. Mukherjee has also the Australian Embassy Kong, Japan, Sweden and United Kingdom.
2014 to November 2016. social contributions with served as the General Business Advisory Group the Philippines. Mr. Sakib is a currently on
He is also the immediate accolades such as the Manager in charge of and serves as the President the board of IFIC Bank
past president of YPO’s SEN Sustainability the Risk Management of the Association of She is a Member of Limited representing M/s.
Management Association Award for Philanthropy Department, and the Nepalese Alumni from Women Leadership Tradenext International
of Nepal (MAN) and is the and the President’s Award Technology Management Australia (ANAA). He Forum, Confederation of Limited. He is also the
current President of the for Social Contribution Department of Indian also holds the position Nepalese Industries (CNI) Chairman of IFIC Money
Confederation of Banks from Lions Club Bank at its corporate of Director at Nepal and a former Executive Transfer (UK) Limited, United
and Financial Institutions International as well as office in Chennai. He Education Consultancy Board Member of Kingdom, and a board
Nepal (CBFIN). Mr. World Economic Forum’s was Chairman of MDI, since 2015 and is involved Management Association member of IFIC Investment
Poudyal is a representative Young Global Leader Gurgaon a premier in multiple consulting of Nepal (MAN). She Limited and Oman
of Asia Pacific- Global nomination. business school in India. associations like IERIN, is keenly interested in Exchange LLC. He was
Alliance for Banking on Presently he sits in boards NAAER, & AEAA. Women Entrepreneurship also the Chairman of the
Values and a sustainability of various companies in As a representative of development programs Board of Directors of Nepal
advocate who ensures that India and Sri Lanka in public shareholders, he with an Integrated Bangladesh Bank Limited
the bank remains resilient addition to Nabil Bank. ensures the bank adopts Development Approach for (NBBL) prior to acquisition
in change. sustainable business ‘Sustainable and Inclusive of NBBL by Nabil Bank
practices. Growth’. Limited.

50 NABIL BANK LIMITED ANNUAL REPORT 2022/23 51

 EXECUTIVE
MANAGEMENT
TEAM

MR. GYANENDRA MR. SUJIT KUMAR MR. BINAYA MR. MANOJ MR. BHUPENDRA MR. ADARSHA
THE STRIKERS
PRASAD DHUNGANA SHAKYA KUMAR REGMI KUMAR GYAWALI PANDEY BAZGAIN
CHIEF EXECUTIVE OFFICER SENIOR DEPUTY CEO DEPUTY CEO DEPUTY CEO DEPUTY CEO DEPUTY GENERAL MANAGER

Mr. Gyanendra Prasad Mr. Sujit Kumar Shakya is Mr. Binaya Kumar Regmi, Mr. Manoj Kumar Gyawali, Mr. Bhupendra Pandey Mr. Adarsha Bazgain,
Dhungana serves as the the Senior Deputy CEO of Deputy CEO at the bank, a CA from the Institute of serves as a Deputy CEO currently serving as Deputy
Chief Executive Officer the bank. He completed has an MBA degree from Chartered Accountants of at the bank. He is a General Manager at Nabil
of Nabil Bank. He is a his Post Graduation in Tribhuwan University, India, is a Deputy CEO at CA from the Institute of Bank, exercises oversight
Chartered Accountant and Business Management from Kathmandu. He oversees the bank. He spearheads Chartered Accountants of over the areas of Treasury,
Member of the Institute of Institute of Productivity & Operations and Digitisation Finance, Human Resources, India along with holding a Remittance, and nBank
Chartered Accountants of Management in Lucknow, at the bank. With a Recovery & Contractor Master’s degree in business Operations within the
India and Nepal. He also India and B. Com (Honors) comprehensive experience Business Units. He brings studies from Tribhuwan institution. He holds an
holds Masters of Financial from Delhi University, India. in marketing, consumer with him his experience of University. Mr. Pandey MBA from Kathmandu
Analysis degree from the In his 27 years of banking banking, digitalization, and working at the central bank assumes responsibility for University. He has overseen
University of New South career with impeccable track operations, Mr. Regmi has of the country which enables corporate and wholesale bank's international banking
Wales, Australia. He has record, he has delivered a deep understanding of him to have a broader banking operations, endeavors and its strategic
previously served as the successfully across various the banking industry. His outlook about the bank. liability management, and expansion initiatives. Prior
CEO of erstwhile Nepal strategic and leadership leadership capabilities have He has diverse experience infrastructure banking to joining the bank, he
Bangladesh Bank Ltd. positions in different consistently driven growth in sectors like hydropower functions, drawing from worked as the Head of
(acquired by Nabil Bank verticals like Strategy, Sales, and success within the as well along with his a wealth of experience Financial Markets and Sales
in FY 2021-22). He has Corporate & Infrastructure organization, making him experience in the banking across diverse financial at Standard Chartered Bank
also held the position Banking, Retail Banking, a valuable asset in shaping industry. Prior to his tenure at institutions. His expertise Nepal.
of Chairman of Nepal Business Development and Nabil’s digital future. Nabil, Mr. Gyawali worked lies in corporate strategy,
Bankers Association during Liabilities Management, as the Chief Executive wholesale banking, and
2018-2020. His previous SME Finance, Digital Officer at Jyoti Bikas Bank financial management
employment also includes Banking, Human Resources Limited and also served as reflecting his comprehensive
at the role of Director in different organizations. Vice president of Nepal Italy understanding of the
at the country’s central Prior to joining Nabil Bank, Chamber of Commerce and financial landscape.
bank. His rich experiences he served as the Deputy Industry. He was also the
in the field of banking CEO of Global IME Bank Past Treasurer of Association
and policy formulation Ltd. Currently leading SME of Chartered Accountants
enables him to lead the Lending, Retail Assets and of Nepal, and Executive
bank towards greater Liabilities, Retail Transaction member of Management
heights. His skills as a Banking, Credit Approval Association of Nepal.
finance professional paired Centre and chairing many
with his strategic vision, important committees in
exceptional leadership, and the Bank, he helps drive the
management expertise make business growth of the bank,
him an impactful CEO. especially championing the
granularity and sustainable
banking focus of the
Bank, alongside fostering
innovation and pushing a
paperless work environment
in order to make Nabil a
future ready Bank.

52 NABIL BANK LIMITED ANNUAL REPORT 2022/23 53

 LONG SERVING STAFF: NABIL’S HEROES
EXECUTIVE
Nabil Bank boasts some of the longest serving staff in the banking
MANAGEMENT
industry. These personnel have manned key functions during the best
TEAM
and the worst of times at the bank. The bank is humbled by their
commitment and dedication to both the institution and the banking
industry in Nepal. Thank you!

Table 5: Nabil Heroes

FULL NAME DESIGNATION SERVICE PERIOD (IN YEARS)

MR. GANESH MR. GYANENDRA Binaya Kumar Regmi Deputy Chief Executive Officer 37
PRASAD AWASTHI PRATAP SHAH Gyanendra Pratap Shah Deputy General Manager 33
Sulabh Kumar Shrestha Manager (M4) 33
DEPUTY GENERAL DEPUTY GENERAL
Suresh Prasad Tripathee Manager (M4) 31
MANAGER MANAGER
Kailash Tripathi Manager (M3) 29
Suresh Jung Karki Manager (M3) 28
Mr. Ganesh Prasad Mr. Gyanendra Pratap
Hari Prasad Koirala Manager (M3) 27
Awasthi serves as the Chief Shah serves as the Chief Jyoti Man Shrestha Manager (M3) 26
Operating Officer of the Risk Officer at Nabil. With Digendra Chand Manager (M2) 30
bank. He holds a Master a Master's degree in Public Krishna Kumar Thapa Manager (M2) 29
of Business Studies (MBS) Administration (MPA) from Dambar Bahadur Shrestha Manager (M2) 28
degree from Tribhuvan Tribhuvan University, and Vinisha Shrestha Manager (M2) 28
University, complemented Post Graduate Diploma in Pramod K.C. Manager (M2) 26
by a Master of Arts in Management in Financial Samik Regmi Manager (M1) 32
Murari Prasad Aryal Manager (M1) 29
Economics (MA Eco) degree management through
Santosh Bhattarai Manager (M1) 28
from the same institution. distance learning program
Rabin Shakya Manager (M1) 27
Mr. Awasthi's career of NMIMS, Mumbai.
Binaya Devkota Manager (M1) 27
trajectory showcases a series Mr. Shah brings a wealth Manika Shrestha Manager (M1) 26
of pivotal leadership roles of knowledge to his current Prashant Nath Upreti Acting Manager (M1) 33
across various distinguished responsibilities. His tenure Puran Bahadur Bhat Officer (O2) 32
banks in operations, at Nabil Bank has seen him Tirendra Singh Basnet Officer (O2) 31
marketing, business occupy various significant Gayatri Giri Officer (O2) 31
promotion and credit. roles, notably as Chief Mohan Kafle Officer (O2) 31
Risk Officer and Chief Keshab Raj Subedi Officer (O2) 31
Nandita Malla Pradhanang Officer (O2) 28
Business Officer overseeing
Rajeeb Shrestha Officer (O2) 27
Corporate and Infrastructure
Sujan Raj Pandey Officer (O2) 27
Finance. In these capacities, Jayesh Rajkarnikar Officer (O2) 26
Mr. Shah spearheaded Khagendra Bahadur Poudel Officer (O2) 26
initiatives in corporate, Sanjaya Giri Officer (O2) 26
infrastructure, and project Anjana Lohani Officer (O2) 25
financing, among other Pushpa Pokhrel Officer (O1) 31
pivotal areas. Birendra Kumar Shrestha Officer (O1) 31
Anjalee Shakya Officer (O1) 30
Rajendra Khatiwada Officer (O1) 27
Pratibha Shrestha Officer (O1) 26
Dwarika Shrestha Officer (O) 25
Govinda Prasad Paudyal Assistant (A3) 35
Bala Raj Shrestha Assistant (A1) 26
Krishna Bahadur K.C. Senior Messenger 32
Kedar Bhattarai Senior Messenger 30
Kamal Giri Senior Messenger 28
Binod Dangol Senior Messenger 27
Sukdev Bajgain Senior Messenger 26
Beg Bahadur Shrestha Senior Messenger 25
Bishwo Maharjan Senior Driver 30
Kul Bahadur Shrestha Senior Driver 28
Babu Raja Maharjan Senior Driver 28
Krishna Maharjan Senior Driver 26

54 NABIL BANK LIMITED ANNUAL REPORT 2022/23 55

 SUCCESS STORIES NABIL IN
RENEWABLE ENERGY
NABIL SCHOOL
OF SOCIAL
ENTREPRENEURSHIP
Nabil has a strong presence in Nepal’s FELLOWS
hydropower sector, where it was one of
the first banks to invest in an industry The Nabil School of Social
that was taking its first steps. Nabil Entrepreneurship (NSSE) is a little-
began investing in small projects known gem that has seeded and
and now has investments in different continues to support innovations
projects generating 2,000 megawatts across Nepal.
(MW) as lead bank and/or syndication
member bank. Among the feathers in Nabil SSE was launched in 26
its cap is its contribution to the 456 MW November, 2021 has been running
Upper Tamakoshi Hydropower Project, in all seven provinces of Nepal
a national pride project. Renewable as a part of Social Corporate
energy remains a priority at Nabil. responsibility (CSR). The program RAJ BIKRAM MAHARJAN YEM BAHADUR KARKI
seeks to provide knowledge, skill- Galli Maps (Fellow, I-Cohort) Agro Ilam
Nabil became a part of the project in sets, and resources and shape
2009 when it had extended a bridge mindsets of aspiring entrepreneurs Galli Maps- a product of Galli In Ilam, Nabil SSE handheld an
gap facility of NPR 400 million to the to address social issues through Express Pvt. Ltd. is Nepal's own map entrepreneur, Yem Bahadur Karki
promoter for preliminary works (road entrepreneurship. Nabil SSE application, which was launched with to upgrade and expand his coffee
construction). The move was guided by offers two types of courses: a the purpose of developing the most business. Agro Ilam, in Mangsebung of
bank's policy to support infrastructure fellowship course and a certificate accurate map of the country. The term the district, aims to create employment
development, particularly harnessing course. Fellowship course is galli translates as “side street” and to uplift the lives of farmers. Founded
Nepal’s hydropower potential. As the being undertaken in partnership true to its name, the application aims in 2016 B.S., the company engages
first mover among banks, Nabil had with Tribhuvan University, Faculty to help people navigate the by-lanes 350 farmers in its coffee campaign,
set up a dedicated Infrastructure & of Management, School of of the ancient cities of Kathmandu covering plantations spread across 600
Project Financing unit to handle hydro Management (SOMTU). The Valley and expand to other parts of ropanis of land with 60,000 plants.
financing. Nabil supported Upper duration of the fellowship is six the country. “We began Galli Maps The company has begun harvesting
Tamakoshi throughout the construction months. during the 2020 lockdown to find a coffee and provides eight full-time and
period, particularly for assisting it solution for efficient home delivery of 200 part-time jobs.
to overcome various uncertainties So far 36 social entrepreneurs goods and services,“ says Raj Bikram
including a period when last-hour have completed the fellowship Maharjan, the founder. “Providing the “My social entrepreneurial journey
changes had to be made in project course from two cohorts and have most detailed road with house numbers has been greatly aided by Nabil SSE.
design. The Upper Tamakoshi Project established 29 enterprises. Together was our aim.” Before I joined the SSE program, I
remains a major milestone for Nabil, their ventures have created 872 jobs lacked clarity on my goals and how to
and as a glowing example of successful both directly and indirectly. Similarly, Raj joined the Nabil SSE program achieve them, with limited knowledge
Public Private Partnership. Nabil has partnered with seven at the prototyping stage. The Nabil about marketing and the products
colleges in all seven provinces for SSE program guided him to focus on were not market-ready,” Yem Bahadur
The experience in Upper Tamakoshi three-month certificate courses. So completing one task at a time. “We Karki, Agro Ilam. “Nabil SSE has
has assisted the bank to become far, 270 people have participated officially launched our first version of transformed me from a farmer to
one of the largest contributors to and received certificates along with the app during the sessions and have social entrepreneur, now I understand
infrastructure building in Nepal, and establishment of 23 enterprises since had 100K users,” says Maharjan. my customers, target market, designing
the dominant presence it has in the under this program. The team received the ICT award products to match needs, and to
renewable energy sector. Even today, in 2022 and the Startup World Cup promote them effectively” he adds.
Nabil has investments in many high We have collected the stories from award in 2023. “I recommend the SSE
impact projects including the 900 MW some of our NSSE fellows as they to others as it provides the know-how
Arun 3 Hydroelectricity Project. share their journey in their own to build a successful and sustainable
words as follows: business."

56 NABIL BANK LIMITED ANNUAL REPORT 2022/23 57

 Ashim Bhadra – Aifiverse Dikshya Poudel - Kosis Enterprises,
Technologies Pvt. Ltd (Fellow I Cohort) (Fellow, I-Cohort):
n Sector: Omnecal a product of n Sector: Empowering rural communities
Aifiverse Technologies Pvt. Ltd. aims to through financial independence and
revolutionize the transportation industry entrepreneurship.
in Nepal through digitization and n "The learnings during the fellowship
BINILRAJ ADHIKARI, SHANTARAJ BHANDARI, cashless payment systems. and the support after have been
Pi-Innovations Pvt. Ltd Creative Floral, Poultry & Husbandry Agro n "My training journey has been truly very important for shaping me as an
(Fellow, II-Cohort) Farm (Fellow, II-Cohort) incredible. The presence of amazing entrepreneur."
mentors have been the light posts."
Sikshyashala- a product of Pi- Shantaraj Bhandari had spent 18 years
Innovations Pvt. Ltd has a vision to running a non-profit organization called
develop a platform that assists students Lovelight Society that provided shelter,
in preparing for competitive exams food, and education to orphans. However,
through state-of-the-art Machine depending solely on foreign funds
Learning Algorithms,” an IT enthusiast became challenging, especially during
told Nabil SSE. “We track learning the COVID-19 pandemic. Realizing the
patterns of students and identify their need for sustainable income, he decided
weak points and use our in-house to venture into poultry, vegetable farming,
Machine Learning Algorithm to suggest and the nursery business to pay for the
the most effective learning methods.” social work.
Before joining Nabil SSE, Binilraj
Adhikari, said his focus was primarily ”During the 6-month journey, the NSSE
on himself and his challenges when helped me design and manage my
developing products. “The NSSE business professionally, says Bhandari. “It
transformed my approach, taught me has made me more confident and now I
to prioritize users' needs and create believe more on the possibilities."
products to address their requirements” Divya Maharjan – Nutrasmetic Suraj Rijal - Waling Agro Processing Pvt.
he says. “The program has also So far, Nabil SSE has influenced the lives Industries Pvt. Ltd., (Fellow, II-Cohort): Ltd, (Fellow, II-Cohort):
provided insights into legal and of 36 entrepreneurs through the program. n Sector: High-quality skincare products, n Sector: Providing high-quality, sustainably
financial aspects of doing business.” Some others who were in the program committed to using locally available sourced ginger and other agro-products
and what they have to say are provided resources. to promote local community growth.
below: n "It was very helpful for me to understand n "The sessions were very interactive and
the entire concept of business and also helpful. There were great facilitators and
to network with participants." the selection of enterprises represented
was very diverse."

58 NABIL BANK LIMITED ANNUAL REPORT 2022/23 59

 MILESTONES
Nabil has consistently enhanced its performance, which is evidenced by multiple recognitions and
awards, over the years. The following section lists some of the milestones.

n 2004 n 2016 n 2020 n 2022

Bank of the Year Financial Institution of the Year 2016, Leading Partner Bank in SME Financier of the Year-
(By Frost and Sullivan) Nepal 2020 (By the Asian Asia, under Global SME
Development Bank) Finance Award - 2022
Commercial Bank 2016
Nepal’s Best Bank 2020 National HR Excellence
n 2014
Best Domestic Bank 2016 (By Euromoney) (By Euromoney) Award 2022
Best Presented Annual
Report Award 2014, Acquisition of erstwhile
ICAN Nepal Bangladesh Bank
n 2013
Limited 2022
People Excellence Award
– Large Enterprise, 2013
National Best Presented
(The award is given by the
Annual Report Award
Federation of Nepalese
2022 (Silver), ICAN
Chamber of Commerce &
Industry, FNCCI)
VISA Excellence Award 2022

2000's
2016 2020
n 2009-2013 n 2019 n 2021 n 2023
Best Presented Annual Report Best Digital Bank 2019, Acquisition of erstwhile United Finacle Excellence
Award 2009 (The award (By Euromoney) Finance Limited, 2021 Award 2023
is given by the Institute of
Chartered Accountants of Leading Partner Bank in Nepal
Nepal or ICAN) 2021, (By the Asian Development
n 2015
Bank)
Leading Partner Bank
of Nepal 2015 (By the Excellence in Employee Experience
Asian Development Award 2021, (By Growth Seller)
Bank)
SME Financier of the Year- Asia
2021 (Honorable Mention), (By the
International Finance Corporation
and the SME Finance Forum)

60 NABIL BANK LIMITED ANNUAL REPORT 2022/23 61

 AWARDS & HIGHEST
RECOGNITIONS TAXPAYER
AWARD
The continuous efforts of Nabil towards JOURNEY
providing best financial solutions to Nabil Bank Limited: Ratings Placed on Watch with Negative Implications1
customers has made it a trusted name in Nabil has been
the Nepali financial ecosystem. Some of awarded by 'Highest March 7, 2023
the awards received by the bank in the Taxpayer Award'
reporting period are as follows: by Inland Revenue
Summary of rating action
Department in many
INSTRUMENT/FACILITY RATED AMOUNT RATING ACTION
[ICRANP-IR] AA-@*; placed on Watch with Negative
1) National Best Presented Annual Report fiscal years for its Issuer Rating NA
Implications
Award 2022 (Silver) contribution in taxes to
[ICRANP] LAA-@*; placed on Watch with Negative
2) SME Financier of the Year – the government's office. Subordinated Debenture Program NPR 2,000 million
Implications
Asia (2022) Subordinated Debenture Program NPR 2,000 million# [ICRANP] LAA-@; assigned
3) VISA Excellence Award 2022 FY 2010/11 *The symbol ‘@’ indicates Rating Watch with Negative Implications; Instrument details are provided in Annexure-1
4) Finacle Excellence Award 2023 FY 2014/15 # Debenture issued by erstwhile Nepal Bangladesh Bank.
5) Highest Taxpayer Award 2021/22 FY 2016/17
FY 2018/19
Rating action
FY 2019/20
ICRA Nepal has placed the Nabil Bank Limited’s (Nabil’s) issuer rating on “Watch with Negative Implications” as indicated
FY 2020/21
by [ICRANP-IR] AA-@ (pronounced ICRA NP issuer rating Double A minus). Issuers with is rating are considered to be of a
BEST PRESENTED FY 2021/22
high degree of safety regarding the timely servicing of financial obligations. Such issuers carry very low credit risk. The
AWARD JOURNEY
sign of + (plus) or – (minus) appended to the rating symbol indicates the entity’s relative position within the rating
categories concerned. The rating is only an opinion on the general creditworthiness of the rated entity and is not specific
Nabil’s commitment to stakeholder CREDIT RATING
to any debt instrument.
communication and information disclosure OF THE BANK
has been recognized by ICAN. It received
ICRA Nepal has also placed the bank’s subordinated debenture rating on “Watch with Negative Implications” as indicated
the award for the best-presented annual Nabil remains among the most
by [ICRANP] LAA-@ (pronounced ICRA NP L Double A Minus). ICRA Nepal has also assigned the rating of [ICRANP] LAA-@
report in the following years: robust businesses in the financial
to the debenture issued by erstwhile Nepal Bangladesh Bank Limited. Instruments with this rating are considered to have
sector with AA-@ rating issued
by ICRA Nepal Ltd. a high degree of safety regarding timely servicing of financial obligations. Such instruments carry very low credit risk. The
FY 2008/09 (Winner)
FY 2009/10 (Winner) sign of + (plus) or – (minus) appended to the rating symbol indicates the entities relative position within the rating
Year Issuer Rating categories concerned.
FY 2010/11 (Winner)
2022 {ICRANP-IR} AA-@
FY 2011/12 (Winner)
2021 {ICRANP-IR} AA-
FY 2012/13 (Winner) Rationale
2020 {ICRANP-IR} AA-
FY 2013/14 (Winner) The rating watch with negative implications is mainly on account of the recent deterioration in the Nabil’s assets quality
2019 {ICRANP-IR} AA-
FY 2021/22 (Runner-up) profile with higher than industry average non-performing asset (NPA) levels (2.98% as of mid-January 2023 against 2.49%
2018 {ICRANP-IR} AA-
for the industry), along with spike in 0+ days delinquencies (~25% as of mid -January 2023). The recent slippages have
2017 {ICRANP-IR} AA-
impacted the bank’s solvency profile (net NPA/ net worth) which has slipped to ~9%, on a higher side among the industry
Companies with AA- rating peers as of mid-January 2023. While the spike in delinquencies can be partly attributed to post-merger integration of
are considered to be having credit books acquired from Nepal Bangladesh Bank Limited, the uptick in delinquencies coinciding with recent economic
a high degree of safety slowdown, end of COVID-19 related moratorium/relaxations in mid-July 2022, high interest rate environment and
regarding timely servicing of tightening liquidity in banking industry remains a concern for Nabil’s incremental asset quality outlook. Given the low
their financial obligations. provision cover, sustained stress in asset quality could have a major impact on the bank’s profitability and capitalization
Such companies carry very low indicators through additional credit provision expenses, which remains a major rating concern. Rating concerns also
credit risk. The rating is only emanate from the moderation in the deposit portfolio and liquidity profile of the bank as reflected in a decline in CASA
an opinion on the general deposits, uptick in cost of deposits, high CD ratio and relatively high deposit concentration.
creditworthiness of the rated
entity and is not specific to any Nonetheless, the ratings continue to derive comfort from Nabil’s long track of operation (since 1984), its healthy market
particular debt instrument. share, strong promoters, seasoned management team and established brand reputation. The ratings also factor in the
The detailed report follows bank’s fair capitalisation profile with adequate cushion, both at capital to risk weighted assets ratio (CRAR) and tier -I
hereafter.
1 Please refer here for details on rating watch and its meaning/implications.
62 NABIL BANK LIMITED
levels, which stood at 12.40% and 10.08% respectively as of mid-January 2022 vis-à-vis minimum regulatory requirement mid-October 2021 making Nabil one of the most granular banks in the industry. The deposit concentration, albeit on a
of 11%, common equity tier-I (CET-I) of 7% and tier-I capital of 8.5%. This coupled with the increasing granularity of credit higher side, has remained same with top-20 depositors contributing for ~25% of total portfolio.
portfolio remain positive (concentration among top-20 borrowers/groups declined to ~13% as of mid-January 2023 from
~18% as of mid-October 2021, when last rated). The rating also positively factors in the bank’s good profitability profile Credit challenges
partly supported by the relaxations on interest spread cap as a part of merger incentives, to be applicable for one year Increased delinquency and NPLs amid unfavourable economic environment– Nabil reported major deterioration in its
from the date of commencement of post-merger operations (i.e., until mid-July 2023). This coupled with low operating asset quality since last rating , wherein NPLs have spiked to 2.98% as of mid-January 2023 (industry average of 2.49%)
expense ratio of the bank remains a positive for bank’s ability to generate internal capital. Going forward, the bank’s from 0.84% as of mid-July 2021. Moreover, 0+ days delinquency levels increased to ~25% as of mid-January 2023 from
ability to improve its asset quality and solvency position, maintain adequate capital cushion and improve its funding and ~12% as of mid-October 2021. Higher fresh slippages have also led to lower provisioning cover which has moderated the
liquidity profile will remain a key rating monitorable and sensitivity. Sustained deterioration in these areas could exert bank’s solvency indicators (net NPL to net worth) to 8.79% as of mid-January 2023 compared to 3.75% as of mid-October
2021. Although the rising delinquency can be partly attributed to the integration of credit book acquired from NBB, it
downward pressure on the ratings.
nonetheless creates risk of a sustained impact on asset quality, given the unfavourable economic environment created
by high interest rate, credit crunch and regulatory changes like introduction of stringent working capital guidelines, etc.
Going forward, Nabil’s ability to improve its asset quality profile, contain its delinquencies and maintain adequate capital Sustained high NPAs could further increase the provisioning expenses and could impact the incremental profitability and
cushion to withstand probable credit shocks will remain key rating sensitivities. Moreover, maintaining its competitive capitalisation for the bank and could have a rating implications.
positioning in the industry, protecting profitability profile, and improving its deposits profile will remain among other key
rating drivers. Moderation in funding profile and liquidity profile– Nabil’s current and saving accounts (CASA) have depleted in the last
18 months to ~35% as of mid-January 2023 from ~51% as of mid-July 2021 (vs. industry average of ~35% as of mid-Januar y
2023). Declining low-cost deposits has spiked the bank’s cost of deposits in the recent periods. This has largely impaired
Key rating drivers the Nabil’s competitive position amid the base rate plus lending regime. Bank’s high credit to deposit ratio (89% as of
Credit strengths mid-January 2023, as per the regulatory method of calculation vs. regulatory cap of 90%) has left minimal space for the
future credit growth despite decent deposit growth (annualised growth of ~13% in H1FY2023 vs. ~7% for the industry) .
Long track record, healthy market share, strong promoter and experienced management team– Operating since 1984,
Likewise, liquidity ratio has also reported gradual moderation in the recent years (total liquid assets/total liability ratio of
Nabil bank is the first private sector bank of Nepal with a long track record of operations. The bank’s track record in terms
of growth, profitability and assets quality has remained strong over the years. Post-acquisition of Nepal Bangladesh Bank, ~21% as of mid-January 2023 from ~30% as of mid-July 2020). Furthermore, concentration among top-20 depositors
Nabil’s geographical presence has improved with 246 branches across the country as of mid -January 2023 (135 as of mid- continues to remain high (~25% as of mid-January 2023).
October 2021) and its market share has improved to ~7.5% share in total deposits and ~7.6% share in total credits as of
Uncertain operating environment – The banking industry has faced stress with the general weakening in the country’s
mid-January 2023 (from ~5.3% as of mid-October 2021). The bank is mainly promoted by individuals and institutions
related to Chaudhary group, one of the leading family-owned business houses in Nepal. Nabil’s board of directors and macroeconomic outlook in the recent periods. The expiry of all COVID-related relaxations/ liquidity support/ moratorium
from mid-July 2022 could result in gradual unravelling of asset quality concerns in the banking industry. Additionally, the
the management team comprise of seasoned professionals in the Nepalese banking and business sector.
stress on the market liquidity in the recent periods with widening trade deficit, pressure on foreign reserves and
Healthy profitability profile supported by adequate NIMs and operating efficiency– Nabil has outperformed its industry consequently lower deposit formation has led to the shortage of loanable funds and increased the banking sector interest
peers in terms of profitability profile and return indicators over the years with strong Net Interest Margins (NIMs) and rates. Furthermore, the demand slowdown for most sectors amid an inflationary economic outlook along with the
regulatory control measures to curb the imports such as higher margin requirement for letter of credit (LCs), increased
improving operating expenses. Profitability indicators for FY2022 remained muted due to acquisition wherein profits of
risk weightages to certain segments etc has affected the business profile of borrowers across the spectrum in various
the acquired entity (erstwhile NBB, merged operation started from July 11, 2022, i.e., just before the year -end date) was
adjusted directly through reserves while closing assets/ net-worth base were inflated due to acquisition. Profitability degrees. The increasing repayment liability of the borrowers and the inability of the banks to extend the credit facilities
during H1FY2023 has improved with the better NIMs and improving operating efficiency ; despite the pressure from amid tight liquidity as well as recently introduced stringent working capital guidelines by the regulator, could create asset
quality stress and remains a rating concern across the industry.
increasing credit cost amid deteriorating assets quality. The reported return on assets (RoA) of 1.61% and return on net
worth (RoNW) of ~12.8% remains marginally better than the industry average of 1.11% and 11.74% respectively for
H1FY2023. However, the profitability remains supported by the relaxations on interest spread cap until mid -July 2023 Analytical approach: For arriving at the ratings, ICRA Nepal has applied its rating methodologies as indicated below.
(i.e., one year from the commencement of combined operations). The bank’s ability to maintain the interest margins on Links to applicable criteria:
a sustained basis while managing the credit cost will remain crucial for its incremental profitability profile . Bank Rating Methodology
Issuer Rating Methodology
Adequate capitalisation profile– Nabil has maintained an adequate capitalisation profile with CRAR of 12.40% and tier-I
of 10.05% as of mid-January 2023 (albeit lower than industry average of 13.01% and 10.13% respectively) against a Links to the last rating rationale:
minimum requirement of 11% for CRAR, CET-I requirement of 7% and tier I capital of 8.5%. While the portfolio growth
Rationale- Nabil Bank Limited-Ratings Surveillance January 2022
was modest, CRAR has declined compared to FY2021 levels owing to regulatory increase in risk weightages for personal
Rationale- Nepal Bangladesh Bank Limited-Ratings Surveillance December 2021
overdraft loans, personal hire purchase loans, real estate loans and margin loans, uptick in delinquencies as well as cash
dividend out of FY2022 profits. The bank’s ability to maintain the cushion commensurate to its growth plans and
prevailing asset quality concerns will remain a key rating monitorable. Company profile
Nabil Bank Limited (Nabil), the first private sector class A commercial bank in Nepal, started its commercial operations
Improved portfolio granularity– The portfolio concentration has declined significantly since the last rating exercise aided from July 1984 as Nepal Arab Bank Limited. The name was changed to Nabil bank, following the withdrawal of joint
by the higher credit growth (due to acquisition) and granularity on the incremental profile. The concentration on top-20 venture partner Emirates Bank International in 1997. The bank acquired another class-A commercial bank, Nepal
borrowers has decreased to ~13% (95% of tier-I capital) as of mid-January 2023 from ~18% (~136% of tier-I capital) as of Bangladesh Bank Limited (NBB) on July 11, 2022. Its head office is located at Kathmandu. Following the acquisition of
NBB, Nabil is among the top three banks in terms of asset base and net-worth.
 Instrument Detail:
The major promoters of the bank are NB International Ltd., Ireland (39.44%), IFIC Bank Ltd. (7.77%), Rastriya Beema
Instrument Name Interest Amount Interest Issue Year Maturity Period
Company Ltd. (7.63%). Mr. Gyanendra Prasad Dhungana is the Chief Executive Officer of the bank. The bank’s equity Rate Payment
share is listed in Nepal Stock Exchange (NEPSE) and the bank is one of the leading companies in term of market Nabil Debenture 2082 10% p.a. 2,000 million Half yearly FY2020 7 years
capitalization. NBBL Debenture-2085 10.25% p.a. 2,000 million Half yearly FY2019 10 years

As of mid-January 2023, Nabil has presence throughout the country through its 246 branches, 17 extension counters and
275 ATMs. Nabil has market share of ~7.5% in terms of deposit base and ~7.6% of total advances in Nepalese commercial For further details please contact:
banking industry as on mid-January 2023. Nabil reported a profit after tax of ~NPR 4,256 million during FY2022 over an
asset base of NPR 418,427 million as of mid-July 2022, against profit after tax of ~NPR 4,527 million over an asset base of
Analyst contacts
NPR 277,432 million as of mid-July 2021. During H1 FY2023, the bank reported profit after tax of NPR 3,417 over an asset
Mr. Sailesh Subedi (Tel No. +977-1-4419910/20)
base of ~NPR 433,120 million as of mid-January 2023. As of mid-January 2023, Nabil’s CRAR was 12.40% with Tier I capital
[email protected]
of 10.05% and gross NPLs stood at 2.98%. In terms of technology platform, the bank has implemented Finacle acros s all
its branches. Ms. Kushum Bhattrai (Tel No. +977-1-4419910/20)
[email protected]
Key financial indicators
July 2019 July 2020 July 2021 July 2022 January 2023 Relationship contacts
Year Ended
(Audited) (Audited) (Audited) (Audited) (Provisional) Ms. Barsha Shrestha (Tel. No. +977-1-4419910/20)
Net interest income 7,159 6,984 8,076 8,919 7,833 [email protected]
Profit before tax 6,041 5,095 6,255 6,288 4,883
Profit after tax 4,239 3,463 4,528 4,256 3,418
Loan and advances 132,486 153,011 205,131 309,071 324,840 About ICRA Nepal Limited
Total assets 192,804 226,916 277,432 418,427 433,120 ICRA Nepal Limited, the first credit rating agency of Nepal, is a subsidiary of ICRA Limited (ICRA) of India. It was licensed
by the Securities Board of Nepal (SEBON) on October 3, 2012. ICRA Nepal is supported by ICRA Limited through a technical
Operating ratios support services agreement, which envisages ICRA helping ICRA Nepal in areas such as the rating process and
Yield on average advances 11.44% 10.34% 8.12% 8.09% 12.25% methodologies, analytical software, research, training, and technical and analytical skill augmentation.
Cost of deposits 5.43% 5.32% 4.26% 4.94% 7.75%
Net interest margin/ATA 4.05% 3.33% 3.20% 2.56% 3.68%
Our parent company, ICRA Limited was set up in 1991 by leading financial/investment institutions, commercial banks and
Non-interest income/ATA 1.23% 1.02% 0.94% 0.74% 0.80%
financial services companies as an independent and professional investment information and credit rating agency. Today,
Operating expenses/ATA 1.64% 1.51% 1.83% 1.17% 1.30%
ICRA and its subsidiaries together form the ICRA Group of Companies.
Credit provisions/ATA 0.23% 0.41% 0.33% 0.32% 0.89%
For more information, visit www.icranepal.com
PAT/ATA 2.40% 1.65% 1.80% 1.22% 1.61%
PAT/net worth 19.37% 14.12% 15.16% 9.80% 12.79%
ICRA Nepal Limited,
Gross NPLs 0.74% 0.97% 0.84% 1.62% 2.98%
0+ days delinquencies 6.82% 6.86% 13.87% 15.60% 24.90% Sunrise Bizz Park, 6th Floor, Dillibazar, Kathmandu, Nepal.
Phone: +977 1 4419910/20
Capitalisation ratios Email: [email protected]
Capital adequacy ratio 12.50% 13.07% 12.77% 13.09% 12.40% Web: www.icranepal.com
Tier-I Capital 11.40% 10.90% 10.67% 10.77% 10.05%
Net NPLs/net worth 1.03% 1.95% 2.10% 3.74% 8.79% All Rights Reserved.
Contents may be used freely with due acknowledgement to ICRA Nepal.
Liquidity ratios ICRA Nepal ratings should not be treated as recommendation to buy, sell or hold the rated debt instruments. The ICRA Nepal ra tings
Total liquid assets/total liability 28.56% 30.27% 23.46% 22.81% 21.39% are subject to a process of surveillance which may lead to a revision in ratings. Please visit our website ( www.icranepal.com) or
Total advances/total deposits 81.96% 80.65% 92.46% 95.20% 93.60% contact ICRA Nepal office for the latest information on ICRA Nepal ratings outstanding. All information contained herein has been
Source: Nabil, ICRA Nepal Research; Amount in NPR million unless mentioned otherwise obtained by ICRA Nepal from sources believed by it to be accurate and reliable. Although reasonable care has been taken to ensure
*CD ratio as per recent NRB guidelines that the information herein is true, such information is provided ‘as is’ without any warranty of any kind, and ICRA Nepal in
#CCD ratio as per earlier NRB guidelines particular, makes no representation or warranty, express or implied, as to the accuracy, timeliness or completeness of any such
information. All information contained herein must be construed solely as statements of opinion and ICRA Nepal shall not be l iable
for any losses incurred by users from any use of this publication or its contents.
 CRISP

RESULT
ORIENTED
We must ensure that everything
we do adds value to our Bank’s
bottom line in the short, medium
or long term. We are focused on
delivering end results that will
create sustainable environment,
society and governance.

68 NABIL BANK LIMITED ANNUAL REPORT 2022/23 69

 A management report strives to provide

REPORT
MANAGEMENT insights on how a business is being run,
the strategies being adopted to achieve its
objectives, the progress and achievements
of the organization and key milestones
as well as it’s future outlook. In this
section of the report, we have covered
a comprehensive review of the bank’s
financial position and performance as well
as the total value generated by the bank.

The Bank has been continuously strengthening its

financial position, expanding its customer base and
adopting diversification along with strategic investments
in infrastructure, technology and human resource pool to
ensure a sustainable success. This has also helped firmly
establish a competitive edge in the market.

As we reflect on the accomplishments of the past

year, we remain mindful of the responsibility we bear
towards our stakeholders and the broader society. Our
commitment to corporate social responsibility (CSR)
continues to guide our actions, driving positive social
and environmental impact while creating value for our
shareholders.

We remain cautiously optimistic about our ability to

capitalize on the opportunities amidst the uncertainties
posed by the economy. We believe that we will be able to
build on the strong foundation of the bank and continue
to surge together ahead.

70 NABIL BANK LIMITED ANNUAL REPORT 2022/23 71

 CHAIRMAN'S STATEMENT

TOWARDS
SUSTAINABLE
FUTURE

In 39 years of operation, Nabil Bank has firmly established

itself as the first-choice provider of all financial solutions.
The bank has remained fully committed to ensuring highest
level of customer satisfaction and delight, while remaining
the first mover into new opportunities. Nabil has a stable
base of NPR 403.12 billion in deposits, NPR 339.41 billion
in loans and a balance sheet size of NPR 481.20 billion.
Acquisitions of two financial institutions in the preceding
years contributed to the balance sheet alongside the
organic growth achieved by the bank.

Our focus now is ensuring that we run a Thirty-six social entrepreneurs

sustainable business to continue at the same
in the bank’s Fellowship
or enhanced level for many more decades
to come with the lightest environmental Program – the Nabil School
footprints. We have embedded sustainability of Social Entrepreneurship
in all business strategies adopted by the
established in collaboration
bank, and we are committed to using our
financial resources in ways that promote with the School of
environmental and social sustainability, Management, Tribhuwan
in our quest for financial stability and
University – have established
profitability. Towards this end, we have been
making every possible effort to integrate 29 new ventures and are
sustainability in all decisions we make. already employing 872 people.

72 NABIL BANK LIMITED ANNUAL REPORT 2022/23 73

 The bank has become a member of of borrowers and other challenging
the Partnership for Carbon Accounting economic conditions, Nabil has been
Financials (PCAF) and has been disclosures able to achieve good growth, and
on Greenhouse Gas (GHG) emissions corresponding returns to shareholders. A
associated with its loans and investments. growth of 22.67% in net profit, given the
The information is also available in this operational uncertainties, is indeed an
annual report. achievement. I am certain that the bank
will continue to generate good value and
The increased focus on rural banking, returns to in the coming days as well.
introduction of sustainable banking
loan products, and branchless banking This is the kind of success the bank strives
represents initiatives through which the to be associated with. That also explains
bank aims to create sustainable impact by Nabil’s efforts towards transforming its
promoting financial inclusion, digitization, banking services to make them more
and financial literacy. Nabil has also impactful at the individual, social, and
been prioritizing investment in small and environmental levels.
medium enterprises (SME) via a separate
vertical which focuses on lending to low- The culture of running a sustainable
income groups, women-run enterprises, business has been passed down in
youth, farmers, and aspiring entrepreneurs. Nabil leaders of the past by financing
The SME Financier of the Year – Asia in environmentally conscious businesses or by
Global SME Finance Awards 2022 won by inculcating a robust risk culture that assures
Nabil recognizes its efforts. business of the bank remains stable even
in the most difficult times. We, therefore,
Nabil now has a separate neo-banking owe the successes we have achieved to
vertical, nBank, which allows customers the visionaries and staff who were with
to enjoy all the services without leaving Nabil in its 39-year journey. I extend my
the comfort of their homes. The bank deepest respect and appreciation to my
had pioneered extending loans using predecessors both the visionaries and staff.
a completely digital platform when
it had introduced FoneLoan. nBank I express my sincere gratitude to the
takes digitization and ICT use to the regulators Nepal Rastra Bank, Securities
next level. The bank believes that Exchange Board of Nepal and Office of
digitization whilst ensuring security is Company Registrar for their continued
the future of banking and is committed guidance and support. I also thank all
to leaving no stones unturned towards our customers and business partners
this end. The bank was also awarded for their trust and cooperation. I humbly
the “Finacle Innovation Award 2023” acknowledge the contributions of
for the launch of nBank. Another shareholders, and express gratitude for
award, “VISA Excellence Award their guidance and support and look
2022”, recognizes the excellent growth forward to similar co-operation going
and achievements in debit card and forward.
e-commerce acquiring businesses
among all banks in Nepal. Finally, I firmly believe we at the bank will
continue to add more stars to the Nabil
Other awards received by the bank include brand. Thank You, fellow board members
the “National Best Presented Annual and my team at Nabil, let us continue to
Report Award 2022 (Silver)” in 2023. The invest our efforts to make this organisation
Government of Nepal has also recognized stronger.
Nabil as the largest taxpayer in the banking
sector for Fiscal Year 2021/22. Namaste Nabil!

Despite the challenges posed by degrading Upendra Prasad Poudyal

asset quality, erosion of repayment capacity CHAIRMAN

74 NABIL BANK LIMITED ANNUAL REPORT 2022/23 75

 CEO'S PERSPECTIVE

BANKING
TODAY FOR
TOMORROW

2022/2023 has been a noteworthy year for us at Nabil. We

have displayed the best performance in the banking industry
so far, particularly in terms of post-merger and acquisition
(M&A) organizational alignment and the resulting synergistic
gains, evidenced in the financial reports. Nabil had acquired
the erstwhile Nepal Bangladesh Bank in the fourth quarter of
2021/2022.

After the M&A we prioritized decisions loans by 10.48%. We have delivered a

and actions to support amalgamation 22.67% growth in net profit compared to
of systems, people, and cultures, while the combined base of Nabil’s profit of the
taking care to continuously attend to year before and the pre-acquisition profit
the aspirations of our customers and of the acquired entity. In the process we
stakeholders. The entire process required also benefited from regulatory incentives
careful planning, timely interventions, related to M&A, particularly the interest
and absolute commitment across the spread incentive.
organization starting with top management
to the frontlines. As such, it has proposed
a total dividend of 11%
The year-end financial numbers have paid out in cash and
been satisfactory and match investor
expectations. We have expanded our
will continue to work
balance sheet by 14.62% overall, while towards enhancing
increasing deposits by 21.65% and gross value for stakeholders.

76 NABIL BANK LIMITED ANNUAL REPORT 2022/23 77

 This allowed the bank to operate with an I want to assure our customers, investors,
additional 100 basis points in interest employees, and stakeholders at large
spread compared to the standard that Nabil Bank will push the bar further
threshold spread ceiling. to continuously set new standards in
domestic banking. We are committed to
The dent in the bottom line has investing in technology and in initiatives
resulted from credit impairment aimed at raising public awareness of
charges owing to non-performing digital channels and its use for seeking
loans – the ratio reached to 3.39%, banking services. Initiatives on digital
which has generally resulted from the channel expansion, process automation,
prevailing subdued macro conditions operational efficiency, and innovation
and prudent risk management will continue with increased commitment.
decisions. We closed the year 2022- A key priority continuation for us is
23 with market shares of 7.93% in transaction security and adherence to
deposit, of 7.92% in loans, and were anti-money laundering and combating
placed in second position among the financing of terrorism related policies
commercial bank for deposit, loans, and measures. We will also continue
and net profit. investing on developing of our human
capital to make us the bank that leads
We need to remain vigilant as the the industry in all fronts.
dampened aggregate demand conditions
can have a bearing on the bottom line as I express my sincere gratitude to the
well as on the capital position of banks Board of Directors for trusting me and
in general. The industry has witnessed supporting my team in the decisions we
a slowdown in fresh credit offtake while have taken, and our actions in managing
the default rates have grown. Capital the bank. I thank the auditors and
regulations have also tightened with regulators for their support and guidance
buffer requirements. in our journey.

We, therefore, maintain a moderately Finally, I thank our customers for their
positive outlook on the macro variables. confidence in the Nabil brand and
We will continue to look into selective patronage and look forward to continued
growth opportunities while also support.
consolidating legacy portfolios in line
with our prudent banking orientation. Namaste Nabil!
In doing so, we will align ourselves with
the regulatory priorities of the central Gyanendra Prasad Dhungana
bank and broadly with the economic CHIEF EXECUTIVE OFFICER

development vision of the Government.

Nabil is fully committed to sustainable
banking and this sustainability spirit will
reflect in all our decisions and actions.

78 NABIL BANK LIMITED ANNUAL REPORT 2022/23 79

 STRATEGIC DIRECTION SWOT ANALYSIS OF THE BANK

Phase 1 Phase 2 Phase 3

Digital
FY 2020-21 Revival Acceleration Ecosystem FY 2024-25

Agni Tattva (Sales Pillar), Vayu Tattva (Support Pillar), Aakash Tattva (Strategy Pillar), Jal Tattva (Control Pillar)
S
STRENGHTS
W
WEAKNESSES
O
OPPORTUNITIES
T
T H R E AT S
and Prithvi Tattva (Compliance Pillar)

Nabil Bank is driven by its forward-looking approach The immediate priorities for Nabil, considering the
towards delivering the best financial services to customers. selectively promising macro-outlook, are to maintain
Its actions are driven by the commitment to be the Bank of a satisfactory risk profile while continuing the growth
1st Choice for all stakeholders. We continuously function momentum in low-risk segments. The bank has
by our institutional values of being customer-focused, adopted an agile strategy and is capable of rebalancing
result-oriented, innovative, synergistic, and professional between retail banking and corporate banking in 1. Brand Value 1. SME financing
in all actions and behaviors. The following set of values pursuit of a quality balance sheet. The bank has grown 2. Capitalization 2. Virtual banking services
defines our culture and drives Nabil Bank forward. significantly in size, which is the result of effective 3. Management depth 3. Technology adoption
strategy execution, which, in turn, has also exposed it to 4. Branches network 4. Inward remittance
Nabil Bank is executing its long-term strategic framework emerging operational risks. Anti-money laundering and 5. Scale of operations 5. Foreign operations
NABIL 2025, which spans a five-year period covering FY combatting financing of terrorism (AML/CFT) as well as
2020-21 through FY 2024-25. It encompasses the bank’s other regulatory compliances and prudent banking will
strategic direction and action plans to drive the bank continue be priorities. Capital management to support 1. Limited avenues for 1. Uncertain global
towards attaining its Vision and Mission. NABIL 2025 is the bank’s growth aspiration and a satisfactory capital directed sector lending geopolitical situation
inspired by the eastern philosophy of Panch Tatva, leading cushion to absorb probable balance sheet shocks will also 2. Limited foreign debt 2. Slowdown in the
to five-pillar structural balance between the Agni Tatva continue. The bank will continue to strengthen and align
mobilization domestic economy
3. Limited foreign presence 3. Competition in the
as the Sales Pillar, Vayu Tatva as the Support Pillar, Akash its framework of risk management under the changing
4. Regulated pricing structure banking industry
Tatva as the Strategy Pillar, Jal Tatva as the Control Pillar, economic context.
5. Constraint of regulatory 4. Emerging Fintech
and the Prithvi Tatva as the Compliance Pillar. capital companies /
Over the medium term, the bank will continue its pursuit Customer shift
NABIL 2025 has been structured for a three-phase of market share, building upon its core capabilities and towards e-wallets
execution. Phase I strategies covered short-term plans leveraging its competitive strength. Scaling up operations 5. Short supply of
of revival, and Phase II covered medium-term plans for and services, gaining wider penetration, delivering an skilled human
acceleration. The actions planned in these phases have above-par customer experience journey with Nabil, resources
been successfully executed. The bank now stands firm and ensuring secure and sustainable partnerships with
and resolute towards executing the Phase III action plans clients and stakeholders are the directions set by the
through the current and next financial year to 2024-25. bank. Sustainability is an area highly valued by Nabil
The direction is to leverage technological capabilities stakeholders, and it has been considered in defining and
that have been developed and enable customers to designing the bank's strategies. In the long term, Nabil
experience seamless integration into the digital banking intends to have a positive impact on the environment
journey. We visualize Nabil getting closer to complete and in the lives of people and make the driving the Nabil
ecosystem banking for catering to corporate customers brand sustainable in the process.
and consumers alike.

80 NABIL BANK LIMITED ANNUAL REPORT 2022/23 81

 REPORTING The audited financial statements of the Bank has 2. REPORTS PERTAINING TO CORPORATE of the Directive Related to Corporate Governance

FRAMEWORK
been prepared in line with existing regulations and GOVERNANCE for Listed Companies, 2017.
guidelines issued by Nepal Rastra Bank (NRB), the n Disclosure of functions and agendas of Board n Risk Management Framework of the Bank.
banking regulator, and is complaint with the applicable level committees.
financial reporting standard prescribed by the Institute n Disclosure of information under section 109(4) of 3. INTEGRATED REPORTING
of Chartered Accountants of Nepal (ICAN). The the Companies Act 2006. n Disclosure in accordance with the International
reporting framework used to prepare the financial n Disclosure related to Sub rule (2) of rule 26 of Integrated Reporting Council (IIRC).
statements are listed below: Securities Registration and Issuance Regulation,
2016. 4. DISCLOSURE OF OTHER FINANCIAL AND
1. PROCESS OF PREPARATION OF FINANCIAL n Disclosure under Sub rule (3) and (4) of rule 20 NON-FINANCIAL ASPECTS OF THE BANK
STATEMENTS

The financial statements have been prepared in

compliance with Unified Directives issued by NRB
for “A”, “B” and “C” Class licensed Banks and
Financial Institutions (BFIs), Nepal Financial Reporting
Standards, Bank and Financial Institution Act, 2017,
Companies Act, 2006 Nepal Rastra Bank Act, 2002,
Capital Adequacy Framework, 2015, Income Tax Act,
2002 and amendments thereto

Compliance check by Internal Audit

Compliance check by External Audit (S.A.R Associates/

P.J.P. N & Co.) in accordance with Nepal Standards on
Auditing (NSAs), and other technical standards and
guidelines published by ICAN

Compliance check and approval by Nepal Rastra Bank

Approval by Board of Directors

Audited Financial Statements

Approved by Annual General Meeting

82 NABIL BANK LIMITED ANNUAL REPORT 2022/23 83

 REVIEW OF PARTICULARS DESCRIPTION AS PER NEPAL RASTRA BANK VIDE UNIFIED DIRECTIVE 2079
COMPANY’S PERFORMANCE
Liabilities
Due to banks and FIs The balances in accounts maintained with the institution by other local and foreign banks and
1. BANK’S FINANCIAL POSITION financial institution has been presented under this head. Interbank borrowing, interbank deposit,
A) Basis of preparation of Balance Sheet (Based on regulatory guideline of NRB) balances on settlement and clearing accounts as well as other amount due to bank and financial
institution is presented under this account head.
PARTICULARS DESCRIPTION AS PER NEPAL RASTRA BANK VIDE UNIFIED DIRECTIVE Due to Nepal Rastra Bank Amount of payable to Nepal Rastra Bank. Amount payable to NRB includes amount of refinance
facilities, standing liquidity facility, lender of last resort, sale and repurchase agreements, deposit
Assets
from NRB, etc.
Cash and cash equivalents Total amount of cash-in-hand, balances with other BFIs, money at call and short notice, and highly
Derivative financial instruments Derivative liabilities of instruments like interest rate swap, currency swap, forward foreign exchange
liquid financial assets with original maturities of three months or less from the acquisition date.
contract etc. held for trading as well as risk management purposes has been presented under this
Due from Nepal Rastra Bank Statutory balances held with NRB for compulsory cash reserve, securities purchased from NRB under
head.
resale agreement and other deposits with and receivables from NRB.
Deposits from customers All deposit accounts other than deposits from BFIs (local and foreign) and NRB has been presented
Placement with banks and FIs Placements with domestic as well as foreign BFIs with original maturities of more than three months
under this account head.
from the acquisition date.
Borrowings All domestic as well as foreign borrowing other than interbank borrowing and borrowing from
Derivative financial instruments Instruments like interest rate swap, currency swap, forward foreign exchange contract, etc. held for
Nepal Rastra Bank, Nepal Government and Multilateral Development Banks has been presented
trading as well as risk management purposes.
under this heading.
Other trading assets Those assets that the licensed institution acquires principally for the purpose of selling in the
Current tax liabilities Liabilities recognized for the purpose of current income tax, including fees, penalties, etc.
near term or holds as part of a portfolio that is managed together for short-term profit has been
Provisions Provision are recognized when as a result of a past event, the licensed institution has a present
presented under this account head.
legal or constructive obligation that can be estimated reliably, and it is probable that an outflow
Loans and advances to Loan and advances given to microfinance financial institutions as well as other bank and financial
of economic benefits will be required to settle the obligation. Provision for redundancy, provision
banks and FIs institutions has been presented under this head. Specific impairment on loan and advance to bank
for onerous contracts, provision for restructuring, pending legal issues and tax litigation, credit
and financial institutions has been deducted.
commitments and guarantees, etc.
Loans and advances to customers Sum of the outstanding amount of all loans and advances extended to the customers other than
Deferred tax liabilities Amounts of income taxes payable in future periods in respect of taxable temporary differences.
BFIs, staff loans as well as bills purchased and discounted less the amount of impairment
Other liabilities Any residual liabilities not captured above, has been presented under an appropriate head in this
allowances.
account. Liabilities relating to employees benefits like liabilities for defined benefit obligation
Investment securities Investments made by the licensed institutions in financial instruments.
gratuity and pension fund, liabilities for long-service leave, cash settled share-based payment
Current tax assets Advance payment made by the licensed institution towards income tax liabilities or other tax
liabilities, short-term employee benefits, creditors and accruals, Interest payable on deposit and
liabilities to the taxing authorities.
borrowing, unearned income, unpaid dividend, etc.
Investment in subsidiaries Investment in subsidiaries, which are the entities that are controlled by the bank.
Debt securities issued Debenture, bond, or other debt securities issued by bank.
Investment in associates Investment in associates which are those entities in which the bank has significant influence but not
Subordinated liabilities Liabilities subordinated, at the event of winding up, to the claims of depositors, debt securities
control over the financial and operating policies.
issued and other creditors.
Investment property Land, land and building acquired as non-banking assets by the bank but not sold.
Total Liabilities Sum of total liabilities
Property and equipment All assets of long-term nature (fixed) like land, building, IT equipment, fixtures and fittings, office
equipment and appliances, vehicles, machinery, leasehold developments, and capital work in
Equity
progress owned by the licensed institution.
Share capital Amount of paid-up share capital of the licensed institution. Amount credited in share capital by
Goodwill and intangible assets Goodwill and intangible assets like computer software both purchased and internally generated,
issuing bonus shares utilizing the accumulated profit and reserves has also been disclosed under
trademark, etc.
this heading.
Deferred tax assets Deferred tax assets recognized as per NFRSs on temporary deductible differences, carry forward of
Share premium Amount of money collected on issue of shares in excess of its face value.
unused tax losses, changes in tax rate, etc.
Retained earnings The accumulated profits which have not been distributed to shareholders and has been ploughed
Other assets This account includes any other tangible or intangible asset not mentioned above. Assets held
back in the Bank's operations and is free for distribution of dividend.
for sale, non-banking assets (other than land or land and building), restricted deposits with central
Reserves Includes the amounts received from allocation of profits or retained earnings in connection with
banks, accounts receivable, interest receivable, accrued income, prepayments and deposit are some
maintaining reserves or created from any other process. General Reserve, Exchange Equalization
of the items included under this head.
reserve, Fair Value Reserves, Assets Revaluation Reserve, Capital Reserve, Special Reserve, Capital
Total Assets Sum of total assets
Redemption Reserve, Dividend Equalization Fund, Capital Adjustment/Equalization Fund, Corporate
Social Responsibility Fund, Investment Adjustment Reserve, Actuarial Gain/Loss Reserve, Regulatory
Reserve, etc.
Total Equity Attributable to Sum of share capital, share premium, retained earnings and reserves
Equity Holders
Total Liabilities and Equity Sum of total liabilities and total equity attributable to equity holders

84 NABIL BANK LIMITED ANNUAL REPORT 2022/23 85

86
Table 6: Five Year Trend Analysis (Bank’s Financial Position)
NPR IN BILLION
PARTICULARS 2023 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(%) CAGR(%) (VOL)

Assets

NABIL BANK LIMITED

Cash and Cash Equivalents 6.77 11.05 7.29 4.80 10.67 -38.70 -3.16 (4.28)
Due from Nepal Rastra Bank 25.65 13.04 8.02 20.02 8.00 96.76 28.32 12.62
Placement with Banks and FIs 13.42 8.87 9.87 10.23 11.08 51.33 5.73 4.55
Derivative Financial Instruments 3.83 1.37 13.62 10.86 8.54 179.08 2.46
Other Trading Assets - 0.03 - - - -100.00 (0.03)
Loans and Advances to Banks and FIs 8.28 10.37 8.60 5.84 6.06 -20.10 12.65 (2.08)
Loans and Advances to Customers 331.12 300.21 198.02 148.05 127.50 10.30 24.87 30.92
Investment Securities 76.45 62.46 39.89 33.63 25.30 22.41 32.98 14.00
Current Tax Assets - 0.61 0.31 0.26 0.14 -100.00 -100.00 (0.61)
Investment in Subsidiaries 1.80 0.30 0.08 0.08 0.08 503.36 87.30 1.50
Investment in Associates 0.08 0.08 0.08 0.08 0.08 0.00 14.87 -
Investment Property 1.83 1.32 0.01 0.01 0.01 38.56 194.71 0.51
Property and Equipment 3.87 3.54 1.76 1.32 1.05 9.48 31.45 0.34
Goodwill and Intangible Assets 0.29 0.29 0.17 0.07 0.04 -2.15 41.49 (0.01)
Deferred Tax Assets - - - - - 0.00 -
Other Assets 7.80 6.30 3.53 2.43 2.59 23.85 30.37 1.50
Total Assets 481.20 419.82 291.24 237.68 201.14 14.62 24.48 61.39

Liabilities
Due to Banks and FIs 6.28 3.35 4.50 2.23 1.42 87.19 39.97 2.92
Due to Nepal Rastra Bank - 4.66 5.45 0.05 0.09 -100.00 -100.00 (4.66)
Derivative Financial Instruments 3.81 1.39 13.63 10.76 8.34 174.17 134.44 2.42
Deposits from Customers 396.84 326.22 223.47 190.81 162.95 21.65 24.10 70.62
Borrowings - 10.72 - - - -100.00 (10.72)
Current Tax Liabilities 0.48 - - - - 0.00 0.48
Provisions - - - - - 0.00 -
Deferred Tax Liabilities 1.92 1.78 1.37 1.44 0.85 7.89 13.70 0.14
Other Liabilities 8.47 12.23 6.70 4.50 4.30 -30.75 21.06 (3.76)
Debt Securities Issued 6.49 6.48 2.10 2.04 - 0.03 155.14 0.00
Subordinated Liabilities - - - - - 0.00 -
Total Liabilities 424.29 366.84 257.23 211.82 177.95 15.66 24.76 57.45

Equity
Share Capital 27.06 22.83 13.84 10.10 9.01 18.50 27.46 4.22
Share Premium - 0.00 0.16 0.00 0.00 -100.00 -100.00 (0.00)
Retained Earnings 3.19 2.90 4.16 3.58 3.74 9.92 -0.42 0.29
Reserves 26.67 27.25 15.84 12.18 10.44 -2.13 23.48 (0.58)
Total Equity Attributable to Equity Holders 56.91 52.98 34.01 25.86 23.19 7.42 22.55 3.93
Total Liabilities and Equity 481.20 419.82 291.24 237.68 201.14 14.62 24.48 61.39

ANALYSIS OF MAJOR ITEMS OF BANK’S BALANCE SHEET

1) ASSET
LOAN AND ADVANCES
Bank’s lending book is presented in the Statement of Financial Position under two line items viz. Loan and Advances to BFIs and Loan and Advances to customers depending
on the type of customer being a BFIs or otherwise. These figures are obtained after addition of interest receivable and deduction of deferred employee expenditure (in case of
staff loan) and deduction of provision attracted by such loans as directed by NRB.

Table 7: Five year trend analysis (Loans and Advances)

NPR IN BILLION

PARTICULARS 2023 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(%) CAGR(%) (VOL)

Loan and advances to customers except staff loan and

Loans to customers (gross value) (i) 333.06 298.57 196.80 147.12 126.37 11.55 25.31 34.50
Staff Loan (gross value) 8.95 8.07 4.87 4.31 3.80 10.94 35.22 0.88
Less: Deferred employee expenditure 4.15 2.85 1.74 2.01 1.74 45.61 25.86 1.30
Less: Allowances for Impairment 13.12 7.67 3.94 2.97 2.13 71.10 49.73 5.45
Add : Interest receivables from loan and advances from customers 6.38 4.09 2.03 1.61 1.20 56.06 22.11 2.29
Loan and advances to customers (A) 331.12 300.21 198.02 148.05 127.50 10.30 24.87 30.92
Loan and advances to BFIs (gross value) (ii) 8.39 10.50 8.71 5.90 6.12 -20.10 12.72 (2.11)
Less: Allowances for Impairment 0.11 0.14 0.11 0.06 0.06 -20.10 18.79 (0.03)
Loan and advances to BFIs (B) 8.28 10.37 8.60 5.84 6.06 -20.10 12.65 (2.08)
Total loan and advances except staff loan (gross value) (i+ii) 341.45 309.07 205.52 153.01 132.49 10.48 24.89 32.38
Total loan and advances presented in Balance Sheet (A+B) 339.41 310.57 206.62 153.89 133.56 9.28 24.47 28.83

The following graph shows the breakdown of loans and advances book of the bank outstanding on the report date. These figures are principle figures and do not include
any interest receivable or impairment provisions.
ANNUAL REPORT 2022/23
87
 Gross Value of loan and advances to customers and BFIs only Provision attracted by loan portfolio is the sum of n amount determined as per para 5 of the carve out,
outstanding loan multiplied by percentage of provision which prescribes the method for the calculation of
Loan and Advances to Customers and BFIs (Gross Value) based on loan category as defined by Unified Directive impairment loss on incurred loss.
of the NRB. Impairment loss on loans and advances is
NPR in Billion
determined the one which is higher of: As a result of this treatment, the Group has recognized
the amount of impairment loss on loans and advances
50.39% 341.45
n amount derived as per directive no. 2/79 of NRB that has been derived as per prudential norms specified in
for loan loss provisioning generally applying a fixed NRB directive no. 2/79
34.32% percentage of impairment allowance based on overdue
309.07
period; and
153.01 205.52
132.49
Table 8: Impairment Loss Provision per NRB Directives
NPR IN BILLION
17.87%
15.49%
10.48% 2080 ASAR 31 2079 ASAR 32

Gross Loans and Advances to Customer and BFIs

2019 2020 2021 2022 2023
(principal amount, excluding staff loans, accrued interest and impairment) 341.45 309.07
Loan and advances to customers and BFIs (gross value) Growth Rate Loss provision per NRB Directive – alternative 1 13.23 7.81
Impairment Loss per NFRS – alternative 2 4.65 3.19
Loss provision recognized in financial statements (higher of the two alternative) 13.23 7.81

The loan portfolio from FY 2021 to FY 2022 registered growth of 50.39% out of which 39.08% of the growth is attributed
by acquisition of NPR 80.31 billion of loans from the erstwhile Nepal Bangladesh Bank Ltd. and 11.31% of the growth Table 9: Five year trend analysis (Loan and Advances to customers
is attributed to Nabil Bank Ltd. The growth rate of 10.48% in the FY 2023 represents organic growth in the combined and BFIs presented in SOFP)
NPR IN BILLION
portfolio. The compounded annual growth rate in the 5 years is 24.89%.
PARTICULARS 2023 2022 2021 2020 2019 YOY 5 YEAR YOY
GROWTH CAGR GROWTH

Five year trend analysis (Provision on Loan) (%) (%) (VOL)

Total loan and Advances 339.41 310.57 206.62 153.89 133.56 9.28 24.47 29
(NPR in Billion)
Provision for Losses on Lending Portfolio Growth rate (%) 9.28 50.31 34.27 15.22 17.54
NPR in Billion

13.23
The discussion here forward presents the mix of loan portfolio of the bank in terms of currency, sector as well as collateral.

Currency Wise Loan and Advances

7.81
Currency Wise Loan and Advances
4.05 NPR in Billion
3.03
2.19
3.69
5.34
2019 2020 2021 2022 2023 335.72
305.24
13.9
Significant growth of 69.50% has been registered in the provision as compared to the previous year with a compounded 8.3
7.5 192.73
annual growth rate of 49.19%. Despite having a stable portfolio, it became imperative to provide for those losses as the
126.05 145.59
repayment capabilities of the borrower took a hit owing to general macro-economic conditions. The bank expects these
provisions to be written back with reenergising economy.

2019 2020 2021 2022 2023

Nepalese Currency Foreign Currency

More than 90% of the lending of the bank is extended in domestic currency with some term loans, trust receipt loans as well
as credit cards extended in foreign currency.

88 NABIL BANK LIMITED ANNUAL REPORT 2022/23 89

 Table 10: Product Wise Loan and Advances Breakdown of Directed Sector Lending
NPR IN BILLION

PARTICULARS 2023 2022 2021 2020 2019 Table 13: Lending to Agriculture Sector
Long Term Loans 90.12 58.46 36.79 30.27 19.69 PROVINCE COUNT LOAN OUTSTANDING IN BILLION PROVINCE CONTRIBUTION (%)

Overdraft (Personal) 6.49 6.79 23.39 14.09 15.47 Koshi Province 663 5.16 12.9
Trust Receipt/Import Loans 8.38 10.94 18.99 12.07 11.00 Madesh Province 613 4.21 10.5
Short Term WC/ Demand Loans 105.77 119.48 54.43 49.31 43.15 Bagmati Province 1398 22.55 56.3
Personal Residential Loans 20.24 16.53 15.06 10.73 10.07 Gandaki Province 116 0.61 1.5
Real Estate Loans 22.60 17.87 12.69 6.45 4.95 Lumbini Province 647 6.53 16.3
Margin Lending Loans 9.18 7.51 5.93 1.34 0.86 Karnali Province 30 0.04 0.1
Hire Purchase Loans 7.48 7.18 3.98 2.52 2.66 Sudurpaschim Province 213 0.92 2.3
Deprived Sector Loans 7.78 7.27 3.11 1.12 7.32 Total 3,680 40.03 100.0
Bills Purchased 0.05 0.01 0.41 0.06 0.18 Loan outstanding 6 months prior 324.84
Staffs Loans 4.81 5.22 3.09 2.82 2.52 % w.r.t loan outstanding 6 months prior 12.32%
Wholesale lending 8.28 10.37 8.60 5.84 6.06
Other 41.84 38.84 18.13 16.18 8.88
Sub-Total 333.03 306.49 204.59 152.80 132.81 Table 14: Lending to Hydropower/Energy Sector
Interest Receivable on loans and advances to customers 6.38 4.09 2.03 1.09 0.74
PROVINCE COUNT LOAN OUTSTANDING IN BILLION
Grand Total 339.41 310.57 206.62 153.89 133.56
Hydropower/Energy 105 22.21
Total 105 22.21
Table 11: Collateral Wise Loan and Advances Loan outstanding 6 months prior 324.84
NPR IN BILLION
% w.r.t loan outstanding 6 months prior 6.84%
PARTICULARS 2023 2022 2021 2020 2019

Secured
Moveable/Immoveable Assets 324.47 286.71 182.54 139.12 113.00 Table 15: Lending to Micro, Cottage, Small and Medium Industries
Collateral of Export Document 0.79 0.92 0.41 0.06 0.18 PROVINCE COUNT LOAN OUTSTANDING IN BILLION PROVINCE CONTRIBUTION (%)
Collateral of Fixed Deposit Receipt 2.86 2.27 0.99 0.72 0.82
Koshi Province 3279 3.64 18.3
Collateral of Government Securities - 0.01 0.01 0.01 0.01
Madesh Province 2266 2.90 14.6
Other Collateral 2.33 9.84 13.80 7.93 13.24
Bagmati Province 4590 6.58 33.1
Subtotal 330.44 299.75 197.75 147.84 127.26
Gandaki Province 1048 1.55 7.8
Unsecured 0.68 0.45 0.27 0.22 0.24
Lumbini Province 2115 3.21 16.1
Total 331.12 300.21 198.02 148.05 127.50
Karnali Province 594 0.58 2.9
Loans to BFIs 8.28 10.37 8.60 5.84 6.06
Sudurpaschim Province 1292 1.44 7.3
Grand Total 339.41 310.57 206.62 153.89 133.56
Total 15,184 19.90 100.0
Loan outstanding 6 months prior 324.84
% w.r.t loan outstanding 6 months prior 6.13%
DIRECTED SECTOR LENDING
The NRB Unified Directive has requires that a certain percentage of the lending portfolio must be extended to deprived and
productive sectors. Metrices of performance under such sectors for FY 2079/80 is tabulated below:
Table 16: Total Deprived Sector Lending
Table 12: Directed Sector Lending PROVINCE COUNT LOAN OUTSTANDING IN BILLION PROVINCE CONTRIBUTION (%)

ACHIEVEMENT REGULATORY Koshi Province 2573 1.68 22.3

DEPRIVED AND PRODUCTIVE SECTOR* NABIL CEILING Madesh Province 1610 1.15 15.2
Agriculture 12.32% 11.00% Bagmati Province 3200 2.39 31.7
Hydropower/Energy 6.84% 6.00% Gandaki Province 647 0.52 6.9
Micro,Cottage, Small and Medium Industries 6.13% 11.00% Lumbini Province 1214 0.84 11.2
Total Deprived Sector Lending 5.12% 5.00% Karnali Province 488 0.34 4.5
Sudurpaschim Province 980 0.62 8.2
Total indirect lending 10,712 7.55 100.0
*Merger benefit/waiver provided to the bank up to Ashadh 2080, for the limit of productive sector lending.
Total direct lending 139 9.09
Deprived Sector Lending 10,851 16.63
Loan outstanding 6 months prior 324.84
% w.r.t loan outstanding 6 months prior 5.12%

90 NABIL BANK LIMITED ANNUAL REPORT 2022/23 91

 Table 17: Subsidized Loan NPR IN BILLION Table 21: Five year trend analysis (Investments in Subsidiaries and Associate)
NPR IN BILLION
AS OF ASHADH END 2080 AS OF ASHADH END 2079
PARTICULARS 2023 2022 2021 2020 2019 YOY 5 YEAR YOY
PARTICULARS NO. OF CUSTOMERS AMOUNT NO. OF CUSTOMERS AMOUNT
GROWTH CAGR GROWTH
Subsidized Loan 8,820 11.34 7,039 12.72 (%) (%) (VOL)

a. Placement with Banks and FIs 13.42 8.87 9.87 10.23 11.08 51.33 5.73 4.55
Placement with Domestic BFIs 1.70 - 1.79 - 1.32 0.00 1.70
Table 18: Loan Trend of Industry vs. Nabil Bank Placement with Foreign BFIs 11.72 8.87 8.08 10.23 9.76 32.16 2.90 2.85
NPR IN BILLION
b. Investment Securities 76.45 62.46 39.89 33.63 25.30 22.41 32.98 14.00
PARTICULARS 2023 2022 2021 2020 2019 Debt Securities 1.63 - - - - 0.00 1.63
Nabil Bank Ltd 341.45 309.07 205.52 153.01 132.49 Government Bonds 36.35 37.22 26.34 18.32 15.89 -2.34 25.33 (0.87)
Growth Rate 10.48% 50.39% 34.32% 15.49% 17.87% Government Treasury Bills 26.45 17.62 4.83 9.81 5.50 50.05 52.99 8.82
Industry ("A" Class Commercial Banks) 4,312.59 4,182.30 3,719.60 2,910.23 2,500.07 Nepal Rastra Bank Bonds - - - - - 0.00 - -
Growth Rate 3.12% 12.44% 27.81% 16.41% 18.36% Nepal Rastra Bank Deposit
Market Share 7.92% 7.39% 5.53% 5.26% 5.30% Instruments 5.00 - - - - 0.00 - 5.00
Other - 0.99 1.60 - - 100.00 - (0.99)
Investment in Equity
measured at FVTOCI 7.03 6.62 7.12 5.51 3.91 6.19 15.10 0.41
Growth Rate of Loan (Based on Gross Outstanding Portfolio) Quoted Equity Securities 4.96 4.87 5.67 4.49 2.96 2.00 12.23 0.10
% Unquoted Equity Securities 0.96 0.71 0.69 0.56 0.46 34.49 21.43 0.25
Mutual fund units 1.11 1.04 0.76 0.46 0.48 6.45 27.40 0.07
c. Investment in Subsidiaries 1.80 0.30 0.08 0.08 0.08 503.36 87.30 1.50
50.39
d. Investment in Associates 0.08 0.08 0.08 0.08 0.08 0.00 14.87 -
a+b+c+d Total Investments 91.76 71.70 49.91 44.02 36.54 27.96 26.20 20.05
34.32 Growth Rate 27.96% 43.66% 13.38% 20.48% 27.47%
27.81
18.36 16.41 Investments
12.44 10.48 NPR in Billion
17.87
15.49
3.12
43.66% 91.76
2019 2020 2021 2022 2023
71.70
Nabil bank Ltd Industry (”A” Class Commercial Banks)
27.47%
49.91
Note: The spike in the growth rate in FY 2022 is due to acquisition of erstwhile Nepal Bangladesh Bank. 20.48% 27.96%
36.54
44.02
Table 19: Weighted Average Yield on Loan NPR IN BILLION 13.38%
PERIOD ENDING MID JULY 2023 2022
AVERAGE VOLUME INTEREST YIELD AVERAGE VOLUME INTEREST YIELD
2019 2020 2021 2022 2023
Business Loans 235.71 29.75 12.62% 158.15 14.49 9.16%
Total Investment Growth Rate
Retail Loans 94.83 11.73 12.37% 68.83 6.66 9.68%
Total loans and advances 330.53 41.48 12.55% 226.98 21.15 9.32%

Yields on loans have improved as compared to the previous year. Growth rate of investment from FY 2021 to FY 2022 is 43.66%, out of which 28.47% is attributed by acquisition of erstwhile
Nepal Bangladesh Bank and remaining 15.19% is attributed to normal operation of investment portfolio by Nabil Bank Ltd.
INVESTMENTS Table 22: Income Avenues from Investment
NPR IN BILLION
Investment is reported in the Statement of Financial Position across four different line items viz. Placement with BFIs,
PARTICULARS 2023 #2022 2021 2020 2019
Investment Securities, Investment in Subsidiaries, and Investment in Associates.
Dividend income 0.14 0.35 0.08 0.10 0.10
Table 20: Investment in Subsidiaries and Associates Gain on sale of investment securities 0.09 0.07 1.24 - -
Interest Income 4.12 2.72 1.60 1.39 1.05
PARTICULARS NAME SHARE OWNERSHIP
Total income from investment 4.36 3.13 2.92 1.49 1.12
Subsidiary Nabil Investment Banking Ltd. 60% Growth Rate 39.15% 7.32% 95.45% 30.00% 2.23%
Subsidiary Nabil Stock Dealer Ltd. 100%
# Inclusive of income from erstwhile NBB. Total income of NPR 957 million was generated from investment portfolio by
Associate NADEP Laghubitta Bittiya Sanstha Ltd. 25%
erstwhile Nepal Bangladesh Bank in FY 2022.

92 NABIL BANK LIMITED ANNUAL REPORT 2022/23 93

 Table 23: Weighted Average Yield on Investments ASSET SIZE
NPR IN BILLION

PERIOD ENDING MID JULY 2023 2022 Table 25: Five year trend analysis (Asset Size)
NPR IN BILLION
AVERAGE VOLUME INTEREST YIELD #AVERAGE VOLUME #INTEREST YIELD
PARTICULARS 2023 2022 2021 2020 2019 YOY 5 YEAR YOY
Government Securities
GROWTH CAGR GROWTH
(including NRB Term Deposits) 55.12 3.74 6.78% 34.79 1.80 5.18%
(%) (%) (VOL)
Placement 11.51 0.38 3.31% 12.23 0.17 1.38%
Total Investments 66.63 4.12 6.18% 47.02 1.97 4.19% Total Asset 481 420 291 238 201 14.62% 24.48% 61
Growth rate 14.62% 44.15% 22.53% 18.17% 24.95%
# Average volume of FY contains portfolio of erstwhile NBB for last 4 days of the FY and Interest does not contain interest
Return on assets 1.42% 1.20% 1.71% 1.58% 2.34%
income acquired from erstwhile NBB on investment.

The growth in the asset size from FY 2021 to FY 2022 is 44.15%, out of which 36.21% is attributed by acquisition of
PROPERTY & EQUIPMENT AND GOODWILL & INTANGIBLE ASSETS erstwhile Nepal Bangladesh Bank and remaining 7.94% is attributed by normal operation of Nabil Bank Ltd. The growth of
Table 24: PPE & Intangible Assets 14.62% achieved in FY 2023 is organic growth achieved in the combined portfolio.
NPR IN BILLION

PARTICULARS 2023 2022 2021 2020 2019

Property and Equipment 3.87 3.54 1.69 1.32 1.05

2) LIABILITY
Land 1.97 1.97 0.51 0.24 0.24
Building 0.34 0.18 0.19 0.18 0.19
DEPOSIT
Leasehold Properties 0.45 0.40 0.23 0.18 0.09 The bank’s deposit book is presented in the Statement of Financial Position under two-line items viz.” Due to Banks and FIs”
Computer & Accessories 0.25 0.17 0.13 0.13 0.07 and ”Deposits from Customers”, depending on the type of customers being a BFIs or otherwise.
Vehicles 0.36 0.33 0.28 0.27 0.24
Furniture & Fixtures 0.15 0.11 0.09 0.09 0.06 Table 26: Five year trend analysis (Deposit)
NPR IN BILLION
Equipment & others 0.35 0.37 0.26 0.23 0.16
Goodwill and Intangible Assets 0.29 0.29 0.06 0.07 0.04 PARTICULARS 2023 #2022 2021 2020 2019 YOY 5 YEAR YOY

Goodwill and Intangible Assets* 0.17 0.17 - - - GROWTH CAGR GROWTH

Software 0.12 0.12 0.06 0.07 0.04 (%) (%) (VOL)
Total 4.16 3.83 1.76 1.39 1.09
Due to BFIs 6.28 3.35 4.50 2.23 1.42 87.19% 39.97% 2.92
Growth Rate 8.59% 118.07% 26.29% 27.14% 5.46%
Interbank Borrowing 0.43 - - - - 0.00% - 0.43
Other Deposits from BFIs 5.84 3.35 4.50 2.23 1.42 74.25% - 2.49
* These figures consist only of goodwill recognised on the acquisitions of erstwhile United Finance Limited and Nepal Deposits from Customers 396.81 326.22 223.47 190.81 162.95 21.64% 24.10% 70.60
Bangladesh Bank Limited. The bank does not own any other intangible asset. Significant increase in total tangible and Accrued interest payable 0.03 0.01 - 0.00 0.00 504.77% 101.52% 0.03
intangible assets of the bank in FY 2022 is due to addition of asset from acquired institutions. The bank remains prudent in Total Deposit 403.12 329.58 227.98 193.04 164.37 22.32% 24.28% 73.55
capital expenditure and invest in capital assets only to aid in its operations. Growth Rate 22.32% 44.57% 18.10% 17.44% 20.88% - - -

Growth rate of deposit from FY 2021 to FY 2022 was 44.57%, out of which 36.47% is attributed to the acquisition of
erstwhile Nepal Bangladesh Bank and remaining 8.10% is attributed by normal operations of Nabil Bank Ltd. The growth
of 22.32% is organic growth achieved in the combined portfolio and is one of the best performances in the industry.

Table 27: Currency Wise Deposit

NPR IN BILLION

PARTICULARS 2023 2022 2021 2020 2019

Due to BFIs 6.28 3.35 4.50 2.23 1.42

Local Currency 5.84 3.10 3.25 1.92 1.40
Foreign Currency 0.43 0.25 1.25 0.31 0.02
Deposits from Customers 396.81 326.22 223.47 190.81 162.95
Local Currency 385.93 314.54 210.43 180.93 150.35
Foreign Currency 10.88 11.68 13.04 9.87 12.60
Total Deposit 403.09 329.57 227.98 193.04 164.37

94 NABIL BANK LIMITED ANNUAL REPORT 2022/23 95

 Table 28: Deposit Mix and Market Share of Nabil Bank
NPR IN BILLION
CACASA Mix
PARTICULARS 2023 2022 2021 2020 2019

Savings Deposit 101.56 90.36 77.94 56.89 49.87

Call Deposit 34.87 25.34 19.42 35.50 28.72
Current Deposit 45.13 38.52 37.34 21.81 20.82 60.48% 59.15% 59.08%
FD 221.52 175.35 93.28 78.85 64.96
Total Deposit Nabil Bank 403.12 329.58 227.98 193.03 164.37 54.58% 54.35% 46.79%
52.82% 45.04%
Total Deposit Industry 5,086.24 4,545.16 4,204.91 3,490.10 2,880.09
Market Share 7.93% 7.25% 5.42% 5.53% 5.71% 46.38%
43.02%

Table 29: Deposit Mix Industry

NPR IN BILLION

PARTICULARS 2023 2022 2021 2020 2019 2019 2020 2021 2022 2023

Savings Deposit 1,366.48 1,261.75 1,426.36 1,087.52 901.36

CACASA Mix Industry CACASA Mix Nabil
Call Deposit 333.86 329.90 338.33 332.55 336.80
Current Deposit 487.76 516.59 520.66 423.41 333.66
FD 2,898.15 2,436.95 1,919.57 1,646.63 1,308.27
Total Deposit 5,086.24 4,545.16 4,204.91 3,490.10 2,880.09 The above chart depicts that the CASASA mix in the bank’s deposit follows the trend in the industry. The declining mix is
representative of intense competition in rates and preference of customers towards higher return fixed deposits.

Retail vs Institutional Deposit

Deposit (Nabil Vs Industry)
NPR in Billion
37.5% 39.05% 32.0% 28.45% 27.9%

44.6%
5,086.24

4,204.91
4,545.16
71.55% 72.1%
3,490.1 68.0%
2,880.09 62.5% 60.95%
20.9% 21.2% 20.5% 22.3%
16.0% 18.1%
17.4%
11.9%
8.1%
164.37 193.03 227.98 329.57 403.09

2019 2020 2021 2022 2023 2019 2020 2021 2022 2023

Retail Deposit Institutional Deposti

Industry Nabil Growth (Industry) Growth (Nabil)

The portion of retail deposits in the bank’s books has remained stable over the years with some increase in the recent years.
This growth was attained in an attempt to manage the liquidity crunch that the banking industry had to face in the recent
Table 30: Mix of FD and CACASA: Nabil Bank vs. Industry years. The bank is focused on increasing the proportion of retail deposits in its portfolio and has been launching various
NPR IN BILLION
campaigns to do the same.
PARTICULARS 2023 2022 2021 2020 2019

Nabil Table 31: Weighted Average Cost of Fund

FD Mix 54.96% 53.21% 40.92% 40.85% 39.52%
CACASA Mix 45.04% 46.79% 59.08% 59.15% 60.48% 2023 2022
Industry PARTICULARS AVERAGE VOLUME INCOME/EXPENSE YIELD/COST AVERAGE VOLUME INCOME/EXPENSE YIELD/COST
FD Mix 56.98% 53.62% 45.65% 47.18% 45.42%
CACASA Mix 43.02% 46.38% 54.35% 52.82% 54.58% Deposits 353 28 7.91% 236 14 5.89%
Borrowings 11 1 5.54% 14 1 3.78%
Total interest bearing liabilities 364 29 7.84% 250 14 5.77%

96 NABIL BANK LIMITED ANNUAL REPORT 2022/23 97

 BORROWING AND DEBENTURE Table 36: Movement in Retained Earnings
NPR IN BILLION

Table 32: Debentures Issued by Bank PARTICULARS 2023 2022 (NBBL 2021(UFL
ACQUISITION) ACQUISITION) 2020 2019
NPR IN BILLION
Reserve added from acquisition (0.64) 0.08
DEBENTURE ISSUE SIZE SUBSCRIBED ISSUANCE MATURITY REMAINING DEBENTURE
Adjusted Retained Earning at year beginning 2.90 3.52 3.65 3.74 3.25
AND ALLOTED DATE DATE MATURITY REDEMPTION
(DAYS) RESERVE Add : Net profit for the year 6.40 4.26 4.53 3.46 4.24
Less : Transfer to Reserves during the year 3.51 1.27 1.32 0.57 1.16
10.25% NBBL Debenture 2085 2.00 2.00 24-May-19 21-May-29 2,136 0.89
Add :Transfer from Reserves during the year 0.02 0.52 0.86 0.02 0.14
10% NABIL Debenture 2082 2.00 2.00 15-Mar-20 14-Mar-27 1,337 1.00
Less : Bonus Shares Issued - 3.52 3.38 1.09 0.97
8% NABIL Debenture 2085 3.00 2.21 25-Jul-21 23-Jul-28 1,834 0.37
Less : Cash Dividend Paid 2.63 0.61 0.18 2 2
Total 6.21 2.26
Retained Earning at year end 3.19 2.90 4.16 3.58 3.74
The bank has three debentures outstanding at the end of the reporting period as detailed above. The bank has been setting
aside the required funds for redemptions of these instruments out of profits of every year. 2. BANK’S PROFITABILITY POSITION
A) Basis of preparation of Profit and Loss Statement (Based on regulatory guideline of NRB):

Table 33: Borrowing and Debenture presented in SOFP MATHEMATICAL PARTICULARS DESCRIPTION AS PER NRB UNIFIED DIRECTIVE
NPR IN BILLION
OPERATION
PARTICULARS 2023 2022 2021 2020 2019
a Interest Income Interest income on loan and advance, investment securities except on those investment
Borrowing - 10.72 - - -
securities measure at fair value through profit or loss, cash and cash equivalent, due from NRB,
Domestic - 8.10 - - -
due from BFIs, loan, and advances to staff, etc.
Foreign - 2.62 - - -
b Interest Expense Interest accrued on deposits collected, debt securities issued, borrowings obtained,
Debenture 6.49 6.48 2.10 2.04 -
subordinated liabilities, amount due to bank and financial institutions, due to NRB, etc. has
Subscribed amount 6.21 6.21 2.00 2.00 -
been presented under this heading.
Unamortised Debenture Issuance Cost (0.01) (0.01) (0.00) (0.00) -
c=a-b Net Interest Income
Accrued Interest Payable 0.29 0.29 0.10 0.04 -
d Fee and Commission Fee income arises on the execution of a significant act completed or from provision of services
Total 6.49 17.21 2.10 2.04 -
Income like asset management, portfolio management, management advisory and service fees, etc.
Loan documentation fee, loan management fee, consortium fee, commitment fee, card
issuance and renewal fees, prepayment and swap fee, remittance fee, investment banking fee,
Table 34: Five Year Trend Analysis (Shareholder's Fund) asset management fee, brokerage, commission on letter of credit, commission on guarantee,
NPR IN BILLION locker rental income, etc.
PARTICULARS 2023 2022 2021 2020 2019 YOY 5 YEAR YOY e Fee and Commission Payouts on account of fee and commission for services obtained by the bank has been
GROWTH CAGR GROWTH Expense presented under this account head. This account head includes card related fees, guarantee
(%) (%) (VOL) commission, brokerage expenses, etc.
f=d-e Net Fee and
Share Capital 27.06 22.83 13.84 10.10 9.01 18.5 27.46 4.22
Commission Income
Share Premium - 0.00 0.16 0.00 0.00 -100.0 -100.00 (0.00)
g=c+f Net Interest, Fee and
Retained Earnings 3.19 2.90 4.16 3.58 3.74 9.9 -0.42 0.29
Commission Income
Reserves 26.67 27.25 15.84 12.18 10.44 -2.1 23.48 (0.58)
h Net Trading Income Trading income comprises gains less losses relating to trading assets and liabilities, and
Total 56.91 52.98 34.01 25.86 23.19 7.4 22.47 3.93
includes all realized interest, dividend, and foreign exchange differences as well as unrealized
Sustainable organic growth from internal profit generation as well as acquisition of reserve of acquired institutions has changes in fair value of trading assets and liabilities.
helped achieve a compounded annual growth of 22.47% in shareholders’ fund. i Other Operating Includes foreign exchange revaluation gain, gain/loss on sale of available for sale securities,
Income dividend on available for sale securities, gain/loss on sale of property and equipment, gain/
loss on sale of investment properties, operating lease income, gain/loss on sale of gold and
silver, finance income of finance lease, etc.
Table 35: Movement in Share Capital j=g+h+i Total Operating
NPR IN BILLION
Income
PARTICULARS 2023 2022 2021 2020 2019 k Impairment Charge/ Impairment loss recognized as per NFRSs on loan and other losses has been presented under
Share Capital at year beginning 22.83 13.84 10.10 9.01 8.04 (Reversal) for Loans this account head. It includes impairment charge/reversal on loan and advances to customers,
Add: Bonus share amount 4.22 4.6 3.38 1.09 0.97 and Other Losses loan and advances to bank and financial institutions, investment securities, placement with
Add: Capital added from acquisition - 4.34 0.36 - - bank and financial institutions, property and equipment, goodwill and intangible assets,
Total share capital at year end 27.06 22.83 13.84 10.10 9.01 investment properties, etc.
Bonus share% 0.0% 18.5% 33.6% 33.5% 12.0% l=i-k Net Operating
Income
Operating Expense

98 NABIL BANK LIMITED ANNUAL REPORT 2022/23 99

 NPR IN
BILLION

NPR IN
BILLION
YOY GROWTH
(VOL)

YOY GROWTH
(VOL)

14.76
12.92
1.40
0.44
8.54
8.81
(0.03)
(0.24)
6.21
14.76
8.54
6.21
0.21
0.12
0.09
6.30
(0.25)
(0.37)
5.68
3.42

2.26
-
0.51
(0.13)
(0.02)
1.89
(0.05)
0.26
1.58
-
0.38
0.02
1.18
MATHEMATICAL PARTICULARS DESCRIPTION AS PER NRB UNIFIED DIRECTIVE 2079
OPERATION

m Personnel Expenses Expenses covered under this head includes employees' salary, allowances, pension, gratuity,
contribution to provident fund, training expenses, uniform expenses, insurance, staff bonus,
finance expense under NFRSs, cash-settled share-based payments, etc.

0.00

0.00
5 YEAR
CAGR(%)

32.44
41.15
23.17
27.48
97.06
22.92
23.13
4.49
-8.12
21.13
98.55

14.78

21.24
22.14
32.35
10.97
31.10
109.54
10.41

10.75
-259.82
9.97

5 YEAR
CAGR(%)

32.44
31.96
35.02
57.35
41.15
40.71
88.10
33.32
23.17
n Other Operating The expenses covered under this account head includes office administration expense, other
Expenses operating and overhead expense, directors' emoluments, remuneration and non-audit fee paid
to auditors, professional and legal expense, branch closure cost expense, redundancy cost
expense, expense of restructuring, impairment of non-financial assets, expense of corporate
social responsibility, onerous lease provisions, etc.

YOY GROWTH
(%)

YOY GROWTH
(%)

46.85
45.23
51.53
202.47
42.81
46.30
-4.45
-80.58
53.84
46.85
42.81
53.84
6.14
22.56
3.04
43.90
-33.93
-50.29
35.89
170.71

16.33

12.83
-8.00
-3.51
24.83
-52.75
1737.25
20.58

15.59
43.26
22.67
o Depreciation & Depreciation measured and recognized as per NFRSs on property and equipment, and
Amortization investment properties, and amortization of intangible assets has been presented under this
account head
p=l-m-n-o Operating Profit
q Non-Operating The income and expenses that have no direct relationship with the operation of transactions

Operating Expense

Income Tax Expense

(COMBINED)

(COMBINED)
2019

15.24
8.08
7.16
1.29
0.06
1.23
8.39
0.45
0.49
9.33
0.41

8.92

1.95
0.78
0.17
6.03
0.02
0.00
6.04

1.81
(0.01)
4.24

2019
Income/Expense has been presented under this head. The income/expense covered under this account head

15.24
14.14
1.05
0.05
8.08
8.08
0.00
0.00
7.16
shall include loan written off, recovery of loan, redundancy provision, expense of restructuring,
etc.
r=p+q Profit Before

2020

2020
16.46
9.48
6.98
1.31
0.06
1.24
8.23
0.47
0.43
9.12
0.86

8.27

2.01
1.05
0.12
5.09
0.00
0.00
5.10

1.55
0.08
3.46

16.46
14.86
1.39
0.21
9.48
9.42
0.04
0.02
6.98
Income Tax
s Income Tax Expense The amount of income tax on net taxable profit has been recognized and presented under
this account head. This account head includes current tax expense and deferred tax expense/
deferred tax income.

2021

2021

17.19
14.64
1.60
0.94
9.11
8.84
0.20
0.07
8.08
17.19
9.11
8.08
1.74
0.25
1.49
9.56
0.64
1.45
11.66
0.83

10.83

3.41
1.05
0.14
6.23
0.04
0.01
6.26

2.26
(0.53)
4.53
t=r-s Profit for the Year -

In all the discussions henceforth, the incomes and expenses of previous fiscal year i.e., 2022 figures of erstwhile Nepal
Bangladesh Bank Limited (NBBL) have been added to the figures of standalone figures of NABIL Bank for ease of

2022

31.50
19.96
11.54
3.34
0.53
2.81
14.35
0.74
0.74
15.82
2.00

13.81

4.01
1.66
0.52
7.62
0.09
0.01
7.70

2.42
0.05
5.22

2022

31.50
28.56
2.72
0.22
19.96
19.03
0.62
0.30
11.54
comparision. In the audited and published figures of the previous year, incomes and expenses acquired from erswhile NBBL
were not presented in the income statement and was directly accounted into reserves. The column 2022 (Combined) depicts

Table 37: Five Year Trend Analysis (Bank’s Financial Performance)

the figures which would have been reported if those incomes and expenses were presented in the income statement. YoY
Growth has also been calculated from those combine figure.

23.34
14.42
8.92
2.04
0.46
1.58
10.50
0.56
0.41
11.47
1.12

10.35

2.66
1.02
0.39
6.28
0.01
0.00
6.29

1.94
0.09
4.26

2022

2022

23.34
21.15
1.97
0.21
14.42
13.81
0.42
0.19
8.92
Table 38: Five Year Trend Analysis (Net Interest Income)

46.25
41.48
4.12
0.65
28.50
27.85
0.60
0.06
17.75
46.25
28.50
2023

17.75
3.55
0.65
2.89
20.64
0.49
0.37
21.50
5.43

16.07

4.53
1.53
0.50
9.51
0.04
0.27
9.28

2.80
0.07
6.40

2023
Impairment Charge/ (Reversal) for Loans and Other
Net Interest, Fee and Commisson Income
Net Fee and Commission Income
Fee and Commission Expense

Depreciation & Amortisation

Fee and Commission Income

Profit Before Income Tax

Other Operating Expenses
Total Operating Income

Net Operating Income

Other Operating Income

Non Operating Expense

Non Operating Income
Net Interest Income

Net Interest Income

Bond and Borrowing
Profit for the Year
Personnel Expenses
Net Trading Income

Interest Expense
Operating Profit

Interest Income
Interest Expense
Interest Income

Deferred Tax
Current Tax
PARTICULARS

PARTICULARS

Investment

Deposit
Others

Others
Loan
Losses
100 NABIL BANK LIMITED ANNUAL REPORT 2022/23 101
102
this growth.

NPR in Billion
NPR in Billion

NABIL BANK LIMITED

1.23
7.16

2019
2019

18.92%
14.33%

Net Interest Income

Net Interest Income

Net Fee and Commission Income

1.24
6.98

2020
2020

Growth Rate

1.26%
Net Fee and Commission Income
-2.45%

Growth Rate
1.49
8.08

2021
2021
15.64%

19.85%
2.81

2022
2022
11.54
42.86%

88.73%
2.89

2023
2023
17.75

commission income. The breakdown of both incomes and expenses have been presented separately hereafter.
3.04%
53.84%

the services which earn fees and commission income for the bank and have been deducted to arrive at net fees and
income from guarantees. Expense on fees and commission are those expenses which have been incurred to provide
As compared with the combined figures of erstwhile Nepal Bangladesh Bank (acquired in FY 2022) and Nabil of the
The net interest income of the bank has registered compounded annual growth rate of 23.17% in the past five years.

fee incomes. Reduction in issuance of government guarantees is the major cause behind the decrease in commission
The net fees and commission income of the bank registered a compounded annual growth of 22.92% with an annual
relaxations given on the ceiling of regulatory interest rate spread on account of mergers and acquisitions helped achieve

growth rate of 3%. Significant growth has been registered loan administration fees, card related fees as well as remittance
previous, net interest income has grown by 53.84%. The synergistic benefits of acquisitions done by the bank as well as the

Table 39: Five Year Trend Analysis (Net Fee and Commission Income) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Fee and Commission Income 3.55 2.04 3.34 1.74 1.31 1.29 6.14 27.48 0.21
Less: Fee and Commission Expense 0.65 0.46 0.53 0.25 0.06 0.06 22.56 97.06 0.12
Net Fee and Commission Income 2.89 1.58 2.81 1.49 1.24 1.23 3.0 22.9 0.09

Table 40: Five Year Trend Analysis (Breakdown of Fee Income and Commission Income) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Loan administration fees 0.82 0.49 0.70 0.58 0.41 0.36 17.35 20.69 0.12
Service fees 0.03 0.03 0.03 0.02 0.03 0.03 12.33 2.43 0.00
Commitment fees 0.00 0.00 0.00 0.01 0.01 0.02 17.97 - 0.00
DD/TT/Swift fees 0.05 0.04 0.04 0.04 0.03 0.04 22.24 5.79 0.01
Credit card/ATM issuance and renewal fees 0.85 0.63 0.65 0.36 0.23 0.30 31.06 32.94 0.20
Remittance fees 0.19 0.12 0.13 0.10 0.07 0.09 51.18 13.88 0.07
Commission on letter of credit 0.31 0.22 0.30 0.19 0.12 0.13 3.17 21.75 0.01
Commission on guarantee contracts issued 0.96 0.29 1.06 0.26 0.25 0.17 -8.65 48.38 (0.09)
Locker rental 0.03 0.02 0.03 0.02 0.02 0.01 7.72 15.05 0.00
Other fees and commision income 0.29 0.20 0.41 0.16 0.14 0.14 -28.25 24.46 (0.12)
Fee and Commission Income 3.55 2.04 3.34 1.74 1.31 1.29 6.14 27.48 0.21

Table 41: Five Year Trend Analysis (Breakdown of Fee and Commission Expense) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

ATM management fees 0.01 0.01 0.01 0.01 0.01 0.01 10.35 2.09 0.00
VISA/Master card fees 0.56 0.35 0.36 0.17 - - 53.38 - 0.19
DD/TT/Swift fees 0.02 0.01 0.03 0.01 0.01 0.01 -31.21 15.16 (0.01)
Remittance fees and commission 0.03 0.02 0.02 0.01 0.01 0.02 19.34 31.93 0.00
Other fees and commission expense 0.04 0.07 0.11 0.05 0.03 0.03 -63.27 - (0.07)
Fee and Commission Expense 0.65 0.46 0.53 0.25 0.06 0.06 22.56 97.06 0.12
ANNUAL REPORT 2022/23
103
104
Table 42: Five Year Trend Analysis (Net Trading Income) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Changes in fair value of trading assets - - 0.01 - - - -100.00 - (0.01)

NABIL BANK LIMITED

Gain/loss on disposal of trading assets - - - 0.01 - - 0.00 - -
Gain/loss foreign exchange transation 0.49 0.56 0.73 0.64 0.47 0.45 -33.06 4.49 (0.24)
Net Trading Income 0.49 0.56 0.74 0.64 0.47 0.45 -33.93 4.49 (0.25)

Trading income from foreign exchange transaction has declined by 33.93% primarily due to shrinking commission margin on buying and selling of foreign currency. Customer
forward transaction volume has also significantly declined causing a negative impact on the income.

Table 43: Five Year Trend Analysis (Other Operating Income) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL

Foreign exchange revauation gain 0.14 0.13 0.13 0.13 0.31 0.37 8.94 -15.87 0.01
Gain/loss on sale of investment securities 0.09 (0.00) 0.07 1.24 - - 40.92 4.11 0.03
Dividend on equity instruments 0.14 0.21 0.35 0.08 0.10 0.10 -58.53 2.32 (0.20)
Gain/loss on disposal of property and equipment (0.03) (0.00) (0.01) 0.00 0.00 0.00 432.76 -256.76 (0.03)
Gain/loss on sale of investment property 0.01 - 0.02 - - - -70.35 - (0.01)
Gain/loss on sale of gold and silver 0.01 0.02 0.02 0.01 0.01 0.01 -14.70 2.89 (0.00)
Other Operating Income - 0.06 0.16 - 0.01 0.02 -100.00 - (0.16)
Other Operating Income 0.37 0.41 0.74 1.45 0.43 0.49 -50.29 -8.12 (0.37)

Table 44: Five Year Trend Analysis (Impairment Charge) NPR IN

BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Impairment charge/(reversal) on
loan and advances to BFIs (0.03) 0.02 0.03 0.05 (0.00) - -191.71 - (0.06)
Impairment charge/(reversal) on
loan and advances to customers 5.45 1.09 1.97 0.74 0.83 0.40 176.31 98.69 3.48
Impairment charge/(reversal) on
financial Investment - - - - 0.02 - 0.00 - -
Impairment charge/(reversal) on placement with BFIs - - - - - - 0.00 - -
Impairment charge/(reversal) on property and equipment - - - - - - 0.00 - -
Impairment charge/(reversal) on goodwill and
intangible assets - - - - - - 0.00 - -
Impairment charge/(reversal) on investment properties - - - - - - 0.00 -100.00 -
Impairment charge/(reversal) on other assets 0.00 0.00 0.00 0.03 0.00 0.00 -60.76 - (0.00)
Impairment Charge/ (Reversal) for Loans 5.43 1.12 2.00 0.83 0.86 0.41 170.71 98.55 3.42
and Other Losses

Impairment charge on loans and advances have significantly grown in the reporting period which is reflective of the macro economic conditions prevalent in the country.
The businesses in the country have a taken a severe hit from the pandemic and are struggling to recover from the impacts of the same. As the businesses are in the phase
of revival, the repayment capacities of the borrowers are also adversely impacted. Various relaxations extended by the regulator introduced to cushion the impacts of
provisioning have also been withdrawn.
NPR IN
Table 45: Five Year Trend Analysis (Personnel Expense) BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Salary 0.90 0.53 0.87 0.48 0.46 0.39 3.22 23.04 0.03
Allowances 1.34 0.85 1.24 0.76 0.71 0.59 7.79 22.83 0.10
Gratuity Expense 0.24 0.15 0.19 0.32 (0.03) 0.13 24.72 13.73 0.05
Provident Fund 0.09 0.05 0.09 0.05 0.05 0.04 5.02 23.07 0.00
Uniform 0.04 0.02 0.04 - 0.03 0.02 15.17 26.54 0.01
Training & development expense 0.04 0.03 0.05 0.03 0.02 0.04 -26.69 2.70 (0.01)
Leave encashment 0.21 0.09 0.28 0.15 0.10 0.14 -25.89 34.00 (0.07)
Medical 0.00 0.00 0.03 0.00 0.00 0.00 -85.52 17.49 (0.03)
Insurance 0.02 0.02 0.02 0.01 0.01 0.01 6.00 22.41 0.00
Employees incentive 0.00 - - - 0.00 0.00 0.00 - 0.00
Cash-settled share-based payments - - - - - - 0.00 - -
Pension expense - - - - - - 0.00 - -
Finance expense under NFRS 0.51 0.20 0.21 0.91 0.09 (0.15) 149.65 - 0.31
Other expenses related to staff 0.09 0.01 0.13 0.01 0.01 0.00 -32.64 18.06 (0.04)
Prior period employee bonus - - - - - 0.05 0.00 - -
Subtotal 3.49 1.96 3.16 2.72 1.44 1.28 10.73 26.02 0.34
Employees bonus 1.03 0.70 0.86 0.70 0.57 0.67 20.58 10.41 0.18
Perosnnel Expense 4.53 2.66 4.01 3.41 2.01 1.95 12.83 21.24 0.51

Trend - Personnel & Other Operating Expenses

69.8% 4.53
4.01
57.8%
3.41
38.2 35.0%

1.95 2.01 17.6%

12.8% 12.8%
3.1% 1.66
0.4% 1.53
0.78
1.05
1.05 -8.0%

2019 2020 2021 2022 2023

Personnel Expense (NPR in Billion) Other Operating Expense (NPR in Billion) Growth Rate (Personnel Expenses) (%) Growth Rate (Other Operating Expense) (%)
ANNUAL REPORT 2022/23
105
106
Table 46: Five Year Trend Analysis (Other Operating Expense) NPR IN
BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Directors' fee 0.01 0.01 0.01 0.00 0.00 0.00 -34.07 14.31 (0.00)

NABIL BANK LIMITED

Directors' expense 0.01 0.00 0.00 0.00 0.00 0.00 37.24 9.56 0.00
Auditors' remuneration 0.00 0.00 0.00 0.00 0.00 0.00 -0.67 17.38 (0.00)
Other audit related expense - - 0.00 - - - -100.00 - (0.00)
Professional and legal expense 0.05 0.06 0.19 0.05 0.10 0.02 -72.90 108.96 (0.14)
Office administration expense 1.19 0.78 1.07 0.66 0.66 0.55 10.80 28.14 0.12
Operating lease expense 0.15 0.11 0.26 0.27 0.23 0.17 -41.28 2.92 (0.11)
Operating expense of investment properties - - - - - - 0.00 - -
Corporate social responsibility expense 0.02 - - - 0.02 0.00 0.00 - 0.02
Onerous lease provisions - - - - - - 0.00 - -
Other Expenses 0.10 0.06 0.13 0.07 0.03 0.03 -19.29 5.17 (0.02)
Other Operating Expense 1.53 1.02 1.66 1.05 1.05 0.78 -8.00 22.14 (0.13)

Depreciation and Amortization

268.4%
0.5
0.52

37.3%
22.4% -3.5%
0.17 0.12
0.14
-32%

2019 2020 2021 2022 2023

(Combined)

Depreciation and Amortisation (NPR in Billion) Growth Rate (%)

Table 47: Breakdown of Office Administration Expense NPR IN BILLION

PARTICULARS 2023 2022 2022 (COMBINED) 2021 2020 2019

Water and Electricity 0.07 0.05 0.05 0.04 0.04 0.03
Repair and Maintenance 0.06 0.03 0.03 0.02 0.02 0.02
Insurance 0.07 0.04 0.04 0.06 0.07 0.04
Postage, Telex, Telephone, Fax 0.07 0.05 0.05 0.04 0.04 0.03
Printing, Stationery and Small Purchase 0.08 0.06 0.06 0.06 0.06 0.06
Newspaper, Books and Journal 0.00 0.00 0.00 0.00 0.00 0.00
Advertisement 0.07 0.07 0.07 0.07 0.06 0.06
Donation - - - 0.00 0.00 0.00
Security Expenses 0.20 0.14 0.14 0.12 0.15 0.12
Deposit and Loan Guarantee Premium 0.10 0.05 0.05 0.05 0.04 0.03
Travel Allowance and Expenses 0.02 0.01 0.01 0.00 0.01 0.01
Customer Entertainment 0.01 0.02 0.02 0.01 0.01 0.00
Annual / Special General Meeting Expenses 0.00 0.00 0.00 0.00 0.00 0.00
Other Expenses 0.43 0.26 0.26 0.19 0.17 0.14
Office Administration Expense 1.19 0.78 1.07 0.66 0.66 0.55

Table 48: Five Year Trend Analysis (Non Operating Income) NPR IN BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Recovery of loan written off 0.04 0.01 0.09 0.00 0.00 0.02 -52.75 31.10 (0.05)
Other income - - - 0.03 - - 0.00 - -
Non Operating Income 0.04 0.01 0.09 0.04 0.00 0.02 -52.75 31.10 (0.05)

Table 49: Five Year Trend Analysis (Non Operating Expense) NPR IN BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Loan written off 0.21 - - 0.00 0.00 0.00 0.00 98.69 0.21
Redundancy provision - - - - - - 0.00 - -
Expense of restructuring - - - - - - 0.00 - -
Other expense 0.06 0.00 0.01 0.00 (0.00) (0.00) 328.86 - 0.05
Non Operating Expense 0.27 0.00 0.01 0.01 0.00 0.00 1737.25 109.54 0.26

Table 50: Five Year Trend Analysis (Income Tax Expense) NPR IN BILLION
PARTICULARS 2023 2022 2022 2021 2020 2019 YOY GROWTH 5 YEAR YOY GROWTH
(COMBINED) (%) CAGR(%) (VOL)

Current Tax 2.80 1.94 2.42 2.26 1.55 1.81 15.59 10.75 0.38
Deferred Tax 0.07 0.09 0.05 (0.53) 0.08 (0.01) 43.26 -259.82 0.02
Income Tax Expense 2.88 2.03 2.48 1.73 1.63 1.80 16.17 11.41 0.40
ANNUAL REPORT 2022/23
107
 4. DISTRIBUTABLE PROFIT
Net Profit A) Basis of Calculation of Distributable Profit:
NPR in Million
MATHEMATICAL PARTICULARS DESCRIPTION AS PER NRB UNIFIED DIRECTIVE
6.40 OPERATION
30.73%
5.22 i Net profit or (loss) as Net Profit calculated as per the format of "Statement of Profit or Loss"
4.53 22.67% per statement of profit
4.24
15.32% or loss
6.45% 3.46
ii=sum (at of) Appropriations:
a. General reserve General reserve is a statutory reserve. No type of dividend (cash or bonus share) shall be
distributed from the amount in general/statutory reserve. Approval of NRB shall be required
-18.3% in order to use the amount in this reserve. As per BAFIA 2072 20% of net profit is allocated to
this reserve until the reserve is twice the paid-up capital. After the requirement is fulfilled
2019 2020 2021 2022 2023 only 10% of the net profit to be segregated unto the reserve
(Combined)
b. Foreign exchange Exchange equalization reserve is a statutory reserve. A bank which has earned foreign
Net Profit Growth Rate
fluctuation fund exchange revaluation gain on foreign currency has to allocate 25 percent of such revaluation
gain except for that from Indian currency (INR) to this reserve as per provision of the Bank
On review of the financials of the previous five years, it is evident that the bank’s operations have become better efficient and Financial Institution Act
which is reflected in the growth in the bottom line. Even when compared with the combined figures of erstwhile Nepal c. Capital redemption This head includes the statutory reserve created for making payment towards Redeemable
Bangladesh Bank and Nabil of the previous year, the net profit has grown by 22.67%. The bank has been able to increase reserve Nonconvertible Preference Shares. Each year Size of instrument /(n-1) amount of fund must be
the income from operations in a satisfactory manner which ultimately contributed to net profit growth. segregated in the reserve, where n=period of the instrument
d. Corporate social The fund created for the purpose of corporate social responsibility by allocating profit is
responsibility fund presented under this account head. 1% of net profit is segregated for the fund
Table 51: Regulatory Ratios e. Employees' training Differential between 3% of salary and allowances of the primary year and actual training
%
fund expense is allocated to the fund
PARTICULARS 2023 2022 2021 2020 2019
f. Other Any reserve created with specific or non-specific purpose (except stated in above)
CD Ratio 87.12 90.13 80.30 68.76 73.04 iii=i-ii Profit or (loss) before
LD Ratio 27.86 22.79 23.49 29.20 26.99 regulatory adjustment
Cash Reserve Ratio 6.89 4.13 3.66 11.20 4.78 iv=g+h Regulatory adjustment:
Capital Adequacy Ratio 12.54 13.09 12.77 13.07 12.50 g. Interest receivable 63% increase of portion of unrealized interest income is deducted from retained earnings and
ROA 1.42 1.20 1.71 1.58 2.34 added to the regulatory reserve. In case of decrease in unrealized portion of interest income
ROE 11.66 9.78 15.19 13.61 17.76 (-)/previous accrued vice versa treatment is performed
Earnings Per Share (NPR) 23.67 18.64 33.57 36.16 50.57 interest received (+)
h. Short loan loss If the calculation as per NRB directive No 2 is greater than that calculated under the Incurred
provision in accounts Loss Model, then the difference amount is deducted from retained earnings and added to
(-)/reversal (+) Regulatory Reserve. In reverse case, the same is reversed.
v=sum (i to n) Short provision for
possible losses on
investment (-)/
reversal (+)
i. Short loan loss Any provision on NBA derecognised in SOPL is deducted from retained earnings and is not

108 NABIL BANK LIMITED ANNUAL REPORT 2022/23 109

 MATHEMATICAL PARTICULARS DESCRIPTION AS PER NRB UNIFIED DIRECTIVE 2079 Table 52: Five Year Trend Analysis (Distributable Profit)
NPR IN BILLION
OPERATION
PARTICULARS 2023 2022 2021 2020 2019
provision on Non- allowed to be distributed
Closing balance in retained earning of last FY 2.90 4.16 3.58 3.74 3.25
Banking Assets (-)/
Bonus share distribution and other adjustments last FY (2.63) (4.77) (2.35) (3.06) (2.73)
reversal (+)
Opening balance in retained earnings 0.27 (0.61) 1.23 0.67 0.52
j. Deferred tax assets Any increase in Deferred Tax Assets recognized during the year is deducted from distributable
Net profit / (loss) as per statement of profit or loss 6.40 4.26 4.53 3.46 4.24
recognized (-)/ profit. Any decrease in added back to the profit.
Less: appropriations (-) / contributions (+): (2.29) (1.27) (1.32) (0.79) (0.85)
reversal (+)
a. General reserve (1.28) (0.85) (0.91) (0.69) (0.85)
k. Goodwill recognized
b. Foreign exchange fluctuation fund (0.04) (0.03) (0.03) (0.08) (0.09)
(-)/ impairment of
c. Capital redemption reserve (Debenture Redemption Reserve) (0.92) (0.33) (0.33) - -
Goodwill (+)
d. Corporate social responsibility fund (0.06) (0.04) (0.05) (0.03) (0.04)
l. Bargain purchase Carrying amount of Bargain Purchase Gain to be deducted from Retained Earnings during the
e. Employees' training fund (0.01) (0.01) - - 0.00
gain recognized (-)/ year of acquisition. Reversal of same is performed upon distribution of Bonus Share
f. Investment adjustment reserves (0.00) - (0.00) (0.00) 0.13
reversal (+)
f. Others: 0.02 (0.00) (0.00) 0.02 0.00
m. Actuarial loss Any actuarial gain/loss directly routed through Other Comprehensive Income is not allowed to
Regulatory adjustment : (1.20) 0.52 (0.22) 0.23 (0.18)
recognized (-)/ be distributed and is shown as deduction from distributable profit.
a. Interest receivable (-)/previous accrued interest received (+) (0.90) 0.49 (0.09) 0.04 (0.08)
reversal (+)
b. Short loan loss provision on Non Banking Assets (-)/reversal (+) (0.32) (0.01) 0.00 - -
n. Other Any reserve created with specific or non-specific purpose (except stated in above)
c. Actuarial loss recognised (-)/reversal (+) 0.02 0.03 (0.14) 0.19 (0.10)
vi=iii-iv-v Net Profit for the
d. Others (-)/reversal (+) - - 0.00 - -
Qtr end …………
Distributable profit for the year 2.91 3.51 2.99 2.91 3.22
available for distribution
Transfer from fair value reserve - - 1.08 - -
vi Opening Retained Retained earnings at the end of Fiscal Year
Total distributable profit 3.19 2.90 5.30 3.58 3.74
Earning as on
No of share 270,569,967 228,329,086 138,444,512 100,974,974 90,118,454
Shrawan 1
Distributable Profit per Share 11.8 12.7 38.3 35.4 41.4
vii Adjustment (+/-) Any other exceptional adjustments
Bonus Share distributed - 4.22 4.65 3.38 1.08
viii Distribution:
Cash Dividend distributed 2.98 2.63 0.61 0.18 1.98
Bonus shares issued Bonus share issued out of distributable profit and approved by AGM
Cash Dividend Paid Cash distributed out of distributable profit and approved by AGM
ix=vi+vii-viii Total Distributable profit or (loss) as on Qtr end date
Annualized Distributable Profit/Loss per share 5) CAPITAL ADEQUACY RATIO (CAR)
A) Basis of Preparation of CAR:
Capital Adequacy ratio is prepared in accordance with Capital Adequacy Framework 2015.

Table 53: Five Year Trend Analysis (CAR)

NPR IN BILLION

CAPITAL ADEQUACY RATIO 2023 2022 2021 2020 2019

Common Equity Tier 1 Capital 46.07 44.90 26.96 20.94 19.37

Tier 1 Capital 46.07 44.90 26.96 20.94 19.37
Tier 2 Capital 10.45 9.65 5.29 4.17 1.88
Total Capital 56.53 54.56 32.25 25.11 21.25
Risk-Weighted Exposures 450.73 416.90 252.60 192.21 169.95

IN %

REGULATORY RATIOS 2023 2022 2021 2020 2019

Leverage Ratio 6.62% 6.96% 7.05% 6.52% 7.25%

Common Equity Tier 1 to Risk Weighted Exposure Ratio 10.22% 10.77% 10.67% 10.90% 11.40%
Tier 1 to Risk Weighted Exposure Ratio 10.22% 10.77% 10.67% 10.90% 11.40%
Total Capital to Risk Weighted Exposure Ratio 12.54% 13.09% 12.77% 13.07% 12.50%

110 NABIL BANK LIMITED ANNUAL REPORT 2022/23 111

 Table 54: Market Share of the Bank (Based on number of customers) COMPARISON OF UNAUDITED FINANCIAL STATEMENT
IN %
Table 56: Quarterly Comparision of Unaudited Statement of Profit and Loss
PARTICULARS 2023 2022 2021 2020 NPR IN MILLION

Deposit 4.72% 4.50% 3.72% 2.41% PARTICULARS Q1 Q2 Q3 Q4 MID YOY YOY

Loan 4.44% 4.32% 2.72% 2.14% JULY 2023 GROWTH GROWTH
VOLUME (VOL) (%)
ATM 6.67% 5.90% 4.64% 4.92%
Branches 5.25% 4.61% 2.84% 2.66% Interest Income 10,245 11,120 11,512 13,504 46,381 22,599 95.0%
Debit Card 6.64% 6.25% 7.03% 7.06% Interest Expense 6,568 6,964 7,244 7,623 28,399 14,048 97.9%
Credit Card 14.21% 10.97% 11.71% 12.62% Net Interest Income 3,677 4,156 4,268 5,881 17,982 8,550 90.7%
Mobile Banking 6.21% 5.49% 4.63% 4.45% Fees and Commission Income 659 684 1,116 1,083 3,543 1,848 109.1%
Internet banking 8.18% 6.81% 4.13% 4.52% Fees and Commission Expense 31 30 400 185 646 533 473.1%
Net Fees and Commission Income 628 654 716 898 2,897 1,315 83.2%
Net Interest, Fees and Commission Income 4,306 4,810 4,984 6,779 20,879 9,866 89.6%
Table 55: Bank's Outreach and Customer Base Net Trading Income 136 121 121 107 485 (80) -14.2%
NPR Other Operating Income 56 88 68 100 313 (44) -12.4%
PARTICULARS 2023 2022 2021 2020 Total Operating Income 4,497 5,019 5,173 6,987 21,677 9,741 81.6%
Number of Customers Impairment Charge/ (Reversal) for
Deposit 2,077,724 1,750,447 1,224,677 668,302 Loans and Other Losses 993 894 1,444 558 3,890 3,186 452.8%
Loan 67,127 64,497 37,137 25,634 Net Operating Income 3,504 4,125 3,729 6,429 17,787 6,555 58.4%
Network Personnel Expenses 822 1,036.97 594 2,240 4,693 1,967 72.2%
ATM 298 250 185 185 Other Operating Expenses 389 393.08 447 586 1,815 583 47.3%
Branches 265 231 135 118 Depreciation & Amortization 62 63.43 64 80 269 91 51.4%
Number of Users Operating Profit 2,230 2,631 2,625 3,524 11,011 3,914 55.2%
Debit Card 754,517 642,086 594,999 498,346 Non-Operating Income 15 6.15 7 16 43 35 398.0%
Credit Card 40,243 26,193 22,530 20,227 Non-Operating Expense (0) 0.00 205 70 275 274 31791.0%
Mobile Banking 1,145,281 883,049 585,073 450,044 Profit Before Income Tax 2,245 2,638 2,426 3,470 10,779 3,675 51.7%
Internet banking 110,272 87,141 46,111 45,305 Income Tax Expense 673 791 728 1,063 3,256 1,124 52.7%
QR 15327.00 8,881 4387.00 59.00 Current Tax 673 791 728 1,063 3,256 1,124 52.7%
iCard 13761.00 5,714 1988.00 Deferred Tax - - - - - -
POS 4,300.00 3,627 3,265.00 Profit /(Loss) For the Period 1,572 1,846 1,698 2,407 7,523 2,551 51.3%

112 NABIL BANK LIMITED ANNUAL REPORT 2022/23 113

 Table 57: Quarterly Comparision of Unaudited Statement of Financial Position VERTICAL AND HORIZONTAL ANALYSIS
NPR IN MILLION

PARTICULARS Q1 Q2 Q3 Q4 GROWTH GROWTH GROWTH GROWTH TABLE 58: HORIZONTAL ANALYSIS

(Q4 2022 TO (Q1 2023 TO (Q2 2023 TO (Q3 2023 TO
Q1 2023) Q2 2023) Q3 2023) Q4 2023) Statement of Financial Position
NPR IN MILLION
Cash and Cash Equivalent 9,597 9,427 9,828 6,774 2.98% -1.77% 4.25% -31.07%
PARTICULARS YOY 2023 YOY 2022 YOY 2021 YOY 2020
Due from Nepal Rastra Bank 11,289 13,371 13,116 25,640 -13.21% 18.44% -1.91% 95.50%
GROWTH GROWTH GROWTH GROWTH
Placement with Banks and FIs 13,660 10,686 7,138 13,424 28.84% -21.77% -33.20% 88.06% FY 2022/23 FY 2021/22 FY 2020/21 FY 2019/20
Derivative Financial Instruments 1,112 1,515 401 3,833 -19.08% 36.27% -73.53% 856.18%
Assets
Other Trading Assets - - - - 0.00% t0.00% 0.00% 0.00%
Cash and Cash Equivalents -39% 6,774 52% 11,052 52% 7,286 -55% 4,800
Loans and Advances to Banks and Fis 9,899 9,587 8,875 8,283 -4.51% -3.16% -7.43% -6.67%
Due from Nepal Rastra Bank 97% 25,652 62% 13,037 -60% 8,024 150% 20,021
Loans and Advances to Customers 305,697 315,642 323,514 332,699 1.54% 3.25% 2.49% 2.84%
Placement with Banks and FIs 51% 13,424 -10% 8,871 -4% 9,865 -8% 10,231
Investment Securities 55,824 59,175 67,093 76,875 -9.50% 6.00% 13.38% 14.58%
Derivative Financial Instruments 179% 3,833 -90% 1,374 25% 13,615 27% 10,860
Current Tax Assets - 279 171 - -100.00% 0.00% -38.64% -100.00%
Other Trading Assets -100% - 0% 30 0% - 0% -
Investment in Subsidiaries 1,798 1,798 1,798 1,798 503.36% 0.00% 0.00% 0.00%
Loans and Advances to Banks and FIs -20% 8,283 21% 10,367 47% 8,602 -4% 5,836
Investment in Associates 80 80 80 80 0.00% 0.00% 0.00% 0.00%
Loans and Advances to Customers 10% 331,123 52% 300,206 34% 198,021 16% 148,054
Investment Property 1,021 1,666 1,725 1,827 9.71% 63.20% 3.54% 5.89%
Investment Securities 22% 76,453 57% 62,455 19% 39,889 33% 33,633
Property and Equipment 3,139 3,549 3,648 3,865 0.03% 13.08% 2.79% 5.93%
Current Tax Assets -100% - 98% 606 18% 307 90% 261
Goodwill and Intangible Assets 143 310 306 304 14.26% 116.84% -1.21% -0.49%
Investment in Subsidiaries 503% 1,798 282% 298 0% 78 0% 78
Deferred Tax Assets - - - - 0.00% 0.00% 0.00% 0.00%
Investment in Associates 0% 80 0% 80 0% 80 0% 80
Other Assets 7,822 7,524 5,531 7,607 108.54% -3.81% -26.48% 37.53%
Investment Property 39% 1,827 12988% 1,319 23% 10 0% 8
Total Assets 421,082 434,609 443,226 483,011 1.18% 3.21% 1.98% 8.98%
Property and Equipment 9% 3,871 101% 3,536 34% 1,760 25% 1,318
Liabilities
Goodwill and Intangible Assets -2% 285 75% 292 133% 167 73% 72
Due to Banks and FIs 5,245 6,726 5,112 6,278 56.41% 28.22% -23.99% 22.79%
Deferred Tax Assets 0% - 0% - 0% - 0% -
Due to Nepal Rastra Bank 8,042 3,102 4,604 3 72.67% -61.43% 48.43% -99.93%
Other Assets 24% 7,798 78% 6,297 46% 3,535 -6% 2,428
Derivative Financial Instruments 1,105 1,489 390 3,813 -20.57% 34.82% -73.80% 877.13%
Total Assets 15% 481,204 44% 419,818 23% 291,239 18% 237,680
Deposits from Customers 334,095 347,462 363,488 396,843 2.41% 4.00% 4.61% 9.18%
Borrowings 4 - - - -99.96% -100.00% 0.00% 0.00%
Liabilities
Current Tax Liabilities 266 - - 292 0.00% -100.00% 0.00% 0.00%
Due to Banks and FIs 87% 6,278 -26% 3,354 102% 4,503 57% 2,229
Provisions - - - - 0.00% 0.00% 0.00% 0.00%
Due to Nepal Rastra Bank -100% - -15% 4,657 10129% 5,450 -40% 53
Deferred Tax Liabilities 1,759 2,368 1,043 2,430 18.02% 34.63% -55.96% 132.96%
Derivative Financial Instruments 174% 3,813 -90% 1,391 27% 13,634 29% 10,764
Other Liabilities 10,334 13,092 7,836 8,772 11.69% 26.68% -40.14% 11.94%
Deposits from Customers 22% 396,843 46% 326,222 17% 223,474 17% 190,806
Debt Securities Issued 6,353 6,495 6,349 6,499 -2.24% 2.23% -2.24% 2.36%
Borrowings -100% - 0% 10,721 0% - 0% -
Subordinated Liabilities - - - - 0.00% 0.00% 0.00% 0.00%
Current Tax Liabilities 0% 482 0% - 0% - 0% -
Total Liabilities 367,204 380,733 388,822 424,929 0.99% 3.68% 2.12% 9.29%
Provisions 0% - 0% - 0% - 0% -
Equity
Deferred Tax Liabilities 8% 1,919 30% 1,779 -5% 1,367 69% 1,439
Share Capital 22,833 27,057 27,057 27,057 0.00% 18.50% 0.00% 0.00%
Other Liabilities -31% 8,469 82% 12,228 49% 6,703 5% 4,497
Share Premium 0 - - - 0.00% -100.00% 0.00% 0.00%
Debt Securities Issued 0% 6,487 209% 6,485 3% 2,097 0% 2,036
Retained Earnings 3,530 1,245 1,772 3,958 4.71% -64.73% 42.32% 123.37%
Subordinated Liabilities 0% - 0% - 0% - 0% -
Reserves 27,514 25,574 25,574 27,070 4.30% -7.05% 0.00% 5.85%
Total Liabilities 16% 424,291 43% 366,836 21% 257,229 19% 211,824
Total Equity Attributable to 53,878 53,876 54,403 58,085 2.46% 0.00% 0.98% 6.77%

Equity Holders
Equity
Non Controlling Interest 0.00% 0.00% 0.00% 0.00%
Share Capital 19% 27,057 65% 22,833 37% 13,844 12% 10,097
Total Equity 53,878 53,876 54,403 58,085 2.46% 0.00% 0.98% 6.77%
Share Premium -100% - -100% 0 214438% 159 0% 0
Total Liabilities and Equity 421,082 434,609 443,226 483,014 1.18% 3.21% 1.98% 8.98%
Retained Earnings 10% 3,187 -30% 2,900 16% 4,163 -4% 3,576
Reserves -2% 26,669 72% 27,249 30% 15,844 17% 12,182
Total Equity Attributable to Equity Holders 7% 56,913 56% 52,982 32% 34,010 12% 25,856
Total Liabilities and Equity 481,204 419,818 291,239 237,680

114 NABIL BANK LIMITED ANNUAL REPORT 2022/23 115

116


PARTICULARS

Current Tax
Deferred Tax
Interest Income
Interest Expense

NABIL BANK LIMITED

Operating Profit
Net Trading Income

Profit for the Year

Personnel Expenses
Operating Expense
Net Interest Income

Income Tax Expense

Non Operating Income
Loans and Other Losses

Non Operating Expense

Other Operating Income

Net Operating Income

Total Operating Income

Other Operating Expenses

Profit Before Income Tax

Fee and Commission Income

Depreciation & Amortisation

Fee and Commission Expense
Statement of Profit or Loss

Impairment Charge/ (Reversal) for

Net Fee and Commission Income

50%
-20%
44%
48%
9967%
398%
51%
29%
49%
70%
55%
385%
87%
-11%
-14%
83%
40%
74%
99%
98%
98%
YOY

Net Interest, Fee and Commisson Income 97%

have recorded a growth of 4.17% and 6.95% respectively.

2023

6,405
73
2,803
9,281
275
43
9,513
503
1,529
4,525
16,070
5,426
21,496
366
487
20,644
2,895
651
3,546
17,749
28,502
46,251
FY 2022/23

0%
0%

ACHIEVEMENTS OF CURRENT YEAR AND FUTURE OUTLOOK

challenges and help in further strengthening the position of the bank.

-6%
-117%
-14%
1%
-53%
-75%
1%
175%
-3%
-22%
-4%
35%
-2%
-72%
-12%
10%
6%
85%
17%
10%
58%
36%
YOY
2022

4,256
91
1,940
6,288
3
9
6,282
390
1,024
2,659
10,354
1,119
11,473
410
565
10,498
1,579
464
2,043
8,919
14,422
23,341
FY 2021/22

0%
0%

31%
694%

-758%
46%
23%
134%
22%
22%
0%
70%
31%
-3%
28%
237%
38%
16%
20%
297%
33%
16%
-4%
4%
GROWTH GROWTH GROWTH
YOY

4,528
2021

(531)
2,259
6,255
6
35
6,226
142
1,053
3,412
10,832
828
11,660
8,076

1,451
644
9,564
1,489
251
1,740
9,113
17,189

0%
0%

-18%
7%
-74%

-1146%
-14%
0%
-16%
-15%
-32%
35%
3%
0%
-7%
111%
-2%
-13%
4%
-2%
1%
-2%
1%
-2%
17%
8%
FY 2020/21 FY 2019/20
GROWTH
YOY

The bank has continued to expand its business right from the beginning of the running fiscal year 2023-24 and has
delivered a stellar performance. At the end of the first quarter of the running fiscal year, the deposits stand at NPR 419

by the regulator. The bank will continue to focus on the improving the quality of its assets and identify and increase the
The bank is committed to achieving the targets set for the fiscal year despite the various challenges like shrinking interest
margin, economic slowdown, overcoming the lingering impacts of the pandemic as well as the new regulations imposed
billion, loans stand at NPR 363 billion and the investments stand at NPR 93 billion. The bank recorded a net profit of NPR

avenues of non-interest income. The bank believes that any change in the regulations will provide more opportunities than
1.47 billion upto the period. The asset size of the bank has crossed the 500 billion mark in the quarter. Deposits and loans
3,463
3
4

81
1,551
5,095
5,093
116
1,049
2,010
8,267
2020

857
9,124
8,226
1,242
63

430
468
1,305
6,984
9,479
16,463
NPR IN MILLION

TABLE 59: VERTICAL ANALYSIS

Statement of Financial Position NPR IN BILLION

PARTICULARS PROPORTION 2023 PROPORTION 2022 PROPORTION 2021 PROPORTION 2020 PROPORTION 2019
VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL
ASSETS ASSETS ASSETS ASSETS ASSETS

Assets
Cash and Cash Equivalents 1.4% 6,774 2.6% 11,052 2.5% 7,286 2.0% 4,800 5.3% 10,670
Due from Nepal Rastra Bank 5.3% 25,652 3.1% 13,037 2.8% 8,024 8.4% 20,021 4.0% 8,001
Placement with Banks and FIs 2.8% 13,424 2.1% 8,871 3.4% 9,865 4.3% 10,231 5.5% 11,079
Derivative Financial Instruments 0.8% 3,833 0.3% 1,374 4.7% 13,615 4.6% 10,860 4.2% 8,539
Other Trading Assets 0.0% - 0.0% 30 0.0% - 0.0% - 0.0% -
Loans and Advances to Banks and FIs 1.7% 8,283 2.5% 10,367 3.0% 8,602 2.5% 5,836 3.0% 6,058
Loans and Advances to Customers 68.8% 331,123 71.5% 300,206 68.0% 198,021 62.3% 148,054 63.4% 127,500
Investment Securities 15.9% 76,453 14.9% 62,455 13.7% 39,889 14.2% 33,633 12.6% 25,303
Current Tax Assets 0.0% - 0.1% 606 0.1% 307 0.1% 261 0.1% 138
Investment in Subsidiaries 0.4% 1,798 0.1% 298 0.0% 78 0.0% 78 0.0% 78
Investment in Associates 0.0% 80 0.0% 80 0.0% 80 0.0% 80 0.0% 80
Investment Property 0.4% 1,827 0.3% 1,319 0.0% 10 0.0% 8 0.0% 8
Property and Equipment 0.8% 3,871 0.8% 3,536 0.6% 1,760 0.6% 1,318 0.5% 1,052
Goodwill and Intangible Assets 0.1% 285 0.1% 292 0.1% 167 0.0% 72 0.0% 41
Deferred Tax Assets 0.0% - 0.0% - 0.0% - 0.0% - 0.0% -
Other Assets 1.6% 7,798 1.5% 6,297 1.2% 3,535 1.0% 2,428 1.3% 2,591
Total Assets 100.0% 481,204 100.0% 419,818 100.0% 291,239 100.0% 237,680 100.0% 201,139
Liabilities
Due to Banks and FIs 1.3% 6,278 0.8% 3,354 1.5% 4,503 0.9% 2,229 0.7% 1,419
Due to Nepal Rastra Bank 0.0% - 1.1% 4,657 1.9% 5,450 0.0% 53 0.0% 88
Derivative Financial Instruments 0.8% 3,813 0.3% 1,391 4.7% 13,634 4.5% 10,764 4.1% 8,335
Deposits from Customers 82.5% 396,843 77.7% 326,222 76.7% 223,474 80.3% 190,806 81.0% 162,954
Borrowings 0.0% - 2.6% 10,721 0.0% - 0.0% - 0.0% -
Current Tax Liabilities 0.1% 482 0.0% - 0.0% - 0.0% - 0.0% -
Provisions 0.0% - 0.0% - 0.0% - 0.0% - 0.0% -
Deferred Tax Liabilities 0.4% 1,919 0.4% 1,779 0.5% 1,367 0.6% 1,439 0.4% 852
Other Liabilities 1.8% 8,469 2.9% 12,228 2.3% 6,703 1.9% 4,497 2.1% 4,302
Debt Securities Issued 1.3% 6,487 1.5% 6,485 0.7% 2,097 0.9% 2,036 0.0% -
Subordinated Liabilities 0.0% - 0.0% - 0.0% - 0.0% - 0.0% -
Total Liabilities 88.2% 424,291 87.4% 366,836 88.3% 257,229 89.1% 211,824 88.5% 177,950
Equity
Share Capital 5.6% 27,057 5.4% 22,833 4.8% 13,844 4.2% 10,097 4.5% 9,012
Share Premium 0.0% - 0.0% 0 0.1% 159 0.0% 0 0.0% 0
Retained Earnings 0.7% 3,187 0.7% 2,900 1.4% 4,163 1.5% 3,576 1.9% 3,735
Reserves 5.5% 26,669 6.5% 27,249 5.4% 15,844 5.1% 12,182 5.2% 10,441
ANNUAL REPORT 2022/23

Total Equity Attributable to Equity Holders 11.8% 56,913 12.6% 52,982 11.7% 34,010 10.9% 25,856 11.5% 23,189
Total Liabilities and Equity 100.0% 481,204 419,818 291,239 237,680 201,139
117
118
Statement of Profit or Loss NPR IN BILLION

PARTICULARS PROPORTION 2023 PROPORTION 2022 PROPORTION 2021 PROPORTION 2020 PROPORTION 2019
VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL VIZ. TOTAL
SALES SALES SALES SALES SALES

NABIL BANK LIMITED

Interest Income 91.3% 46,251 88.5% 23,341 81.8% 17,189 88.2% 16,463 87.2% 15,244
Interest Expense 56.3% 28,502 54.7% 14,422 43.3% 9,113 50.8% 9,479 46.3% 8,085
Net Interest Income 35.0% 17,749 33.8% 8,919 38.4% 8,076 37.4% 6,984 41.0% 7,159
Fee and Commission Income 7.0% 3,546 7.8% 2,043 8.3% 1,740 7.0% 1,305 7.4% 1,291
Fee and Commission Expense 1.3% 651 1.8% 464 1.2% 251 0.3% 63 0.4% 64
Net Fee and Commission Income 5.7% 2,895 6.0% 1,579 7.1% 1,489 6.7% 1,242 7.0% 1,227
Net Interest, Fee and Commisson Income 40.8% 20,644 39.8% 10,498 45.5% 9,564 44.1% 8,226 48.0% 8,386
Net Trading Income 1.0% 487 2.1% 565 3.1% 644 2.5% 468 2.6% 448
Other Operating Income 0.7% 366 1.6% 410 6.9% 1,451 2.3% 430 2.8% 495
Total Operating Income 42.4% 21,496 43.5% 11,473 55.5% 11,660 48.9% 9,124 53.4% 9,329
Impairment Charge/ (Reversal) for
Loans and Other Losses 10.7% 5,426 4.2% 1,119 3.9% 828 4.6% 857 2.3% 405
Net Operating Income 31.7% 16,070 39.3% 10,354 51.5% 10,832 44.3% 8,267 51.1% 8,924
Operating Expense 0.0% 0.0% 0.0% 0.0% 0.0%
Personnel Expenses 8.9% 4,525 10.1% 2,659 16.2% 3,412 10.8% 2,010 11.2% 1,950
Other Operating Expenses 3.0% 1,529 3.9% 1,024 5.0% 1,053 5.6% 1,049 4.4% 777
Depreciation & Amortisation 1.0% 503 1.5% 390 0.7% 142 0.6% 116 1.0% 170
Operating Profit 18.8% 9,513 23.8% 6,282 29.6% 6,226 27.3% 5,093 34.5% 6,027
Non Operating Income 0.1% 43 0.0% 9 0.2% 35 0.0% 4 0.1% 17
Non Operating Expense 0.5% 275 0.0% 3 0.0% 6 0.0% 3 0.0% 2
Profit Before Income Tax 18.3% 9,281 23.9% 6,288 29.8% 6,255 27.3% 5,095 34.6% 6,041
Income Tax Expense
Current Tax 5.5% 2,803 7.4% 1,940 10.7% 2,259 8.3% 1,551 10.4% 1,810
Deferred Tax 0.1% 73 0.3% 91 -2.5% (531) 0.4% 81 0.0% (8)
Profit for the Year 12.6% 6,405 16.1% 4,256 21.5% 4,528 18.6% 3,463 24.3% 4,239
- - - - -
Total Sales 100.0% 50,649 100.0% 26,359 100.0% 21,024 100.0% 18,667 100.0% 17,478

ANNUAL REPORT 2022/23

119
120
ROE - %
FY 22/23 21/22 20/21 19/20 18/19
11.7 9.8 15.2 13.6 17.8
ROE is calculated by comparing the
proportion of net income against the amount
of shareholder's equity.Where, in case of
DuPont ROE is the product of ROA and Equity
Multiplier.

NABIL BANK LIMITED

DUPONT ANALYSIS

Financial Leverage - Times ROA - %

FY 22/23 21/22 20/21 19/20 18/19 FY 22/23 21/22 20/21 19/20 18/19
8.2 8.2 8.9 8.6 7.6 1.4 1.2 1.7 1.6 2.3
Financial Leverage also referred as Equity ROA is the product of Total Operating Income
Multiplier, derived from dividing the average Ratio and Profit Margin Ratio which shows the
total assets by average equity. Higher equity net profit of the bank to its Average Total
multiplier shows that capital structure is more Assets.
leveraged meaning that the infusion of debt in
capital structure is higher compared to
previous year.

Total Operating Income Ratio - % Profit Margin Ratio - %

FY 22/23 21/22 20/21 19/20 18/19 FY 22/23 21/22 20/21 19/20 18/19
4.8 3.2 4.4 4.2 5.2 29.8 37.1 38.8 38.0 45.4
Total Operating Income ratio is the sum of Net Profit Margin Ratio is the percentage of Net
Interest Income Ratio and Non-Interest Income Profit to Total Operating Income. This ratio has
Ratio which shows the total operating income been decreased primarily due to increase in
Net Interest Income Ratio - % out of average total assets. This ratio has been impairment charge for loan.
increased primarily due to increase in NII and
FY 22/23 21/22 20/21 19/20 18/19 this is upward driver of ROA.
3.9 2.5 3.1 3.2 4.0
Net Interest Income Ratio is calculated by
dividing the net interest income by average Cost to Income Ratio - %
total asset. Increase in this ratio drives the
ROE upward. FY 22/23 21/22 20/21 19/20 18/19
31.6 35.5 39.3 34.8 30.9
Operating Expenses Ratio - % Cost to Income ratio is calculated by dividing the
FY 22/23 21/22 20/21 19/20 18/19 operating expenses by total operating income
which shows the percentage of total operating
1.5 1.1 1.7 1.5 1.6 income to be covered by operating expenses.
Operating Expenses ratio is calculated by
Non-Interest Income Ratio - % dividing the operating expenses by average
total assets. Operating Expenses includes
FY 22/23 21/22 20/21 19/20 18/19 personnel expenses, depreciation and Tax Ratio - %
0.8 0.7 1.4 1.0 1.2 amortization and other operating expenses.
This is the downward driver of ROE. FY 22/23 21/22 20/21 19/20 18/19
Non-Interest Income Ratio is calculated by 31.0 32.3 27.6 32.0 29.8
dividing the non-interest income by average
total assets. Non-Interest Income includes net Tax ratio is calculated dividing sum of Tax
fees and commission income, net trading Expenses (Current tax expenses and Deferred
income and other operating income. tax expenses) by Profit before tax which shows
the burden of tax to the profit.

Operating Profit Ratio - % Impairment Charge for Loan Loss - %

FY 22/23 21/22 20/21 19/20 18/19 FY 22/23 21/22 20/21 19/20 18/19 Profit Before Tax - %
3.3 2.1 2.7 2.7 3.6 1.2 0.3 0.3 0.4 0.2
FY 22/23 21/22 20/21 19/20 18/19
Operating Profit is the difference of Total The ratio is calculated dividing the provision 2.1 1.8 2.4 2.3 3.3
Operating Income and Operating Expenses. for impairment charge by average total asset
Operating profit ratio is the percentage of which is at the highest from the past five
operating profit on average total assets. years. This is the downward driver of ROE.
Operating profit is also referred as the profit
before tax and provision.

Tax Ratio
Profit before tax

Return on Asset
Cost/Income Ratio

Equity Multiplier
Return on Equity
loan and other losses

Profit Margin Ratio

Impairment charge for

Financial Leverage/
Net Interest Income Ratio

Operating Profit Ratio

Operating Expenses Ratio
Non-Interest Income Ratio
Total Operating Income Ratio
Table 60: DuPont Analysis

% of PBT
% of Average Asset
% of Average Asset
% of Operating Income
% of Average Asset
% of Average Asset
% of Average Asset
% of Average Asset

EM*ROA
% of Average Asset

% of total operating income

Asset/equity
Profit margin*Operating income

11.66%
8.20
1.42%
29.80%
30.99%
2.06%
1.20%
3.26%
31.58%
1.51%
4.77%
0.83%
3.94%
2022/23

9.78%
8.17
1.20%
37.10%
32.31%
1.77%
0.31%
2.08%
35.45%
1.14%
3.23%
0.72%
2.51%
2021/22

15.19%
8.87
1.71%
38.83%
27.62%
2.37%
0.31%
2.68%
39.25%
1.73%
4.41%
1.36%
3.05%
2020/21
2019/20

13.61%
8.62
1.58%
37.96%
32.03%
2.32%
0.39%
2.71%
34.77%
1.45%
4.16%
0.98%
3.18%

17.76%
7.59
2.34%
45.44%
29.84%
3.34%
0.22%
3.56%
30.90%
1.59%
5.15%
1.20%
3.95%
2018/19

ANNUAL REPORT 2022/23

%

121
 STATEMENT OF VALUE ADDED
Value added statement represents a In this section bank aims to present the
Net Fee and Net Trading Income
comprehensive disclosure regarding creating Economic Value added to the national economy Commission Income
organization’s value and contribution to national through its operation. Economic value added is
economy through different measures and areas a financial tool that evaluates the value added
of operations. It mainly focuses on value added considering factors such as net profit, capital
to employees, government, investors, financers, invested, volume and cost of debenture etc.
and other stakeholders through effective and Net Interest Income Net Operating Income Other Operating Expenses
efficient operations of business and compliance
to the regulatory requirements and technical
standards to be followed. Value addition can
be calculated and presented based on both
financial and non-financial indicators. VALUE
ADDITION

NPR
20,317
BILLION

VALUE
UTILIZATION

22.27% 13.80% 2.86% 14.65% 46.42%

to Employee to Government to Long Term to Investor to Maintenance
Financier and Expansion

122 NABIL BANK LIMITED ANNUAL REPORT 2022/23 123

 Table 61: Component of Value Addition ECONOMIC VALUE ADDED
NPR IN MILLION

CHANGE Table 63: Economic Value Added

VALUE ADDED FY 2022/23 FY 2021/22 VOLUME PERCENTAGE NPR IN MILLION

Total Value Addition 20,317 14,803 5,514 37.25% MATHEMATICAL OPERATION PARTICULARS FY 2022/23 FY 2021/22 FY 2020/21

Net Interest Income 18,330 12,106 6,224 51.41% a. Net Profit after Tax (For EVA) 6,830 5,637 4,674
Net Fee and Commission Income 2,895 2,809 85 3.04% b. Invested Capital (Volume) 27,057 22,833 13,844
Other Operating Income 366 736 (370) -50.29% c. Cost of Equity (based on CAPM Model) 18.92% 14.40% 15.16%
Other Operating Income except Dividend and Revaluation Gain 80 260 (180) -69.11% d. Debenture (Volume) 6,487 6,485 2,097
Dividend Income 143 346 (202) -58.53% e. Cost of Debenture 9.37% 9.15% 10.00%
Revaluation 142 131 12 8.94% f. After Tax Cost of Debenture 6.56% 6.41% 7.00%
Net Trading Income 487 736 (250) -33.93% g. WACC 16.53% 12.63% 14.09%
Non-Operating Income 43 92 (48) -52.75% =a-(b+d) *g) Economic Value Added 1,285 1,933 2,428
Recovery of loan written off 43 92 (48) -52.75%
Non-Operating Expense (275) (15) (260) 1737.25%
Loan Written Off (211) - (211) The concept of value generation is relevant while assessing resource mobilization within the firm or an organization. Since,
Other Non-Operating Expense (64) (15) (49) 328.86% the firm or the bank (in this case) is an integral part of the economy, it becomes imperative to assess the value added by the
Other Operating Expense (1,529) (1,662) 133 -8.00% bank to the economy. Thus, the economic value added is the value created by company in excess to the return generated
for company’s shareholders. It is also commonly referred to as economic profit.
The Bank has been successful in generating value of NPR 20,317 million during the review period, which is an increment of
37.25% from corresponding period last year. Net interest income, which is the core business of the bank contributed most
Mathematically,
significantly to creating value, by NPR 18.33 million.
Economic Value Added = Net Operating Profit After Taxes - (Invested Capital*Weighted Average Cost of Capital)

Where Cost of Capital is calculated for paid-up capital and debenture. In case of paid-up capital cost of equity is calculated
Table 62: Value Utilized
NPR IN MILLION
by using Capital Asset Pricing Model (CAPM). Similarly, in the case of debenture actual cost after tax is considered.

CHANGES
VALUE UTILIZED FY 2022/23 SHARE (%) FY 2021/22 SHARE (%) AMOUNT %

Utilization of value added 20,317 100.00% 14,803 100.00% 5,514 37.25%

To Employee 4,525 22.27% 4,011 27.09% 514 12.83%
Staff Expense 3,494 17.20% 3,155 21.32% 338 10.73%
Bonus 1,031 5.08% 855 5.78% 176 20.58%
To Government 2,803 13.80% 2,425 16.38% 378 15.59%
Current Tax 2,803 13.80% 2,425 16.38% 378 15.59%
To Long Term Financier 582 2.86% 569 3.85% 12 2.16%
Interest Expense on Debt Securities 582 2.86% 569 3.85% 12 2.16%
To Investor 2,976 14.65% 2,626 17.74% 350 13.35%
Dividend 2,976 14.65% 2,626 17.74% 350 13.35%
To Provide for maintenance and Expansion 9,431 46.42% 5,173 34.94% 4,259 82.33%
Depreciation and amortization 503 2.48% 522 3.52% (18) -3.51%
Provision for Loan and Investment Loss 5,426 26.71% 2,004 13.54% 3,422 170.71%
Deferred Tax 73 0.36% 51 0.35% 22 43.26%
Retained Earnings / Reserves 3,429 16.88% 2,595 17.53% 833 32.10%

Application of value created during the review period has been applied in the interest of all stakeholders and the bank.
Out of NPR 20,317 million, value utilized by employee, government, long term financier, investor, and maintenance &
expansion was 2.27%, 13.80%, 2.86%, 14.65% and 46.42%. Majority of the proportion of value generated was utilized to
provide maintenance of assets and liabilities of the Bank undergoing concern concept. Such utilization of value is pertinent
for sustainable development of the bank in long run.

124 NABIL BANK LIMITED ANNUAL REPORT 2022/23 125

 DISCLOSURE PERTAINING TO NON-PERFORMING ASSETS

Table 64: Movement In Non-Performing Asset and Corresponding Provision

NPR IN MILLION
FY 2022/23 FY 2021/22 FY 2020/21
LOAN CLASSIFICATION NO. OF NO. OF NO. OF
ACCOUNTS AMOUNT PROVISION ACCOUNTS AMOUNT PROVISION ACCOUNTS AMOUNT PROVISION

Restructured and
Rescheduled 3 202.06 109.22 2 209.66 110.10 3 139.43 22.16
Sub-Standard 830 2,689.07 653.82 759 1,651.81 407.92 534 595.58 147.54
Doubtful 1,045 3,626.89 1,796.56 433 1,253.09 622.00 217 281.49 138.63
Loss 1,605 5,049.96 4,987.68 911 1,889.48 1,881.43 370 703.53 701.96
Total Non-Performing Assets 3,483 11,567.98 7,547.29 2,105 5,004.04 3,021.46 1,124 1,720.02 1,010.30
NPA% 3.39% 1.62% 0.84%

Table 65: Details of Restructured Loans

NPR IN MILLION
FY 2022/23 FY 2021/22 FY 2020/21
LOAN CLASSIFICATION NO. OF NO. OF NO. OF
ACCOUNTS AMOUNT PROVISION ACCOUNTS AMOUNT PROVISION ACCOUNTS AMOUNT PROVISION

Restructured-5% 682 5,523.92 876.20 714 5,922.61 296.13 652 3,940.21 197.01
Restructured -12.50% 1 106.09 13.26 1 113.78 14.22 1 134.01 16.75
Restructured -100% 2 95.96 95.96 1 95.88 95.88 2 5.41 5.41
Total 685 5,726 985 716 6,132 406 655 4,080 219

Table 66: Sector wise Non-Performing Assets

SECTOR NPA TOTAL OUTSTANDING NPA (%)
(NPR IN MIO) (NPR IN MIO)

Agricultural and Forest Related 1,512 19,844.37 7.62%

Fishery Related 71 701.84 10.11%
Mining Related - 343.46 0.00%
Agriculture, Forestry & Bevarage
Production Related 1,001 21,439.34 4.67%
Non-food Production Related 434 40,936.86 1.06%
Construction 1,867 19,140.91 9.76%
Power, Gas and Water - 22,100.81 0.00%
Metal Products, Machinary & Electronic Equipment & Assemblage 169 4,169.49 4.05%
Transport, Communication and Public Utilities 79 2,706.59 2.91%
Wholesaler & Retailer 2,669 76,671.64 3.48%
Finance, Insurance and Real Estate 166 10,872.07 1.53%
Hotel or Restaurant 640 9,616.25 6.66%
Other Services 343 14,973.69 2.29%
Consumption Loans 1,033 56,601.60 1.82%
Local Government - - 0.00%
Others 1,585 41,335.84 3.83%
Total 11,568 341,454.76 3.39%

126 NABIL BANK LIMITED ANNUAL REPORT 2022/23 127

 Sustainability reporting involves the

REPORT
SUSTAINABILITY disclosure of non-financial performance
information related to Environmental,
Social, and Governance (ESG) goals. It is a
way for the bank to communicate our efforts
and impacts beyond financial metrics.

As per Global Reporting Initiative (GRI) “Sustainability

Reporting is the practice of companies disclosing the most
significant economic, environmental and social impacts
that arise from their corporate activities, and thereby being
held accountable for these impacts and responsible for
managing them.”

The primary objectives of sustainability reporting

are to provide transparent communication about an
organization’s Environmental, Social, and Governance
(ESG) performance, demonstrating its commitment to
sustainable practices. This reporting aims to enhance
accountability, build trust with stakeholders, and drive
continuous improvement by setting goals and measuring
progress toward sustainability goals. Additionally,
sustainability reporting enables organizations to identify
risks and opportunities, improve resources efficiently,
and contribute to long-term value creation for both the
organization and society.

Report on Corporate Social Responsibility, Sustainable

Initiatives by the bank, Safeguard of bank's resources as
well as disclosures under PCAF requirements form major
part of the sustainability report.

128 NABIL BANK LIMITED ANNUAL REPORT 2022/23 129

 NABIL’S CONTRIBUTION TO THE NATION banking system is an important requisite of a developed CONTRIBUTION TO n Adequate systems and resources to effectively manage
Nabil Bank Ltd. has been the largest taxpayer in banking economy. As of mid-July 2023, Nabil catered to the EMPLOYEE HEALTH AND SAFETY rehabilitation and return to work processes in case of
for seven times in the past 11 years. Most recently, it banking needs of its customers through 265 branches, Nabil has prioritized employee health and safety and a occurrence of any event/incident.
received the award in FY 2020/21. Nabil Bank is proud 19 Extension Counters and 298 ATMs. Bank has been safe workplace. The bank has an Occupational Safety n Instruction and trainings to improve understanding
to have been able to make substantial contributions to the providing access to finance to rural populations through and Health Policy, in accordance with the Labor Act 2017. of all personnel about workplace hazards, safe work
national coffer and nation building. Taxes paid by Nabil 37 branches in rural municipalities. practices and emergency procedures. In-house safety
from 2011/12 to 2022/23 is provided in the following The health, safety, and security of the staff is a priority and rules to provide instructions for achieving safety
table. Digitization an essential part of the its duty of care. Accordingly, it has management objectives.
NPR IN MILLION Nabil has envisioned to completely digitize banking. a low appetite from any health, safety, and security risks n Promoting, developing and maintaining safety and
The digital services provided by the bank include mobile that could harm both staff and customers. The goal of the health awareness in the workplace.
FISCAL YEAR TAXES PAID
banking, internet banking, online account opening, Bank in terms of safety of the employees is to eliminate or
2011/12 728
video KYC, QR code, auto approving loan system, Nabil minimize any accidental hazards. The health and safety Managers and supervisors are accountable for the safety
2012/13 947
Cash Machine, among others. In addition to the digitized measures apply to all directors, employees (permanent, and health of their employees and must provide training
2013/14 981
services, the bank has been working towards automating contract and outsourced), contractors, consultants, and take corrective action. Everyone is responsible for
2014/15 897
internal operating procedures under the Digi Workspace, customers, and all visitors to the bank. their own safety and that of others. The bank is committed
2015/16 1,199
which will ultimately reflect in enhanced banking services. to promote safe work practices and takes disciplinary
2016/17 1,538
The bank’s goal is to prevent all occupational injuries, action to ensure compliance, as necessary.
2017/18 1,682
Corporate social responsibility (CSR) transmission of infectious disease, and illnesses. To ensure
2018/19 1,810
As a catalyst in the overarching value system, Nabil this, the bank has envisioned the following: The bank has in place a medical insurance policy for
2019/20 1,551
assumes the moral duty of giving a fair share of the all staff – permanent, contract and on probation —that
2020/21 2,259
value created back to the community. It has been  Identify, analyze, and eliminate or reduce, as far as covers medical expenses of staff, spouse, dependent
2021/22 1,940
allocating one percent of the net profit to the CSR fund. reasonably possible, all hazards and risks to safety and parents and two children up to 18 years. Further, the bank
2022/23 2,803
Each year as a part of the CSR initiatives, the bank has health. also has in place an accidental insurance policy for all
Total 18,335
organized several programs throughout the nation. These  Conduct operations in compliance with all relevant staff.
Nabil’s Contribution to Investors activities have included charity to local institutions, tree legislation, regulations, standards, licenses, and codes,
Nabil remains the bank of choice for investors for its plantation, donation of electronic devices, provision of including the Occupational Safety and Health Policy. The Bank also put in strict guidelines and adopted the
track record in delivering sound returns. The most recent health supplies, poverty alleviation activities, and blood  Provide instruction, training, and supervision to ensure following health and safety measures for safety against
(39th) Annual General Meeting announced cash dividend donation, among others. The Bank contributed NPR that all staff have necessary knowledge and skills to the COVID-19 Pandemic.
of 11% (NPR 2,976,269,640.21) and has contributed 22.33 million towards CSR activities during the review undertake work in a safe and healthy manner.
towards maximizing returns for shareholders since period.  Require all staff to comply with relevant legislation, 1. Staff were equipped with sanitizers and gloves while
inception. A hundred shares of the bank during inception regulations, standards, Bank policies, procedures, and office premises were disinfected periodically.
have grown to 96,006 shares in 39 years. Over the Employment generation safe work practices. 2. Customers were encouraged to follow COVID-19 and
period, Nabil has provided NPR 20.05 billion in cash Nabil Bank Ltd. has been awarded with the “National HR  Ensure that there is effective involvement and open Dengue safety protocols in all branches and units of
dividends (before taxes) over this period. Excellence Award - 2022”. It has been providing varied communication on all safety and health matters at all the bank.
employee experiences in terms of: levels in the bank. 3. Medical cost, PCR test cost, hospitalization cost and
Compliance with national policies 1) Employee training and skill development  Involve individuals in safety and health matters and hotel isolation cost of COVID-19 infected employees
Nepal Rastra Bank has the authority to regulate BFIs and 2) Salary, allowances and other benefits develop with them ways to recognize, evaluate and was covered by the bank.
thus direct and ensure BFIs function in accordance with 3) Retirement, gratuity and job safety control workplace hazards and risks. 4. The bank remained proactive in arranging medical
national policies. NRB regulates and guides BFIs through 4) Job design and appraisal  Encourage all people to extend the safety and health consultations for infected staff. It also provided infected
various Acts, directives, and circulars to ensure that they 5) Inclusion and equality commitments at work to their home and communities. staff with COVID-19 care kits during quarantine.
remain vigilant in the economic wellbeing of the country. 6) Health and safety of employees  Implement and maintain ongoing occupational safety 5. Employee happiness and wellness programs were
Nabil Bank has prudently complied with NRB directions. 7) Employee motivation. and health system in the bank, including: emphasized, taking into account mental issues that
It has been very cautious in protecting the funds of could have resulted during the pandemic.
depositors and using those funds to uplift sectors like As of mid-July 2023, a total of 2,480 employees were n Conducting regular monitoring/inspections and audits 6. Travel guidelines were issued and implemented for the
agriculture, micro, small and medium industries (MSMEs), working at the bank, out of which 90.12% were in of the workplace and associated activities. safety of employees.
the deprived sector, energy, among others. In doing so, permanent jobs and remaining 9.88% were outsourced n Clear documentation and records relating to safety and 7. Branches and units were provided with oxygen
the bank has taken care to remain prudent in maintaining staff. Of the total permanent employees, 39.55% are health concentrators so that employees and their family
adequacy of capital vis-à-vis risks inherent to loans. female while 60.45% are male. The bank spent NPR 4.52 n Continuous development and improvement of the members could avail of the service, as needed.
billion towards personnel expenses during FY 2022/23. bank’s workplace practices and procedures aimed at 8. Bank had signed agreement with different hospitals
Access to finance This is one of the highest expenditure in personnel in the ensuring the best workplace practices and a zero-harm and pathological labs to provide discounted services to
Integration of the majority of the population in the industry. approach by providing Nabil staff.

130 NABIL BANK LIMITED ANNUAL REPORT 2022/23 131

 SUSTAINABILITY REPORT 2022/23 Governance and Leadership Renewable Energy Waste Management
This sustainability report provides a comprehensive The Board and the management team at Nabil are Bank's sustainability efforts are being integrated in all core In partnership with Doko Recyclers, Nabil Bank has
overview of Nabil Bank’s commitment to environmental, dedicated to steering the banks towards a sustainable activities to the extent practicable. Nabil ventured into contributed towards recycling 28 tons of paper, saving
social, and economic responsibilities. In alignment with future by embedding sustainability in the highest levels of renewable energy financing in 2005. Thereafter, it set up 87,000 liters of water, and saving 527 trees.
the bank’s core values; this report details our ongoing decision-making to ensure responsible and sustainable a dedicated division – Infrastructure and Project Financing
efforts to integrate sustainable practices in business business practices. They have remained at the core of (I&PF) – with the desire to contribute towards tapping
operations for the fiscal year 2079/80. By adopting a our operations and have contributed towards its goals renewable energy by supporting infrastructure building.
holistic approach, it addresses the key aspects such as of embracing sustainable banking in compliance with The focus has continued and the bank now has a sizeable
sustainable initiative, waste management, sustainable the necessary environmental, social and governance portfolio in renewables (hydropower & solar) and remains
and green financing, and community engagement. requirements. committed to fulfilling the directed lending requirement of
Throughout the reporting period, Nabil implemented the NRB, which came after Nabil had already invested in
various initiatives aimed at minimizing its environmental Board Oversight the sector. Further, in 2021 Nabil voluntarily signed up to
impact, fostering diversity and inclusion, and contributing The Board of Directors at Nabil have continued to play a become a member of Partnership for Carbon Accounting
positively to the communities where we have presence. pivotal role in the steering operations towards sustainable Financials (PCAF). In line with its commitment to PCAF, the
It focuses on sustainability, sustainable financing, and its practices. Acknowledging the significance of sustainability bank published the emission disclosure from its exposure
commitment towards environmental and social wellbeing. in the long-term strategy, the Board has retained it as a in I&PF in January 2023.
key pillar to provide guidance to day-to-day operations.
Scope It has carried out regular sustainability reviews at Board
The report is limited to information pertaining to the meetings to access performance and provide strategic
services and operations of Nabil Bank Ltd, unless guidance.
specified otherwise. Services and operations covered
within the report includes those undertaken through Management Team
various units of the bank. The Management team at Nabil Bank has demonstrated
a strong commitment to sustainability, with the goals
Sustainability Initiatives integrated into the performance evaluations of key
Nabil Bank has embraced sustainable banking since 29 executives. This has helped reinforce the importance of
June 2021, on the fitting occasion of National Paddy responsible business practices. The integration is also an
Day, with the objective to integrate environment, social attempt to align incentives for the leadership in regard
and governance (ESG) factors in its banking services and to the sustainability approaches for fostering a culture of
practices, and with the aim of contributing towards the accountability and responsibility.
attainment of the Sustainable Development Goals (SDG).
Environmental Performance
Nabil Bank acknowledges and recognizes the importance Environmental and Social Integration
of sustainable banking practices in the face of global Nabil’s environmental and social risk management system
environmental and social challenges. It is also a strategic (ESMS) is in line with procedures laid down by regulator,
imperative in the rapidly evolving financial landscape. NRB. The ESRM guidelines of the central bank provide the
Nabil has begun integrating sustainability in its core framework for integrating environmental and social risk
operations, demonstrating an overall commitment to in credit decision making. The framework has assisted
sustainable banking. This has been done in recognition the bank to identify, assess, avoid and/or mitigate social
of the interconnectedness of economic, environmental, and environmental risks likely to arise from a project or
and social factors and aims to take these into account in activity financed by bank, by conducting environmental
the process of creating enduring value for stakeholders. and social due-diligence prior to loan approval and
The sustainability strategy is rooted in the principles of disbursement. The framework also assists in managing
environmental stewardship, social responsibility, and environmental and social risks through continuous
economic resilience. monitoring of ongoing projects, after loan disbursement.
The integration of ESG factors in decision-making has
helped Nabil ensure consideration of environmental and
social impacts alongside financial returns.

132 NABIL BANK LIMITED ANNUAL REPORT 2022/23 133

 Social Wellbeing

Table 67: Workplace Diversity

EMPLOYEES 12-OCT-22 14-JAN-23 13-APR-23 15-JUL-23

(ASHWIN END 2079) (POUSH END 2079) (CHAITRA END 2079) (ASHAD END 2080)
Q1 Q2 Q3 Q4

Male 1358 1324 1395 1433

Female 911 918 1028 1047
Permanent 2085 2032 2191 2235
Direct contract 22 23 18 17
Consultants 5 5 4 4
Outsourced 157 182 210 224
Total Employees 2269 2242 2423 2480
% of male employees 59.85 59.05 57.57 57.78
% of female employees 40.15 40.95 42.43 42.22

Nabil has a diversified and inclusive workplace. The bank NEW PRODUCTS/SCHEMES
provides people from all social groups equal opportunities
for employment and upholds a policy of zero-tolerance Nabil Sustainable Housing Loan
against any form of discrimination. On World Environment Day 2023, Nabil Bank came up
with the concept of a Sustainable Housing Loan Scheme
Economic Resilience where customers are encouraged to build eco-friendly,
Sustainable Finance energy efficient residential and commercial buildings
using renewable resources. With this concept, the
Nabil sustainable banking works to assist branches in bank will be encouraging people to install eco-friendly
enhancing business outcomes, fostering stronger local rainwater harvesting systems for water, energy efficient
community ties, and cultivating sustained profitability solar panels for electricity, and promote eco-friendly
for long-term growth and viability through the NKK/ green roofs and solar heating system, etc. These initiatives
NUK initiative. This program is dedicated to advancing can reduce consumption of non-renewable energy in
sustainability by facilitating straightforward and housing and contribute towards reducing climate impacts.
convenient financial assistance to rural, unbanked
populations. Nabil sustainable banking actively promotes Branchless Banking
financial inclusion, nurtures local entrepreneurship, Branchless Banking (BLB) is another initiative under
through the NKK/NUK lending, contributing to the sustainable banking. In alignment with NABIL 2025, the
economic development of rural areas. bank launched its first BLB point on 23 September 2022,
in Ranighat, Barahtaal-02, Surkhet. It now operates with
Nabil Krishi Karja (NKK)/Nabil Udhyemi Karja (NUK) eight BLB agents across Koshi, Lumbini, Karnali, and
Status Report as of mid-July 2023 Sudurpaschim Provinces. The agents provide a range of
n Total files: 570 basic financial services, including account operations,
n Total limit: NPR 631.42 million loan facilitation, and Social Security Allowance (SSA)
n Total outstanding: NPR 529.51 million distribution. The BLB initiative underscores Nabil’s
commitment to financial inclusion. Additionally, BLB
agents actively promote deposits, loans, and digital
products on a commission basis, contributing to the
growth of the Nabil financial ecosystem.

Business status of Branchless Banking as of mid-July 2023

n Number of accounts opened: 155
n Number of cards issued: 16
n Deposit in accounts: NPR 0.76 million

134 NABIL BANK LIMITED ANNUAL REPORT 2022/23 135

 Table 68: List of BLB Agents nBank play in driving innovation and economic
On 22 December 2022, Nabil launched growth, Nabil Bank has actively supported
S.N. AGENT NAME ADDRESS OPERATION DATE AGENT CODE PARENT BRANCH
nBank, a fully digital banking solution, as and financed entrepreneurial ventures.
1. Manoj Kumar Thapa Barahtaal-02, Surkhet 23-Sep-2022 A6901 Barahtaal
a virtual branch within the bank. The goal It has taken a progressive stance in the
2. Mamata Bohara Sayal-01, Doti 8-Feb-2023 A7801 Sayal
of nBank application is to deliver a new transportation sector by investing in electric
3. Gangaram Saud Sayal-06, Doti 8-Feb-2023 A7802 Sayal
4. Narendra Bahadur Bohara Bitthadchir-01, Bajhang 8-Feb-2023 A7001 Bitthadchir banking experience to customers through vehicles (EVs), which while contributing
5. Kalak Bahadur Bohara Bitthadchir-02, Bajhang 8-Feb-2023 A7002 Bitthadchir paperless forms and digital touchpoints: to the reduction of carbon emissions also
6. Jaya Bahadur Bohara Bitthadchir-09, Bajhang 8-Feb-2023 A7003 Bitthadchir all delivered through the nBank app. Later provide an environment friendly alternative.
7. Ser Bahadur Saru Chhatradev-04, Arghakhanchi 10-Mar-2023 L401 Chhatragunj on, 22 June 2023, the Nabil launched the This multifaceted approach to sustainable
8. Nabin Limbu Sangurigadhi-02, Dhankuta 9-Apr-2023 L101 Sangurigadhi nBank web, an omnichannel platform for financing not only enhances the bank's
customers. environmental and social footprint, but also
Using the nBank, customers can open positions Nabil as a leader in sustainable
accounts, apply for cards, get instant, banking practices.
digital loans, and remit money from abroad
without having to visit a physical branch or Statement of Environmental and
fill out a paper form. This has contributed Social Risk Management FY 2079/80
not only to reducing use of paper but also In the fiscal year 2079/80, the bank
eliminates the need for customers to visit made significant strides in reinforcing its
branches for a whole range of banking commitment to environmental and social
tasks, helping save both time and transport risk management (ESRM), as outlined in the
costs. In all, 18,789 accounts were opened Annual Statement on Environmental and
online through the nBank app in the FY Social Risk Management. Its dedication to
2079/80. Given that each physical Account this crucial facet of sustainable business
Opening Form is five pages long, the bank is reflected in the robust formulation and
saved 93,945 pages of paper in opening implementation of policies designed to
new accounts. Similarly, 1,040 credit cards guide ESRM initiatives. Through systematic
were issued through online applications policy development and implementation,
during the period. That is an additional Nabil has been integrating ESRM seamlessly
saving of 2,080 pages of paper (the credit into the organizational fabric. Additionally,
card form comes in two pages). Effectively, the bank has invested in comprehensive
the bank saved over 950 reams of paper in training and capacity-building programs in
a year simply by offering paperless solutions recognition of the pivotal role employee’s
to customers. The savings can only grow play in the successful implementation of the
when more and more bank processes are sustainability goals. Such initiatives not only
digitized in line with the strategy. empower the workforce with the necessary
skills and knowledge, but also contribute
Sustainable Financing and Investment to fostering a culture of environmental and
Nabil Bank is at the forefront in fostering social consciousness organization wide.
environmental and social responsibility Further, as part of the commitment to
through both strategy and through responsible financing, Nabil has successfully
initiatives such as sustainable financing and incorporated environmental and social risk
investment. To demonstrate a commitment considerations in the core risk management
to sustainability, the bank actively supports framework, particularly in the evaluation
sectors that contribute to a greener and of loans associated with environmental
more socially responsible future. It has and social impacts. This holistic approach
directed financial resources towards underscores the bank’s dedication to
agriculture, promoting eco-friendly practices proactively managing environmental and
and sustainable farming. Further, the bank social risks to ensure responsible and
has invested in renewable energy projects, sustainable growth of operations.
in alignment with its commitment. In
recognition of the pivotal role entrepreneurs

136 NABIL BANK LIMITED ANNUAL REPORT 2022/23 137

 ANNUAL STATEMENT ON ENVIRONMENTAL AND SOCIAL RISK MANAGEMENT FOR FY 2079/80
(an annual report of the bank / FI to NRB) Sector-wise Lending: Agriculture, Energy, This sector-wise distribution, totaling NPR 91,403.50
Tourism and Cottage & Small Industries Sector million, demonstrates Nabil’s strategic alignment with key
Name of the bank: Nabil Bank YES/NO DATE REMARKS Loan (As of mid-July 2023) industries that drive economic development. The lending
1 Policy Formulation and Governance practices are in alignment with both sustainability goals
1.1 Formulation and Board approval of an ESRM Policy Yes 19.11.2018 ESRM Guidelines approved by and environmental considerations.
Nabil’s sector-wise lending portfolio (as of mid-July
(or similar policy document) the CEO being within the NRB
2023), reflects its commitment to sustainable and green
ESRM Guidelines.
1.2 Formulation and Board approval of an Yes 19.11.2018 ESRM Guidelines approved by the finance practices. In agriculture, the outstanding loans Table 69: Sector wise Lending
ESRM Procedure (Manual) CEO being within the NRB ESRM stand at NPR 40,026.52 million, which demonstrates NPR IN MILLION

Guidelines. its support to the sector that is the backbone of the S.NO. SECTOR OUTSTANDING LOANS

1.3 Nomination of an E&S Officer No economy. In hydropower/energy, Nabil has extended NPR 1. Agriculture 40,026.52
21,611.90 million in loans. Recognizing the significance 2. Hydropower/Energy 21,611.90
2 EMPLOYEE TRAININGS AND CAPACITY BUILDING QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4 TOTAL of tourism in the economy, the bank has invested NPR 3. Tourism 9,861.72
9,861.72 million in the sector. Additionally, the support 4. Micro, Cottage, Small and 19,903.37
2.1 Allocation of Fund in the budget for ESRM
for MSMEs, which includes deprived sector lending, Medium Industries
Training Programs/Seminars/Workshops (in NPR): - - - - -
Total 91,403.50
2.2 No. of ESRM Training Programs/Seminars/ adds up to outstanding loans of NPR 19,903.37 million.
Workshops conducted in the given quarter: 3 3 6
2.3 No. of attendees of the ESRM Training Programs/
Seminars/Workshops conducted in the given quarter: 176 125 301

3 INCORPORATION OF ENVIRONMENTAL & QUARTER 1 QUARTER 2 QUARTER 3 QUARTER 4

SOCIAL RISK IN CORE RISKS MANAGEMENT

3.1 No. of loan requests rejected due to the Exclusion List

3.2 No. of transactions subject to Environmental & 24 19 25 21

Social Due Diligence (ESDD)

3.3 Share (% total loan value) of the transactions subject to ESDD 0.016% 0.382% 0.198% 0.367%
in the total disbursed commercial (business purpose)
loan portfolio

3.4 Total No. of disbursed transactions by E&S Risk Rating:

Low 14 9 41 32
Medium 24 19 25 21
High 0 0 0 0

3.5 Total amount in disbursed transactions by E&S Risk Rating:

Low 1,098,918,037.63 309,804,000 1,186,203,294 791,324,100
Medium 38,500,000 933,916,873.68 494,697,304.24 923,332,025.9
High 0 0 0 0

3.6 No. transactions with specific E&S Action Plan:

3.7 No. of transactions rejected on the E&S

risk management grounds:

3.8 No. of transactions beneficial to E&S improvements: 19 11 18 12

Renewable energy projects (e.g. hydro power plants,
solar panels, biogas plants, wind power)
Energy efficiency projects (e.g. efficient lighting,
heating/cooling, ventilation,
boiler retrofitting, facility upgrades)
effluents (wastewater) treatment plants
waste recycling and reuse
water consumption reduction

138 NABIL BANK LIMITED ANNUAL REPORT 2022/23 139

 KEY MILESTONES AND Green financing initiatives -- Eco-friendly business loan, Platforms for local entrepreneurs – stalls for locally grown Partnership for Carbon Accounting Financials (PCAF)
SUSTAINABLE DEVELOPMENT Nabil sustainable housing loan, micro-hydro, renewable agricultural and sustainable Nepali products standards. This is another initiative to uphold the
GOALS OBTAINED energy, rooftop solar, EVs, waste management and digital bank’s commitment to transparency and environmental
loans SDG 12: RESPONSIBLE CONSUMPTION AND responsibility. By quantifying and reporting GHG
Partnerships for Greater Impact – Local governments PRODUCTION emissions associated with its infrastructure and project
and governmental institutions, NGO/INGOs, and other SDG 1: NO POVERTY SDG 17: PARTNERSHIP FOR THE GOALS financing activities, the bank aims to provide stakeholders
sustainability-driven organizations SDG 8: DECENT WORK AND ECONOMIC GROWTH with a clear understanding of the environmental impact
SDG 9: INDUSTRY, INNOVATION, AND INFRASTRUCTURE Nabil bank is committed to supporting local entrepreneurs of its investments. This disclosure reflects its dedication
SDG 17: PARTNERSHIP FOR THE GOALS SDG 10: REDUCE INEQUALITIES and promoting sustainable practices. One example of to measuring, monitoring, and mitigating the carbon
SDG 11: SUSTAINABLE CITIES AND COMMUNITIES this is the bank’s collaboration with the Federation of footprint, contributing to the global efforts to address
Nabil has strategic partnerships that aim at attaining SDG 13: CLIMATE ACTION Women Entrepreneurs' Associations of Nepal (FWEAN). climate change. This practice has been continued and the
higher impact while also fostering sustainable Through this partnership, Nabil has provided a platform disclosure is a part of this report as well.
development. Collaborating with local governments Nabil Bank is at the forefront of green financing, for local entrepreneurs to showcase and sell locally grown
and governmental institutions, Nabil actively engages embodying its commitment to environmental sustainability. agricultural and sustainable Nepali products at the bank Global presence at COP 27 - Our commitment to global
in initiatives that contribute to community well-being The comprehensive suite of green financing initiatives at premises. By organizing stalls and events, Nabil helps sustainability efforts and advocacy for a greener future
and economic resilience. Our alliances with Non- Nabil encompasses a range of sectors, including eco- create opportunities for such entrepreneurs to connect
Governmental Organizations (NGOs), International NGOs friendly business loans, Nabil sustainable housing loans, with broader audiences and enhance the visibility of their SDG 13: CLIMATE ACTION
(INGOs), and other sustainability-driven organizations micro-hydro, renewable energy, rooftop solar, EVs, waste products. Such initiatives not only stimulate economic SDG 17: PARTNERSHIP FOR THE GOALS
underscore our dedication to addressing the social and management, and digital loans. By extending financial growth at the grassroots level but also encourage the
environmental challenges. Through these partnerships, support to businesses and projects aligned with eco- production and consumption of sustainable and locally Nabil Bank participated in United Nation Climate Change
Nabil has strived to leverage collective expertise and friendly practices, Nabil has been actively contributing to sourced goods. Nabil Bank remains dedicated to fostering Conference also known as COP 27 on November 2022,
resources to create lasting positive change. Nabil Bank the transition towards a more sustainable and resilient a vibrant entrepreneurial ecosystem and to contributing to underscoring its commitment to global sustainability
remains steadfast in promoting a harmonious relationship future. Through partnerships with environmentally the sustainable development of local communities. and climate action. The bank’s presence at this event
with diverse stakeholders, fostering collaboration that goes conscious enterprises, Nabil facilitates the adoption of highlights its dedication to being an active contributor in
beyond financial support, and also by participating in renewable energy sources, promote energy efficiency, PUBLICATION OF SUSTAINABILITY REPORT the global dialogue on climate change and environmental
initiatives that align with its sustainability goals. and encourage responsible waste management practices. SDG 12: RESPONSIBLE CONSUMPTION AND responsibility. Through meaningful engagements and
Nabil Bank is dedicated to fostering a green economy by PRODUCTION collaborations with stakeholders, the bank strives to
Financing on sustainable business sectors – Low-income providing innovative and tailored financial solutions that align its global operations with sustainable practices,
group, women entrepreneurs, small & micro-enterprises, address the evolving needs of businesses and individuals Nabil Bank published its inaugural Sustainability Report promote green finance and contribute to fostering a low-
agriculture, Nabil Kisan Karja, Nabil Udhyamshil Karja, etc. committed to environmental stewardship. on 22 May 2023. The report covered sustainability carbon economy. At COP 27, Nabil Bank reaffirmed its
activities of fiscal year 2021/22. This comprehensive commitment to international efforts aimed at mitigating
SDG 1: NO POVERTY Financial literacy and capacity development programs document reflects the bank’s commitment to transparency, climate change, to reinforce its role as a responsible
SDG 8: DECENT WORK AND ECONOMIC GROWTH accountability, and sustainable business practices. The financial institution with a global perspective and a focus
SDG 10: REDUCE INEQUALITIES SDG 4: QUALITY EDUCATION report encapsulates its journey towards environmental on sustainable development.
SDG 5: GENDER EQUALITY and social responsibility, showcases key initiatives,
Nabil Bank is proud about its financing initiatives to achievements, and milestones attained in sustainable Nabil Green Week – Culture of celebrating the anniversary
promote social and economic inclusivity, which is also in Nabil Bank is unwavering in its commitment to enhancing banking. The purpose of the report is to communicate of Nabil Sustainable Banking
line with its own sustainability policies. Nabil has prioritized financial literacy and fostering capacity development the bank’s dedication to integrating sustainability in core
support to low-income groups, women entrepreneurs, within the communities served. By conducting workshops, business strategies, fostering positive impacts on the SDG 13- CLIMATE ACTION
small and micro-enterprises, and the agriculture sector, seminars, and training sessions, the bank seeks to equip environment, society, and the economy. Nabil remains
in recognition of their vital roles in fostering community individuals with the knowledge and skills necessary to resolute in its commitment to continuous improvement, Nabil Bank is delighted to announce the celebration
development. The bank’s specialized products, such make informed financial decisions, manage resources and this sustainability report serves as a testament to its of Nabil Green Week, commemorating the 2nd
as Nabil Kisan Karja, Nabil Udhyamshil Karja, etc. are effectively, and achieve economic independence. These pledge to contribute meaningfully to a more sustainable Anniversary of Nabil Sustainable Banking on June 29,
tailored to address the unique needs of these sectors. By capacity development programs not only contribute to the and inclusive future. 2023. This special week-long event is a testament to our
providing accessible and responsible financial solutions, overall well-being of participants but also play a pivotal ongoing commitment to environmental stewardship and
Nabil aims to empower individuals and businesses role in promoting a financially inclusive society. Nabil Disclosure of GHG emission under PCAF standards sustainable banking practices. Throughout Nabil Green
to catalyze positive changes in their lives while also Bank remains steadfast in its mission to cultivate financial Week, we engage our stakeholders, employees, and
contributing to the overall well-being of society and the literacy as a catalyst for positive change, thereby fostering SDG 13- CLIMATE ACTION communities through various initiatives, market placement
environment. Nabil Bank remains dedicated to fostering a more economically empowered and resilient community. for our partners, tree plantation, and awareness
sustainable growth and creating a positive impact on Nabil Bank disclosed its first Greenhouse Gas (GHG) campaigns aimed at promoting sustainable living,
diverse segments of society. emissions under the Infrastructure and Project Financing responsible financial practices, and eco-friendly initiatives.
Portfolio (IPF) on 17 March 2023, adhering to its This milestone not only marks the progress we've made

140 NABIL BANK LIMITED ANNUAL REPORT 2022/23 141

 Marketing and other crucial data

Participants will have knowledge

agri entrepreneurs for informed
Financial literacy among local

Developing Entrepreneurship

Developing Entrepreneurship
Knowledge of Business plan/
women, entrepreneurs, and
in embedding sustainability into our operations but also ESMS for Trade Finance Applicable for ADB Financing for

and guidelines for business

registration and continuity
on the government policy
serves as an opportunity to inspire positive change, ADB’s Trade and Supply Chain Finance Program (TSCFP)

capacity of participants

capacity of participants
awareness and foster a collective commitment to a

of Diary Business
greener and more sustainable future. Nabil Bank remains SDG 17: PARTNERSHIP FOR THE GOALS
dedicated to leading the way in sustainable banking,

EXPECTED

decisions
driving positive impact for the environment and society at Nabil Bank received technical assistance from Asian

RESULT
large. Development Bank (ADB)’s TSCFP for its Environmental
and Social Management System (ESMS) guideline. ADB

Kalpana Khanal
Rainwater harvesting at Nabil Head Office TSCFP is a pilot project, where Nabil is a participating

Bibek Prabhat
Nhemaphuki
and Sushma

Praladh Giri
bank.

Jaya Durga
Saubhagya
Top Prasad

Dilleshwor

Budathoki
RESOURCE

Neupane
Bhattarai
Narayan
Shrestha

Pradhan
SDG 6: CLEAN WATER AND SANITATION

PERSON

Khanal

Basnet
Sunita
Agasti
SDG 17: PARTNERSHIP FOR THE GOALS Under this pilot project Nabil, with technical assistance
from ADB, has prepared a guideline on ESMS for trade

Preparation, Different
Nabil Bank has taken a significant step towards water finance, which is applicable for ADB financing under

points, presentations

Materials as per ILO

Financial Literacy Chart Papers, Power

Yourself as Potential
Business/Start your
Papers, PowerPoint

Business Summary
of “Generate your

Entrepreneurs etc.
Business” Such as
conservation and environmental sustainability by installing TSCFP. Accordingly, if the bank wishes to potentially

Projector, Laptop,

Brochures, Pen &

Presentation and

Certified Course

games for Cash

flow, Accessing
Audio System,
a rainwater harvesting system at the Head Office in seek ADB financing, the trade finance submitted by the

Power points
Presentation
MATERIALS
collaboration with Smart Paani, a private company applicant will be considered subject to compliance with
providing the service. This initiative underscores the this ESMS process which includes the completion of Know

USED
bank’s commitment to responsible resource use and also your client (KYC) questionnaire, E&S screening checklists

aligns with its sustainability goals. By capturing and using further due diligence, as required.

utilization of loan
Entrepreneurship
Digital Financial
rainwater, Nabil not only contributes to water conservation

for Sustainable

Generate your

Generate your
Business/Start

Business/Start
your Business

your Business
Agri-Business
Development

for business,
Literacy and
efforts but also helps to reduce the strain on the supply. Handling bank for SET4NEP under MAF facility project,

Guidelines
Policy and
Program
which aims to replace fossil fuels vehicles under public

Effective
MAJOR

(Dairy)
TOPIC
Shredding the wastepaper for recycling: transportation.
Promoting a circular economy

PARTICI-
SDG 7: AFFORDABLE AND CLEAN ENERGY

NO OF

PANTS

31

41

26

93

30
SDG 12 - RESPONSIBLE CONSUMPTION AND SDG 11: SUSTAINABLE CITIES AND COMMUNITIES
PRODUCTION SDG 13: CLIMATE ACTION

9
TARGETED GROUP (NO)
SDG 17: PARTNERSHIP FOR THE GOALS SDG 17: PARTNERSHIP FOR THE GOALS

41
8

7
Nabil Bank has acted on its commitment to environmental Nabil Bank has been awarded a tender to serve as

27-May-23 Dharan, Koshi 9 12 5

Chathar, Koshi 53 20 20

23-May-23 Phedap, Koshi 5 20 5

6
sustainability through a strategic partnership with Doko Handling Bank for the Sustainable Electric Transport for

18

38 3
5
Recyclers for the shredding and recycling wastepaper. Nepal (SET4NPL) under Mitigation Action Facility (MAF)
This initiative reflects the bank’s dedication to responsible project, which aims to replace fossil fuel vehicles with EVs

waste management and reducing its ecological footprint. under public transportation. This SET4NPL is implemented

4 9
3

Table 70: Financial & Digital Literacy Initiatives
This collaboration contributes towards the circular in collaboration with the German development agency

economy and promotes efficient reuse of resources. GIZ (Gesellschaft für Internationale Zusammenarbeit

1
The shredding of wastepaper generated in business not GmbH).

Koshi Province
only enhances confidentiality and data security but also

Illam, Koshi
Dhankuta,
LOCATION
FINANCIAL LITERACY & ENTREPRENEURSHIP

Kanyam,
transforms discarded materials into a valuable resource.

Phikkal,
These actions at Nabil Bank assist towards fostering DEVELOPMENT PROGRAM

Hile,
a culture of responsible waste disposal and recycling,
which can contribute towards a positive impact on the As part of its sustainable banking initiatives, Nabil Bank

23-Apr-23
2-May-23
8-Jan-23
environment. has organized programs to promote financial literacy,

DATE
entrepreneurship, and digital banking across provinces.
These initiatives aim to empower women and youth for
self-employment and prosperity, emphasizing digital

NAME OF PROGRAM

to Finance Program
Literacy and Access

Entrepreneur and

Entrepreneur and
Financial Literacy

Financial Literacy

Financial Literacy
Financial literacy
financial literacy. Overall, Nabil's initiatives underscore

Digital Financial
its commitment to financial inclusion, entrepreneurship,
and digital literacy, for contributing to regional social and

Program

Program

Training

Training
economic development. Financial literacy activities of FY
2079/80 are shown in the table below.

142 NABIL BANK LIMITED ANNUAL REPORT 2022/23 143

 business plan and entrepreneurial

Knowledge on Financial literacy,

Knowledge on Financial literacy
and other aspects of financial

financial planning, and other

Table 71: Bank's Investment in CSR Activities in the reporting period

Development of bankable
NPR

PILLARS OF SUSTAINABLE DEVELOPMENT GOAL AREAS OF INVOLVEMENT CONTRIBUTION AMOUNT

Goal# 1: No Poverty Rights to basic services 196,700

Goal# 3: Good Health and Well Being Health 3,202,023
Goal# 4: Quality Education Education 2,547,982
EXPECTED

planning

mindset

aspects
RESULT

Goal# 4: Quality Education Financial Literacy 13,901,825

Goal# 5: Gender Equality Leadership & Skill development 200,000
Goal# 6: Clean Water and Sanitation Clean water and Hygiene 289,698
Bank staff and

Goal# 11: Sustainable Cities and Communities Inclusive, safe, resilient settlements including

Entrepreneurs
other experts

from various

Experts from
background

background
safeguarding cultural and natural heritage 954,210
RESOURCE
PERSON

Goal# 13: Climate Action Climate change 890,000

various
Goal# 15: Life on Land Forestation 150,000
presentations, meta Total 22,332,438
presentations, chart

cards, chart papers

Case studies, chart

papers, manuals
Nabil Bank’s sustainability report for the fiscal year 2079/80 reflects a steadfast commitment to environmental, social,
Power point,

Power point,

and economic responsibility. The bank has been demonstrating exemplary efforts in integrating sustainable practices
MATERIALS

papers

into its operations, fostering financial inclusion, and contributing to the overall well-being of communities. By prioritizing
USED

sustainability, Nabil Bank not only aligns with the SDGs but also positions itself as a responsible financial institution poised
for long-term success. The bank remains dedicated to navigating the challenges and opportunities presented by the
HR, organization

dynamic landscape of sustainable finance for ensuring a resilient and responsible future for both the institution and the
digital banking,

digital banking,
habits, banking
literacy, saving

business plan,
management,

financial plan
financial risks

legal aspects,
Lean canvas,

development
communities it serves.
registration,

accounting,
investment,

investment,
budgeting,

marketing,

budgeting,

enterprise
banking ,
Financial

auditing,
requires,
MAJOR
TOPIC
PARTICI-

1400
NO OF

PANTS

259

200
36

9
TARGETED GROUP (NO)
8

12

87
172
7

7
6

17

200
5
4

Sudurpaschim

Sudurpaschim
LOCATION

Madhesh,

Madhesh,
Gandaki,

Gandaki,

Madhesh
Bagmati,

Bagmati,
Lumbini,

Lumbini,
Karnali,

Karnali,
Koshi,
Continue: Financial & Digital Literacy Initiatives

20-Mar-23

Nov-22
DATE

Nabil SSE (Fellowship

Global Money Week

and development of
NAME OF PROGRAM

financial education

financial literacy of
Certificate – 2

Promotion of
– 2 cohorts

women
cohort)

144 NABIL BANK LIMITED ANNUAL REPORT 2022/23 145

 SOCIAL AND
ENVIRONMENTAL POLICY

CORPORATE SOCIAL RESPONSIBILITY POLICY MONITORING AND REVIEW OF CSR ACTIVITIES

Corporate Social Responsibility (CSR) is the The CSR Committee monitors and keeps track of
practice of ethical business that emphasizes all CSR activities of the bank. Reconciliation of
taking into account not only profits but also CSR expenses is done annually and information
the sustainable effects on society and the is given to the CSR Committee about the deficit/
environment. By upholding moral principles and available budget for the following year. Similarly,
conducting business responsibly, Nabil promotes the bank audits the expenses internally at least on
both social development and sustainable growth. an annual basis. Additionally, the bank apprises
the Board of Directors on CSR activities, progress,
REGULATORY REQUIREMENT OF CSR gaps, and expenses on a half-yearly basis.
Following the guidelines set forth by NRB’s Unified
Directive, Directive No.6, Clause 16, Nabil The expenses and budget status is reconciled
Bank has allocated a minimum of one percent annually and submitted to the CSR committee.
of its annual net profit to fund social programs The board is informed on CSR expenditures
and sustainable initiatives. The CSR budget is and advances annually, and an internal audit
used in sectors as required by the directive. examines CSR fund activities.
Further, CSR should not be used to promote the
organization’s brand or benefit board members ENVIRONMENTAL AND SOCIAL RISK
and the expenses need to be rationally diversified MANAGEMENT (ESRM)
geographically. The bank has formulated and implemented the
ESRM guidelines with the objective of contributing
FORMATION OF CSR COMMITTEE to the environment and social wellbeing while
Nabil has formed a CSR committee that providing loans and advances in line with the
recommend and decide projects to support and direction of ESRM guidelines of the NRB. Nabil
is responsible for the operation and management is complying with the ESRM 2023 version 2.0.
of the Fund. The committee has clear objectives, The ESRM guideline have helped the bank to
planned outcomes, monitoring, and reporting institutionalize environmental and social risks
frameworks as outlined in the policy. while making loan decisions.

EVALUATION AND The ESRM serves as a framework to integrate

MANAGEMENT OF CSR PROPOSALS environmental and social risks in the credit
All CSR requests/proposals are handled decision process and ensures that the credit
by the central CSR unit of Nabil Bank. The risk management system is in compliance
projects/proposals are considered in terms of with the NRB guidelines. It helps the bank to
sustainability, impact, requirement in the area, identify, assess, avoid and/or mitigate social and
efficiency, commitment to work, etc. environmental risks likely to arise from a project
or activity financed by bank, by conducting
MODALITIES OF IMPLEMENTING CSR ACTIVITIES environmental and social due-diligence prior to
The CSR committee of Nabil Bank is empowered loan approval and disbursement. It also assists in
to directly handle and oversee CSR initiatives. The managing environmental and social risks through
bank can collaborate with organizations/projects continuous monitoring of ongoing projects.
that support the SDGs. Provisions of outsourcing The core objective of the guideline is to integrate
CSR programs to suitably qualified groups can ESRM in the bank’s credit risk management
also be done as per bank’s norms. The bank can process in order to inform the credit authorities of
also provide support to NGOs/groups/entities on E&S risks before making any credit decisions.
an urgent basis in cash or kind to reach out to
victims of natural calamities.

146 NABIL BANK LIMITED ANNUAL REPORT 2022/23 147

 The main objectives of Environmental and Social damage. Social risks pertain to the potential of business

CARBON
DISCLOSURE REPORT
Management System (ESMS) are: activities to cause adverse impact on individuals, society,
and stakeholders. To reduce exposures to such risks, the
n To increase bank’s understanding of environmental and bank ensures that its borrower’s activities do not have
social risks. any irreversible impact on environment and society. The
As a part of commitment letter signed The IPF portfolio which is being
n To help to identify, systematically assess, and mitigate bank requires proactive approach in managing such risks by Nabil Bank as one of the PCAF covered under this reporting
environmental and social and climate risks associated before they become material and adversely impact both (Partnership for Carbon Accounting represented 10.13% of bank’s total
with borrowers’ activities and monitor their compliance the bank and the client. Financials) signatories in 2021, Nabil LDO as of FY 2022/23 end, i.e.,
with national environmental and social regulations and disclosed its first GHG emissions 16th July 2023 and the portfolio
international good practices and standards. The ESRM guidelines of Nabil require that all loan from its loan and investments under comprises exposure to business
n Identify social and environmental business proposals are screened through an exclusion list and one of its SBU loan portfolio, i.e., sectors like energy, cement, airlines
opportunities. any proposal falling under the exclusion is declined. Infrastructure and Project Financing & telecommunication services that
n Adherence to best risk management practices Environment and Social Risk Due Diligence (ESDD) is (IPF) Division, in March 2023. The come under the asset class of “Project
when financing activities and thereby reducing the conducted in all loans falling under critical sectors and disclosure construes the scope 3 Finance” as per the PCAF Standard.
environmental and social risks. any term loan/ project loan above NPR 10 million. Based category 15 emissions reported using
n Incorporate environment and social risks in bank’s on ESDD, the risks are categorized a high, medium The Global GHG Accounting and Attribution to Emissions
credit decision making process. or low. Any proposal falling under medium and high Reporting Standard Part A: Financed For attribution, the total equity
environmental and social risks requires corrective action Emissions developed by PCAF. and debt of borrowing entities are
Environmental and Social Policy of Nabil Bank guides the plans, which are monitored regularly. Further, in case referred from their latest audited
bank with respect to the sustainable development and is of high and medium risk loans, bank staff/independent This is the second year in row that bank financial statements of FY 2022/23.
embedded in Credit Policy Guidelines which state that: consultants/regulatory authorities may conduct inspections is publishing data related to its carbon Consequently, the productions and
for further due diligence surveillance and submit reports/ footprint under the financed portfolio of revenue of these entities for FY
n The bank is committed to provide sustainable financial issue clearances on borrower compliance. Regular IPF division. The first year (base year) 2022/23 has been considered to
disclosure by bank was based on GICS derive absolute emissions based on
services to customers and it shall not enter into internal and external reporting is done to inform its
sector codes with the emission factors PCAF based emission factor.
business relations where its’ environmental and social stakeholders about the environmental and social risk
(EFs) available for Asia Pacific-Rest of
commitments are not met. exposure.
the World from the PCAF data base. As
n The bank integrates ESRM in the credit risk
country specific data for Nepal is still
management process in order to fully inform the credit ESRM guidelines are essential for promoting responsible
not available, this disclosure continues
authority about environmental and social risks prior to lending and fostering a sustainable financial sector.
to take the reference of economic
the financing decisions. These could involve projects on renewable energy, clean
emission factors however the updated
n The bank will not extend credit facilities to business technology, and environmentally-friendly initiatives. By one available in PCAF database based
activities which fall under exclusion list of NRB ESRM financing such projects, banks can contribute to economic on the Exiobase EEIO (extended input
guidelines. growth while minimizing negative environmental impacts. output) is considered this time. Further,
n The bank will embrace a robust ESRM system to The assessment of environmental and social risks can as the PCAF Exiobase Methodology
minimize associated risks from its lending activities in reduce the likelihood of loan defaults and contribute advises using regional averages for
compliance with the NRB guideline. to building a stable financial system. The guidelines financed emissions calculations, the
also assist banks to manage risks related to climate regional average EFs for emerging
The guideline defines environmental risks as those with change, natural disasters, and social unrest and proper economies have been considered in
the potential to damage the environment and ecosystem, management of the risks can contribute towards overall this disclosure.
breaking them down into physical environmental risks economic resilience.
and transitional risks. These assist the bank to be alert
to those risks and mitigate and manage them to reduce

148 NABIL BANK LIMITED ANNUAL REPORT 2022/23 149

 References to Calculation Methodology: Emission Intensity (tCO2e/$ Million Loaned) =
The disclosure here is based on the following: 3,065.28 tCO2e per million $ loaned (for last year
2021/22)
requires scope 3 reporting for lending to and making
Classification Type Exiobase Sector Classification
investments in companies depending on the sector in
Emission Factor Type Emissions Generated for other sectors and Avoided Emissions for renewable sectors The major difference noted due to new economic
which they are active, i.e., where they earn revenues.
Emission Factor emission factor is on manufacturing sector (i.e., cement)
PCAF provides a sector list detailing where scope 3
Options -Physical Activity Based, i.e., Option 2 (Energy produced annually in Mega Watt hour in FY 2022/23) where total absolute emission (scope 1&2) reported for
-Economic Activity Based, i.e., Option 3 (Company Revenue in the financials of FY 2022/23)
emissions of borrowers and investees are required to
last period (as at FY 2021/22 closing) was 75,884.43
Country -Emerging Economies Emission Factors data as Nepal specific data are not available be reported. For reports published 2023 onwards, the
tCO2e while the emission for same period based on new
Source PCAF Database 2019 NACE Level 2 (L2) sectors to be considered for Scope
EF is seen at 302,611.49 tCO2e vis-à-vis the absolute
References The Global GHG Accounting & Reporting Standard (PART A) 3 emissions are at least transportation, construction,
emission of 171,914.63 tCO2e only for cement sector as
PCAF Database User Briefing (February 2024) buildings, materials, and industrial activities (i.e., NACE
at this reporting period (i.e., FY 2022/23 closing).
Further Information on Exiobase data (Database Methodology) January 2023 L2: 10-18, 21-33, 41-43, 49-53, 81).
Currency Conversion Exchange rate of USD/131.60 NPR of the reporting date (16th July 2023) considered.
For emission factors expressed in Euro, the cross rate for conversion is based on Euro/148.20 on The emission reporting for the Telecommunication
Hence, to this requirement, bank has disclosed the scope
reporting date sector is based on score 2, option 1 (1b) data which
3 emission for manufacturing sector, explicitly cement that
is the primary data reported by the borrowing entity in
come under the portfolio of IPF. The scope 3 emission
Disclosure Results: their latest available sustainability disclosure report of
from financing to cement sector is thus observed as
Table 72: Absolute Emissions from Infrastructure and Project Financing Portfolio (Other than Energy) year 2021 published on their official website. Though
below:
disclosure of latest year has not been available from the
S. N. NACE/ INDUSTRY SCOPE 3
S. N.
NACE/ INDUSTRY ABSOLUTE TOTAL BANK'S DATA borrower, the industry being service nature, their base
EXIOBASE CLASSIFICATION EMISSION TCO2E ABSOLUTE EXPOSURE IN QUALITY EXIOBASE CLASSIFICATION TCO2E
CODE (NACE 2 DESCRIPTION) EMISSION TCO2E USD MILLION SCORE
stations primarily powered by national electricity grids CODE (NACE 2 DESCRIPTION)
SCOPE SCOPE (SCOPE 1 &2) in most places and increasing penetration of electricity
1 TCO2E 2 TCO2E
grids in the country every year, it is reasonable enough to 1 23.51/p26.d Manufacturing (Cement) 33,266.54
1 23.51/p26.d Manufacturing (Cement) 165,204.42 6,710.21 171,914.63 54.86 Score 4, Option 3 (3a) believe that such emission has not markedly increased.
2 51.1/p62 Air Transport 6,164.64 223.51 6,388.15 14.61 Score 4, Option 3 (3a) Hence, the reported data has been still considered over Avoided Emissions from Loans and Investments in
3 61/S15 Telecommunications 316.73 198.95 515.68 25.80 Score 2, Option 1 (1b) the regional economic activity based EFs for the entity. Energy & Renewables (Operational Projects)
Total 171,685.80 7132.67 178,818.46 95.27
Apart from financed emission that bank is responsible for,
Note: Weighted data quality score for above calculation is 3.46
Total Absolute Emissions (Scope 1 & 2) = 178,818.46 tCO2e from total loan exposure of USD 95.27 million the clean energy generated from operational hydropower
where score of 1 indicates high data quality and score of 5
Emission Intensity (tCO2e/$ Million Loaned) = 1,877.03 tCO2e per million $ loaned and solar projects financed by bank have undoubtedly
indicates low data quality.
avoided some of the GHG emissions.
Bank has a sizeable loan commitment in energy sector
Scope 3 Emissions
Though the IPF portfolio increased by 8.34% from the However, for comparability of this year’s disclosure from comprising both hydropower and solar projects under
For reporting the scope 3 emissions of borrowers and
previous reporting period, the growth in non-energy the last one, though detailed guidance on (re)baselining construction and operation. The loan outstanding under
investees, PCAF follows a phase-in approach which
sectors above is actually negative by 13.31% as the major is waited from PCAF, we have just reassessed our baseline energy sector totaled 63% of the total portfolio of IPF on
growth and thrust of SBU has been towards energy sector year disclosure with the same emission factors now the reporting date (16th July 2023) while the exposure
financing. Yet the emission noted above had sharply considered here for this year’s disclosure and hence stood around 6.65% of bank’s total LDO on the reporting
risen from its first disclosure despite de-growth in the arrived at following results: date.
sector. This is due to the revised emission factor which
is updated by PCAF based on most recent information Total Absolute Emissions (Scope 1 & 2) = The lending to Energy sector is a directed lending
available and compilation of latest data by PCAF where 318,851.28 tCO2e from total loan exposure of requirement of NRB wherein commercial banks are
continuous works are ongoing for improving the physical USD 104.02 million (for last year 2021/22) required to progressively lend 6.5%, 7%, 8% and
and economic emission factor data.

150 NABIL BANK LIMITED ANNUAL REPORT 2022/23 151

 10% of their overall lending portfolio in FY 2023/24 (mid-July 2024) and successive fiscal
years respectively. Nabil Bank being one of the leading banks that ventured into the energy
sector not only intends to adhere to these requirements but also internalizes the significance
attached to these prescriptions by regulator which is towards harnessing the untapped power
potential of country which can bring about a turnaround shift in the economy as well as fulfill
and comply with country’s net zero commitments and other aspirations to align with Paris
Agreement.

The energy projects financed by IPF division majorly comprises run of river scheme projects
and grid solar projects. The carbon avoidance by these projects may be relative to the actual
replacement of other energy mix available in the combined grid while Nepal’s grid electricity
is mainly hydropower based. The market mechanisms like CDM (Clean Development
Mechanism) and CER (Certified Emission Reduction) trading are yet to shape up in Nepal
lacking which these avoided emission disclosures have not seen developer’s interest yet.
Considering the orientation there and to underpin bank’s contribution also towards avoiding
emissions through financing of these green and renewable projects, the disclosure for
avoided emissions is continued. However, as the physical activity based emission factor in the
new database was not available, the avoided emissions are derived based on the electricity
produced in MWh for FY 2022/23 and considering the same physical activity based EF for
Nepal which was considered for the base year disclosure. The avoided emissions disclosure is
thus arrived as below:

S.N. NACE CODE/ INDUSTRY EMISSION TCO2E BANK'S DATA QUALITY

(EXIOBASE CODE) CLASSIFICATION (AVOIDED) EXPOSURE IN SCORE
USD MILLION

1 35.11/S11 Renewable Electricity 10,089.58 85.53 Score 3, Option 2 (2b)

(Hydropower)
2 35.11/S11 Renewable Electricity 87.03 7.32 Score 3, Option 2 (2b)
(Solar)
Total 10,176.60 92.85

The avoided total emissions in base year disclosure was 2,131.81 tCO2e only from a total
exposure of USD 28.05 million. Though such disclosure was made for FY 2021/22 in our
first reporting, the attribution was derived based on debt and equity position of borrowing
entities for the financial year 2020/21 based on availability of audited financials then and
accordingly, the electricity produced (MWh) also had to be considered for FY 2020/21 itself.
This had thus already omitted some of the renewable projects that had already commissioned
in FY 2021/22 for the calculation of avoided emissions then. Additionally, more construction
projects financed by bank came to commissioning in the FY 2022/23 which has brought about
a good increase in the total avoided emission figure in this year’s disclosure.

Conclusion:
Bank further realizes the need to increase the data quality score and obtaining physical activity
data from its portfolios for more reliability of these disclosures however the challenge for these
data still remain. Where available and possible, bank shall also try to use more qualitative
data over time through engagement with borrowers and consultants on deemed required
basis. Further, the disclosure process shall be further extended to include loan portfolio
under Business Loan asset class and other SBU portfolios and/or asset classes as the broader
understanding is achieved.

152 NABIL BANK LIMITED ANNUAL REPORT 2022/23 153

 CORPORATE The bank adopts a bottom-up approach when designing empowering entrepreneurs through its Fellowship
SOCIAL RESPONSIBILITY programs and activities, with sustainability at the forefront. Program and Certificate Course, which equip them
It prioritizes all 7 provinces of Nepal by allocating its with essential skills and foster creativity, leadership,
INTRODUCTION conservation, disaster risk reduction and management resources and CSR funds equitably to promote fairness. and sustainable practices. The fellowship program has
Nabil Bank's commitment to corporate social responsibility and climate change adaptation have all been carried out Additionally, the bank is committed to leaving no one achieved remarkable success, with the creation of 872
is motivated by the ideals and tenet of prioritizing people by the bank. behind in the implementation of its initiatives to uphold full-time and part-time jobs from 29 enterprises in its first
in first in all the activities that the bank undertakes. The the rights of all individuals. and second cohorts. 270 participants passed out from
organization's core values of doing good and doing Sustainability, according to Nabil Bank, is the first cohort in Certificate course.
right have always guided the Bank's actions. As part of development of value creation towards betterment of FINANCIAL LITERACY AND
the commitment to giving back to society, the Bank has society via economic, social, corporate governance, and NABIL SCHOOL OF SOCIAL ENTREPRENEURSHIP PATHWAY TOWARDS IMPACTFUL INTERVENTION
launched a number of initiatives that have had a long- environmental interventions. In order to make a significant The bank is actively engaging with different groups of The bank is consistently showcasing unwavering
lasting impact to the society. effect, Nabil Bank has been integrating diversity and people through Financial Literacy programs to educate commitment towards diversity, inclusivity, and
inclusion into its strategy. Being the first in Nepal to apply them on various aspects of financial literacy. The Bank sustainability, thereby embodying the essence of
In order to achieve its social, environmental, and the "Value Based Banking" concept, it is driven by the is committed to bringing about behavioral changes in responsible banking by means CSR initiatives. Our
economic goals, Nabil Bank has synchronized its goal of creating value for all parties. The bank follows the individuals, ranging from basic saving habits to starting extensive support in areas such as education, health,
interventions with the United Nation’s Sustainable Nepal Rastra Bank Unified Directive (NRB) 2080. Bank their own businesses, in order to promote financial financial literacy, disaster risk reduction and management,
Development Goals (SDGs). Programs in the areas of places significant emphasis on health, education, financial inclusion and well-being. As a part of financial literacy environmental conservation, innovation projects, and
financial literacy, health, education, entrepreneurship, literacy, pandemic and natural disaster and other sectors initiatives, Nabil SSE was launched to support, develop women empowerment exemplify our comprehensive
promoting culture, information technology, environmental as outlined by the NRB directive. and promote social entrepreneurship in Nepal. It approach to CSR.
serves as a shining example of social entrepreneurship,

154 NABIL BANK LIMITED ANNUAL REPORT 2022/23 155

 Nabil SSE Fellowship Program
Education has been one of the pillars of Nabil impact on society. It partnered with Engineers
Bank’s CSR strategy and it believes that the power Without Borders Nepal to host a program
of education can bring sustainable change in promoting diversity and involving students from
the community. The Bank undertook series of underprivileged backgrounds to brainstorm
initiatives to support different communities in need innovative solutions for social issues where more
through education program. The Bank provided than 25 individuals were benefited. Additionally,
scholarships to 14 orphans who lost their parent the bank sponsored several youth groups to
during mountain climbing activities. Similarly, 14 showcase their initiatives in global events,
children from poor economic background as well including projects like developing smart glass for
as children with visual imparity were supported the visually impaired, creating an AI-powered app
braille educational materials which promoted for personalized clothing recommendations, and
inclusivity and accessibility in education. More minimizing cloth waste.
than 4700 students were supported all over
Nepal through distributing education materials. The bank supported Nepali Army for Clean
Mountain Campaign 2023. A massive campaign
The Bank has been contributing to enhance was launched by Nepali Army to clean up
access to healthcare services by organizing mountain regions of Nepal. Nepal has 8 out
various health camps and has served around of 10 mountain range of the world. A total
2700 individuals across Nepal. of 35,700 kg of garbage has been collected
under the Clean Mountain Campaign run by
The Bank has been consistently at the forefront the Nepalese Army this year. The campaign was
of providing assistance during natural disasters conducted on Mt Everest (Sagarmatha), Lhotse,
and calamities. Whether it is flood, landslides, or Annapurna and Barunche for 55 days starting the
any other form of disaster or pandemic, Bank has first week of April. Similarly, the bank supported
consistently supported both the community and various organizations in organizing Forums/
the government. Workshops on climate change and its mitigation.
Likewise, the bank supported tree plantation
Nabil Bank has extended its support to various initiatives as well.
organizations and young individuals with
groundbreaking ideas that make a lasting

156 NABIL BANK LIMITED ANNUAL REPORT 2022/23 157

 BUSINESS ETHICS AND n making political, charitable donations or sponsorship. The policy clearly states the employees shall not:
ANTI CORRUPTION MEASURES The policy defines a bribe as an act of offering, The policy specifies the roles and responsibilities of n Offer, promise, give, request, or agree to give a bribe in
Nabil demands the highest standards of integrity and promising, receiving or providing an inducement or employees and senior management including the any form, directly or indirectly to any person including
ethical conduct in business and does not tolerate corrupt reward, directly or indirectly in order to influence a directors. a public official to obtain or retain business or an
practices related to business activities by employees or decision of the recipient or decision maker in an improper advantage for the benefit of the bank.
business partners. It is committed to transparent reporting manner or to induce improper performance from the All employees: n Solicit business by offering bribe or by making any
and to taking all reasonable measures to avoid the recipient or decision maker, all of which may result in a n are required to avoid any activities that could lead to, or kind of unofficial payment to customers or potential
bank’s involvement in bribery or corruption. business, financial or other kind of gain or advantage to imply, a breach of the policy. customers.
the offeror or offeror’s principal/associates. Corruption n must escalate to line manager/HR/CEO as applicable if n Make any donations or charitable contributions to a
Nabil Bank has an Anti-Bribery and Anti-Corruption (ABC) is understood as the abuse of position and/or trust to they are offered bribe by anyone, or if they are asked to public office or a public official in order to influence
Policy to guide Board members, employees and business derive an improper advantage or gain or obstruct fair and make one, or if they suspect that they may be bribed or to obtain or retain business or an advantage for the
partners. The policy also informs stakeholders about the prudent practice. The policy aims to: asked to make a bribe in the near future, or if they have benefit of the bank.
intention to closely monitor bribery and corruption risks, reason to believe that they are victim of another corrupt n Accept, receive, or promise or agree to receive a bribe
and to take immediate action where there is evidence to n Outline principles for conducting business with integrity activity. or any kind of inducement or benefit in any form,
suspect bribery and other corrupt practices. and in accordance with the highest ethical standards. n will face disciplinary action as per the Employees directly or indirectly from any customer or vendor or
n Ensure that financial and other resources of the bank Service By-Laws of the bank if they are found in breach any other person with whom the bank has or may have
are used solely for their proper purposes, and of the policy. a business relationship.
n Promote a culture of honesty and openness among the n Make facilitation payments (payments, large or small
staff. Senior Management Team and Board of Directors need made to government officials to secure or expedite
to: routine or necessary official action, either more
The policy applies to all employees, Board of Directors, n regularly undertake of periodic and high-level risk promptly or at all).
CODE OF and business partners working on behalf of the bank. assessments of business activities.
CONDUCT It bars the acceptance or offering bribes, facilitation n ensure that the policy is well communicated to Nabil
payments, kickbacks or other improper payments employees, outsourcing agencies, and business
under any circumstance. This includes transactions with partners alike.
government officials (including foreign governments) n encourage trust and dialogue with employees, so
as well as with any private company or person. It also that they can voice their concerns if they witness any
applies where payment is received directly or where dishonest activity.
it is received through a third party (agent, contractor,
BUSINESS representative, distributor, or business partner).
ETHICS
Each staff and directors must comply with the policy when
undertaking any of the following activities
on behalf of the bank:

n offering or accepting any benefits, including gifts,

entertainment, meals, travel/accommodation, training, or
ABC any other things of value.
POLICY n engaging and monitoring business partners/customers.
n procuring goods and services.
n commencing activities in new geography or entering
into new business ventures

158 NABIL BANK LIMITED ANNUAL REPORT 2022/23 159

 GRIEVANCE HANDLING NABIL CUSTOMER CARE CENTRE
MECHANISM OF THE BANK
Grievance Handling (Compliance with Unified Directive
20/2079, Point No. 9) Nabil Customer Care Center was established with the n Escalate customer issues and concerns to the related
objective of handling the queries and complaints of the department via trouble shoot ticketing platform and
As a customer centered bank, all activities of Nabil focus bank's customers. It was formally launched on 12th of July, coordinate for the resolution on time.
on customer satisfaction. It has been registering customer 2019. All the customer related queries are routed through
feedback and suggestions through various channels: this center. n ATM monitoring and ATM Cash positioning, particularly
on every Saturday and on public holidays, handling
1) Customer Care Center (24x7 Service) Initial Staff: 11 complaint and grievances from website source.
2) Hot Line: 5970015 Current Staff: 20
3) Suggestion Box – available at every branch Service Hour: 24/7 n Educating customers about security best practices,
4) Operations in-charge of the branch has been identifying potential fraud attempts, and guiding
assigned responsibility of taking care of placing, MAJOR FUNCTIONS customers through security protocols to safeguard their
collecting, and recording complaints and feedback nCustomer Support: handling inquiries, complaints, accounts and personal information.
5) Customer Feedback Register and requests from customers regarding their accounts,
6) Dedicated Information Officer transactions, products, and services. n Analyzing customer interactions, trends, and feedback
7) Dedicated Grievance Handling Officer to identify patterns, areas for improvement, and
8) Viber Helpline - +977-9802002095 n Providing information, resolving issues, and guiding opportunities to enhance service delivery. Generating
9) Online Grievance submission mechanism via the customers through processes. reports for management to track key performance
website of the Bank under following URL: https:// indicators and make informed decisions about
www.nabilbank.com/individual/grievance-handling operational enhancements.
10) Email: [email protected]
11) Emails: [email protected];
12) Chatbot – Nabina – Available in Website & Facebook
13) https://www.facebook.com/nabilbanklimited
14) https://www.instagram.com/nabilbank/
15) https://twitter.com/nabilbank
16) https://www.linkedin.com/company/47613512/
admin/
17) https://www.pinterest.com/nabilbank/_saved/
18) https://www.youtube.com/channel/UCuJCYvI-
WOJ9awI3Gxo_sMw

Grievance Handling Officer

Name: Ganesh Prasad Awasthi
Designation: Chief Operating Officer
Phone number: 9851338012,
Email: [email protected]

Customer Grievances Received in FY 2022/23

A total of 1,053 customer grievances were received
through various media in FY 2022/23 of which, 1,021
were resolved.

160 NABIL BANK LIMITED ANNUAL REPORT 2022/23 161

 Inbound Calls Flow Chatbot Report
in %

3,261
83 2,836
81
78 78 76
71 72 2,454
2,198 2,399 2,173 2,262
65 2,048
62 1,944 1,899
62 61 1,822 1,769
69 1,580 1,678 1,662
55 1,515 1,556 1,534
1,449 1,467
1,190 1,362 1,313
1,191 1,281
870 728 954
570 729 664
577 402
388 427 385
244 251 224

Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23

Total Offered Total Answered Calls Total Abandon

Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23
Answered Call Handled Viber Messages

Number of Queries in Major Issues Handled during the year Jul-23 8,903

Jun-23 4,902
60,903
May-23 6,773
48,093
Apr-23 6,305

30,236
Mar-23 6,325

14,178
11,436 Feb-23 4,435
6,254 4,259 4,023 2,911 2,256
Jan-23 5,930
Account Mobile Debit Branch Credit Icard Loan Demat CRN Fone Loan
Service Banking Card Location Card Related Services Mero share Related Enquiry
Service Related & Timing Related service Dec-22 4,729

Nov-22 3,246

Oct-22 2,249

Sep-22 2,701

Aug-22 3,039

Jul-22 3,342

162 NABIL BANK LIMITED ANNUAL REPORT 2022/23 163

 Total Handled Mail

759
Jul-23 14,012

1,033
Jun-23 9,172

1,387
May-23 11,050

2,329
Apr-23
10,372
1,277
Mar-23
9,138

1,007
Feb-23 5,738

1,344
Jan-23 6,236

680
Dec-22
6,616

Nov-22 769
4,298

Oct-22 1,198
4,750
1,037
Sep-22 6,359

1,000
Aug-22 6,857

942
Jul-22 4,559

Suspicious Email Handled Total Mails Handled

Total Ticket Raised

3,297
2,972 2,934
2,888
2,644 2,644
2,542 2,594
2,425 2,418
2,015 2,072

1,485

Jul-22 Aug-22 Sep-22 Oct-22 Nov-22 Dec-22 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Jul-23

164 NABIL BANK LIMITED ANNUAL REPORT 2022/23 165

 Nabil’s continuous efforts in breaking new

SERVICES
PRODUCTS AND grounds with innovative products and
services in the banking industry has always
enhanced the value of stakeholders. Nabil
has structured its delivery platform by
constituting specific Strategic Business Units
(SBUs) to ensure single window customer
services in specific product segments. For
effective and efficient delivery, most of the
product and service offerings are channeled
through the SBUs. All SBUs are equipped
with resources and expertise required for
driving business in their respective markets.

Nabil is dedicated to meeting the diverse needs of its

customers, offering a variety of products. In line with
technological advancements, Nabil has embraced digital
banking, offering convenient online and mobile banking
platforms such as nBank, Digi Bank. These platforms
provide customers with easy access to their accounts, as
well as range or banking services, anytime and anywhere.
We are committed to delivering innovative and convenient
banking solutions that leverage cutting-edge technology
to enrich the banking experience. With a steadfast
commitment to customer satisfaction and financial well-
being, Nabil endeavors to be the premier banking partner
for both individuals and businesses.

Within markets, the SBUs undertake market research,

product enhancement, delivery channel optimization,
relationship marketing and stakeholder relationship
management. The following SBUs provide the bank’s
product and services:

166 NABIL BANK LIMITED ANNUAL REPORT 2022/23 167

 SBU WISE BRIEFING OF temporary cash needs, the bank’s offerings cater
PRODUCT & SERVICES to various personal and societal financial goals.
Recognized for competitive interest rates and swift
A. NATIONAL CORPORATE loan processing, Nabil provides seamless support
National Corporate (NC) is a one window through its extensive network of touchpoints
banking service designed for catering all nationwide. A comprehensive range of retail
financial services to large corporations. NC loan products and available and new ones are
offers all banking services required by corporate introduced based on market demand.
establishments such as manufacturing and
processing industries, export and import trading, Home Loan
real estate development, hotels, agro- production, Nabil's Home Loans are designed to help
service industries, and others. NC offers capital customers unlock their dream residences with
investment in the form of multiyear term loans, flexible options to match and even better similar
working capital and structured time loans products in the market. Nabil offers competitive
(Permanent working capital), trade transactions interest rates, longer tenure for affordable
in the form of letter of credit, bank guarantees, monthly payments and flexible loan options
import loans, pre/post shipment loans, bills and for purchase, construction, furnishing, and
documentary negotiation/collection/advising and renovations.
open account arrangements. As a banker serving
most of the nation’s large corporations for over Mortgage Loan
three and half decades, Nabil has the both the Nabil's Mortgage caters to assisting customers
expertise and experience to foresee the needs of meet essential needs and aspirations through
businesses and has tailored its products to meet credit, secured by your existing residential or
those requirements. commercial property. Mortgage loans allow
customers to meet diverse needs: Financing
B. INFRASTRUCTURE AND PROJECT FINANCING weddings, dream vacations, children's education,
Infrastructure and Project Financing (IPF) is investments, and other personal requirements.
a one window banking designed unit for The mortgage loans come with easy monthly
catering to large capital-intensive projects such repayments over flexible tenures, up to 35 years.
as hydropower, telecommunication, cement
manufacturing, aviation, and other infrastructure
projects. IPF primarily caters to large funding Auto Loan
requirements through loan syndication. Nabil Nabil has prioritized sustainability and offers
has been a forerunner in financing projects of special loan features for Electric Vehicles (EVs)
different scales and has experience in financing offering competitive interest rates and faster
some of the leading hydropower projects and processing. The regular Nabil Auto Loan serves
mine-based cement plants. In addition to vehicles that run petroleum products such as cars,
providing project financing services, the unit vans, jeeps, taxis, trucks, buses, for both personal
also facilitates Foreign Direct Investment (FDI) or commercial use.
in the infrastructure sector by providing agency
services in the capacity of Agent/Escrow Bank. It Education Loan
also provides consulting services to international Nabil understands the transformative power of
suppliers/contractors directly or indirectly with the education, which explains what led to be the
projects. pioneer in providing tailored Education Loans,
which have helped a large number of Nepali
C. RETAIL LENDING students to pursue academic aspirations, both in-
Nabil Bank empowers individuals across Nepal to country and abroad.
achieve their aspirations with a diverse portfolio
of retail loans. Whether it's realizing the dream
of owning a new home, acquiring a coveted car,
fueling entrepreneurial ventures, or managing

168 NABIL BANK LIMITED ANNUAL REPORT 2022/23 169

 Nabil Bank is the largest provider of education loans and In order to sharpen focus, Nabil has grouped SMEs into w SME issues related to the SME portfolio efficiently. A new
has the most experience in supporting students on their the following segments: Nabil Bank is strategically shifting its focus to the SME project, the Nabil SME School, will deploy dedicated staff
academic journeys. The bank is also the preferred partner sector, in line with its vision, mission, and objectives to for SME proposal writing, aiming to enhance proposal
of many prestigious academic institutions. It is recognized Small Enterprises: Any borrowing unit having a limit up to foster sustainable banking practices. This transformation quality. Conversely, SME Highway offers a fast-track
by the Australian and New Zealand High Commissions, NPR 10 million. involves integrating innovations, fostering stakeholder approval process within the Loan Origination System for
and has been accredited by academic institutions in both connections, and collaborating with development streamlining approval with minimal required information.
the countries. Medium Enterprises: Any borrowing unit having a limit agencies to uplift the SME sector. The bank is committed The groups formed by the bank for efficient handling of
above NPR 10 million and up to NPR 50 million. to the holistic advancement of SMEs through capacity- SMEs and microfinance as shown in the following table:
Gold Loan building trainings for staff, financial literacy training for
In Nepal, gold has always been a symbol of security and Mid-Market: Any borrowing unit having a limit above NPR customers, regular meetings, and interactions. This is
stability. Nabil’s Gold Loan scheme assists customers to 50 million and up to NPR 100 million. done through the SME department. In addition, Nabil has
convert the value of gold to access quick cash in times set up a SME Friend Desk to allow branches to address
of need. This product is another pathway to quickly The SME & MF Hub is equipped with the resources and
accessing cash for diverse family needs. expertise required for driving business in their respective
markets. Within respective markets, the SME & MF Hub Table 73: SME and MF Exposure
Share Loan & Personal Loan undertake market research, product enhancement,
Nabil Bank has loans against shares and also personal delivery channel optimization, relationship marketing and S. N SEGMENT LIMIT OF SEGMENT VOLUME (NPR IN BILLION) COUNT
AS ON MID-JULY 2023
loans, with come with hassle free pre- and post- loan stakeholder relationship management.
SME
services. The microfinance product line is specially designed to
1. Small Enterprises Total limit up to NPR 10 million 17.38 6,369
extend financing to income generating initiatives of the
2. Medium Enterprises Total Limit above NPR 10 million up to NPR 50 million 40.00 5,263
Overdraft or Demand Loan socially underprivileged populations, mainly in rural areas
3. Mid-Market Total Limit above NPR 50 million up to NPR 100 million 18.67 1,472
Nabil Personal Loan is available to salaried individuals where the reach of commercial banks is low. The bank
Microfinance Lending
and professionals with Nabil staff payroll accounts, as has partnered with selected Micro-Finance Institutions 1. Directed Deprived Sector Lending Below 20 lakhs 7.42 10,462
well as for existing mortgage customers. (MFIs) licensed by the Central Bank who serve as financial 2. Micro Finance Wholesale Lending to MFIs 8.82 137
intermediary and this has also allowed Nabil to extend its Total 93.04 23,779
Credit Card reach. Nabil also provides wholesale credit to these MFIs
Nabil offers customers both the global reach of VISA in the form of loan refinancing. It has also participated
and the secure network of Master Card minimizing the in equity in some of the major MFIs from their inception
chances of declined payments and maximizing the travel and is represented in their Board of Directors where Nabil
experience. provides support for capacity development and corporate
Nabil Credit Card is accepted by millions of merchants governance.
across countries, ensuring smooth payments with each
swipe. The card customers can also benefit from the The bank's SME, Microfinance and Sustainable Banking
bank’s advanced systems and partnerships both in- Division caters to the unique banking needs of small
country and abroad. The Nabil application on the phone businesses. The division ensures centralized tracking
allows customers to receive real-time information on and monitoring through easily understandable reports,
spending and transactions to enhance the experience. facilitating daily performance evaluations for branches.

D. MID COPORATE, SME AND MICROFINANCE AND

SUSTAINABLE BANKING DIVISION (INCLUDING
DEPRIVED SECTOR LENDING)
Nabil has been moving forward with a vision, mission,
and target to expand its portfolio with thrust on small and
medium enterprises (SMEs) and Microfinance portfolio
for sustainable banking through these segments. The
SME and Microfinance Division oversees the banking
needs this customer segments and provides all kinds of
financial services from a dedicated Hub at Ghantaghar in
Kathmandu Valley and through all 265 branches across
Nepal.

170 NABIL BANK LIMITED ANNUAL REPORT 2022/23 171

 w Microfinance Lending the risk weightage of the business units with turnaround for employees of corporate houses. The bank provides The bank ‘s premium savings account, Nabil Gold
Microfinance: The microfinance product line targets time of only 35 hours. competitive interest rate along with various banking Savings, comes with one of the highest interest rates.
income-generating ventures of socially underprivileged facilities for individuals with deposits under these Finally, the Nabil Shareholders Savings is designed for the
populations in rural areas. Strategic partnerships with Nabil Nari Karja is a distinctive product designed to schemes. shareholders of Nabil Bank.
licensed MFIs have enabled the bank to extend its empower women-led SME by offering convenient and
services through wholesale credit and loan refinancing. straightforward credit facilities to fulfill their financial Nabil Bank has recently launched three new institutional Along with other general fixed deposit products, Nabil
Additionally, Nabil also participates in equity and needs, thereby contributing to the upliftment of women savings deposit schemes in local currency to cater to the also offers Cumulative Fixed Deposit (CFD) allowing
governance of MFIs, aiding capacity development and entrepreneurs. needs of non-profits such as INGOs/NGOs. customers with regular income to deposit multiple times
providing them assistance to ensure strong corporate into their CFD account for a pre-determined tenure.
governance. Nabil Self Employment Auto Loan is designed to The Retail Liability Unit (RLU) has been structured to Further, the bank provides insurance coverage of NPR
empower individuals seeking auto financing for their self- deliver a wide range of deposits, cards, alternate channels 300,000 based on diagnosis of any one of 13 Critical
Directed Deprived Sector Lending: The bank offers small- employment endeavors especially for investing in income- & digital products. The role of RLU is to continuously illnesses (including the first heart attack, major cancers,
ticket loans for inclusive finance, catering to rural areas, generating vehicles such as taxis, vans, or trucks. engage in product innovation and development. stroke, etc.) along with Term Life Insurance of NPR 75,000
geographically challenged regions, and marginalized which is offered free of cost to all savings account holders
communities. This lending covers micro-businesses, Nabil Women Entrepreneur Loan up to 2 million is One new product the Nabil Dhukka Bachat Khata has who maintain a minimum balance of NPR 50,000.
agriculture, SMEs, low-cost housing, handicrafts, skill- provided for supporting small businesses and enterprises been designed for customers requiring premium and
based enterprises, self-employment auto loans, and owned by women to empower women entrepreneurs at comprehensive services. This account includes three types F. REMITTANCE BUSINESS CENTER
women-run micro-enterprises. every stage of their business journey. of insurance coverage, making it the first savings product The Remittance Business Center delivers a range a
of its kind in the market. Customers who open a Nabil centrally structured and locally delivered range of
w Sustainable Banking Nabil bank has fixed the end-to-end turnaround time for Dhukka Bachat Khata account have access to Medical products. The SBU continuously engaging in product
Nabil Sustainable Banking (NSB) was launched with a all SME loan products, which is monitored regularly to Insurance worth NPR 100,000, Group Personal Accident development, network enhancement and innovation in
mission to revolutionize the financial market through ensure smooth service delivery. SME, MF and Sustainable (GPA) worth NPR 1,000,000, and Critical Illness insurance delivery channels. The remittance services are provided
the integration of ESG standards and a commitment Banking Division plans to continue moving ahead with worth NPR 375,000. In addition to the insurance both from branch offices and also through the extensive
to pursue UN Sustainable Development Goals (SDGs). innovative digital products and value-added services coverage, customers can also avail a range of free network of payout agents across the country.
NSB embodies a value-based approach and actively to increase the customer experience. It also has been services, such as debit card, credit card, nBank (Mobile
promotes well-being of individuals, communities, and the launching various campaigns to make such offers to both Banking), C-ASBA, DMAT, Meroshare, and free five times Western Union (WU)
environment. Nabil prioritizes environmental and social customers and staff. ATM use in a month fee. Nabil Bank has been the only Principal Agent Bank of
well-being by seamlessly integrating sustainability in its Western Union (WU) Money Transfer in Nepal for over two
core operations. This approach underscores the bank's E. RETAIL AND WHOLESALE LIABILITY MANAGEMENT Similarly, the Nabil Gen Alpha Account is designed for decades. WU provides fast, reliable, and convenient ways
unwavering commitment to sustainable banking practices children in an effort to introduce to them the value of to transfer money. Through WU, customers can receive
in line with its values and goals. Deposit Management savings from a tender age. funds through more than 500,000 WU agent locations in
Deposits are the basis for credit mobilization and more than 200 countries and territories. A bank account
In addition to customized SME Products, Nabil Bank has ensuring. Deposits is an important banking function. The Nabil Premium Remittance Savings Account is for at Nabil is not required to receive the funds but having
introduced some unique SME/DDSL products as described Deposits can be institutional or individual. Deposit Nepali citizens in foreign employment or are going one is convenient.
below: management involves the study of consumer behavior abroad for employment by obtaining work permit from
and introduction of deposit products from time to time government. Various free services and added features are The bank has built extensive agent network throughout
Nabil Sakchyam Karja aims to facilitate small businesses to meet expectation of depositors, while continuously available in this account along with highest interest rates the country for effective payout of remittance.
to create the assets for which usually entrepreneurs use analyzing the strategy and products of competitors. as prescribed by NRB.
co-operative or private money lenders to fulfill the gap in The department also prepares customized offers to its WU and Nabil Bank Ltd. have also been providing WU
financial requirement. customers. Nabil Bank offers an extensive range of Another product, the Nabil Jestha Bachat Khata provides Mobile Money Transfer (MMT) service. WU customers can
deposit products for individual and institutional customers. a facilities and special privileges to senior citizens. send money directly to the beneficiary’s eSewa mobile
Channel Financing is an innovative product which wallet in Nepal. The beneficiary can also load money
provides working capital credit facility to distributors/ The Wholesale Liabilities unit manages institutional The bank offers “Nabil Gen-N Account” is targeted in his/her mobile wallet by submitting MTCN number,
dealers/ wholesalers/ retailers of a supply chain. This deposits of three sectors diplomatic & development towards young and technologically adept customers. sender’s name, expected amount and other relevant
product assures availability of working capital to small organizations, government organizations and service While discounts on cards & e-channel facilities are details. Beneficiaries can transfer funds from their wallets
SMEs and helps them to scale production and distribution organizations with dedicated officers for customer care. the main attractions of this account, it also comes with to different bank accounts or use it for making payments.
networks. Institutional depositors have the options to have current freebies and discounts on DEMAT account opening, etc.
accounts, call accounts and fixed deposits. Nabil also In order to differentiate the remittance products from the
Nabil Sajilo Express Karja is based on credit scoring offers salary accounts, the Nabil Gold Payroll Savings The Nabil Premium Nari Bachat Khata”, a specially other remittance service providers and widen the existing
model for credit approval and pricing decision based on Account and Nabil Premium Payroll Savings Account designed deposit product for women, comes with a host services around the world, WU has also partnered with
of facilities and special discounts in locker & card services.

172 NABIL BANK LIMITED ANNUAL REPORT 2022/23 173

 Nabil Bank to provide Direct-to-Bank account (APN-
Account Payment Network) product. APN is designed
to facilitate remittance customers who want to send the
amount directly to the account of the desired beneficiary.
Using the WU APN, the Nepali diaspora in 188 countries
can send money directly into the accounts maintained
with Nabil Bank or any other banks & FIs in Nepal
instantly. The product is convenient and customer-friendly
as the beneficiary doesn’t need any paperwork or visit any
remittance counter for receiving payment.

Nabil Remit
This is a proprietary brand developed by the bank for in-
country remittance services within Nepal.

NABILREMIT is a web-based online money transfer system

introduced by the bank to ease fund transfer from one
place of the country to the other. NABILREMIT has the
network of over 15,000 agents located across the nation.

Foreign inward remittance is a service Nabil has been

providing customers for over two decades. The bank
has been providing inward remittance services for funds
received from India, Qatar, UAE, Saudi Arabia, Kuwait,
Australia, Japan, and South Korea through different
arrangements. The transactions are received through
SWIFT, Nabil Secure FTP, API Integration, and different 5) Access to preferential financial services for remitters, and for processing cards under the Visa and MasterCard preferred by foreigners visiting Nepal for cash withdrawal
web-based software. The transactions are either paid including specially designed loans, high yield deposits brands for both accountholders and others. as they accept debit, credit and pre-paid cards of Visa,
over-the-counter after verifying the beneficiary’s ID or along with all services of the bank and its subsidiaries Visa Classic, MasterCard, Maestro, Cirrus, Union Pay
credited in the beneficiary’s account at Nabil or any other Nepal was the first bank to issue EMV chip-based International and SCT. Nabil is working to further extend
BFI in Nepal. Drafts and SWIFT Transfers and NFC contactless (tap and pay) cards which adds the ATMs in more locations.
The bank issues demand drafts and executes fund convenience for cardholders along with enhanced
Keeping up with the rapid shifts in technology, Nabil transfer instructions for transfer of funds across the globe security. With this enhancement, cardholders can use Domestic Nabil Visa Classic Debit Cards
has made several changes to enhance security in the using SWIFT. Nabil has a wide correspondent banking Nabil cards by just tapping their card at NFC supportive Nabil Visa Classic Debit Cards and Nabil Visa/
remittance payment system. The blend of services of the arrangement with international banks for executing fund Point of Sales (POS) and ATM terminals with Chip and PIN MasterCard Domestic Credit Cards are accepted at over
brand that has been nurtured for over 39 years available transfer requests from clients for facilitating individual verification methods. The bank has been deploying EMV 4.4 million merchant outlets and over 244,000 ATMs in
at the bank are: fund transfers, international trade transactions and compliant POS terminals for supporting NFC contactless Nepal and India. Customers can apply for the debit &
treasury operation of bilateral and multilateral agencies. features at merchant locations for safety, security, and credit card using nBank and webpage of the bank.
For our partners: convenience of both the merchants and cardholders.
1) Quickest turnaround on APIs G. ALTERNATE CHANNEL SALES International Cards
2) API handling of rejection and returns The bank has also deployed Quick Response (QR) codes Nabil offers International Dollar Cards, which like the
3) Ready access to digital remittance platform Retail Transaction Banking for merchants who facilitate contactless and card-less Nabil MasterCard International Credit card and Nabil
4) Efficient payouts with best-in-class fee structure Nabil has always held pride in providing top notch transactions using a machine-readable optical label bar- Visa International Pre-Paid card are accepted at over
5) Access to business centers for marketing and card services in the banking industry. Nabil has been code. QR payments are globally more popular because of millions of merchant outlets and ATMs worldwide.
promotion support the principal member of Visa International Service the portability of mobile phones. These cards are becoming exceptionally convenient for
Association, MasterCard International Inc. (since early customers going to countries other than India where
For our customers: 1990s), and UnionPay International Co. Ltd. It provides Nabil has a network of over 316 EMV upgraded ATMs transactions through cards are the most preferred mode
1) Real time account credits all services including issuance of debit, credit, prepaid inside and outside Kathmandu Valley. These EMV ATMs of payment. Nabil Visa International Pre-paid card can be
2) Instant cash pickup, available in all corners of Nepal and virtual cards such as Visa Master and UnionPay are most secure and are capable of processing EMV ATM obtained at any of the branches without the need to open
3) Access to the support center International. The bank has state-of-art technology to card transactions in the most secure encrypted platform an account.
4) Low fee structure support online banking and mobile banking services, and serve customers 365 days a year. Nabil’s ATM is

174 NABIL BANK LIMITED ANNUAL REPORT 2022/23 175

 Nabil VISA International Debit Card 1990s and there are over 4000 merchants with Android the bank via public chats in a direct, personalized, and costs but also increases operational efficiencies and
Nabil offers Visa International Debit card to foreign POS terminals for card payments. spontaneous manner. Customers can easily search for provide a better customer experience to an increasingly
account holders. This card is designed to meet the and subscribe to the Bank’s Public Account on Viber to digital-friendly customer base. Most customer care
requirements of FCY account holders. The card is Electronic Payment Gateway (EPG) & Online enjoy various features like account information, balance services at the bank have migrated online but there are
accepted worldwide except in India. It can be used in Payment Solution enquiry, mini statements, forex rates, interest rates, ATM also arrangements for customers that require physical
ATMs, POS as well as across e-commerce platforms. Electronic Payment Gateway (EPG) is system that enables and branch locations, banking hours, FAQ’s and products presence to handle concerns.
Nabil offers another unique supplementary service called online card processing electronically. Customers can and services. Account holders need to register their bank
Nabil Installment for Nabil Domestic Visa Credit card browse an online catalog and purchase items online. accounts through the registration menu in order to access Nabil iCard
and MasterCard credit card holders. Nabil Installment EPG complements businesses by improving the way of account information. Ad-hoc comments/ suggestions of Nabil iCard is an international prepaid card which
offers easy Equated Monthly Installments (EMIs) at 0% doing business, increasing the level of sales, expanding customers are processed using a chat-bot. simplifies International online transaction needs of Nepali
interest from our selected merchants with six to 18months business, and improving relationships with existing citizens. Nabil iCard can be issued to an individual and
tenure for purchase of goods and services with minimum customers. This service enables online businesses to offer Nabil Fone Loan organizations having PAN certificate which is used for
purchase amount of NPR 20,000 to a maximum of NPR customers an online payment facility that is convenient, Nabil Fone Loan is another innovative product for making various international online payments for goods
200,000. Under Nabil Installment facility, the bank’s robust, and secure. Nabil’s EPG service can make it providing short-term preapproved loans to individual and services from various International E-commerce
cardholders can purchase various consumer electronics, possible for businesses to sell products/services online in a customers up to a limit of NPR 200,000. This lending platforms.
home appliances, mobiles/smart phones/tablets, bicycles, secure environment by accepting payments through Visa, service can be availed through the mobile banking
branded watches, home furniture, readymade jewelry, MasterCard and UnionPay International Cards issued in platform and by using the Virtual Credit Card. Herein, Chat bot (Nabina)
hair transplant treatment service and various travel Nepal or abroad. customers are provided with a contact-less digital lending Nabina is a web-based chat bot solution on Amazon web
packages. experience with a collateral-free pre-approved loan. services. It is a new Artificial Intelligence powered chat-bot
Similarly, ONELINK is another online payment collection and web-plugin designed to enable seamless self-service
Nabil eSecure method introduced to cater the need of SMEs and MSMEs. ATM customer journeys. This solution enhances consumer-to-
Nabil offers secured internet payment solution for Visa The handicraft businesses, travel and tour operators, Nabil has a large domestic network of 316 ATMs spread business interactions by overlaying an end-to-end digital
and MasterCard cardholders (debit, credit and pre- hotels are the key merchant types who can benefit from across the country. These ATMs serve customers 365 days channel over existing voice infrastructure of Avaya. This
paid) for online shopping in a safe and convenient way. this product. Using this channel of payment collection, a year. Nabil’s ATMs accept debit, credit and prepaid chat bot channel integrates into customer-facing interfaces
This product, Nabil eSecure, is secured by Visa and merchants can generate links against their transactions cards of Visa, Visa Electron, Plus, MasterCard, Maestro, such as a web portal, mobile app, mobile browser, and
MasterCard Secure Code, a 3D Secure Service which and can send it to customers through emails or other Cirrus, UnionPay International and SCT. messaging clients and enables rich, interactive customer
makes online transactions safer and more secure. channels of communication. The customer can then go journeys that can start from the digital interface and
through the link and submit the required card details to Nabil Cash Machine transition seamlessly. It is integrated with Avaya solution
nBank Mobile Banking Application confirm the payment. The cash recycler machine is a self-service terminal that which allows the customer to connect with the bank using
Mobile commerce has been growing exponentially for allows the customer to make deposit and withdrawal Avaya platform.
supporting which Nabil upgraded its user-friendly mobile GreenPIN transactions. This Nabil Cash Recycler Machine is
banking application with dual channel access (Internet/ GreenPIN promotes the environmental conservation by usable for NPR cash deposits and withdrawals. Using Interactive Voice Response (IVR) service
SMS) with personalization features. The nBank application reducing the consumption of paper. GreenPIN allows this machine, customers can deposit cash of specific Nabil Voice Banking is an automated telephony system
allows customers to navigate Nabil’s branches/ ATMs/ cardholders to set/reset their card PIN by visiting the denominations in NPR currency in the CASA account and which interacts with customers and provides the requested
Merchant locations easily. It also allows customers to use bank’s ATM. All cards are activated only upon successful domestic credit cards within the Nabil network. For cash services. It is an Interactive Voice Response (IVR) based
their mobiles to perform non-financial transactions such PIN change at an ATM. withdrawal and deposit in credit cards, presence of card service that comes with the capability of self-service and
as balance enquiry, mini statement request, full statement is mandatory whereas for cash deposit into bank account provides the requested service at a faster speed.
request, view foreign exchange rates and stock market; Nabil KIOSK the card is optional. Accepted cash for deposit by NRCM
PIN change and to also engage in financial transactions Nabil Bank has recently launched Nabil KIOSK, a cheque will be stored in cassettes in the modules for dispensing in Wholesale Transaction Banking
such as third party fund transfers within Nabil Bank and clearing facility from the KIOSK device and has plans to future cash withdrawal transactions. Digital Payment Products:
e-Sewa member banks. nBank also allows Nabil credit upgrade this service to other banking services. • CorporatePAY, e@Nabil & corporate eSewa.
card bills, purchase and payments for Nepal Telecom Nabil Customer Care Center • API Banking (H2H Integration in Enterprise Resource
and Ncell services, electricity, internet service providers, Nabil Voice Banking Customer Care, a proven foundation for growth, lies Planning (ERP).
merchant payments and for loading e-sewa wallets. Viber is a free, internet-based platform for instant at the heart of Nabil. The bank believes customer • Corporate Merchant Collections.
Customers receive notifications and alerts such as messaging and voice over IP (VoIP) application that satisfaction is the key indicator for gauging success
transactions alerts, loan repayments alerts, etc. offers a cheap and efficient way to communicate for and is a very important function of the bank. The Nabil The ongoing digital transformation in the banking
millions of users worldwide. Nabil’s Viber Banking facility Customer Care Centre responds to the customer queries sector signifies a profound operational and cultural shift
Point of Sale (POS) is available to all users through the Viber application and complaints which it believes provides deeper and towards seamlessly integrating digital technology across
Point of Sale (POS) is a terminal at a merchant’s location available at Google Play Store and App Store. Multiple more accurate understanding of each customer’s context, all aspects of banking operations, thereby optimizing
to execute payments for goods and services sold. Nabil banking functions are delivered through the bank’s public behavior, needs and preferences to design and position efficiency and delivering enhanced value to customers.
has been serving merchants with the POS facility since the account. This service allows customers to interact with services. This customer centric approach not only reduces In response to ever changing business needs, Nabil

176 NABIL BANK LIMITED ANNUAL REPORT 2022/23 177

 Bank has strategically shifted its focus towards digital I. DIGI BANK Overall, Nabil Bank’s digital transformation journey has Mastercard or Visa cards to send money into a Nabil
transformation initiatives tailored specifically for corporate The digital revolution has had a tremendous impact on been a success. The bank’s investment in technology Bank account instantly.
clients. The bank has been reshaping its offerings to every aspect of our lives, including banking. Nabil Bank has allowed it to improve efficiency, reduce costs, and
match the distinct needs of corporate clients using began its digital transformation journey in 2022 with the deliver a better banking experience to customers. With 5. International Number Registration: To include Nepali
advanced digital payments platforms. implementation of a new Digital Platform that included the introduction of its new banking app, the bank is well- residing abroad, registration on nBank is available using
a new Core Banking System (CBS), Omni Channel positioned to meet the changing needs of its customers international mobile numbers. Customers residing abroad
From digital invoicing and payment solutions to Manager, Business Intelligence (BI), and Business Process and remain competitive in an increasingly digital world. can not only operate their accounts remotely, but also
sophisticated treasury management systems, the suite Management (BPM). receive OTP & relevant SMS alerts from the bank, making
of digital banking products offered aim to empower nBank the customer experience much smoother.
businesses with heightened agility, efficiency, and The new Digital Platform allowed the bank to digitize nBank was launched internally as a virtual branch within
transparency in financial management. By embracing many of its processes, increasing its efficiency and Nabil Bank on 1 Baisakh 2079 (14 April 2022), where all 6. 24/7 Support & vKYC: Customers can reach out to the
digitalization, Nabil has been endeavoring to optimize providing new opportunities to deliver new banking accounts opened through online channels were booked Nabil Customer Care Centre at any time of day. Further,
corporate operations, streamline cash flow management, experiences to customers. The bank’s investment in under a separate nBank Sol. To facilitate online account customers seeking to activate their accounts through the
and foster stronger collaborations, thereby facilitating technology has resulted in a significant improvement in opening from abroad, it enabled international SMS and video KYC solution can also join the call anytime.
mutual growth and success. customer service, as well as enhancement of operational video KYC was made available 24x7. Further, the Bank’s
efficiency. digital loan product was revamped from a one-month 7. Online Payments Marketplace: With nBank, customers
With the objective of digitizing banking services for model available to employee accountholders to an can make online payments without logging in to the app,
corporate customers, Nabil has been seeking to elevate The CBS has enabled Nabil Bank to automate allowing Equated Monthly Installment (EMI) and Buy Now Pay Later and may choose to make payments using their digital
the digital banking experience by providing corporate it to streamline operations, reduce costs, and improve (BNPL) models that is now available to all eligible savings wallets as well, right from the nBank app.
clients with greater control over their transactional customer service. The Omni Channel Manager has accountholders and QR merchants. The upper ceiling of
flows. Other services include efficient corporate treasury enabled it to deliver a seamless experience across all loan limit has also been increased from NPR 100,000 to Besides these, the nBank app also integrates Nabil Bank
management solutions, and advanced reporting and channels, including online banking, mobile banking, and NPR 200,000. cards, enables cardless cash withdrawals from Nabil
reconciliation capabilities through the digital products. in-person banking. This has made it easier for customers ATMs, offers virtual e-commerce USD cards, allows
to conduct transactions, access their accounts, and obtain On 22 December 2022, Nabil’s mobile banking app QR payments, online fixed deposits, and informational
H. TREASURY support whenever needed. (Nabil SmartBank) was replaced by the nBank app to services such as interest rates, exchange rates, EMI
Nabil’s Treasury offers complete solutions for foreign provide customers with a neo banking experience, along calculator, etc.
currency transaction requirements of customers. The BI has enabled the bank to collect and analyze customer with a host of digital banking services previously not
bank is well equipped with real time transaction windows data to gain insights into their behaviors and preferences. available in Nepal’s banking sector. Some of the new The nBank, Digi, and IT teams collaborated with various
for transacting in global financial markets in order to This information has helped the bank to develop new features are: departments of the Bank to re-engineer many of the
support customer requirements. Extensive network of products and services that better meet their needs. The bank’s manual and paper-based processes in order
correspondent banking arrangements worldwide, with bank has also used BI to identify areas where it can 1. Instant Account Opening: Nepali citizens can open to cut turnaround time, human resource requirement,
well-known counterparties, support client requirements. improve its processes and reduce costs. a Bank account in under 30 seconds, minimizing the and paperwork. Through these processes, nBank has
This include transactions such as remittances to and turnaround time to onboard a customer. eliminated duplication of manual tasks and minimized the
from third countries, trade transactions like advising The BPM system has allowed the bank to automate need for human intervention.
and confirmation of Letter of Credits and Guarantees many of its processes, reducing the need for manual 2. Pre-approved Digital Loans: While Nabil Bank had
through foreign banks or for treasury operations of intervention resulting in streamlined operations. This has been offering transaction-based digital loans to payroll The nBank app team is already working on releasing
bi-lateral and multi-lateral foreign agencies. Nabil led to significant reduction in processing times, allowing accountholders on a one-month model before, the scope the next phase of the project: nBank web to create an
undertakes all foreign exchange transactions as permitted the bank to deliver faster services. of the product was expanded to include one-month, omnichannel experience to the customer.
by the regulations and offers competitive spot rates and EMI, and Buy Now Pay Later models for all savings
hedging solutions by undertaking derivative transactions As part of its digital transformation journey, Nabil Bank accountholders. Further, the teams are collaborating to add more products
like providing forward exchange rates in order to cover has also introduced a new banking domain with a new and services onto the nBank app to provide digital-
customers’ foreign exchange risks. Treasury also offers banking app to provide a new banking experience to 3. Digital Loan Against Fixed Deposits: Through nBank, first solutions to customers and reduce the workload
need-based and customized investment solutions to customers. The nBank app offers a range of features customers can apply and get loans against their fixed in the Nabil Bank branches. Not only are the existing
customers. and services, including instant account opening, real- deposit accounts maintained with Nabil Bank in an products expanding (for example, nRemit is expanding to
time fund transfer, bill payment, and access to a range instant. accommodate card-based, remittance aggregator-based,
Bullion Operation of financial products and services. The app has been 4. Card-Based Remittance (nRemit): Nabil Bank has and internet-banking based remittance to any bank in
Nabil is a wholesale importer of gold on consignment designed to be user-friendly, with a simple and intuitive leveraged its Electronic Payment Gateway to facilitate Nepal). New digital and hybrid loan products are also
basis and has developed a credible name in the domestic interface that makes it easy for customers to navigate and card-based remittance into Nabil Bank accounts. being developed to achieve greater success in the digital
bullion supply chain. The bank offers bullion import use. This initiative is a part of Nabil’s efforts to a leader in Customers residing abroad use their International banking arena.
services to merchants as well as licensed financial delivering new banking experiences and prepare itself for
institutions. making its services futuristic.

178 NABIL BANK LIMITED ANNUAL REPORT 2022/23 179

 Some examples of reduced turnaround time observed are: each and every branch office irrespective of the branch
1. Account onboarding: From 30 minutes to 30 seconds. where they opened an account.
2. Loan against fixed deposit: From one working day to
30 seconds. Extended Banking (EB) Services
3. Remittance: From 2-3 working days to 1 minute. Nabil offers “365 Days Banking Service” and “Extended
Banking Service” from selected branches to cater to the
J. OTHER SERVICES needs of customers who do not have time to visit a branch
Through the Any Branch Banking Services (ABBS), the during regular banking hours. Teendhara and Lalitpur
Bank has capitalized on its technology resources to offer (Kupondole) branches in Kathmandu Valley provides “365
uninterrupted transactions across a wide network of its Days Banking Service” and “Extended Banking Service”
branch offices, and ATM and POS machine networks. The while many more branches across the country provide
objective is to ensure that Nabil’s products and services “Extended Banking Service”.
are easily accessible to customers irrespective of location.
Clients can benefit from hassle free banking services from

NABIL ON SOCIAL MEDIA

As of 16 July 2023

DIGITAL NABIL financial service providers and networks (such as Visa,

The Bank has implemented an omni-channel digital Mastercard, fonepay, ConnectIPS, etc.) to provide
banking experience, revolutionizing the way it delivers seamless financial services within domestic banks and
FACEBOOK INSTAGRAM TWITTER LINKEDIN TIKTOK financial services to customers. This comprehensive Payment Service Providers (PSPs). This way, customers
1,117,231 22,380 4,138 9,096 13,800 approach ensures a seamless and consistent experience do not need to leave the nBank app for any financial
FOLLOWERS FOLLOWERS FOLLOWERS FOLLOWERS FOLLOWERS across various channels, including the mobile banking service, thereby enhancing customer engagement and
app, online platforms, ATMs, and physical branches. satisfaction. This flexibility not only caters to the diverse
The core of this digital banking stack lies in its ability to preferences of customers, but also reflects the bank's
integrate diverse channels to allow customers to transition commitment to delivering a customer-centric approach to
effortlessly between them. Whether customers prefer financial services.
accessing their accounts via a mobile app while on the
go, conducting transactions through the web, or visiting a The adoption of an omni-channel digital banking
physical branch for personalized assistance, the omni- platform positions the bank at the forefront of
channel system ensures a unified and interconnected technological innovation in the financial industry. This
experience. strategy not only meets the growing expectations of tech-
savvy customers but also ensures the institution remains
Using this platform, the bank has continuously innovated agile and responsive to the dynamic landscape of digital
various banking services and implemented them into banking.
nBank app. The nBank app is integrated with multiple

180 NABIL BANK LIMITED ANNUAL REPORT 2022/23 181

 Data-Driven Decision-Making The adoption of BPA technology by Nabil has ushered in because of its readiness in internal process automation. planning for a life event, or creating a budget – the goal
Business Process Automation (BPA) technology has a new era of efficiency, collaboration, and data-driven The bank also has embraced the concept of open is to ensure customers do not have to leave the nBank
become integral to the daily operations at the bank for decision-making. As the banking industry continues to banking, fostering collaborations with third-party platform for any activity related to finance.
streamlining and enhancing staff functions. The adoption evolve, leveraging BPA solutions will remain a strategic developers, and integrating external financial services
of BPA solutions has enabled bank to achieve greater imperative for institutions aiming to stay agile and into its platform. This provides customers with a To provide the envisioned ecosystem of digital banking
efficiency, accuracy, and responsiveness. responsive to the changing needs of clients and the comprehensive financial ecosystem, allowing them to products and services, Nabil is working to pioneer
One key aspect of the BPA technology is its role in market. manage multiple aspects of their financial lives at one Open Banking initiatives and tie up with a wide range of
automating routine tasks. Staff members can leverage place. financial and non-financial service providers. Creating a
automated workflows to handle repetitive and time- Digital Milestones highly integrated and inter-operable platform is key to the
consuming activities, allowing them to focus on more Nabil bank has been a pioneer in introducing new Further, by actively engaging with fintech startups, the digital banking future.
strategic and client-centric services. This has not only technology in the banking industry. The bank has bank has established partnerships and innovation labs
boosted productivity but has also reduced the risk of achieved key milestones in digital transformation of to explore emerging technologies and develop new Internally, the bank will continue to invest in Business
human errors in critical processes such as transaction the industry: from being the first computerized bank solutions. This approach has helped the bank remain at Process Automation, IT-related infrastructure, and periodic
processing and customer data management. in the country, to being the first to deliver a neo- the forefront of innovation. upgrades of systems.
Overall, BPA has helped the bank to monitor service Turn banking experience to customers. Along the way, the
Around Time (TAT) in order to ensure the services are bank introduced credit cards and achieved several Digital Future nBank Outcomes
delivered within the committed time. Through periodic other milestones. The bank's digital transformation has The bank is actively focusing on cultivating exclusive Prior to the launch of nBank, accounts opened online
monitoring, the bank can identify gaps in service delivery positioned it as a pioneer in various aspects, showcasing technological capabilities to expedite innovation, aiming were opened at Service Outlet Locations (SOLs) of
on time and take necessary actions to rectify them. its commitment to innovation and meeting the evolving to introduce state-of-the-art banking services using the respective branches. However, after the launch of nBank,
The monitoring and analytics capabilities of the BPA needs of customers. latest technologies. This strategic emphasis underscores all accounts opened online were booked in a separate
systems allows staff to track the performance of various its commitment to providing cutting-edge and modernized SOL: 98. Therefore, details of accounts opened prior to
processes. By having access to key performance indicators The bank has developed the first-ever neo-banking financial solutions. 14 April 2022 are not considered in the table below.
and analytics, employees can make informed decisions, mobile app (nBank app) that provides a seamless and
identify bottlenecks, and continuously optimize workflows user-friendly experience. This app offers a range of Through the omnichannel banking platform, the Bank
for better outcomes. This data-driven approach to services, from quick account onboarding to quick lending, aims to create a digital banking ecosystem, in which
decision-making is crucial in the dynamic and competitive combined with a host of banking services that can be customers can get all of their financial requirements met.
banking landscape. done without visiting the branches. This was possible These include saving, shopping, paying bills, investing,

182 NABIL BANK LIMITED ANNUAL REPORT 2022/23 183

 Table 74: Accounts Opened via nBank

PARTICULARS FY 2022/23 FY 2021/22 (3 MONTHS)

Total Number of Savings Accounts 17,942 2,915

Number of Active Savings Accounts 12,559 2,000
% Active Accounts 70% 69%
Volume (NPR m)
Volume of Savings Accounts 480.88 71.41
Volume of Fixed Deposit Accounts 277.45 5.75
Total Deposits (NPR m) 758.33 77.16

Table 75: Number of Users

In '000
PRODUCT 2022/23 2021/22 2020/21 2019/20 2018/19

nBank users
Registered Users 1,137,673 866,861 563,248 424,609 341,300
Connect IPS
Total Users 85,093 74,887 52,091 18,195 6,497

Table 76: Number and Volume of Transaction

2022/23 2021/22
NO OF VOLUME OF NO. OF VOLUME OF
TRANSACTIONS TRANSACTIONS TRANSACTIONS TRANSACTIONS
PRODUCT (NPR EQUIVALENT) (NPR EQUIVALENT)

nBank 18,118,493 116,615,568,691 12,987,952 72,212,119,755

POS 986,318 4,872,687,677 935,664 5,983,117,032
ATM 7,871,407 71,024,128,500 5,913,838 55,757,952,500
IPS 459,994 80,353,235,962 336,779 81,673,717,142
Connect IPS 2,262,021 248,665,544,916 1,453,408 123,935,242,129

2022/23 2021/22
NO OF VOLUME OF NO. OF VOLUME OF
TRANSACTIONS TRANSACTIONS TRANSACTIONS TRANSACTIONS
TRANSACTION DETAILS (NPR EQUIVALENT) (NPR EQUIVALENT)

nBank: Intra-bank Transfer (Nabil to Nabil) 1,911,918 29,633,601,858 1,371,531 20,134,668,968

nBank: Inter-bank Transfer (Nabil to Others) 3,688,012 64,785,602,543 2,181,015 37,654,156,704
QR Payment 3,982,552 12,820,671,552 1,984,548 7,222,177,779
Loading wallet 3,627,349 8,792,019,925 2,245,319 6,529,973,503
Mobile Top-up 4,908,662 583,672,813 5,205,539 671,142,800

184 NABIL BANK LIMITED ANNUAL REPORT 2022/23 185

 PRODUCTS AND SERVICES REMITTANCE

NABIL REMIT: INTERNATIONAL REMITTANCE PARTNERS OTHER REMITTANCE PAYMENTS:

DEPOSITS

Domestic Remittance n Western Union (200+ Countries) n IME Remit

SAVING DEPOSIT
International Remittance n Al-Sadd Exchange (Qatar) n GME Remit
LOCAL CURRENCY FOREIGN CURRENCY Outward Remittance: n Almana Exchange (Qatar) n City Express
n Payments through Convera n Muthoot Finance Limited (India) n E-sewa Money Transfer
Nabil General Saving Account Nabil USD Special Saving Account n Swift n Kookmin Bank (South Korea) n Nepal Remit
Nabil Gen Alpha Account Nabil USD Elite Saving Account n KEB Hana Bank (South Korea) n United Remit
Nabil Corporate Super Savings Nabil USD Saving Account n Doha Bank (Qatar) n IPAY Remit
Nabil Premium Remittance Savings Nabil NRN Saving Account n Axis Bank (India) n Samsara Remit
Nabil Gaurav Bachat Khata n CG Remit
Nabil Sahuliyat Khata
Nabil Insta Kit Account
OTHER SERVICES:
Nabil Gold Savings Account
nSaving Account
Nabil Smart Bank (Mobile Banking) Master Card Intl. Credit Card Bill Inward/ outwards
Nabil Dhukka Bachat Khata
Nabil Net (Internet Banking) Visa Intl. Prepaid Card Documentary Credits (Import / Export)
Nabil Bachat Yojana
QR Code Payment Visa Intl. Debit Card Documents Against Payment/ Collection
Nabil Corporate Staff Saving Account
Safe Deposit Locker Nabil iCard Guarantees
Nabil Bal Bachat Khata
Visa Electron Prepaid Card SWIFT- outward/ Inward Nabil Corporate Pay
Nabil Jestha Bachat Khata
Visa Electron Debit Card Manager’s Cheque (MC) Issuance Demand Draft
Staff Saving Account
Visa & Master Credit Card Advance Payment Certificate POS Services
Nabil Premium Nari Bachat Khata
Nabil Social Saving Security Saving
Nabil Premium Payroll Saving
Nabil Gold Payroll Saving
Nabil Shareholder’s Saving
Nabil Gen-N Account
Nabil Corporate General Saving
Nabil Corporate Premium Saving
Nabil Institutional Saving Account

FIXED DEPOSITS

LOCAL CURRENCY FOREIGN CURRENCY

Individual: Nabil NRN Fixed Deposit

n Regular Fixed Term Deposit n USD
n Nabil Karnali Kramik Fixed Deposit n GBP
n Nabil Remittance Fixed Deposit n AUD
n Nabil Akshaya Kosh Muddati Khata
n Smart Fixed Deposit Nabil FCY Fixed Deposit
n Nabil Choice Fixed Deposit n USD
n Cumulative Fixed Deposit n GBP
n Remittance Dhukka Muddati n AUD
n JPY
Institutional:
n Regular Fixed Term Deposit
n Nabil Akshaya Kosh Muddati Khata

186 NABIL BANK LIMITED

 LOANS

BUSINESS LOAN DIRECT DEPRIVED SECTOR SUSTAINABLE RETAIL LOANS LOAN AGAINST
BANKING

1. Working Capital Loans 1. General Loan Product 1. Nabil Kishan 1. Housing 1. Fixed Deposit
2. Term Loan i. Low Cost Housing Karja I. Housing Loan(Personal (Nabil Bank)
3. Export Finance ii. Commercial Agricultural loan 2. Nabil Residential Home Loan) 2. Fixed Deposit
4. Channel Financing (Without Interest Subsidy) Udhyamshil II. Housing Loan(Registered (Other Banks)
5. Nabil Sakchhyam iii. Small and Micro Enterprise Loan Karja Mortgage) 3. 1st Class Bank
Karja iv. Handicraft and Skill Based Guarantee
6. Nabil Nari Karja Enterprise Development Loan 2. Auto 4. Other Bank's
7. Nabil Sajilo Karja v. Self Employment Auto Loan I. Private Guarantee
8. Nabil Sajilo Express vi. Woman Entrepreuneur Loan II. Commercial 5. Government
Karja vii. Agri Business Loan III. Tractor Loan Securities
9. Institutional Auto Loan IV. Electric Vehicle 6. LCY Loan against
2. Interest Subsidized loan FCY Deposit
product 3. Mortgage Loan 7. Loan against
i. Commercial Agro and Livestock 4. Education Loan Shares
Loan 5. Personal Overdraft Loan 8. Gold Loan
ii. Educated Youths Self Employment (Collateral Based)
Loan 6. Nabil Fone Loan
iii. Project Loan for youths returning 7. Credit Card Loan
from Foreign Employment up to Rs 8. Nabil Personal Loan
1 Million (Professional Loan, Non
iv. Woman Run Micro Enterprise Loan Collateral based)
v. Loan for Under Privileged Caste/
Community/Marginalized
Communities for Business
Enhancement upto Rs 1 Million.
vi. Higher and Techno Vocational
Educational Loan upto 0.5 Million.
vii. Personal Home Construction Loan
for Earthquake Effected People up
to Rs. 0.3 Million.
viii. Youth Self Employment Loan
ix. Textile Industry Operation Loan
x. Technical Education and Vocational
Training Loan

188 NABIL BANK LIMITED ANNUAL REPORT 2022/23 189

 CRISP

INNOVATIVE
Innovation has always been
at the very core of what we
do and how we do it. For us
being innovative is business as
usual, in both internal processes
and external products. We will
constantly look for ways to better
the manner in which we do
things internally so that we can
design and deliver our products
and services in a better manner
externally. We are committed
to innovating our digital
capabilities, business process
and products in a manner
that has positive bearing on
environment and society.

190 NABIL BANK LIMITED ANNUAL REPORT 2022/23 191

 Segment reporting is a financial practice

INFORMATION
SEGMENT that involves breaking down a company’s
financial data into different business
segments. These segments can be
divisions, subsidiaries, or other distinct
parts of the company. As per NFRS 8
Operating segments, “an entity shall
disclose information to enable users
of its financial statements to evaluate
the nature and financial effects of the
business activities in which it engages
and the economic environment in which
it operates”. For reporting purpose
segments are divided into reportable
segment and other segment.

The bank has provided a comprehensive overview

of its segmental performances, detailing the
factors utilized in identifying the entity's reportable
segments in this section. This includes a thorough
description of the types of products and services
from which each reportable segment derives its
revenues. Additionally, the bank has meticulously
outlined the measurement of operating
segments’ profit or loss, assets, and liabilities,
offering a detailed and insightful analysis of its
segmental operations which is also compliant
with NRB Directives. Segmental performance has
been analyzed and presented on the basis of
geographical segments (Provinces).

192 NABIL BANK LIMITED ANNUAL REPORT 2022/23 193

 GENERAL INFORMATION

NPR
TOTAL

50,692,808,350
65,937,913,125
10,312,455,374

402,687,105,406
339,406,230,103
46,251,162,764
(28,502,320,274)
17,748,842,491
(503,209,614)
10,312,455,374

(5,426,269,148)
481,203,547,746
424,290,869,339
-
A. Basis of accounting for any transactions between Profit or Loss
(a) Factors that management uses to identify the NPR
reportable segments:
entity's reportable segments PARTICULARS AMOUNT
Interest earnings and foreign exchange gains/losses
The bank has adopted a “Management Approach” for Total profit or loss for reportable segments 10,312,455,374
generated while conducting business under different
identifying the operating segments i.e., seven segments Other profit or loss (staff bonus) -
segments are reported under the respective segment.

j. Other material non-cash items

905,403,467
818,994,952
45,159,363
1,104,367,109
(377,302,603)
727,064,506
(11,172,511)
45,159,363

6,122,538,424
8,739,933,409
(324,589,249)
9,277,141,631
9,277,141,631
-
SUDUR PASCHIM
based on the geographic locations of its offices in seven Elimination of intersegment profits
Equity and tax expense are not allocated to the individual
provinces. Interest earnings and foreign exchange gains/ Unallocated amounts: (1,031,245,537)
segments. For segmentation, all business transactions of Profit before income tax 9,281,209,837
losses generated while conducting business under
offices and business units located in a particular province
different segments are reported under the respective
are grouped together. All transactions between the units
segment. Equity and tax expense are not allocated
are conducted on an arm's length basis, with intra unit Assets

301,809,320
251,513,099
140,438,280
334,785,511
(97,298,863)
237,486,648
(3,723,489)
140,438,280

2,622,451,239
2,604,784,085
(6,106,637)
2,802,218,548
2,802,218,548
-
to individual segments. For segmentation purpose,

KARNALI
NPR
revenue and cost being nullified at the bank level.
all business transactions of offices and business units PARTICULARS AMOUNT

located in a particular province are grouped together. Total assets for reportable segments 481,203,547,746
B. Nature of any differences between the measurements
All transactions between the units are conducted on an Other assets -
of the reportable segment's profits or losses and the
arm's length basis, with intra unit revenue and cost being Unallocated amounts

2,838,938,078
2,825,152,887
888,811,075
3,847,225,793
(1,187,657,464)
2,659,568,328
(19,367,209)
888,811,075

19,326,149,206
29,727,779,025
(429,588,492)
32,091,135,276
32,091,135,276
-
LUMBINI
entity's profit or loss before income tax.
nullified at the bank level. Entity's assets 481,203,547,746
None

(b) Description of the types of products and

C. Nature of any differences between the measurements Liabilities
services from which each reportable segment NPR
of the reportable segment's assets and the entity's assets.
derives its revenues

2,449,157,706
2,152,264,437
839,089,603
2,840,270,591
(1,247,521,925)
1,592,748,666
(14,195,207)
839,089,603

17,582,472,030
14,597,181,911
(138,289,058)
15,826,204,569
15,826,204,569
-
GANDAKI
None PARTICULARS AMOUNT
The products and services offered by the bank can be
Total liabilities for reportable segments 424,290,869,339
broadly divided into the following categories:
D. Nature of any changes from prior periods in the Other liabilities -
measurement methods used to determine reported Unallocated amounts
n Financial Intermediation: The core business of deposit Entity's liabilities 424,290,869,339
segment profit or loss and the effect, if any
mobilization and lending activities along with other
38,329,777,029
54,321,897,118
7,297,609,952
30,726,836,505
(921,771,393) (22,818,275,710)
7,908,560,795
(412,091,972)
7,297,609,952

14,824,042,762 316,359,238,307
26,288,952,634 227,206,587,032
(3,247,228,603)
28,647,530,951 359,764,429,789
28,647,369,945 302,853,203,438
-
BAGMATI

The Bank previously used to have segmental division on

auxiliary banking services excluding treasury, cards and
the basis of business segment and geographical segment.
trade finance operations are reported under financial
The same has now been changed to geographical c. Information about products and services
intermediation.
segment on the basis of points of representation present NPR
Table 77: Profit or Loss, Assets and Liablilities (Operating Segments)

in seven provinces. PARTICULARS AMOUNT

n Treasury Operations: The bank's entire investment book
2,247,526,004
2,551,127,393
539,187,246
3,337,632,633

2,415,861,240
(19,768,127)
539,187,246

(490,084,445)
-
MADHESH

a. From financial intermediation 111,870,207,033

and foreign currency operations comes under treasury
E. Nature and effect of any asymmetrical allocations to b. From treasury operations 3,280,735,254
operations. Treasury is responsible for overall liquidity
reportable segments. c. From trade finance operations 1,271,504,832
management, open market operations and investment d. Cards, e-banking and alternate channels 208,274,356
None
portfolio.
3,620,196,745
3,016,963,239
562,159,854
4,060,044,624
(1,852,492,315)
2,207,552,308
(22,891,098)
562,159,854

25,850,213,438
30,241,012,008
(790,382,664)
32,794,886,982
32,793,595,932
-
KOSHI

Trade Finance Operations: The bank's entire trade b. Reconciliation of reportable segment revenues,
n d. Information about geographical areas
finance operations like LC and Guarantee are handled profit, or loss, assets, and liabilities NPR
by trade finance. PARTICULARS AMOUNT

a. Domestic 116,618,427,971
Table 78: Reconciliation of Reportable Segments
n Cards, e-banking and alternate channels: All the debit - Koshi 6,637,159,984
associates accounted for using equity method

and credit card issuance, merchant relationships, Revenue - Madhesh 4,798,653,397

NPR
e-banking, m-banking, and ATM management are - Bagmati 92,639,380,643
PARTICULARS AMOUNT
- Gandaki 4,601,422,142
i. Entity's interest in the profit or loss of

reported here.
a. Revenues from external customers

Total revenues for reportable segments 116,630,721,475 - Lumbini 5,664,090,966

g. Depreciation and amortization

Other revenues - - Karnali 553,322,419

MEASUREMENT AND RECONCILIATION
Elimination of intersegment revenues (65,937,913,125) - Sudur Paschim 1,724,398,419
f. Net Interest Revenue (b)
b. Intersegment revenues

Entity's revenues 50,692,808,350 b. Foreign 12,293,504

k. Impairment of assets
h. Segment profit/(loss)

a. Measurement of operating segment profit or

Total (a+b) 116,630,721,475
m. Segment liabilities
d. Interest Revenue

loss, assets, and liabilities

e. Interest Expense

l. Segment assets
c. Net Revenue
PARTICULARS

- Deposits
- Loans

194 NABIL BANK LIMITED ANNUAL REPORT 2022/23 195

 NABIL’S Shareholders are the owners and ultimate

SHAREHOLDERS
beneficiaries of the company. They
contribute the capital for establishment
and possess the key decision maker
role. Board of directors is chosen from
among the shareholders to perform the
strategic activities and to provide the
governance oversight over the business
of the organization. Shareholders get
the dividend from organization as a
return for the capital invested. The long
term goal of the organization should be
maximization of the value and wealth of
shareholders.

In this section of the report, the bank aims to

provide shareholders with a comprehensive
overview of key aspects related to the structure
of share capital. This includes information on
the composition of the board of directors, the
notification process for the Annual General
Meeting, protocols for shareholder inquiries
and communication channels, as well as details
regarding taxation on dividends and bonus shares.
The report also features a share price sensitivity
analysis as well as a shareholders' dashboard for
enhanced transparency. Additionally, the section
covers the mechanisms for redressal of investors’
complaints. .

196 NABIL BANK LIMITED ANNUAL REPORT 2022/23 197

 STRUCTURE OF SHARE CAPITAL NOTICE OF ANNUAL GENERAL MEETING Nabil Investment Banking Ltd. Gain or loss arising from disposal of shares under
Table 79: Shareholding Structure The 39th Annual General meeting (AGM) of the bank Naxal, Narayan Chaur, Kathmandu, Nepal Section 37 of the Act shall be the amount that is
will be held on 28 December 2023 at 10:00 am at Army Tel: 977-1-4411604, 4411733 determined by reducing the amount incurred while
SHAREHOLDERS SHARE STRUCTURE % HOLDING
Officers Club situated at Bhadrakali, Kathmandu, Nepal. Fax: 977-1-4410554 acquiring the shares with the amount that is received at
Ordinary shareholders 112,448,822 41.56%
Following resolutions will be discussed in the meeting: Email: [email protected] the time of its disposal. The amount of disposal in case
NB International Ltd. 106,706,242 39.44%
Ordinary Resolution Web: www.nabilinvest.com.np Nabil Bank’s shares are in the stock market shall be the
IFIC Bank PLC 21,017,264 7.77%
Rastriya Beema Company Ltd. 20,636,986 7.63%
net amount received from the buyer less brokerage and
Muthoot Finance Ltd. 1,198,531 0.44% 1. To approve Director’s Report 2022/23 (2079/80). TAXATION ON DIVIDENDS other costs incurred during the transaction. The costs
Nepal Stock Exchange Ltd. 712,340 0.26% 2. To approve Balance Sheet as of 16 July 2023, Profit Taxation on Dividends (Cash and Bonus Dividends) incurred for the shares by the way of an acquisition
MAW Enterprises Pvt Ltd. 582,248 0.22% and Loss Account and Cash Flow Statement for the Pursuant to Section 88(2) of the Income Tax Act 2002, through stock exchange shall be the amount paid to the
Others 7,267,534 2.68% year ended thereat, together with Auditor’s Report. the tax on dividend received by the shareholders of Nabil beneficiary plus all costs attributable to the acquisition.
Total 270,569,967 100.00% 3. To approve consolidated books of accounts i.e. Bank is subject to withholding tax at the rate of 5%. The Further, the costs incurred for the shares by the way of
including books of accounts of Bank’s subsidiary tax is final withholding tax as per Section 92(1) (a) of the transfer from the deceased person shall be the market
Nabil Investment Banking Ltd and Nabil Stock Dealer Act and need not require further assessment while filing value prevailing immediately before the death of the
REPRESENTATION IN THE BOARD OF DIRECTORS
(Previous Nabil Securities Limited) for the FY 2022/23 annual tax return under Section 96. transferor. The tax being withheld on the gains arising
Representation of the promotor group
(2079/80). from disposal of shares is an advance tax and the tax
1. Mr. Upendra Prasad Paudyal
4. To approve cash dividend @ 11.00% Capitalization of profits is deemed as distribution under credit is available at the time of filing annual tax returns.
2. Mr. Nirvana Kumar Chaudhary
(Rs 2,976,269,640.21) of the paid-up capital as Section 53(1) (b) of the Act and hence, issuance of bonus
3. Mr. Malay Mukherjee
proposed by the Board. shares by the bank from the profits earned (excluding
4. Mr. A.R.M. Nazmus Sakib
5. To appoint the auditor for the Fiscal Year 2023/24 dividend received) is subject to withholding tax at the rate
(2080/81) and to fix the auditor’s remuneration for the of 5% under Section 88(2).
Representation of the public shareholder group
same.
1. Mr. Ananta Poudyal
Capital Gains on Disposal of Shares
2. Mr. Pravin Tibrewala
SHAREHOLDER INQUIRIES AND COMMUNICATION Pursuant to clause (a) of Section 95A (2) of the Income Tax
Act, 2002 (amended by subsequent Finance Ordinance),
Independent Director
Communication the gain on disposal of shares listed at SEBON computed
Mrs. Asha Rana Adhikary
Nabil regularly communicates with shareholders, as per Section 37 of the Act is subject to withholding tax.
customers, and the general public through print media Shares of Nabil Bank are listed both at SEBON and the
SHAREHOLDER’S PROFILE
(national dailies) and electronically through bank’s Nepal Stock Exchange for the purpose of public trading
As at balance sheet dated (16 July 2023), the Bank’s
official website www.nabilbank.com. The information on and therefore the gain on disposal of shares is subject to
Share Registrar, M/s Nabil Investment Banking Ltd. has
AGM including both ordinary and special agenda items withholding tax in accordance with clause (a) of Section
recorded following details of shareholders:
to be discussed at the meeting is published in national 95A (2).
Table 80: No of Shareholders and Shareholding daily newspapers 21 days prior to the date of the AGM.
Range Similarly, interim financial highlights are published
within the stipulated deadlines prescribed by SEBON
SHAREHOLDING NO. OF TOTAL SHARES
RANGE SHAREHOLDERS HELD and the central bank. These statements along with Basel
Disclosures as prescribed by Point 7.4(b) of Capital
1-100 100,785 3,742,010
Adequacy Framework 2015 under Directive 1 of NRB
101-500 66,207 15,164,433
501-1,000 15,486 10,882,267
Unified Directives are posted in the bank’s website.
1,001-2,500 9,528 14,591,831
2,501-5,000 3,358 11,944,327 Inquires
5,001-10,000 1,449 10,041,848 All inquiries related to the shareholders of Nabil Bank
10,001-25,000 1,087 16,424,279 on the share registrar viz., maintenance of shareholder’s
25,001-50,000 235 7,872,100 record, share transfer including domestic transfer in
50,001-100,000 92 6,256,559 case of death of a shareholder, replacement of lost
Above 100,000 67 173,506,943 share certificates, pledge of shares, dividend warrants/
Fractional shares 16,958 143,370 bonus shares declared and ratified by the AGM, payment
Total 215,252 270,569,967
against dividend/lost warrant, opening of Demat account,
dematerialization of shares, etc. should be sent to the
STOCK SYMBOL
address given below:
Nabil Bank’s shares are traded on Nepal stock exchange
Ltd. (NEPSE) with stock symbol NABIL.

198 NABIL BANK LIMITED ANNUAL REPORT 2022/23 199

 *All the information necessary to form a rational investment decision may not be presented here.
The Bank recommends understanding all the fundamentals prior to investing.

SHAREHOLDER'S DASHBOARD

This dashboard summarizes all the relevant figures and ratios that would be relevant from a shareholder's point of view.

EPS ROA Price Earning Ratio Net Assets

in NPR/Share in % in % NPR in Billion
2.11

57
1.71 53
50.57 1.58 44.21
40.48
1.42
36.16 33.57 1.20 34
25.31
23.67 26
21.15 23
18.64
15.82

2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23

ROE Dividend Payout Ratio Shareholders Fund Earning Yield

in % in % NPR in Billion in %

160.95
17.76

15.19 6.32
13.61 113.18 57
11.66 53
97.51 4.73
9.78 3.95
67.24 34
46.47 26 2.47
23 2.26

2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23

SHAREHOLDER'S DASHBOARD contd.

200 NABIL BANK LIMITED ANNUAL REPORT 2022/23 201

 SHAREHOLDER'S DASHBOARD contd.

Distributable Profit per Share Distributable Profit Nabil Share Prices Vs NEPSE Index
NPR NPR in Billion

41.45 4.07
3.74
2535
3.91 2344
29.40 1910 2097.09
1815 1364.34
1582.67
2.91 2.90 2001.53
28.77 1153
1718.15 1212.36 1274.86
1523
12.70 1359
11.78
1036 961 903
800 765 824
518 599.2

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23
NEPSE Index (Points) Nabil Index (NPR)

Book Networth per Share Dividend History NEPSE Index Vs Banking Sub Index
NPR % Points
35.26

38

257 256 2535

33.6
33.5

251
34

2344
30

232 1910
210 1815 1964.26
1523 1344.85
1153
22

18.5

1023.56 1149.73 1207.09

1573.73
1418.81
1359
11.5
12

11
11

945 831.35 903

800 765 824
505 599.2
4.4
1.76

2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23

2018/19 2019/20 2020/21 2021/22 2022/23 2018/19 2019/20 2020/21 2021/22 2022/23
Banking Sub Index NEPSE Index
Bonus Cash Total

202 NABIL BANK LIMITED ANNUAL REPORT 2022/23 203

 REDRESSAL OF INVESTORS' COMPLAINTS to the Central GHO ([email protected]). Further, Annual General Meeting, dividend distribution The bank’s Chairman and the CEO addressed all of
Investor confidence is critical for the success and stability grievances lodged at [email protected] through our and other generic matters: the grievances and thanked shareholders for their
of any financial institution. As such, addressing investor’s website are jointly handled by the representative assigned n Suggest conducting AGM and distributing dividends suggestions. Responding to the suggestions Mr. Upendra
complaints, their advice and suggestions in a timely and by COO as well as Team Leader(TL), Customer Care before Dashain next year. Prasad Poudyal, Chairman, thanked the shareholders
effective manner is crucial for maintaining this confidence. Center(CCC) who are responsible for handling customer n Requested the management to function to match the and stated that all suggestions, queries and questions
Investors seek assurance that their investments are complaints. expectations of shareholders. received at the AGM would guide for the bank in the
safe and that their grievances are addressed promptly n Requested management to function in accordance with future, as much as possible. He added that the directors
and fairly. Nabil acknowledges the significance of the Apart from the grievances on the service of the bank, the bank slogan Darilo Bhabishya ko Laagi Digopan and management of the bank were committed to improve
grievance redressal and has been actively addressing shareholders raise concerns about value addition, (Sustainability for a Resilient Future). on shortcomings. Various complex factors, including
them in a timely manner and to the satisfaction of operations, and how the bank has been performing. n Requested to make space for shareholder participation the unexpected liability or taxes generated this year,
customers. Following are some shareholder concerns expressed at in various programs of the bank. government expenditure and the impact on the ability
the 39th AGM of the bank: n Requested continuation of the program to honor senior of contractors to pay their debts, the overall reduction in
In line with the regulatory requirement, every branch citizens who are shareholders at the AGM, and inquired the ability of customers to pay their debts, the economic
office has a customer service desk to provide information Non-Performing Loans (NPA), Non-Banking about why the practice was discontinued. recession, the increase in loan loss provision and the
and for handling grievances. Further, each bank branch Assets and bad debt n Suggested paying more attention to market research, impact of COVID-19 had influenced the performance
maintains a suggestion box for obtaining customer n Suggested that the bank should focus on how to reduce opening of contact offices abroad and to complete the of the bank, Mr. Poudel said. He also expressed hope
suggestions/feedback. The suggestion box is opened on NPA and how to increase profit distribution. audit on time. that the situation would improve in the coming year
a monthly basis in the presence of respective Operation n Stated that the increased NPA affected shareholder's n Suggested that bonus share should be given instead of and appealed for patience among shareholders as the
In-charge (OI)/Branch Manager (BM) of the branch. The return and urged the bank to work towards reducing cash dividends. dividend was reduced this year due to circumstances
bank has published the names of the grievance handling such loans and reducing the loan loss provisions. beyond the bank’s control.
officers on its website along with his/her name, title, n Recommended that the list of NPAs be published in the Other matters:
contact number and the email address. annual report from next year. n Expressed the view that the shareholders were affected Mr. Gyanendra Prasad Dhungana, CEO, responded to
n Inquired about the bad loans when merging/acquiring by reasons such as liquidity, economic recession, lack the questions of shareholders focused on operations
The bank also has a hotline number for filing grievances. other BFIs. of coordination between various regulators and the of the Bank. He said various unavaoidable reasons
The bank’s website also provides the link to the NRB’s n Inquired about the strategy for recovering bad loans. government. including economic, political, and social had caused the
grievance handling portal i.e. [email protected]. n Suggested focus on improving asset quality disposing/ n Suggested the conservation of the land of bank in entire banking sector to face unprecedented challenges
The regulatory requirements for handling customer cleaning NBA/NPA and increasing non-funded income Bishalnagar and to build a corporate office. the past year. He also expressed hope that this situation
suggestions/grievances are fully complied at all times. (off balance-sheet income). n Suggested expansion of the Nabil School of would gradually improve. He added that shareholder
Shareholders can also submit their suggestions and n Suggested prioritizing asset quality improvement, Social Entrepreneurship to encourage the people suggestions would guide the operations and thanked
grievances in the same manner. reducing NPA to below 1% through a proper strategy going abroad to stay in Nepal and engage in them, and the Board of Directors and management
and writing back losses. entrepreneurship. committee for their guidance.
The bank uses a three-layered channel for redressing n Suggested that bank should concentrate on reducing n Suggested improvements in the income from LC
customer queries, complaints, feedback and suggestion. the cost of funds by properly managing the Non- payment and remittance.
The first level includes the various touch points Banking Assets and its collection. n Suggested reducing the number of meetings of the
like Hotline, Website, Email (www.nabilbank.com, n Suggested including details of Non-Banking Assets Board of Directors and the audit committee.
[email protected], [email protected] and the principal and interest of unwritten loans in the
link in our website and [email protected]), social annual report.
media (Facebook, Twitter, Viber, LinkedIn, Pinterest and n Suggested focusing on providing loans to small
Instagram) and Chat-bot on Website and Facebook, and borrowers rather than only some large corporate
Suggestion Boxes at the branch level. borrowers.

The second level includes notifications to respective Annual report:

department representatives and operations in-charge at n Suggested that the list of main bad debtors should be
branches who are responsible for grievance handling at published in the annual report.
the branch Level. n Suggested that the details of bargain purchase should
be included in the annual report.
The third layer includes the escalation of unaddressed
or unattended grievances to the Central Grievance
Handling Officer i.e. COO. Customers can also escalate
unaddressed or unattended cases at the lower levels

204 NABIL BANK LIMITED ANNUAL REPORT 2022/23 205

 SHARE PRICE SENSITIVITY ANALYSIS NEPSE Index, Consumer Price Index, Interbank Rate,
Share Price Sensitivity Analysis of the bank is performed Deposit, Broad Money, PE Ratio and Return on Assets.
using multiple regression analysis. This is merely a
theoretical exercise performed on limited number of HYPOTHESIS
variables that the bank team deems are relevant. The H1: There is significant impact of NEPSE Index on Market
results could vary if other variables are included. This Price of Nabil Bank.
multiple linear regression exercise attempts to predict the H2: There is significant impact of Consumer Price Index
sensitivity of share price of the bank to the variables laid on market price of Nabil Bank.
down below. H3: There is significant impact of Inter Bank Rate on
market price of Nabil Bank.
MODEL ADOPTED FOR ANALYSIS H4: There is significant impact of deposit on market price
Market price of Nabil Bank = B0 + B1NEPSE Index + B2 of Nabil Bank.
Consumer Price Index + B3 Interbank Rate + B4 Deposit H5: There is significant impact of Broad Money on
+ B5 Broad Money + B6 PE Ratio + B7 ROA market price of Nabil Bank.
Where H6: There is significant impact of PE Ratio on market
NEPSE Index = Capitalization weighted index of all price of Nabil Bank.
companies listed in Nepal Stock Exchange H7: There is significant impact of ROA on market price of
Consumer Price Index = Inflation rate of Nepal Nabil Bank.
Interbank Rate = Policy rate of interest
Deposit = Deposit of Nabil Bank Ltd. RESULT
Broad Money = Broad Money supply of Nepal Table 81: Regression Analysis of Share Prices of
PE Ratio = Price to earnings ratio of Nabil Bank Ltd. the Bank against Selected Variables
ROA = Return on assets of Nabil Bank Ltd. REGRESSION STATISTICS

Multiple R 0.96
SAMPLE
R Square 0.93
Time series data of 44 quarters beginning from Q1 of Adjusted R Square 0.92
FY 2011/12 to Q4 of FY 2022/23 has been taken for Standard Error 165.25
following parameters: Market price of Nabil Bank Ltd., Observations 44.00

ANOVA

DF SS MS SIGNIFICANCE F

Regression 7.00 13,307,689.91 1,901,098.56 00.00

Residual 36.00 983,128.42 27,309.12
Total 43.00 14,290,818.33

COEFFICIENTS STANDARD ERROR T STAT P-VALUE

Intercept 925.49 576.13 1.61 0.12

NEPSE Index (0.02) 0.18 (0.11) 0.91
Consumer Price Index 13.77 15.90 0.87 0.39
Interbank Rate (28.72) 17.88 (1.61) 0.12
Deposit 2.31 1.19 1.94 0.06
Broad Money (M2) (0.36) 0.12 (2.92) 0.01
PE Ratio 39.65 8.05 4.92 0.00
ROA 70.81 144.70 0.49 0.63

As is evident from the above results the overall regression was statistically significant since the R square is 0.93 which
suggests that 93% variation in market price of the bank shares is explained by independent variables.

At 10% confidence interval, alternative hypothesis H4, H5 and H6 can be accepted. This suggests that market price of
the bank shares is significantly affected by deposit, Broad Money, and PE Ratio. However, at 10% confidence interval,
alternative hypothesis H1, H2, H3 and H7 can be rejected. This suggests that market price of the bank is not significantly
affected by NEPSE Index, Consumer Price Index, Interbank Rate and ROA. The result of the analysis merely provide insights
into significant predictors of share prices. The results could significantly vary if the sample size and/or introduction/deletion
of the independent variables.
[Please note that the Bank does not recommend or encourage investors to transact shares of the bank based on the above statistical analysis]

206 NABIL BANK LIMITED ANNUAL REPORT 2022/23 207

 CRISP

SYNERGISTIC
Teamwork is in the DNA of
Nabil Bank. We understand
that the synergy and motivation
of team members are what
gives us sustainable competitive
edge. With that as the focal
point, we keep surging ahead
together in solidarity and with
uncompromising dedication.
Each of us realizes that while
alone we may be able to go
faster, together we will go
further.

208 NABIL BANK LIMITED ANNUAL REPORT 2022/23 209

 CLASSIFICATION
DISCLOSURE OF
ACCOUNTING
POLICIES
AND VALUATION
OF INVESTMENT AS PER
REGULATORY GUIDELINE

STANDARDS
The bank has diversified its investment portfolio
across various assets, encompassing associates,
subsidiaries, and other investment securities. The
classification and valuation principles adopted in
recognizing each of the statements have been laid
down in the paragraphs below.

ASSOCIATES
The group had 25% shareholding in NADEP
Laghubitya Bittiya Sanstha Ltd., an associate,
during the reporting period. According to the
standard, associates are defined as entities where
the group holds 20% of the voting power, either
directly or indirectly through a subsidiary, exerting
significant influence—though not control—over
the variable return by influencing financial and
operational policies.

Investments in associate entities are accounted

for using the equity method (equity-accounted
investees), initially recognized at cost as mandated
by Nepal Accounting Standards – NAS 28 on
"Investments in Associates and Joint Ventures".
Consequently, the group maintains its associate
investments at cost, adjusted for post-acquisition
changes in its share of the associate’s net assets,
making accounting policy adjustments to align
with those of the Group as necessary.

At each reporting date, the Group assesses

whether there is objective evidence of impairment
in the investment in the associate. If such evidence
exists, the Group calculates the impairment
amount as the difference between the associate's
recoverable amount and the carrying value,
charging it to profit or loss as a net impairment
charge / (reversal) for loans and other assets.

210 NABIL BANK LIMITED ANNUAL REPORT 2022/23 211

 SUBSIDIARY selling a security within one year of acquisition and are Mutual Funds ii. Cash Flow Characteristics Test: The contractual terms of
The bank has investments in Nabil Stock Dealer and not permitted to classify them as trading assets. These The bank also engages in investments in mutual funds, the financial asset result in cash flows solely from principal
Nabil Investment Banking Limited, holding 100% and investments can be further segmented into Unquoted, which are investment funds generated by pooling capital and interest payments on specified dates, related to the
60% stakes, respectively. Consequently, these investments Quoted, and Mutual Funds categories. from numerous investors for the acquisition of securities. outstanding principal amount. Interest, within the context
are classified as subsidiaries of the bank, in accordance To ascertain the fair value of these funds, the bank of the contractual cash flow test, serves as compensation
with the provisions outlined in NFRS 3 Business Quoted Securities employs two distinct methods in accordance with the for the time value of money and the credit risk associated
Combination and NFRS 10 Consolidated Financial These securities constitute listed securities traded within applicable guidelines of NFRS 13. For mutual funds listed with the outstanding principal amount during a specific
Statement. Subsidiaries are investees that are controlled the over-the-counter market at the Nepal Stock Exchange on NEPSE, the bank references the last traded rate of the period.
by the Group. Control is achieved when the Group (NEPSE). The valuation of these securities is readily funds. Conversely, for closed-end mutual funds, a Level 3
is exposed, or has rights, to variable returns from its accessible, being actively traded on NEPSE, thereby valuation approach is utilized, specifically employing the All debt instruments meeting these aforementioned
involvement with the investee and has the ability to affect qualifying as Level 1 data for fair value measurement as Net Asset Value (NAV) Method for calculation. conditions are subsequently measured at amortized cost
the returns of those investees through its power over the per NFRS 13. Conversely, the fair valuation of promoter using the effective interest rate (after deducting any write-
investee. shares of Quoted Securities employs a Level 3 mark-to- Investment in Securities and Bonds downs for impairment), unless the Group designates an
market approach, referencing the ordinary price of the The bank has diversified its investments across various instrument at fair value through profit or loss (FVTPL).
The financial statements distinguish the subsidiaries same company, with adjustments made as necessary securities and bonds, including Debt Securities, As of the reporting date, the Group did not hold any
separately within the Group and at the bank. In the bank's to reflect alterations in market conditions or specific Government Bonds, Government Treasury Bills, Nepal financial assets designated as FVTPL.
Statement of Financial Position, subsidiary investments circumstances. Rastra Bank Deposit Instruments, and other bonds. These
are displayed independently under the asset section as investments are recognized and valued in accordance Any gains or losses on financial assets measured at
“investment in subsidiary” recognized initially at cost. Unquoted Securities with NFRS 9 guidelines. They are recorded using an amortized cost, not involved in a hedging relationship,
Conversely, the NFRS requires the Group to consolidate Unquoted shares denote ownership stakes in a company amortization model, where financial assets are valued at are recognized in profit or loss through the amortization
the assets, liabilities, equity, income, expenses, and that are not traded on a recognized stock exchange. amortized cost when both of the following conditions are process upon de-recognition, impairment, or
cash flows of the parent entity with its subsidiaries. This These shares present a greater challenge in valuation met: reclassification to fair value. The amortization is depicted
consolidation process involves removing the parent's compared to publicly traded shares, as they lack a readily as interest income, while any impairment loss is presented
investment and equity stake in subsidiaries, as well as available market price. Consequently, their valuation often i. Business Model Test: The primary objective of the as an impairment charge/(reversal) in the profit or loss
fully eliminating intragroup assets, liabilities, income, necessitates the application of various methodologies and Group's business model is to retain the financial asset statement.
expenses, and cash flows, a practice also adhered to by assumptions, particularly in the context of determining to receive contractual cash flows, rather than selling
the bank. their fair value for accounting purposes under NFRS 13. the instrument before its contractual maturity to realize
changes in fair value.
INVESTMENT SECURITIES One prevalent approach involves deriving their fair
The bank's investments in securities are classified and value from the net worth per share, as computed by
documented in line with NFRS 9 Financial Instrument, financial institutions based on the most recent available
paragraph 5.7.5, which states “At initial recognition an information pertaining to such securities. This method Table 83: Investment in Equity measured at FVTOCI NPR

entity may make an irrevocable election to present in entails assessing the fair value of the company's net GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
other comprehensive income subsequent changes in assets on a per-share basis. The Net Asset Value (NAV)
the fair value of an investment in an equity instrument is determined by deducting the company's liabilities from Equity Instruments
within the scope of this NFRS that is not held for trading.” its assets, then dividing the resultant figure by the total Quoted Equity Securities 4,989,309,816 4,929,672,462 4,963,042,499 4,865,931,885
This classification directive is prescribed by both the number of shares outstanding. This method of valuation is Unquoted Equity Securities 956,775,241 711,401,065 956,775,241 711,401,065
Accounting Standards Board (ASB) Nepal and the Nepal categorized as level 3, denoting a fair value measurement Mutual fund units 1,146,151,707 1,039,103,991 1,106,163,443 1,039,103,991
Rastra Bank (NRB), whereby banks are prohibited from that relies on significant unobservable inputs. Total 7,092,236,764 6,680,177,518 7,025,981,183 6,616,436,941

Table 82: Investments in Subsidiaries

NPR Table 84: Investment Securities measured at Amortized Cost NPR

BANK GROUP BANK

2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS COST FAIR VALUE COST FAIR VALUE
Debt Securities 1,877,333,764 123,093,000 1,627,633,764 -
Government Bonds 36,350,986,240 37,222,637,772 36,350,986,240 37,222,637,772
Nabil Investment Banking Ltd. 278,000,000 278,000,000 278,000,000 78,000,000
Government Treasury Bills 26,445,395,731 17,624,079,681 26,445,395,731 17,624,079,681
(1,944,000 ordinary shares @ NPR 100 paid up including
Nepal Rastra Bank Bonds - - - -
624,000-unit bonus shares)
Nepal Rastra Bank Deposit Instruments 5,002,988,025 - 5,002,988,025 -
Nabil Stock Dealer Ltd. 1,520,000,000 1,520,000,000 1,520,000,000 220,000,000
Other 340,596,548 1,546,894,410 - 991,890,000
(15,200,000 ordinary shares @ NPR 100 paid up)
Less: Specific Allowances for Impairment - - - -
Total 1,798,000,000 1,798,000,000 1,798,000,000 298,000,000
Total 70,017,300,307 56,516,704,863 69,427,003,759 55,838,607,453

212 NABIL BANK LIMITED ANNUAL REPORT 2022/23 213

 THE FAIR VALUE MEASUREMENT like stock exchanges are the primary basis. This level COMPLIANCE STATEMENT OF APPLICABLE
The NFRS defines the fair value as the price that would be offers high reliability and transparency, making it the most REPORTING STANDARD
received to sell an asset or paid to transfer the liability in preferred source of fair value. Examples include quoted The table provided below serves as a comprehensive
an orderly transaction between market participants at the market prices and benchmark yields for government guide to the Nepal Financial Reporting Standards (NFRS)
measurement date. When measuring fair value an entity bonds. or Nepal Accounting Standards (NAS) that are applicable
must take into account the characteristic of the asset or to the various accounting policies outlined. Additionally,
liability such as the condition and location of the asset Level 3 Fair value measurement: the table includes additional notes where available,
and any restrictions on sale or use of the asset. Level 3 fair value measurement in NFRS 13 is the offering a more detailed breakdown and facilitating a
lowest level in the hierarchy. It uses unobservable better understanding of these standards in practice.
Level 1 fair value measurement: inputs, requiring significant adjustments and subjective
Level 1 fair value measurement under NFRS 13 is judgments. Methods include NAV models and discounted Table 86: Applicable Reporting Standards NPR
the highest level in the hierarchy. It uses observable cash flow analyses. This level is highly subjective, relying
PRINCIPLE NOTE ACCOUNTING POLICY TOPICS NFRS/ NAS ADDITIONAL NOTES
inputs from active markets without requiring significant on management's judgment TO FINANCIAL STATEMENTS
adjustments. Quoted prices for identical assets in markets
3 Significant Accounting Policies
Table 85: Fair Value Measurement 3.1 Basis of measurement
3.2 Basis of consolidation NFRS 3, NFRS 10, NAS28
Group - at 16-Jul-2023 (2080 Ashadh 31) NPR 3.3 Cash and cash equivalent 4.1
LEVEL 1 LEVEL 2 LEVEL 3 3.4 Financial assets and financial liabilities NFRS 9 5.3
Other Trading Assets 92,810,034 - - 3.5 Trading assets NFRS 9 4.5
- Equity instruments - quoted 92,810,034 - - 3.6 Derivative assets and derivative liabilities NFRS 9 4.4, 4.19
- Equity instruments - not quoted - - - 3.7 Property and equipment NAS 16 4.13
- Mutual Funds Units - - - 3.8 Goodwill and intangible assets NAS 38 4.14
Equity Investments measured at FVTOCI 1,525,709,047 - 5,566,527,717 3.9 Investment property NAS 40 4.12
- Equity instruments - quoted 379,557,340 - 4,609,752,476 3.10 Income Tax NAS 12 4.41
- Equity instruments - not quoted - - 956,775,241 3.11 Deposits, debt securities issued and subordinated liabilities 4.17, 4.20, 4.24, 4.25
- Mutual Funds Units 1,146,151,707 - - 3.12 Provisions NAS 37 4.22
Total 1,618,519,081 - 5,566,527,717 3.13 Revenue recognition NFRS 9/NFRS 15 4.29, 4.31, 4.33, 4.34, 4.39
3.14 Interest expense 4.30
3.15 Employee benefits NAS 19 4.23.1 to 4.23.7
Bank - at 16-Jul-2023 (2080 Ashadh 31) NPR 3.16 Leases NFRS 16 4.28.4
3.17 Foreign currency transactions, translation, and balances NAS 21
LEVEL 1 LEVEL 2 LEVEL 3
3.18 Financial guarantee and loan commitment 4.28.1, 4.28.2
Other Trading Assets - - - 3.19 Share capital and reserves 4.26, 4.27
- Equity instruments - quoted - - - 3.20 Earnings per share NAS 33
- Equity instruments - not quoted - - - 3.21 Segment reporting NFRS 8 5.4
- Mutual Funds Units - - - 3.22 Impairment of Non-Financial Assets NAS 36
Equity Investments measured at FVTOCI 1,459,453,466 - 5,566,527,717 3.22 Statement of cash flows NAS 7
- Equity instruments - quoted 353,290,023 - 4,609,752,476
- Equity instruments - not quoted - - 956,775,241
- Mutual Funds Units 1,106,163,443 - -
Total 1,459,453,466 - 5,566,527,717

Subsidiary - at 16-Jul-2022 (2079 Ashadh 32) NPR

LEVEL 1 LEVEL 2 LEVEL 3

Other Trading Assets 92,810,034 - -

- Equity instruments - quoted 92,810,034 - -
- Equity instruments - not quoted - - -
- Mutual Funds Units - - -
Equity Investments measured at FVTOCI 66,255,581 - -
- Equity instruments - quoted 26,267,317 - -
- Equity instruments - not quoted - - -
- Mutual Funds Units 39,988,264 - -
Total 159,065,615 - -

214 NABIL BANK LIMITED ANNUAL REPORT 2022/23 215

 EXTENT OF COMPLIANCE WITH NATIONAL To maintain consistency, the group ensures uniform for post-acquisition changes in its share of the associate's recognized in profit or loss, except for assets held in
STANDARDS (NAS/NFRS) accounting policies across all members, adjusting any net assets. The accounting policies are aligned with the a hedging relationship. FVTPL is determined by the
This section elaborates on the principles established by differences found in a subsidiary's financial statements group's policies where necessary. When the group loses investment motive, such as assets acquired for short-term
the standard as they relate to the table mentioned earlier. to align with the group's policies for similar transactions significant influence over an associate, it stops using the selling or portfolio management for short-term profit.
It provides an in-depth exploration of the degree to which and events. Income and expenses of a subsidiary are equity method and follows the group's policy for financial
the bank has adhered to the prescribed Nepal Accounting incorporated into the consolidated financial statements instruments regarding any remaining investments. Fair value through other comprehensive income (FVTOCI):
Standards (NAS) or Nepal Financial Reporting Standards from the date of gaining control until the loss of control, Gains or losses from disposal are recognized in profit Certain equity investments are irrevocably measured
(NFRS). By delving into the details, this section offers a with figures based on the assets and liabilities recognized or loss. At each reporting date, the group assesses if at FVTOCI, not for trading. Only dividend income is
thorough analysis of how the bank has implemented and at the acquisition date. For instance, post-acquisition there is evidence of impairment for its investment in the recognized in profit or loss. Unrealized gains or losses on
complied with the stated standards outlined in the table. depreciation expenses are calculated using the fair values associate. If impairment exists, the group calculates it these investments are recognized in other comprehensive
of depreciable assets recognized during the acquisition. as the difference between the recoverable amount and income. When such gains are realized upon sale, they
NFRS 3 (BUSINESS COMBINATION) the carrying value, recording it in profit or loss as a net are not reclassified to profit or loss but directly affect
Non-controlling Interest impairment charge/(reversal) for loans and other assets. equity. Taxes and employee bonuses related to these gains
It sets out principles for the acquirer to recognize Non-controlling interests represent the share of profit or are expensed in profit or loss. Details on investments
and measure identifiable assets, liabilities, and non- loss and net assets of subsidiaries not directly or indirectly NFRS 9 (FINANCIAL INSTRUMENTS) measured at FVTOCI are in Note 5.1.10.2.
controlling interests acquired, goodwill, or gains owned by the Group. They are shown in the consolidated
from bargain purchases, as well as requirements for statement of financial position within equity, separately Financial assets are assets that come from contracts Whereas, Financial liabilities are classified as:
disclosing information to allow users to assess the from the Group's equity holders. Non-controlling interests resulting in future cash inflows or owning equity of Fair value through profit or loss (FVTPL): Held for trading
business combination's nature and financial effects. This in the Group's profit or loss are disclosed separately in another entity. They are non-physical and usually or designated as such at initial recognition. Fair value
NFRS applies to transactions meeting the definition of the consolidated statement of profit or loss. When there's more liquid than tangible assets. Examples include changes are recognized in profit or loss, except when
a business combination, excluding joint arrangements' a change in ownership of a subsidiary without loss of cash, investments, and loans. Financial liabilities are credit risk changes are recorded in other comprehensive
formation accounting, acquisitions of non-business assets, control, it's treated as an equity transaction. This involves obligations from contracts requiring settlement with cash income. The Group has no FVTPL liabilities.
and combinations of entities under common control. adjusting the carrying amounts of controlling and non- or another financial asset, possibly under unfavourable
Additionally, it excludes acquisitions by investment entities, controlling interests to reflect their changing proportions conditions. Examples are bank debts and borrowings. Amortized cost: All other liabilities not FVTPL are
as defined in NFRS 10, of subsidiaries measured at fair in the subsidiary. Financial instruments create these assets and liabilities measured at amortized cost. The Group is obligated
value through profit or loss. between counterparties. The group follows NFRS 9 to deliver cash, exchange assets, or issue variable own
NAS28 (INVESTMENT IN ASSOCIATES AND JOINT for classification, measuring, and impairing financial equity. These are measured using the effective interest rate
Nabil Bank formally completed the acquisition of United VENTURES) instruments. Assets and liabilities are recognized when the method, considering discounts/premiums on issuance and
Finance Limited (UFL) on the 27th of Asar, 2078, followed entity joins the contract. They are initially measured at fair related costs. Amortization appears as interest expense
by the acquisition of Nepal Bangladesh Bank Limited The presumption of significant influence by an entity value plus transaction costs. Financial assets are classified in profit or loss, with gains or losses recognized when
(NBB) on the 29th of Asar, 2079. Throughout the merger in another is established by holding 20 percent or as amortized cost or fair value based on the entity's liabilities are derecognized.
process, bank diligently adhered to the established more of the voting power, unless proven otherwise. business model and the asset's cash flow characteristics.
principles outlined by the Nepal Financial Reporting Conversely, holding less than 20 percent indicates no Details are in Note 5.3 of the financial statements. Details on financial liabilities are in Note 5.3 of the
Standards (NFRS) as well as the Merger Bylaws defined significant influence, unless demonstrated otherwise. Financial assets are at amortized cost when the group financial statements.
by the regulatory authority, Nepal Rastra Bank (NRB). This Factors indicating significant influence include board intends to collect contractual cash flows and the asset's Financial assets and liabilities can be reclassified at
meticulous approach ensured a seamless and compliant representation, involvement in policy-making, significant cash flows are solely principal and interest payments. management's discretion on an instrument-by-instrument
consolidation of operations, thereby further enhancing the transactions, managerial personnel interchange, and the Such assets are measured using the effective interest basis. Reclassification of assets occurs if the business
bank's position within the financial landscape. provision of crucial technical information. The Group has rate, unless designated as fair value through profit or model objective changes, but NFRS 9 prohibits this for
recognized NADEP Laghubitta Bittiya Sanstha Ltd. As an loss (FVTPL), which the group does not have. Gains or equity investments at FVTOCI or where the fair value
NFRS10: CONSOLIDATED FINANCIAL STATEMENT Associate company in which the Bank held 25% equity losses on these assets, not in a hedging relationship, are option is exercised. Reclassification is done prospectively
interest at the report date. There has been no change recognized in profit or loss when derecognized, impaired, from the reclassification date, defined as the first day of
Accounting Requirements in the Bank’s holding in the Associate for the reporting or reclassified. Amortization is shown as interest income, the reporting period after the business model change.
Consolidated financial statements under NFRS mandate period and the previous comparative period. and impairment losses appear as impairment charges in Previously recognized gains, losses, or interest are not
the combination of assets, liabilities, equity, income, profit or loss. restated. For assets reclassified to fair value, the difference
expenses, and cash flows of a parent entity with its Under the equity method, investments in associates between the previous carrying amount and fair value
subsidiaries. This includes the elimination of the parent's or joint ventures are initially recognized at cost and Classification and Reclassification is recognized in profit or loss. For assets reclassified to
investment and equity share in subsidiaries, as well as adjusted for the investor's share of the investee's profit Financial assets are either measured at fair value amortized cost, the fair value at the reclassification date
the full removal of intragroup assets, liabilities, income, or loss. Investments in associate entities of the bank or amortized cost. Under fair value, there are two becomes the new carrying amount.
expenses, and cash flows. Any intragroup profits are are initially recognized at cost, following the equity classifications:
eliminated, and losses are considered for impairment method as per Nepal Accounting Standards - NAS 28 Details on financial liabilities are in Note 5.3 of
recognition as required. NAS 12 Income Taxes addresses on "Investments in Associates and Joint Ventures". The Fair value through profit or loss (FVTPL): All fair value the financial statements.
temporary differences arising from the elimination of group values its associate investments at cost, adjusted changes (realized and unrealized gains or losses) are Financial assets are derecognized when contractual rights
these profits and losses.

216 NABIL BANK LIMITED ANNUAL REPORT 2022/23 217

 to cash flows expire or Rights to receive cash flows are been without impairment. Financial assets are written off income or expense over the asset or liability's life, Cost Model:
transferred along with risks and rewards of ownership, or if recovery is unrealistic, usually after realization of any considering any acquisition discount or premium. After recognition as an asset, an item of property,
the Group assumes an obligation to pay received cash security proceeds. Trading assets are acquired for near-term selling or plant and equipment shall be carried at its cost less
flows without delay to a third party under a 'pass-through' as part of a portfolio for short-term profit, like bonds, any accumulated depreciation and any accumulated
arrangement. For individually significant loans, impairment considers treasury bills, and equities. Debt instruments are treated impairment losses.
factors like total exposure, borrower viability, expected like financial assets at amortized cost, while equity
Upon de-recognition, the difference between the asset's repayments, collateral value, and potential recoveries. instruments are treated like financial assets at FVTPL. Revaluation Model:
carrying amount and consideration received is recognized Collective impairment is assessed statistically for Property, plant, and equipment can be revalued
in profit or loss. Any residual interest in transferred homogeneous loan portfolios, using methods like the "net Derivative assets and liabilities transfer financial risks if its fair value is reliably measurable after initial
assets is separately recognized. Continuing involvement flow rate" to predict delinquency and default likelihoods. without necessarily transferring the underlying asset on recognition. The revalued amount is fair value at
is measured at the lower of the original carrying Rescheduled loans are assessed using the original contract inception or maturity. Examples include futures, the revaluation date, less subsequent accumulated
amount or consideration received. Financial liabilities effective interest rate, with ongoing reviews to ensure options, or swaps based on interest rates, security prices, depreciation and impairment losses. Regular
are derecognized when contractual obligations are payments are likely. or other factors. Derivatives are treated as financial revaluations are necessary to keep the carrying amount
discharged, cancelled, or expire, or a liability is replaced assets or liabilities at FVTPL, with changes in fair value close to the fair value at the reporting period's end.
by a substantially different one from the same lender, or The Group provides loans to employees at below-market recognized in profit or loss. The Group does not use If one asset in a class is revalued, the whole class
terms of an existing liability are substantially modified. rates, recognizing this as two elements: prepaid employee derivatives for hedging under NFRS 9. The Fair Value should be. An increase in the asset's carrying amount
The difference between the original liability's carrying benefits and a loan asset. Initial fair value of employee Reserve is a non-statutory requirement for financial assets. from revaluation goes to other comprehensive income
value and consideration paid is recognized in profit. loans is determined by discounting future repayments NFRS 9 mandates that changes in fair value of assets at and adds to equity as a revaluation surplus. Yet, any
using a market rate, with any excess over the principal FVTOCI are recognized here until asset disposal. Realized increase reversing a prior revaluation decrease is in
Fair-value of Financial Asset and Liabilities recognized as deferred employee expenditure. This fair value changes upon disposal are then moved from profit or loss. A decrease in the asset's carrying amount
Fair value of financial assets and liabilities is the price expenditure is amortized over the loan term, with the this reserve to retained earnings. The Group follows this from revaluation goes to profit or loss, but if a credit
in an orderly transaction between market participants amortization as interest income and finance expense. policy. balance exists in the revaluation surplus, the decrease
at the measurement date. It's based on the principal or goes to other comprehensive income, reducing the
most advantageous market accessible to the Group, Securities sold under agreements to repurchase are not NAS 16 (PROPERTY, PLANT AND EQUIPMENT) equity under revaluation surplus.
assumptions of market participants acting in their best removed from the Statement of Financial Position, as
interests and considering the asset's highest and best use the Group retains ownership risks and rewards. This Recognition The bank however follows the cost model approach
for generating economic benefits. is recorded as a liability, reflecting the transaction's An item of property, plant, and equipment is recognized with cost less any accumulated depreciation.
economic substance. The difference between sale and as an asset if two conditions are met: if there is a
For non-financial assets like land and buildings, values repurchase prices is recorded as interest expense, probability of future economic benefits flowing to the Depreciation
are derived from reports by independent property amortized using the effective rate. Securities purchased entity or if the cost of the item can be reliably measured. Each significant part of property, plant, and equipment,
valuators. Details on fair value measurement and the under agreements to resell are not initially recognized. Items like spare parts, stand-by equipment, and with a cost notably different from the total, should be
fair value hierarchy are in Note 5.1.10.1 of the financial The consideration paid is recorded as an asset, with the servicing equipment are classified as property, plant, and depreciated separately, recognized in profit or loss unless
statements. difference between purchase and resale prices recorded equipment. Otherwise, they are considered inventory. This included in another asset's carrying amount. Depreciable
as 'Interest Income', accrued using the effective interest standard does not specify the exact unit of measure for amount is spread over an asset's useful life systematically,
Impairment of Financial Asset rate. recognition. Judgment is needed to apply these criteria reviewing residual value and life at least annually.
At each reporting period, the Group checks for evidence based on the entity's circumstances. Depreciation applies even if fair value exceeds carrying
of impairment in financial assets, which occurs due Financial assets and liabilities are offset when the Group amount, as long as residual value is not higher, or when
to events impacting estimated future cash flows. This holds a legally enforceable right, presenting the net Measurement at recognition an asset becomes idle or retired from the active use.
evidence can include significant financial difficulties of the amount. Income and expenses are netted only when The bank evaluates all costs related to property, plant, Repairs and maintenance don't replace depreciation. The
issuer, contract breaches like defaults or missed payments, permitted by NFRSs or for similar transaction gains and and equipment when they are incurred. This includes chosen method reflects how future benefits are expected
lender concessions due to financial distress, likelihood of losses. initial acquisition or construction costs, as well as costs for to diminish, reviewed yearly, and adjusted for significant
borrower bankruptcy, disappearance of the market for the additions, replacements, or servicing. Costs from leases changes.
asset, measurable decrease in estimated future cash flows Looking at the amortized cost of a financial asset or of assets used for these purposes, such as depreciation
for a group of assets. liability is: of right-of-use assets, may also be included. The costs De-recognition
n The initial recognition amount of purchase, import duty, any cost directly attributable to An item of property, plant, and equipment is removed
Impairment losses are measured as the difference n (Minus) principal repayments bringing the asset to the location and condition necessary, from the books either when it's sold or disposed or when
between the asset's carrying amount and the present n (Plus/Minus) cumulative amortization using the effective initial estimate of costs of dismantling or removing the there's no expectation of future economic benefits from its
value of estimated future cash flows discounted at the interest rate method item are also included. use or disposal. The gain or loss from de-recognition is
original effective interest rate. These losses are recognized n (Minus) any impairment reduction included in profit or loss when the item is removed, unless
in profit or loss, reducing the asset's carrying amount Measurement after recognition NFRS 16 Leases states otherwise for sale and leaseback
through an impairment allowance account. Reversals of The Group calculates this using the effective interest An entity can choose either to record at cost model or the scenarios. Gains are not treated as revenue. The gain
impairment are recognized if the debtor's credit rating rate, which discounts future cash payments or receipts to revaluation model as its accounting policy and shall apply or loss on de-recognition is calculated as the difference
improves, capped at the amount the asset would have the net carrying amount. This method allocates interest that policy to an entire class of the property, plant and between any net disposal proceeds and the carrying
equipment. amount of the item.

218 NABIL BANK LIMITED ANNUAL REPORT 2022/23 219

 NAS 38 (INTANGIBLE ASSETS) a finite or indefinite useful life and, if finite, the specific The exchange of investment properties for monetary property is recognized in profit or loss when it becomes
length of that useful life. If there is no foreseeable limit or non-monetary assets typically involves fair value receivable.
Identification and Recognition to the period over which the asset will generate cash measurement, unless the transaction lacks commercial
An intangible asset is identifiable non-monetary resource inflows, it is considered to have an indefinite useful life. substance or fair value measurability. In cases where NAS 12(INCOME TAXES)
without physical substance controlled by an entity due For intangible assets arising from legal rights, the useful fair value is not feasible, the cost is determined by the
to past events, from which future economic benefits life cannot exceed the period of those rights, unless the carrying amount of the asset given up. The reliability of an Deferred Taxes
are expected to flow. An intangible asset must be entity expects to use the asset for a shorter period. If asset's fair value hinges on low variability in reasonable Deferred tax liabilities are recognized for taxable
distinguishable from goodwill. Goodwill, recognized in a rights can be renewed, they are included in the useful measurements or the ability to reasonably assess estimate temporary differences, except when they arise from
business combination, represents future economic benefits life only if renewal is likely without significant cost. For probabilities within a defined range. the initial recognition of goodwill or assets/liabilities in
from acquired assets not individually identified. An asset reacquired rights in a business combination, the useful transactions not involving business combinations that
is identifiable if it is separable (capable of being sold, life is the remaining contractual period. The useful life The bank has recorded its properties initially at the affect neither accounting nor taxable profit at the time of
transferred, etc.) or arises from contractual or legal rights. is determined by both economic benefits and legal cost and any non-banking asset form NBB and UFL the transaction. When an asset's carrying amount exceeds
restrictions, with the shorter period prevailing. has been revalued before transferring and recording its tax base, indicating future economic benefits will lead
An entity controls an asset if it can obtain future economic at the banks financial statement. The standard allows to higher taxable income than allowed for tax deductions,
benefits and restrict others' access. This control often An intangible asset with a finite useful life is systematically the bank to either record it at cost or fair value for its a deferred tax liability arises. This Standard mandates
arises from enforceable legal rights, although other allocated its depreciable amount over that life, starting subsequent measurement where at cost the property the recognition of all such deferred tax liabilities, except
means of control may exist, such as protected knowledge. when it's ready for use and ending when it's classified is depreciated and its reduction of depreciation to the for specific circumstances detailed in paragraphs 15 and
And an intangible asset is recognized only if it is probable as held for sale or derecognized. The method of cost (carrying amount) is presented at asset. Where 39 of the standard for business combination. Examples
that future economic benefits will flow to the entity and the amortization should match how the asset's future benefits as in fair value model gain or loss from investment of taxable temporary differences include interest revenue
cost can be reliably measured. The entity uses reasonable are expected to be consumed, using the straight- property's fair value change goes to profit or loss when it recognized in accounting profit before being taxed,
assumptions about future economic conditions over the line method if the pattern is unclear. Changes in the happens. The fair value model doesn't repeat recognition differing depreciation methods used for accounting
asset's useful life, with greater weight given to external amortization period or method are treated as changes of assets or liabilities already recognized separately. versus tax purposes, and capitalized development costs
evidence for certainty. They are measured initially at cost. in accounting estimates. Intangible assets with indefinite If an entity previously valued property at fair value, it deducted for tax but amortized for accounting, resulting
useful lives are not amortized but tested for impairment should keep doing so until disposal, except if it becomes in differences between the carrying amount and the tax
Subsequent Measurement annually and when indicators arise. The assessment of owner-occupied or used for development for sale in the base.
After initial recognition, an entity must select either the indefinite useful life should be reviewed periodically, with usual course of business. This applies even if market
cost model (paragraph 74) or the revaluation model a shift to a finite life treated as a change in accounting transactions decrease or prices are less available and the Current tax
(paragraph 75) as its accounting policy for intangible estimate and an indicator for impairment testing under bank has adhered for the fair value option and doesn’t Current tax comprises the amount of income taxes
assets. If the revaluation model is chosen, all assets in the NAS 36. charge depreciation and records the changes in the value payable (or recoverable) in respect of the taxable profit
same class must also follow this model, unless there is no to p/l. (or tax loss) for the reporting period, and any amount
active market for those assets. A class of intangible assets NAS 40 (INVESTMENT PROPERTY) adjusted to the tax payable (or receivable) in respect of
comprises similar assets in nature and use. Under the cost According to the standard an entity may choose as its previous years. It is measured using tax rates enacted, or
model, the asset is carried at its cost less accumulated Recognition accounting policies either as fair value model or the cost substantively enacted, at the reporting date.
amortisation and impairment losses. Conversely, Investment properties are recognized as assets when it's model and shall apply that policy to all its investment Current tax and deferred tax are recognized outside of
under the revaluation model, the asset is carried at its likely they'll provide future economic benefits and when property. According to NAS 8 Accounting Policies, profit or loss when they pertain to items acknowledged
fair value at the revaluation date, minus subsequent their costs can be reliably measured. These costs include Changes in Accounting Estimates and Errors, a voluntary outside of profit or loss, either in the same period or a
accumulated amortisation and impairment losses, with acquisition expenses and subsequent costs for additions, change in accounting policy should only occur if it results different one. In such cases, the recognition of current tax
fair value determined from an active market. Increases replacements, or property maintenance. An asset can in more reliable and relevant information about the and deferred tax aligns with the treatment of the related
from revaluations are recorded in other comprehensive only be recorded as Investment property if they are held effects of transactions on an entity's financial position, items:
income and accumulated in equity as revaluation surplus, for capital appreciation or to earn rentals. However, performance, or cash flows.
reversing any previous revaluation decreases. Decreases The Group has recognized as investment property such (a) For items recognized in other comprehensive income,
are recorded in profit or loss, unless there's a credit land or land and building acquired by the Bank as Disposal the associated current tax and deferred tax are also
balance in the revaluation surplus, in which case it's non-banking assets in course of recovery of loans and An investment property is removed from the statement of recognized in other comprehensive income.
recognized in other comprehensive income. If fair value advances to borrowers that have turned into chronic financial position (derecognized) when it is disposed of or (b) For items recognized directly in equity, the relevant
can't be determined from an active market, the asset defaulters. permanently withdrawn from use with no expected future current tax and deferred tax are recognized directly in
is carried at the last revalued amount, less subsequent economic benefits. Gains or losses from the retirement equity.
accumulated amortisation and impairment losses. Measurement at Recognition and Subsequent or disposal of investment property are calculated as
However, the bank follows the cost model with carrying Measurement the difference between the net disposal proceeds and Examples of items recognized in other comprehensive
amount (cost less amortisation and impairment) at asset When recognizing an owned investment property, its the asset's carrying amount. These gains or losses are income, as per Nepal Financial Reporting Standards,
and amortization and impairment charged to p/l. initial measurement is based on the cost, which includes recognized in profit or loss during the period of retirement include changes in the carrying amount from property,
transaction costs. The cost of the property consists of the or disposal, unless NFRS 16 dictates otherwise in a sale plant, and equipment revaluation and exchange
Useful life and amortization purchase price and directly related expenses like legal and leaseback scenario. Any compensation received from differences arising from translating financial statements
The bank determines whether an intangible asset has fees and property transfer taxes. However, certain costs third parties for impaired, lost, or relinquished investment of foreign operations. Current tax liabilities (assets) for
are not added to the property's cost.

220 NABIL BANK LIMITED ANNUAL REPORT 2022/23 221

 current and prior periods are determined based on the Onerous contract contracts. They encounter various contract types, Banks amount of short-term benefits expected to be paid,
expected amount to be paid to (recovered from) tax If an entity enters into an onerous contract, it must enter into loan agreements with customers, providing subtracting any amounts already disbursed. If payments
authorities, using the enacted or substantively enacted tax recognize and measure the present obligation arising funds in exchange for the promise of repayment with exceed the undiscounted benefits, the excess is recorded
rates and laws by the reporting period's end. Deferred from the contract as a provision. Many contracts, interest. Under NFRS 15, banks recognize revenue from as an asset, provided it leads to future payment reductions
tax assets and liabilities are measured at the tax rates such as routine purchase orders, can be cancelled interest income over time as the customer consumes the or cash refunds.
expected to apply when the asset is realized or the liability without incurring compensation, hence no obligation benefit of the loan and when customers deposit funds into
settled, considering the enacted or substantively enacted exists. However, contracts that impose both rights and their accounts with banks, it represents a contract where Defined Contribution Plans
tax rates and laws by the reporting period's end. obligations on the parties fall under this Standard. When the bank holds the customer's funds and provides various Accounting for defined contribution plans is
events make such a contract burdensome (onerous), a banking services. Banks also often charge various fees to straightforward as the reporting entity's obligation
In measuring current and deferred tax assets and liability is recognized. Executory contracts that are not customers for services such as account maintenance, ATM each period is determined by the contributions due for
liabilities, enacted or substantively enacted tax rates onerous do not fall within this Standard's scope. An usage, wire transfers, and overdraft facilities. Revenue that period, requiring no actuarial assumptions. This
and laws are typically used. However, in certain onerous contract, as per this Standard, is one where the from these fee-based contracts is recognized when the eliminates the possibility of actuarial gains or losses.
jurisdictions, government announcements regarding tax unavoidable costs of fulfilling the obligations exceed the related services are provided to the customer, aligning Obligations are measured on an undiscounted basis,
rates and laws may have the substantive effect of actual expected economic benefits. These unavoidable costs with the performance obligations specified in the contract. except when settlement is not expected within twelve
enactment, though this may occur several months after include the least net cost of exiting the contract, which is While recording interest incomes bank also follows months after the annual reporting period in which
the announcement. In such cases, tax assets and liabilities the lower of fulfilling it or any compensation or penalties “Guidelines on Recognition of Interest Income 2019” employees render service. When an employee provides
are measured using the announced tax rate and laws. due to non-fulfilment. Before establishing a provision issued by Nepal Rastra Bank. service, the entity recognizes the contribution to the
When various tax rates apply to different levels of taxable for an onerous contract, any impairment loss on assets defined contribution plan as a liability (accrued expense),
income, deferred tax assets and liabilities are measured dedicated to the contract must be recognized (refer to NAS 19 (EMPLOYEE BENEFIT) subtracting any payments made. Any excess payments
using average rates expected to apply to taxable profit NAS 36). are recorded as an asset (prepaid expense) if they lead
(tax loss) in the periods when the temporary differences Employee benefits encompass all forms of compensation to future payment reductions or cash refunds. This
are anticipated to reverse. The measurement of deferred Restructuring provided by an entity for services rendered by its contribution is expensed unless another NFRS mandates
tax liabilities and assets reflects the tax implications Restructuring events encompass various scenarios, employees. Within the Group's remuneration package, or allows inclusion in an asset's cost (e.g., NAS 2 and
expected at the reporting period's end concerning how the including the sale or termination of a business line, both short-term and long-term benefits are included, NAS 16). Contributions not expected to settle within twelve
entity plans to recover or settle the carrying amounts of its shutting down business locations in a region, relocating such as salaries, allowances, paid leave, accrued leave, months are discounted using the specified discount rate.
assets and liabilities. activities to another region, altering management gratuity, provident fund contributions, and annual
structures (like removing a management layer), and statutory bonuses. The Group adheres to NAS 19 – Defined Benefit Plan
substantial reorganizations impacting the entity's "Employee Benefits" for accounting purposes related to all Defined benefit plans can be unfunded or funded by
NAS 37 (PROVISION, CONTINGENT operations significantly. A provision for restructuring employee benefits. In its financial statements, the Group contributions from both the entity and its employees
LIABILITY AND ASSETS) costs is recognized when it meets the general criteria for recognizes: into a legally separate fund. These funds, distinct from
provisions as outlined in paragraph 14of the standard. the reporting entity, disburse employee benefits. The
Recognition The criteria for recognizing a constructive obligation to n A liability when an employee has provided services, payment of funded benefits hinges not just on the fund's
A provision is established when three conditions are met: restructure involve having a detailed formal plan that entitling them to employee benefits in the future; and financial status and investment outcomes but also on the
the entity has a current obligation (legal or constructive) specifies the affected business areas, principal locations, entity's capacity and willingness to cover any fund deficits.
due to a past event; it is probable that using resources will impacted employees and their compensation, anticipated n An expense when the Group utilizes the economic Thus, the entity essentially underwrites the actuarial and
be necessary to settle the obligation; and the amount of expenditures, and the implementation timeline. benefit resulting from services rendered by an employee, investment risks associated with the plan, meaning the
the obligation can be reliably estimated. If these criteria Moreover, the entity needs to have created legitimate in exchange for the provided employee benefits. expense recognized for a defined benefit plan may not
aren't fulfilled, no provision is recognized. Generally, expectations among those impacted by either initiating align with the contribution due. Accounting for these
it is evident whether a past event has led to a present the implementation of the plan or publicly disclosing its Short Term Employee Benefits plans involves several steps: determining the deficit or
obligation, except in rare disputes like lawsuits. Here, the key elements. Recognition of a provision for restructuring Short-term employee benefits consist of payments and surplus using actuarial methods like the projected unit
entity evaluates the evidence, including expert opinions occurs when the Group has sanctioned a detailed perks that an entity expects to settle entirely within twelve credit method, discounting this to find the present value
and any post-reporting period events, to determine and official restructuring plan, and the restructuring months after the end of the annual reporting period, of the obligation, subtracting the fair value of plan assets,
if a provision should be recognized or disclosed as a has either begun or has been publicly announced. As corresponding to services provided by employees. This and adjusting for limitations on the net defined benefit
contingent liability. An obligating event, a past event of the reporting date, the Group has no provision for includes wages, salaries, social security contributions, asset. Recognized amounts include current service costs,
leading to an obligation, occurs when the entity has no restructuring. paid annual and sick leave, profit-sharing, bonuses, past service costs, gains or losses on settlement, net
realistic choice but to settle the obligation, either by legal and non-monetary benefits. If an entity's expectation interest on the net defined benefit liability (asset), and
enforcement or by creating valid expectations in other NFRS 15 (REVENUE FROM of the settlement timing changes temporarily, there is re-measurements of the liability (asset). When there's
parties. Financial statements reflect an entity's position at CONTRACTS WITH CUSTOMER) no need to reclassify these benefits. However, if the a surplus, the net defined benefit asset is measured as
the end of the reporting period, not future expectations, benefit's characteristics alter or the change in settlement the lower of the surplus or the asset ceiling, calculated
hence provisions are only made for existing obligations Recognition expectations is not temporary, the entity evaluates using a specified discount rate. This asset may arise from
arising independently of the entity's future actions. Under Nepal Financial Reporting Standards (NFRS) 15, whether it still fits the definition of short-term benefits. overfunding or actuarial gains, offering future benefits
banks adhere to specific guidelines for recognizing, For recognition and measurement, when an employee such as reduced contributions or cash refunds, which are
measuring, and disclosing revenue from customer renders service, the entity recognizes the undiscounted recognized in the statement of financial position. These

222 NABIL BANK LIMITED ANNUAL REPORT 2022/23 223

 procedures apply to each significant plan separately, and depreciated either until the end of the underlying asset's NAS 33 (EARNING PER SHARE) NAS 36 (IMPAIRMENT)
the entity should regularly assess the net defined benefit useful life if ownership transfers or a purchase option is
liability to ensure accurate reporting. exercised, or until the end of the right-of-use asset's useful Basic earnings per share is determined by dividing the Recognition
life or lease term. The lessee then measures the lease profit or loss attributable to ordinary equity holders of the At the end of each reporting period, an entity must assess
NFRS 16 (LEASES) liability post-commencement by adjusting the carrying parent entity by the weighted average number of ordinary whether there are any indications that an asset may be
amount for interest accrued on the liability, reducing it for shares outstanding during the period. This calculation impaired. If such indications exist, the entity needs to
Identifying and Recognition lease payments made, and reassessing or modifying the includes profit or loss from continuing operations and estimate the asset's recoverable amount. Additionally,
NFRS 16 Leases mandates that lessees recognize both amount for any changes or revised fixed lease payments. profit or loss attributable to the parent entity, adjusted for irrespective of indications, the entity should annually test
an asset and a liability for all leases, except for those Interest is calculated as a constant periodic rate on the after-tax amounts of preference dividends and similar intangible assets with indefinite useful lives, those not yet
that are short-term or of nominal value. It is crucial to remaining balance of the liability, using the discount rate effects of preference shares classified as equity. available for use, and goodwill acquired in a business
determine whether a contract constitutes a lease or merely or any revised rate. Additionally, post-commencement, combination for impairment. Indications of impairment
a service agreement. A lease exists within a contract when the lessee records in profit or loss both the interest on the The number of ordinary shares used in calculating basic include observable declines in the asset's value beyond
it grants 'the right to control the use of an identified asset lease liability and variable lease payments not accounted earnings per share is the weighted average number normal use, adverse changes in the entity's environment
for a period, in exchange for payment' (NFRS 16, para for in the initial lease liability measurement, unless these of ordinary shares outstanding during the period. This affecting the asset, increases in market rates affecting
9). Control of the asset includes having the majority of costs are included in the carrying amount of another asset average is adjusted for events, other than the conversion discount rates, net assets exceeding market capitalisation,
the economic benefits from the asset, and having the under relevant Standards. of potential ordinary shares, that have altered the number signs of obsolescence or physical damage, changes in
authority to direct its use. of ordinary shares outstanding without a corresponding asset use or expected use, evidence of poor economic
NAS 21 (THE EFFECT OF CHANGES IN FOREIGN change in resources. These measures provide a standard performance, and dividends from investees exceeding
Even if the lessor imposes limitations on the asset's use, EXCHANGE RATES) method for assessing the earnings performance relative to carrying amounts or total income. These assessments
such as mileage restrictions on a vehicle or geographic the ownership stake of ordinary equity holders. help ensure the accurate representation of assets on the
limitations, these restrictions outline the lessee's scope of NAS 21 outlines foreign currency transactions as those financial statements and compliance with accounting
use rather than negate their ability to direct its use. NFRS involving transactions denominated or settled in a NFRS 8 (OPERATING SEGMENTS) standards.
16 states that a lessee does not have the right to use foreign currency. This includes buying or selling goods
an identified asset if the lessor can practically substitute and services with prices in a foreign currency, borrowing An operating segment of an entity is a distinct part of the Measurement
it with another asset and if such substitution would be or lending funds with amounts in foreign currency, and business that earns revenues, incurs expenses, and has its When an asset's recoverable amount is less than its
economically beneficial for the lessor. acquiring or disposing of assets or settling liabilities in financial results regularly reviewed by the chief operating carrying amount, an impairment loss is recognized
foreign currency. A foreign currency transaction shall be decision maker for resource allocation and performance immediately in profit or loss, except for revalued assets,
Upon commencement, a lessee calculates the cost of the recorded, on initial recognition in the functional currency, evaluation, with separate financial information available. where it's treated as a revaluation decrease. For non-
right-of-use asset. This includes: The initial measurement by applying to the foreign currency amount the spot These segments include both revenue-earning and pre- revalued assets, impairment losses are recognized in
of the lease liability (as described in paragraph 26); any exchange rate between the functional currency and the revenue activities, such as start-up operations. However, profit or loss, and for revalued assets, they're recognized
lease payments made before or at the commencement foreign currency at the date of the transaction. not every entity component qualifies as an operating in other comprehensive income to the extent it doesn't
date, minus lease incentives received; initial direct costs At the end of each reporting period foreign currency segment; for instance, corporate headquarters or certain exceed the revaluation surplus. Adjustments are made
borne by the lessee; and an estimation of costs for monetary items shall be translated using the closing functional departments that do not primarily earn to future depreciation charges after recognizing an
dismantling, removing the asset, or restoring the site, rate; non-monetary items that are measured in terms of revenues are excluded. Post-employment benefit plans are impairment loss, spreading the revised carrying amount
unless these costs relate to inventory production. The historical cost in a foreign currency shall be translated also not considered operating segments under this NFRS. over the remaining useful life. If the estimated impairment
lessee incurs these obligations either at commencement or using the exchange rate at the date of the transaction; loss exceeds the asset's carrying amount, a liability is
during asset use. and non-monetary items that are measured at fair For transparent financial reporting, entities must disclose recognized if required by another Standard. Goodwill
value in a foreign currency shall be translated using information enabling users to understand their business acquired in a business combination is allocated to cash-
At commencement, the lessee measures the lease liability the exchange rates at the date when the fair value was activities and operating environments. Reported segment generating units that benefit from synergies, representing
at the present value of unpaid lease payments. Payments measured. Exchange differences arising on the settlement items, such as profit or loss, assets, and liabilities, the lowest internal management level monitored for
are discounted using the interest rate implicit in the lease of monetary items or on translating monetary items at are based on the metrics used by the chief operating goodwill, and not exceeding the size of an operating
if determinable. If not, the lessee employs its incremental rates different from those at which they were translated decision maker for resource allocation and performance segment as defined by NFRS 8.
borrowing rate. on initial recognition during the period or in the previous assessment. Adjustments, eliminations, and allocations
financial statements shall be recognised in profit or loss of revenues, expenses, gains, or losses are included Reversals of Impairment
Subsequent Measurement in the period or in previous financial statements shall be in reported segment figures if they align with the chief An entity must assess at each reporting period whether
Following the commencement date, a lessee typically recognised in profit or loss in the period in which they operating decision maker's measures. This ensures that indications suggest that a previously recognized
employs a cost model to measure the right-of-use asset. arise. When a gain or loss on a non-monetary items reported segment data reflects the true financial picture impairment loss for an asset, excluding goodwill, may
Under the cost model, the lessee assesses the right-of- are recognised in the other comprehensive income, used for managerial decision-making. Additionally, no longer exist or may have decreased. This assessment
use asset at its initial cost, adjusted for any accumulated any exchange component of the gain or loss shall be specific details such as revenues from external customers, considers observable changes indicating an increase
depreciation, impairment losses, and re-measurement recognised in other comprehensive income. Conversely, inter-segment transactions, interest revenue and expense, in the asset's value, positive alterations in the entity's
of the lease liability as specified in paragraph 36(c). when a gain or loss on a non-monetary items are depreciation, amortization, and other material income technological, market, economic, or legal environment,
Depreciation follows the guidelines outlined in NAS recognised in profit or loss, any exchange component of and expenses are disclosed for each reportable segment, or decreases in market interest rates affecting the asset's
16 Property, Plant and Equipment, with the asset being the gain or loss shall be recognised in profit or loss. as long as they are part of the metrics reviewed by the recoverable amount. Internally, it considers improvements
chief operating decision maker.

224 NABIL BANK LIMITED ANNUAL REPORT 2022/23 225

 in the asset's use or performance, incurred costs for Investing Activities
enhancement, or better-than-expected economic The disclosure of cash flows from investing activities is
performance. If there's a change in the estimates used to crucial as these flows indicate the extent of expenditures
determine the asset's recoverable amount since the last made for assets intended to generate future income and
impairment loss, the entity reverses the impairment loss by cash flows. Only expenditures leading to a recognized
increasing the asset's carrying amount to its recoverable asset in the statement of financial position qualify as
amount, unless the reversal exceed the carrying amount investing activities. Examples include cash payments for
which would have been determined (net of amortisation acquiring property, plant, equipment, and intangibles,
or depreciation) had no impairment been recognised for including capitalization of development costs and self-
asset in prior years. constructed assets. Cash receipts from sales of such
assets, payments for acquiring equity or debt instruments
NAS 7 (STATEMENT OF CASH FLOWS) of other entities, and cash advances to other parties also
fall under investing activities.
The statement of cash flows categorizes cash flows into
operating, investing, and financing activities for the Financing Activities
reporting period. This classification method is chosen by The disclosure of cash flows from financing activities is
the entity based on what best suits its business operations. essential as it helps in anticipating future claims on cash
It aims to provide users with insights into how these flows by capital providers to the entity. Examples of such
activities affect the entity's financial position and its cash Receipt from issue of debt securities, Receipt from issue
and cash equivalents. This breakdown helps in assessing of subordinated liabilities, Receipt from issue of shares,
the impact of different activities and understanding their Dividends paid, Interest paid reducing outstanding
interrelationships. Sometimes a single transaction can liabilities.
involve cash flows classified under multiple categories,
such as when a loan repayment includes both interest When reporting cash flows from operating activities,
(classified as operating) and capital (classified as entities can choose between the direct method, which
financing). discloses major classes of gross cash receipts and
payments, or the indirect method, adjusting profit or loss
Operating Activities for non-cash transactions, deferrals or accruals of past or
The cash flows from operating activities serve as a future operating cash flows, and income or expense items
crucial measure of an entity's ability to generate enough associated with investing or financing cash flows.
funds from its core operations such as interest received,
Fees and other income received, Dividend received, to
meet obligations like loan repayments, Commission
and fees paid, Cash payment to employees, and other
expenses paid without relying on external financing.
Understanding the specific components of historical cash
flows from operations, alongside other information, aids
in forecasting future operational cash flows. These cash
flows primarily stem from the core revenue-generating
activities of the entity, encompassing transactions and
events integral to determining its profit or loss.

226 NABIL BANK LIMITED ANNUAL REPORT 2022/23 227

 As we progress and adopt modern
HUMAN
RESOURCES management practices including
adoption of technology in all the fronts,
the role of human capital becomes
highly pivotal for the success of any
organization. Accordingly, effective
human capital management in any
organization is gaining paramount
importance for effective implementation
of strategies to achieve the stated goals.

The above stated objective would not be possible

without effective team work and also without
sharing and owning the goals of the organization.
Hence, in our organizational set up, all senior staff
members enjoin to act as HR Managers in their
areas of operations by implementing policies and
guidelines of the Bank. They ensure that strong
ethical practices are put in place by nurturing
talent and sharing knowledge thus by taking the
ownership in all activities that we carry out.

Likewise, HR Department is responsible for

monitoring and ensuring that the Bank’s HR
policies are updated regularly as well as are
interpreted consistently across the Bank. Employee
By-Laws acts as a framework that guides human
resource management practices within the Bank.
This document is approved by regulatory authority
i.e. central bank of Nepal upon recommendation
of the Board of the Bank. Principle of ethical work
culture, open communication, objective career
development, transparency in remuneration, pay
– performance correlation supports HR practices
implemented within the Bank.

228 NABIL BANK LIMITED ANNUAL REPORT 2022/23 229

 SUCCESSION PLANNING Risk management:
Employee Service Bylaw of Nabil governs succession n Assessing human capital risk helps to be prepared for
planning in the organization. Selection of the CEO is workforce changes.
done by Board of Directors on the basis of provision n Identifying critical roles and skills ensures continuity
laid out by Bank and Financial Institution Act 2017, during transitions.
Memorandum of Association and Articles of Association
of the Bank. Recruitment of staff is done based on the Employee wellbeing:
Equal Employment Opportunity principle as approved by n Recognizing human capital’s worth promotes employee
CEO under recommendation of Committee relating to satisfaction and engagement.
Staff Services and Facilities. n Prioritizing wellbeing attracts and helps to retain top
talent.
Succession planning is institutionalized on following order:
1) Top management Level The valuation of human resources is done following the
2) Management Level assumptions and estimates according to the Human
3) Officer Level Resources Accounting (HRA), which refers to recognizing
4) Assistant Level expenses associated with employees of an organization,
5) Teller Level including those for recruiting and training. It aims to
6) Support Level accurately account for retirement and other benefits
received throughout the service period and improves
Human resource for succession planning is managed human resource planning.
through various methods like:
i) Open competition Lev and Schwartz Model of valuing human capital i.e. a
ii) Internal promotion value-based approach (Present Value of Growing Annuity)
iii) Talent or head hunt has been adopted to value the human capital where
Iv) Campus placement following assumptions are made: REMUNERATION AND BENEFITS documented position grades of individual employee as
The quality of our human capital defines the scale of per his/ her annual performance appraisal ratings. The
INDEPENDENT CERTIFICATION n The total benefit given to the employee will grow at a business success. Banking stands on trust, relationships, grade earned in annual performance appraisal ratings
The bank has obtained independent valuation of its post- constant rate of 8% and remain consistent throughout and ethical conduct. Nabil’s strategy is to be proactive to has an incremental impact in the basic pay.
employment benefits as per the requirement of NAS 19 the period. attract, select, develop, and retain the best talent from the
– Employee Benefits, as follows: n The cost of capital is taken as the discount rate used to market. For this, there is need to constantly ensure that n Salary structure is reviewed every two years with
calculate the present value of future employee benefit the bank has the required skills, knowledge, and expertise reference to national economic scenario, bank’s business
1) Actuarial valuation of Gratuity Plan as of 16 July 2023, and remains consistent throughout the period. in the talent pool. performance and market practice. Any one or both of
in accordance with NAS 19 by Global Risk Consultants. n The series of regular and growing cash flows will flow the basic and variable components may be revised as
annually, and first flow occurs one period from the Nabil believes staff commitment and motivation towards appropriate.
2) Actuarial valuation of Leave Encashment Plan as of present time. the job is achieved over time, which is affected by multiple
16 July 2023, in accordance with NAS 19 by Global Risk n Ignores the possibility of employees leaving or other factors among which financial benefits are very important. n The bonus element of annual pay is tied up to the
Consultants. possibilities Market forces constantly pose a challenge to our HR overall performance of the bank at the end of each
strategy and retaining the best talents is often not easy. financial year. This instills a winning spirit among
HUMAN CAPITAL VALUATION Remuneration is one of the major factors that affects employees, drives business performance and aligns their
Table 87: Human Capital Valuation
Human capital refers to the collective skills, knowledge, one’s decision to join and/or continue with the current personal interests with the interest of Nabil stakeholders.
NPR MILLION
and abilities possessed by individuals. It encompasses organization and this fact has been fully acknowledged.
EMPLOYMENT LEVEL HUMAN CAPITAL AT NOMINAL VALUE
education, experience, training, and expertise. Unlike Accordingly, Nabil attracts the best people who wish to n Bank’s contribution to Employees’ Gratuity Fund and
physical assets, human capital is intangible but plays a Management Level* 3,869 work in an organization having strong corporate values, Provident Fund is proportionately linked to the number of
crucial role in economic productivity and growth. Officer Level 10,232 ethical work culture, reputed brand performance and years in employment and the last drawn salary at the time
Assistant and Support Level 17,067 the one offering excellent work experience and career of making such contribution.
Recognizing the economic worth of human capital is Total 31,168 development opportunities. The bank’s remuneration
essential for several reasons like: * Excluding CEO policy covers the following: n Besides, the bank’s employees receive the benefit of
housing loan, vehicle loan and personal loan facilities at
Strategic decision-making: n Salary structure comprises of fixed monthly pay and concessional rates as per their individual eligibility in line
n Helps making informed decisions about talent variable incremental pay which is provided based on with the Integrated Staff Loan Policy.
acquisition, development, and retention.
n Understanding the value of human capital guides
resource allocation and investment strategies.

230 NABIL BANK LIMITED ANNUAL REPORT 2022/23 231

 HUMAN RESOURCE DYNAMICS Table 90: Province/ Unit Composition Table 91: Retention Ratio after Maternity Leave
FY 2022/23 FY 2021/22 FY 2020/21
Table 88: Trainings Conducted during FY 2079/80 Total Work Force Classification PROVINCES FY 2022/23 FY 2021/22 FY 2020/21 Retention Rate after 100% 100% 100%
ACTIVITIES COUNT 145 Koshi Province 253 246 124 Maternity Leave
Total trainings conducted 441 224 4 4 Madhesh Province 204 181 93
17
Total staff participants 46,748 Bagmati Province 794 728 386
21 10
Total person hours 105,470.25 Gandaki Province 101 97 65 Table 92: Service Period wise Classification
Lumbini Province 201 186 123
FY 2022/23
1,261 Karnali Province 42 38 29
FY 2021/22 PARTICULARS FY 2022/23 FY 2021/22 FY 2020/21
Sudurpaschim Province 94 90 44
Training Details FY 2020/21 2,109
Units 546 543 397
Less than 10 3.96 4.11 2.38
Above 10 years to 20 years 13.87 13.96 13.83
Total person hours = 105,470.25 Total 2,235 2,109 1,261
Above 20 years to 30 years 23.98 24.06 26.95
Training hours per Female (Individual training) = 34,508.65 2,235
Above 30 years 32.27 32.45 35.02
Training hours per Male (Individual training) = 24,548.60
Training hours pertaining to AML/CFT = 65 Hours
Permanent Contract Outsourced Consultant

Table 93: Age wise Classification

FY 2022/23 FY 2021/22 FY 2020/21
PARTICULARS AVERAGE AGE STAFF COUNT AVERAGE AGE STAFF COUNT AVERAGE AGE STAFF COUNT
Table 89: Female Representation
Gender Composition Less than 20 Years 19.20 4.00 19.76 2 18.78 1
GENDER FY 2022/23 FY 2021/22 FY 2020/21
in % Above 20 years to 30 years 26.52 843.00 27.14 820 27.24 513
Senior Management Level 1 1 1 Above 30 years to 40 years 34.31 894.00 34.54 811 34.85 464
Manager Level 22 21 14 37.4% 39.6% Above 40 years to 50 years 44.30 353.00 44.55 339 44.36 195
36.3%
Officer Level 179 152 75 Above 50 years to 60 years 53.19 141.00 53.05 137 53.44 88
Assistant Level 666 602 355
458 795 884
Support Level 16 19 13 Note: The figures presented above are based on the number of permanent staff only.
Total 884 795 458
63.7% 62.3%
1,351
803 1,314
60.5%
RECRUITMENT
Table 94: Number of Staff Hired from Lateral
Table 95: Number of New Recruits
Hiring
2020/21 2021/22 2022/23 POSITION NUMBER
POSITION NUMBER
Male Female Junior Teller 115
Assistant (A1) 1
Trainee Assistant 122
Officer (O) 4
Assistant (A1) 1
Officer (O1) 4
Management Trainee 17
Officer (O2) 5
Officer (O) 4
Total 14
Officer (O1) 4
Officer (O2) 5
Total 268

232 NABIL BANK LIMITED ANNUAL REPORT 2022/23 233

 PERFORMANCE MANAGEMENT The Bell Curve Performance Management System ensures the distribution of employees’ ratings as highlighted below:
SYSTEM AT NABIL BANK LIMITED
Performance management at Nabil Bank starts with the setting up of clear, specific, and measurable goals for individuals
and teams that provides a clear and distinct alignment with the bank's strategic objectives for the fiscal year. These goals
serve as a roadmap for employees to direct their efforts and contributions. Performance management at Nabil Bank is a
year-round process that includes regular feedback, coaching, and evaluations against performance benchmarks set at the
onset of the fiscal year.

Performance Management System of the bank consistently tracks and assesses each employees' performance against
predetermined goals and benchmarks which serves as a tool for identifying achievements and recognizing success. These,
in turn, provide formalized assessment of an employee's performance for the fiscal year, which further acts as a foundation
for the employee’s career growth.

Acceptable

Very Good
30-50%

30-60%
Standard

Excellent
0-8%

0-3%

0-5%
Good
Sub-
Develop Performance
Measures & Targets Review annual business
and develop a Conduct Half-yearly The following table reports the performance appraised by total workforce ratio for last two fiscal years:
reviews with the performance and plan
scoreboard for cascade for next year
employees Table 96: Performance appraisal 2078/79 Table 97: Performance appraisal 2079/80
Beginning
July-August
of FY
Total Workforce as of FY 2078/79 end 2,130 Total Workforce as of FY 2079/80 end 2,252
1 2 3 4 5 6
Performance Appraised 1,887 Performance Appraised 2,039
Defining
Defining the Business & Goal Setting Appraisal, Performance Appraised/Total Workforce Ratio 89% Performance Appraised/Total Workforce Ratio 91%
Organisational -Develop Performance Align to next
Function Rating &
level strategy KRA & KPI Reviews Feedback year Targets
strategy &
& targets targets

January July-August
Prepare Annual Goal Setting workshop Initiate the Appraisal
Business Plan and is initiated accross the process followed by
Budget Targets organisation over 2 formal feedback
weeks to freeze and mechanisms and ratings
agree on the KRAs
and KPIs for every
employee

PERFORMANCE MANAGEMENT 3) Feedback: Constructive feedback is instrumental

PROCESS ADOPTED BY NABIL BANK LIMITED in guiding the growth of team members. Along with
The annual review process begins with the setting of each the ratings, supervisors then provide specific feedback
individual’s goals. Thereafter, all supervisors duly follow highlighting their strengths and provide appraisees
the following steps: suggestions for improvement. Further, areas wherein
additional training are required are also identified
1) Consultation with Appraisee: The supervisors and communicated accordingly to the Learning and
insights on the performance of their team are invaluable. Development Department.
Nabil Bank encourages all supervisors to engage in
meaningful conversations with their appraisees (their Nabil upholds that open and transparent communication
subordinates). Supervisors discuss each appraisee’s is the key to a successful performance appraisal process.
achievements, challenges and goals and gather their Therefore, it encourages all staff to maintain open
perspective on their performance at this stage. communication with appraisees and ensure that they
understand the rationale behind the provided ratings and
2) Provide Ratings: Based on their assessment and feedback.
consultation, supervisors will provide honest and fair
performance rating to each appraisee. These ratings Additionally, the bank uses the Bell Curve Performance
are generally free from personal biases and reflect the Management System to ensure a fair distribution of
appraisee’s achievements, contributions, and potential performance ratings across teams. This system recognizes
areas for improvement. employees’ performance in five categories and helps
to identify top performers and low performers and take
corrective action, as required.

234 NABIL BANK LIMITED ANNUAL REPORT 2022/23 235

 Board of Directors

GOVERNANCE
CORPORATE There are seven members in the Nabil's
Board, including the Chairman. All
Board Members are non-executive
directors and thus, they do not take part
in day-to-day management decisions.
The directors come from diverse
backgrounds and with specialization
and expertise in various fields. They thus
bring to Nabil an external perspective on
company affairs and provide suggestions
to the CEO. Individual directors exercise
their authority at the board meetings and
represent the interests of shareholders.
The main function of the directors is to
formulate policies and provide guidance
and suggestions to management for
long-term sustainability of the bank with
reasonable returns to the shareholders.

The Board of Directors decides on corporate

and business strategies, approves capital and
operational plan, and continuously monitors and
reviews the performance of the management
to ensure that the actual performance is
aligned with both annual and strategic targets.
Similarly, the Board sets strategic path for the
organization, identifies business objectives,
reviews management’s performance, and
provides guidance to the management towards
achieving targeted goals and objectives.

The directors are collectively responsible for

long-term sustainability of the bank. To this
end, they exercise their authority within the
framework of regulatory provisions, Companies
Act, Bank and Financial Institutions Act,
Memorandum and Articles of Association and
other relevant laws and regulations. The Board
of Directors delegates executive responsibility for
running the bank to the CEO, who can further
delegate responsibilities down the chain of

236 NABIL BANK LIMITED ANNUAL REPORT 2022/23 237

 command. The Board may form committees for specific APPOINTMENT AND INDUCTION OF DIRECTORS Department based on the concept of risk-based internal Attendance
purpose considering the requirement ascribing specific The appointment, retirement and re-election of Directors audit. Mr. Malay Mukherjee 25/25
responsibilities and delegating relevant authority to such are done as per the provisions laid out in the Companies Mr. Pravin Tibrewala 25/25
committees. Act, Bank and Financial Institution Act, Articles of The overall objective is risk taking with due knowledge Total 25
Association of the bank and other relevant laws and and its acknowledgement and putting in place measure
However, the Board keeps certain important authorities regulations. Directors are required to take an oath of to address/ mitigate risks. The Internal Audit Department Roles and Responsibilities
and rights to itself including, but not limited to, the secrecy and fidelity in presence of the Chairman, and the shares the knowledge of the risk and closure of The Committee’s role is extensive and strongly supports
approval of strategic plans, performance targets, policy Chairman, in presence of the Governor of NRB at the reported issues and how they were addressed. The first the Board in dealing with aspects of good corporate
documents, annual budgets, annual financial statements latter’s office immediately after appointment. An induction responsibility of risk taking or averting a risk lies with governance, internal control, risk management, financial
and the authority or the delegation of authority to approve session on important aspects of banking in Nepal, the business units (first line of defense units). Similarly, reporting, legal and regulatory compliance, and ethical
credit and market risk limits. transparency, disclosure, conflict of interest, international check and control units and their resultative/ effective conduct of business.
best practices, compliance and relationships with the review makes it more sensible to all. This could even
A total of 31 board meetings were held during the review regulatory institutions, is organized within a month of the culminate in dropping some businesses if they are not Major responsibilities of the Committee are:
year, for which NPR 3.47 million was paid as meeting appointment of the Directors. in compliance with prescribed standards. Such actions 1. Reviewing the bank’s overall system of internal controls.
allowances, and NPR 5.35 million against other expenses make everyone aware of the requirements and what 2. Reviewing observations and recommendations made
of the directors, which includes the communication SHAREHOLDER RELATIONS needs to be avoided while doing business; for example, in audit reports issued by internal auditors, statutory
allowance, travelling and accommodation expenses, The Board encourages active participation of shareholders if one has decided to do the business, what are the auditors, and regulators.
among others. at AGMs. The meetings are an important platform for benefits and what are the safeguards the bank should 3. Reviewing the bank’s financial statements, ensuring
Board Members to interact with shareholders, both put into play. The Internal Audit Department has a role its accuracy and the required level of compliance in
INFORMATION TO THE BOARD individual and institutional, for communicating the to ensure that such awareness is inculcated among all relation to financial reporting standards.
Nabil has an open communication culture, which has objectives and strategic plans, clarifying on shareholders’ staff. 4. Reviewing compliance in relation to the bank’s internal
fostered healthy working relationship at all levels. Open concerns, and for sharing the collective vision. policy and prevailing regulatory and legal provisions.
communication policy at the Board level has smoothened Similarly, periodic review of the business can also 5. Reviewing risk management systems and security
the information sharing between the Board and the Most of the Directors represent institutional shareholders, provide an indication of its compliance to the business position of the bank in respect to exposure to credit risk,
bank’s executive team. The Board receives reports and engage in regular dialogues with them, continuously units. Timely action against early warning signals help to operations risk, and market risk.
attends presentations by board committee convenars apprising them of the bank’s performance. correct the course and continue on the sustainable path. 6. Advising and recommending to the Board on
and the CEO on matters relating to credit exposures, This is not a one-day or one-activity function. This has to management actions required for achieving the desired
risk portfolio, liquidity, financial performance, business Composition of Board of Directors from 38th to 39th be embedded in the staff culture, including the control level of effectiveness and compliance in response to
expansion, audit, and compliance. The Board regularly Annual General Meeting remained unchanged. units (second line defense units) in order to remain above reviews.
reviews management performance against approved vigilant to changes in the business and the environment. 7. Recommending to the Board on appointing the
budget target and goals. BOARD LEVEL COMMITTEES statutory auditor, the remuneration and reviewing that
Lapses at the first line of defense can be fully checked the auditor’s actions in course of bank’s audit, do not
Nabil has four permanent Board-level Committees: Audit Committee (AC) and controlled by second line of defense, where Internal contravene with applicable laws and provisions.
The Audit Committee, Risk Management Committee, The Committee is formed and functions in compliance to Audit Department makes assessments and suggests
Committee relating to Staff Services and Facilities and the regulatory provisions of NRB Unified Directives and changes, if required. This is because not addressing such Major Activities
Committee relating to Money Laundering Prevention the Sections 164 and 165 of the Company Act 2006. The lapses on time can lead to more complex problems. a. Review and checking of Financial Statements, both
(AML Committee formed as per Section 7 of NRB coordinator and other members of AC are non-executive The Internal Audit Department (third line of defense) quarterly and annual.
Unified Directive Number 6). Each Committee can directors. The role of Committee Secretary is performed by scrutinizes business decisions following Risk Based b. Review of monthly Capital Adequacy Ratio (CAR) and
include a minimum three members and a maximum of the Chief of Internal Audit Department. Internal Auditors Internal Audit principles to ensure that the bank is risk Risk Weighted Assets of the Bank, and half-yearly
five members. All Board Committees have a Member and Statutory Auditors have direct access to the Audit aware, and the risks are appropriately managed and Investment portfolio review and certification.
Secretary who is engaged and has expertise in the Committee. Nabil Bank has adopted Risk Based Internal controlled. c. Review of internal control mechanism and risk
concerned area of business within the Bank. For effective Auditing. The bank has a separate and independent unit management system through audit of different
discussions of agenda items, other members from the set up to promote a risk aware culture. This unit shares the The composition of the Committee on 16 July 2023 was control function units and business units by the Audit
bank’s management team, whose responsibilities relate risks in the business, suggests for remedial measures, and as follows: Department.
to the agenda, are also invited as required. The meeting mitigation and closure of the risks. The entire process has 1. Director Mr. Pravin Tibrewala (Coordinator) d. Supervision and review of the functions of the Internal
agenda is communicated to the Board members in been outsourced to an independent chartered accountancy 2. Director Mr. Malay Mukherjee (Director) Audit Department.
advance of the meetings to ensure that they have timely firm from the last fiscal year, which continued in the review 3. Mr. Yugesh Lal Bijukchhe, Head, Internal Audit e. Selection of Statutory Auditors and proposing final 3
and adequate information to participate in the meetings. period. (Member Secretary) names and remuneration for final approval from AGM.
The Board members may seek independent professional (Currently, Subodh Lohani, Chief, Internal Audit) f. Review of compliance activities of different units of the
advice as needed and can also visit branches to obtain The unit functions under the broad vision to become a bank and their reporting through audit done by the
a better understanding of local business conditions, better bank by analyzing and tackling the increasing Audit Committee Attendance Audit Department.
participate in business promotion and CSR activities, and complexities and the business they pose. The bank Total 25 AC meetings were held during 2022/23. Details g. Others as appropriate – Special Audit Report Review,
to interact with customers and employees. promotes the risk culture through the Internal Audit of meetings are provided below: Monitorable Action Plan Report Review, Vigilance Audit
Report Review, and ACM-ATR Review, etc.

238 NABIL BANK LIMITED ANNUAL REPORT 2022/23 239

 Audit Committee Agenda Members of the AML Committee of the Board on 16 July AML Committee Recommendations to the Board Meetings
a. Main Audit Reports 2023 was: n The Committee reviewed KYC and AML/CFT Policy NAME NO OF MEETINGS
1. Audit report of 114 branches and 13 units, total 1. Director Mr. A.R.M. Nazmus Sakib, Convener of Nabil Bank Limited and recommended tabling the Malay Mukharjee 14
reports reviewed: 127 in 2079-80, as planned. 2. Director Mr. Ananta Poudyal, Member revised KYC and AML/CFT policies to the Board for Asha Rana Adhikary 1
3. Mrs. Namita Dixit (Chief Risk Officer), approval. Ananta Poudyal 1
b. Other Reports Currently Acting Member Secretary Mr. Bhaskar Awasthi, n The Committee reviewed the Annual AML/CFT Program Pravin Tibrewala 13
1. NRB Inspection Implementation Status – Review and Member Secretary and Budget and recommended it to the Board for A.R.M Nazmus Sakib 12
Suggestions. 4. Mrs. Anjuli Shrestha (Head, Compliance), Member approval. Total 14
2. Status update of MAP listed units. 5. Mr. Sandip Kumar Sigdel (Head, AML/CFT), Member n The Committee reviewed the annual AML/ CFT risk
3. Update against Audit Committee Meeting Action Taken Secretary assessment report of the bank and instructed the bank
Report (ACM ATR) Review. to submit the risk assessment report to NRB and adhere Major Roles and Responsibilities
4. Quarterly and yearly report to the Board on Audit AML Committee Attendance Record to the feedback from NRB, if any. The Committee nTo propose appropriate risk management system and
Committee activities in line with Standard Operating Total of 5 meetings were held in 2022/2023. Meetings presented the report to the Board for information. procedures of the bank to the Board and get approval
Guidelines of Audit Committee. attended by the directors were as follows: n The Committee perused the implementation status of
of the same for implementation.
5. Review of Risk Acceptance report – total 3 Reports. KYC and AML/CFT frameworks updates and decided
6. Review of Vigilance Audit Report – total 5 Reports of DIRECTOR ATTENDANCE to present the quarterly reports to the Board for n To keep the Board of Directors (BOD) informed on
Branches and Accounts. Mr. A.R.M. Nazmus Sakib 4/4 information and deliberation. the adequacy and appropriateness of the existing risk
7. Quarterly review of NPA status of the Bank and major (In first meeting of the F/Y, he was not the member of the identification and management system and advice for
NPA accounts. committee) Risk Management Committee (RMC) the development of the system.
The RMC oversees the overall risk governance framework
Suggestions to Management from Audit Committee Mr. Ananta Poudyal 5/5 of the bank. It ensures that proper risk management n To regularly review the level of risk inherent to business
n Quarterly review of NPAs and appropriate measures to policy and procedures are in place and effectively activities, risk tolerance capacity, risk management
deal with past due and keep a watch on overdue loan Roles and Responsibilities practiced at all levels. In doing so, it assesses whether strategy, and policies and guidelines; and advice the
accounts. Following are the major functions and responsibilities of or not the bank’s policies and procedures are adequate BOD on their adequacy.
n Monthly review of status of old and unreconciled items the AML Committee: and implemented. It reviews the effectiveness of both the
in the nostro accounts and appropriate directions for 1. Review AML/CFT related policies and programs and Management Information System and Internal Control n To receive risk management report from the
timely reconciliation to keep the unreconciled items recommend to the Board for its review/ approval as Systems. The Committee, on an ongoing basis, defines management on regular basis and discuss on
under control. required. and reviews risk appetite of the bank in relation to overall the methodology of risk assessment, evaluation,
n Review and discussions on the NRB inspection report 2. Review the quarterly reports on implementation status business risk with specific focus on credit risk, market monitoring, and control; and submit necessary inputs to
of the bank and advise on appropriate measures to be of the AML/CFT framework in the bank. risk, operation risk and liquidity risk. RMC advises the the BOD.
taken by the management for compliance. 3. Update and track issues and events related to AML/ Board on the overall risk tolerance levels throughout the
n Investment made in different portfolios while presenting CFT globally and make an assessment of risk in the strategic implementation process. By doing so, RMC aims n To conduct regular discussions and analysis of capital
the half yearly Investment Portfolio Report to the national perspective and at the bank. to achieve following objectives: adequacy corresponding to risk asset, Internal Capital
committee to be presented with percentage under each 4. Provide recommendations/ feedback to the Board and Adequacy Assessment Process (ICAAP), adequacy of
category. the management on issues pertaining to AML/CFT. To ensure that the bank has developed and implemented systems and policies in line of business strategy and risk
n Review and discussions made on the Statutory Audit 5. Accomplish any other additional responsibilities that proper risk management system as required by directives tolerance and provide necessary inputs/suggestions to
report of the bank and advise on appropriate measures may be entrusted upon the Committee from time and risk management guidelines of the regulatory the BOD.
to be taken by the management for compliance. to time as per the stipulations of prevailing laws, authority.
n Review and discussion made on the loans under instructions/ directions of the regulatory authority or n To provide suggestions to BOD for the development
refinance submitted to the management as per the Board of Directors. To ensure the adequacy and appropriateness of bank’s of policy and structures according to NRB directives/
requirement of NRB. risk management system. guidelines, bank’s internal ceilings, and national &
AML Committee Agenda international best practices.
Committee Relating to Money Laundering 1. Annual Review and Revision of Know-your-customer Composition of RMC as of 16 July 2023:
Prevention (AML Committee) (KYC) and AML/CFT Policy of Nabil Bank Limited. 1. Director Mr. Malay Mukherjee, Convener n To suggest to the BOD necessary policy that need to be
The AML Committee of the Board has been formed in line 2. Awareness program for customers relevant to AML/ 2. Director Mr. A.R.M Nazmus Shakib, Member formulated or decision processes based on stress testing
with the provision of Directives of NRB. The Committee CFT. 3. Director Mr. Pravin Tibrewala, Member results.
oversees implementation of Assets (Money) Laundering 3. Update on national and international events related to 4. Mr. Ganesh Prasad Awasthi
Prevention Act, 2007, Assets (Money) Laundering AML/CFT. (Chief Operating Officer), Member n To submit report to the BOD with necessary suggestions,
Prevention Rules, 2016, NRB Unified Directives and other 4. Annual review of money laundering and financing 5. Mrs. Namita Dixit (Chief Risk Officer), after analyzing of the limits and rationale of authority
legal and regulatory requirements related to prevention of of terrorism-related risk assessment of Nabil Bank Currently Acting Member Secretary Mr. Bhaskar Awasthi, delegated by the BOD.
money laundering. Limited. Member Secretary
5. AML/CFT quarterly reports.

240 NABIL BANK LIMITED ANNUAL REPORT 2022/23 241

 n To formulate and present to the Board of Directors 4. Assets Liability Committee (ALCO)
plans, policies, and standards related to human FUNCTIONAL DESIGNATION RESPONSIBILITY
n To submit the quarterly report to the BOD on bank’s 6. The Committee reviewed the bank risk limit of foreign
resource management, including recruitment, selection,
asset structure and status of asset mobilization, and domestic banks and recommended adjusting the 1. Chief Executive Officer Coordinator
appointment, transfer, promotion, learning and 2. Senior DCEO, Business Member
anticipation of income from their mobilization, increase limit based on economic indicators and performance
development, performance appraisal, awards and 3. DCEO, nBank & Operations Member
or decrease in their quality and the tasks performed by of the bank.
penalties, and labor relations. 4. DCEO, Finance & HR Member
Asset Liability Committee (ALCO). 7. The Committee took updates on changing national
n To review the policies related to employees 5. DCEO, Corporate and Liability Business Member
and international economic environments and took
and organization structure of the bank and to 6. DGM, International Banking & Contractor Business Member
n To study impact on financial position of the bank due to timely measures to safeguard the bank’s portfolio vis-
prepare employee succession planning and make 7. Chief Business Officer, Corporate & Infrastructure Member
changes in economy and submit the report along with à-vis the changing environment.
recommendations to the Board for approval. 8. Chief-Wholesale Liability Member
adequate mitigation strategies to the BOD. 8. While reviewing the internal sectoral credit limits of the
9. Head-Finance Member
bank, the Committee focused on creating diversified CRSSF Agenda 10. Head-Treasury Member Secretary
RMC Committee Agenda loan portfolio. FOCUS AREAS COUNT %
To fulfill its objectives, the RMC deliberates on various 9. The Committee recommended to link the external
Compensation and Benefits 1 2.4%
agendas at its meetings. After deliberations, the RMC credit rating of a borrower with pricing and on- Continuous Improvement 4 9.8%
decisions are communicated to the Board in the form of boarding. Market and Industry Analysis 3 7.3%
5. Risk Management Committee
memos and minutes. In FY 2022/23, a total 99 agendas 10. Considering the increasing operational risk events at Performance Evaluation and Development 4 9.8% FUNCTIONAL DESIGNATION RESPONSIBILITY
were deliberated. They broadly covered the issues related the bank, the Committee instructed that the bank to Policy and Compliance 9 22.0%
1. Chief Executive Officer Coordinator
to credit, operation, market, information security, strategy, be more focused on operational risk issues, adding Regular Updates and Monitoring 16 39.0%
2. Senior DCEO-Business Member
performance, stress test, ICAAP, policies and product the need for improving the operational risk culture. Strategic Initiatives 4 9.8%
3. DCEO, nBank & Operations Member
Total 41 100.0%
paper guidelines, etc. 4. DCEO, Finance & HR Member
5. DCEO, Corporate and Liability Business Member
Recommendations to Management Committee Relating to Staff Services MANAGEMENT LEVEL COMMITTEES 6. Chief Operating Officer Member
The RMC Committee made the following and Facilities (CRSSF) Besides Board Level Committee, the bank also has 7. Chief Risk Officer Member Secretary
recommendations and suggestions to management in Composition of the Committee on Ashadh 2080 was as numerous management level committees, each entrusted 8. Chief-Credit Control Member
2022/2023. follows: with the responsibility of a specific silo or function. 9. Head-Credit Risk Member
1. The Committee focused on strategic direction of 10. Chief-Operation Risk, AML & CFT Member
being a more granular bank and diversification of
COMMITTEE MEMBERS ROLE 1. Executive Committee 11. Head-Compliance Member
assets through increased focus in SME and the retail 1. Mr. Nirvana Kumar Chaudhary, Director Coordinator FUNCTIONAL DESIGNATION RESPONSIBILITY
portfolio. It aligned lending authorities of the credit to 2. Mrs. Asha Rana Adhikary, Director Member
1. CEO Coordinator
support diversification efforts. 3. Mr. Gyanendra Prasad Dhungana, CEO Member
2. Senior DCEO, Business Member
4. Mr. Manoj Kumar Gyawali, DCEO, Finance & HR Member
2. Based on the macro-economic indicators and 3. DCEO, nBank & Operations Member 6. Labor Relation Committee
5. Mr. Diwas Karki, Head, Human Resources Member Secretary
increasing NPA level of the bank, the Committee was 4. DCEO, Finance & HR Member
FUNCTIONAL DESIGNATION RESPONSIBILITY
of the view that NPA figures might increase in near 5. DCEO, Corporate and Liability Business Member
future. Accordingly, it advised that bank to focus on 6. DGM, International Banking & Contractor Business Member 1. DCEO, Finance & HR Coordinator
1. Director’s Attendance during FY 2079/80
2. DCEO, Corporate and Liability Business Member
recovery from willful defaulters and restructuring/ 7. Chief Risk Officer Member
Mr. Nirvana Kumar Chaudhary Ms. Asha Rana Adhikary 3. Chief Human Resources Officer Member
rescheduling to support the customers who were 8. Executive Assistant to CEO Secretariat to the committee
12 of 12 12 of 12 4. Manager-Human Resources Member Secretary
facing difficulties, despite of their good intentions. The
5. Representative from Nabil Union 4 Members
Committee also advised the bank to be very selective 2. Recruitment and Selection Committee
2. Major Functions of the Committee ( with at least one
while on-boarding new customers. FUNCTIONAL DESIGNATION RESPONSIBILITY female member)
3. The Committee noted that fixed deposits were on an The major function of CRSSF are as follows:
n To assist the bank's Board in formulating policies 1. Senior DCEO, Business Coordinator
increasing trend and (Current Account and Saving
concerning staff remuneration and facilities. 2. DCEO, nBank & Operations Member
Account (CASA) deposits were in a decreasing
3. DCEO, Finance & HR Member
trend, which was a matter of concern. It said the n To conduct periodic studies and analyses of the
remuneration structure, regularly examining and
4. DCEO, Corporate and Liability Business Member 7. Anti-Money Laundering & Combating
bank should focus on increasing CASA deposits to 5. Chief Human Resources Officer Member Secretary
reporting to the Board any changes in the market salary Financing of Terrorism Management Committee
strengthen deposit portfolio.
4. The Committee reviewed the Credit Policy Guidelines structure that may impact the organization. FUNCTIONAL DESIGNATION RESPONSIBILITY
of the bank and suggested new credit approval n To make recommendations to Board of Directors in the 3. Strategy Committee
1. DCEO, nBank & Operations Coordinator
mechanisms for Politically Exposed Persons (PEPs)., event of need to increase the salary of all employees, FUNCTIONAL DESIGNATION RESPONSIBILITY 2. Chief-Operation Risk/ AML CFT Member Secretary
Debt to Equity (DE) Ratio, and receivable financing. including that of the CEO, in accordance with the policy 1. Chief Executive Officer Coordinator 3. Information Security Officer Member
5. The Committee reviewed the country exposure related to staff remuneration and prevailing laws. 2. Senior DCEO, Business Member Secretary 4. Chief Risk Officer Member
of foreign placements and advised not take any n To develop employee performance appraisal system 3. DCEO, nBank & Operations Member 5. Chief Operating Officer Member
additional exposures, and not to rollover existing along with employee’s job performance details, 4. DCEO, Finance & HR Member 6. Chief Digital Banking Officer Member
placements countries where FCY reserves were objectives, and progress indicators and to conduct 5. DCEO, Corporate and Liability Business Member 7. Head-Compliance Member
declining. periodic reviews of the same. 6. DGM, International Banking & Contractor Business Member
7. Chief Strategy Officer Member Secretary

242 NABIL BANK LIMITED ANNUAL REPORT 2022/23 243

 8. Operation Risk Management Committee (ORMC) 11. CSR Committee DISCLOSURE OF INFORMATION UNDER i. Details of shares forfeited (number of shares,
FUNCTIONAL DESIGNATION RESPONSIBILITY FUNCTIONAL DESIGNATION RESPONSIBILITY SECTION 109(4) OF THE COMPANY ACT 2006 face value, amount received by the Company
1. Chief Operating Officer Coordinator 1. DCEO, Finance & HR Coordinator prior to forfeiture, amount received by the
2. Chief Risk Officer Member 2. DCEO, Corporate and Liability Business Member a. Business review of last year: Company after putting such forfeited shares into
3. Chief-Operational Risk/ AML CFT Member Secretary 3. Head-Retail Liability Member Secretary This has been disclosed under section “Management subscription and amount refunded on account of
4. Head-Legal Member 4. Head-Legal Member Report” of the report. forfeited shares):
5. Head-Information Technology Member The bank has not forfeited any shares.
6. Information Security Officer Member b. Any impact caused to the business of the
7. Head-Compliance Member 12. Financial Direction Committee company due to national and international j. Review of the progress made by the Company
FUNCTIONAL DESIGNATION RESPONSIBILITY
conditions? and its subsidiary(s) in the reporting fiscal year
Although the economy has been recovering from the 2022/23 and the position of the same at the end
9. Recovery Committee 1. DCEO, Finance & HR Coordinator
2. Head-General Administration Member
impact of COVID-19, interest rate increase in local of fiscal year:
FUNCTIONAL DESIGNATION RESPONSIBILITY market has created challenges to increase the bank’s Disclosed under chapter: Nabil Investment Banking
3. Chief-Operating Officer Member
1. DCEO, Finance & HR Coordinator 4. Procurement Officer/Manager Member Secretary investment. Limited and Nabil Stock Dealer Limited.
2. Chief-Contractor Business Member
3. Head-Recovery Member Secretary c. Current year’s (2023/24) achievement until k. Main activities carried out by the Company
4. Manager-Recovery Member 13. Governance Committee the date of preparation of Report and Board of and its subsidiary(s) in last fiscal year and any
5. Head-legal Member FUNCTIONAL DESIGNATION RESPONSIBILITY Director’s view on 2022/23: significant changes in the business activities of
1. Chief Human Resources Officer Coordinator In accordance with Management Report 2022/23. the Company and its subsidiary during the same
10. Integrated Risk Management Committee 2. Manager-Human Resources Member Secretary period:
3. Head-Internal Audit Member d. Industrial and professional relation: a) Nabil Bank: Commercial banking activities like credit
FUNCTIONAL DESIGNATION RESPONSIBILITY
4. Head-Compliance Member The bank has achieved success due to the harmonious
1. DCEO, nBank & Operations Coordinator disbursement, deposit mobilization, remittance, operation
2. Chief-Risk Officer Member relationship among its stakeholders. Employees work of foreign trade, electronic transactions and other
3. Chief Human Resources Officer Member in union to achieve common organizational goals. financial services.
4. Head-General Administration Member Staff union and management have built a harmonious
5. Consultant Doctor Member relationship over the years. b) Subsidiary Company: Nabil Investment performs
6. Representative from Nabil Union 3 Members (with at Investment banking activities like portfolio management
least one female member) e. Changes in the Board of Directors and the service, corporate advisory service, and mutual fund
reason thereof: scheme management along with merchant banking
Under “Corporate Governance” section of this Report. activities like issue management, underwriting and
registrar to shares and depository participant’s service
f. Main factors that affect business activities: of CDS and Clearing Ltd. whereas Nabil Stock Dealer
1. Increased competition. performs the activities of a securuties dealer.
2. Quality Investment.
3. Increase in cost of deposits. l. Any information given to the Company by its
4. Liquidity crisis. principal shareholder (who holds 1% or more
shares of the Company) during the financial year:
g. Any remarks and observation stated in the No such information provided by the principal
Independent Auditors’ Report and response of shareholders.
Board of Director towards the same:
No such remarks were made. m. Shares held by the directors and officials of
the Company and information received by the
h. Amount recommended for distribution of Company on their involvement in trading of
dividend: shares:
Cash dividend NPR 11.00 per share amounting NPR
2,976,269,640.21

244 NABIL BANK LIMITED ANNUAL REPORT 2022/23 245

 Shares held by the Directors and Company Officials & their Involvement in Trading n. Information provided on personal interest of u. Remuneration, allowances and benefits paid to
Board of Directors and their relatives (nearest Director, MD, CEO, and officials:
DESIGNATION DIRECTORS & OFFICIALS SHARE UNITS
kin) regarding contract or agreement done with Disclosed under point 5.7 entitled “Related Party
Director Mr. Nirvana Kumar Chaudhary 1,897,459
the Company during the year: Disclosure” of the heading “Disclosure and Additional
Director Mr. Ananta Poudyal 26,188
Director Mr. Pravin Tibrewala 1,056
There is no record of such event/ transaction. information”.
C.E. O Mr. Gyanendra Prasad Dhungana 10,059
Manager Mr. Akash Deep Shrestha 789 o. Buyback of share by the Company, reason v. Uncollected dividend by the Shareholders: NPR
Manager Mr. Amrit Laal Shrestha 3,142 thereof for buyback, number of shares bought 546,950,304.
Manager Mr. Arjun Shrestha 80 back, face value of share and amount paid during
Manager Mr. Ashesh Adhikari 1,435 the buyback w. Information on assets bought or sold as per
Manager Mr. Ashish Singh 324 The Bank has not bought back any shares. Section 141:
Manager Mrs. Binita Shrestha 3,387 No assets were bought or sold.
Manager Mr. Binod Kumar Mahat 886 p. Information on existence of Internal control
Manager Mr. Bishnu Raj Rayamajhi 807
system and if there is, its detail x. Details of related party transaction as per
Manager Mr. Bishwa Prakash Poudel 391
Other information of bank is further disclosed in "Risk Section 175 (transactions between associated
Manager Mr. Digendra Chand 2,985
Management and Control Environment". companies)
Manager Mr. Hari Prasadh Koirala 791
Manager Mr. Kailash Tripathi 11,919
Disclosed in point 5.7 of Note to the Consolidated
Manager Mr. Kapil K.C 21 r. Details related to the operating expense during Financial Statement.
Manager Mr. Khagendra Banskota 699 2022/23:
Manager Mr. Kiran Kumar Pradhan 1,518 Employee expense is disclosed in schedule number 4.36 y. Any other details to be disclosed in the report
Manager Mr. Krishna Kumar Thapa 101 of “Personnel Expenses” and from the Directors in accordance Act or other
Manager Mrs. Manika Shrestha 896 4.37 under “Other Operating Expense”. prevailing laws:
Manager Mr. Manoj Kumar Yadav 1,060 Disclosed in appropriate part of this Report and financial
Manager Mr. Murari Prasad Aryal 246 s. Dues payable to the Company by any director, statements.
Manager Mr. Naresh Kayestha 3,706 MD, CEO, principal shareholders (holding shares
Manager Mr. Nishant Pradhan 152
more than 1%) or their relatives or firms or z. Any other pertinent details
Manager Mr. Nitin Nandawan 1,277
institutions in which they have their involvement Disclosed in appropriate part of this Report and financial
Manager Mr. Padam Raj Upreti 3,083
(interest): statements.
Manager Mrs. Prabhawati Singh Bista 395
Manager Mr. Pratul Bhatta 3
No dues payable to the Company.
Manager Mr. Rabin Shakya 1,406
Manager Mr. Rajan Manandhar 541 t. Name list of internal audit committee, their
Manager Mr. Raju Maharjan 2,880 allowance and benefits, details of disciplinary
Manager Mrs. Ratna Kala Rawal 402 action taken by committee and any suggestions
Manager Mr. Rabi Bhatta 129 given:
Manager Mrs. Rekha Pradhan 500 Under "Corporate Governance" section of this report.
Manager Mr. Sagar Timilsena 514
Manager Mr. Sandesh Raj Bhattarai 142
Manager Mr. Santosh Bhattarai 4
Manager Mr. Santosh Prasad Pandey 12
Manager Mrs. Sareena Shrestha 332
Manager Mr. Sujit Pokharel 90
Manager Mrs. Sumina Prajapati 1,211
Manager Mr. Sunav Shrestha 323
Manager Mr. Surya Bahadur Rokka 569
Manager Mr. Sushil Bhattarai 1,689
Manager Mr. Sushil Sapkota 794
Manager Mr. Tek Bhatta 585
Manager Mr. Uttam K. C. 200

246 NABIL BANK LIMITED ANNUAL REPORT 2022/23 247

 DISCLOSURE RELATED TO SUBRULE (2) OF RULE b) A lawsuit filed by or against the promoter or DISCLOSURE UNDER SUBRULE (3) AND (4) b) Share Ownership structure:
26 OF SECURITIES REGISTRATION AND ISSUANCE director of the body corporate involving statutory OF RULE 20 OF THE DIRECTIVE RELATED
NAME OF SHAREHOLDER NO.OF SHARES PERCENTAGE
REGULATION 2016: regulations or criminal offence: TO CORPORATE GOVERNANCE FOR LISTED
COMPANIES, 2074 1. NB (International) Ltd, Ireland 106,706,242 39.44%
The bank does not have any knowledge of any such
2. IFIC Bank Ltd. Bangladesh 21,017,264 7.77%
1. REPORT OF THE BOARD OF DIRECTORS: claims.
Name of the listed Company Nabil Bank Limited 3. Rastriya Beema Company Ltd. 20,636,986 7.63%
Disclosed in the “Corporate Governance” portion of this
Address, Email, and Website Nabil Centre, Beena Marg, 4. Nepal Stock Exchange Ltd. 712,340 0.26%
report. c) A lawsuit, if any, filed against the promoter and
Durbarmarg, Post Box No: 3729, 5. Muthoot Finance Limited, India 1,198,531 0.44%
director for committing economic crimes: The bank 6. Other shareholders 7,849,782 2.90%
Kathmandu,
2. AUDITOR’S REPORT: does not have knowledge of any such claims. Email: [email protected], Total 158,121,145 58.44%
Disclosed before this financial statements within this Website: www.nabilbank.com
report. 5. ANALYSIS OF STOCK PERFORMANCE OF THE BODY Phone No.: 01- 4227181, 01- 4221718 TYPE OF SHAREHOLDER NO.OF SHARES PERCENTAGE
CORPORATE: Report for the fiscal year FY 2079/80 (2022-23) Promoter 158,121,145 58.44%
3. AUDITED FINANCIAL REPORTS: Ordinary Share 112,448,822 41.56%
Disclosed in appropriate part of this report and financial a) Management’s view on the Stock Exchange Total 270,569,967 100%
statement. The Bank’s share price is guided by market operations 1. Information related to Board of Director
of the capital market. The bank does not comment on its a) Name of Chairman and Appointment Date:
4. LEGAL PROCEEDINGS: share transactions. Mr. Upendra Prasad Poudyal was appointed as
Chairman on 14th January 2022
a) A lawsuit filed by or against the body corporate b) High, low and closing price of the stocks of the
during the quarterly period: c) Information related to Board of Director
company during each quarter of the preceding
No mentionable suits have been filed by the bank except (As of Mid-July 2023)
year of the preceding year along with total
for regular lawsuits concerning loan recovery and tax volume of trading of shares and number of days
liabilities arising in normal course of banking business. NAME GROUP NO. OF SHARES APPOINTMENT DATE DATE OF OATH METHOD OF APPOINTMENT
traded.
1. Mr. Upendra Prasad Poudyal Promoter - 1/14/2022 1/14/2022 Elected from 37th AGM
Shareholder dated 2022/01/14
2. Mr. Nirvana Kumar Chaudhary Promoter 1,897,459 1/13/2023 1/15/2023 Elected from 38th AGM
QUARTER (MONTH) MAXIMUM PRICE MINIMUM PRICE CLOSING PRICE TOTAL SHARES TOTAL DAYS
Shareholder dated 2023/01/13
PER SHARE (NPR) PER SHARE (NPR) PER SHARE (NPR) TRADED TRADED
3. Mr. Malay Mukherjee Promoter - 1/13/2023 1/15/2023 Elected from 38th AGM
Shareholder dated 2023/01/13
First Quarter (Mid-October 2022) 885 750 794 3,443,136 65
4. Mrs. Asha Rana Adhikary Independent - 6/28/2020 6/28/2020 Nomination from BOD
Second Quarter (Mid-January 2023) 913 714 714 4,008,557 49
Director meeting no. 539
Third Quarter (Mid-April 2023) 713 580 619 3,340,616 56
5. Mr. Ananta Poudyal Public 26,188 1/13/2021 1/13/2021 Elected from 36th AGM
Fourth Quarter (Mid-July 2023) 620 582 599 3,606,025 62 Shareholder dated 2021/01/13
6. Mr. Pravin Tibrewala Public 1,056 1/13/2021 1/13/2021 Elected from 36th AGM
Shareholder dated 2021/01/13
7. Mr. A.R.M. Nazmus Sakib* Promoter - 1/13/2023 1/15/2023 Elected from 38th AGM
6. PROBLEM AND CHALLENGES: Services and Facilities and AML Committee. Management Shareholder dated 2023/01/13
Unhealthy competition, fueled by increase in the cost Level Executive and Asset and Liability Management
* Appointed by 605th Board Meeting dated 29th July 2022 and elected by 38th AGM held on 13th January 2023.
of deposit, instability in interest rate, low government Committee (ALCO), Operations Risk/AML & CFT
expenditure in development activities, trade deficit, Committee are also operational.
fluctuating exchange rates and increasing inflation rates
have been some of the challenges apart from those b. Internal Audit is conducted by the internal auditors
outside of bank’s control. The bank has adopted business of the bank to review the effectiveness of internal
diversification, customer focused quality service along control processes. Regular meetings of the Board Audit
with effective risk management strategy to cope with the Committee are conducted to ensure the execution and
challenges. review of suggestions presented in the audit report.

7. CORPORATE GOVERNANCE c. Various internal policies, regulations and directives

Description of management’s initiative towards good have been put in place to minimize operational risk as
governance: well as to regulate the transactions.

a. The bank has Board of Directors along with the d. Employees Code of Conduct has been issued to ensure
different Board Committees namely Audit Committee, Risk maintenance of corporate governance. The compliance is
Management Committee, Committee Relating to Staff reviewed periodically.

248 NABIL BANK LIMITED ANNUAL REPORT 2022/23 249

 d) Meeting of Board of Directors 2. Information related to code of conduct of Board of Directors and other information:
a) Code of conduct pertaining to Board of Directors in place: Yes
DATE OF BOD MEETING NO.OF ATTENDEES NO. OF DIRECTORS DATE OF BOARD MEETING
DURING FY 2022/23 HAVING CONTRASTING OPINIONS DURING FY 2022/23 b) Details if more than one family members of the director are directors of the bank: No
c) Details of annual training and refresher program attended by Board of Directors:
1. 2022/07/29 7 - 7/26/2021
2. 2022/08/14 6 - 7/28/2021
3. 2022/08/24 7 - 8/2/2021 S.NO. TRAINING NAME DATE PARTICIPANTS LOCATION
4. 2022/09/12 7 - 8/15/2021 1. Orientation Program for New Director A.R.M.
5. 2022/09/29 6 - 8/25/2021 Nazmus Sakib (As per Clause 3(1) of Directive No. 6) 14/08/2022 1 In-house
6. 2022/10/16 7 - 10/1/2021 2. Board Level Leadership & Risk Management 12/05/2023 – 13/05/2023 1 Tayo Resort, Nagarkot
7. 2022/11/02 7 - 10/3/2021 organized by NBI
8. 2022/11/06 7 - 10/8/2021 3. KYC – AML/CFT for BODs and Senior Managers 16/06/2023 7 Nagarkot and via Zoom
9. 2022/11/22 7 - 10/10/2021 4. Advancing Board Leadership; Navigating Success 07/07/2023 – 08/07/2023
10. 2022/12/06 7 - 11/2/2021 and Sustainability 1 Dhulikhel
11. 2022/12/11 7 - 11/18/2021
12. 2022/12/19 7 - 11/26/2021
13. 2022/12/28 7 - 12/20/2021
d) Whether below mentioned information submitted or not by Directors within 15 days of their
14. 2023/01/05 7 - 12/23/2021
appointment or nomination:
15. 2023/01/15 7 - 12/29/2021
16. 2023/02/06 7 - 1/12/2022
n Details of any contract executed or likely to be executed with the bank by the Director or family members Informed
17. 2023/03/02 7 - 1/13/2022
n Detail of shares and debenture of the bank or its subsidiary held by the Director or family members Informed
18. 2023/03/07 7 - 1/13/2022
19. 2023/03/14 7 - 1/14/2022 n If the Director is shareholder of any other organization or holds the position of director in any other Informed
20. 2023/03/27 6 - 1/25/2022 organization, details thereof
21. 2023/03/28 7 - 2/7/2022 n Detail of family members of Director who works as an employee or holds a position in the management team Informed
22. 2023/04/12 7 - 3/11/2022 n Detail of listed organization of similar nature where the director has served as a salaried employee or Informed as not
23. 2023/04/13 7 - 3/21/2022 held the position of Director, management team or CEO holding such position
24. 2023/04/27 7 - 4/12/2022 n Details of any action taken against the board of directors by regulatory and other authorities None
25. 2023/05/21 7 - 4/24/2022
26. 2023/06/05 7 - 5/5/2022
27. 2023/06/16 6 - 5/20/2022
28. 2023/07/05 6 - 6/8/2022 3. Detail of Risk Management and Internal Control - Mr. Pravin Tibrewala: Member
29. 2023/07/06 7 - 6/20/2022 System of the organization - Mr. Ganesh Prasad Awasthi: Member, Chief
30. 2023/07/14 6 - 6/23/2022
Operating Officer
31. 2023/07/15 6 - 6/28/2022
a) Whether any Committee formed for risk - Mrs. Namita Dixit: Member Secretary, Chief
32. - - - 6/30/2022
33. - - - 7/3/2022 management, if not formed reason: Risk Risk Officer (Currently Mr. Bhaskar Awasthi,
34. - - - 7/8/2022 Management Committee formed Acting CRO)
35. - - - 7/16/2022 ii) Number of meetings held during FY2022/23: 14
b) Information related to Risk Management iii) Roles and responsibilities of Risk Management
Committee: Committee:
- Details, if the Board meeting was adjourned due to shortfall in quorum: No i) Structure of the Committee (Name and - Provide suggestions to the Board of Directors
- Additional information related to Board Meeting:
designation of members): about the adequacy and appropriateness of
a) Whether director/alternate director was present or not in the board meeting No arrangement of alternate director - Mr. Malay Mukherjee: Coordinator Risk Identification and Management System in place
(In case of absence in the Board Meeting date of meeting along with reason to be disclosed) - Mr. A.R.M. Nazmus Sakib: Member and further development of such system.
b) Whether separate record related to Board Meeting such as name of directors present in the Separate record maintained
meeting, agenda of the meeting and decision maintained
c) Maximum gap between two consecutive Board Meetings (in days) 23 days
d) Annual General Meeting date wherein Meeting Fees of Board of Directors were determined 38th AGM held on 13th January 2023
e) Meeting allowance of Board of Directors (per meeting) Chairman: Rs. 22,000.00
Directors: Rs. 17,000.00
f) Meeting expenses of board of directors during FY Rs. 34,73,000.00 (Board Meeting
Allowance only)

250 NABIL BANK LIMITED ANNUAL REPORT 2022/23 251

 - Conduct periodic review of inherent business committees such as Executive Committee, Operational ii) Number of Meetings:
risk, strategies developed for management of Risk Management Committee, AML Committee are in COMMITTEE NO. OF MEETING
such risks, policies and guidelines in place and place.
Board of Directors 31
provide suggestions to the Board of Directors on its Risk Management Committee 14
adequacy. e) Details on Internal Control System related committees Audit Committee 25
- Provide suggestions to the Board of Directors Board of Directors: Committee relating to Staff Services and Facilities 11
regarding estimation, evaluation and management of - Mr. Upendra Prasad Poudyal (Chairman) Committee relating to Money Laundering Prevention 5
risks based on the Risk Management Reports. - Mr. Nirvana Kumar Chaudhary (Director)
- Provide suggestions to the Board of Directors on - Mr. Malay Mukherjee (Director)
iii) Role of Committees:
Capital Adequacy, Internal Capital Adequacy - Mrs. Asha Rana Adhikary (Director)
The responsibility to review internal control system of the Bank and its effectiveness lies with the Board of Directors. The
- Assessment Procedure (ICAAP), adequacy of policies - Mr. Ananta Poudyal (Director)
Audit Committee provides independent suggestions about the effectiveness of the internal control system to the Board
in coherence with business strategy and risk appetite of - Mr. Pravin Tibrewala (Director)
of Directors after reviewing audit reports of Internal Auditor, Statutory Auditor and Supervisory Inspector. The Bank is
the bank. - Mr. A.R.M. Nazmus Sakib (Director)
committed towards conducting business mitigating the inherent risk associated with the business. With this objective, bank
- Provide suggestions to the Board of Directors for
has Internal Control System in place. This has contributed in identification, analysis, evaluation and management of risks
formulation of necessary policies and structure for Risk Management Committee:
in an effective manner. For mitigation and management of operational risks several internal policies, regulations and
Risk Management in line with NRB’s Risk Management - Mr. Malay Mukherjee (Coordinator)
guidelines are in place. Likewise, for ensuring Corporate Governance Code of Conduct for employees are in place and is
Directives/Guidelines and risk appetite and tolerance - Mr. Pravin Tibrewala (Member)
being monitored.
limit. - Mr. A.R.M. Nazmus Sakib (Member)
- Provide suggestions to the Board of Directors - Mr. Ganesh Prasad Awasthi, Chief Operating Officer
iv) Financial Administration Byelaws in place or not : Yes
regarding formulation of necessary policies based on (Member)
the review of Stress Test Report on periodic basis. - Mrs. Namita Dixit, Chief Risk Officer (Member
- Submission of report along with suggestions to the Secretary) (Currently Mr. Bhaskar Awasthi, Acting CRO) 4. Details on information to general public:
Board of Directors on the review focusing on rationale a. Information to general public:
for of delegation of authority and limit by Board of Audit Committee:
Directors. - Mr. Pravin Tibrewala (Coordinator) PARTICULARS MEDIUM DATE OF PUBLICATION
- Submission of report along with suggestions to the - Mr. Malay Mukherjee (Member) Notice of Annual General Meeting (AGM) Public Notice in National Daily Newspaper 21st December 2022 and 28th December2022
Board of Directors on activities of ALCO like portfolio - Mr. Yugesh Lal Bijukchhe, Chief Internal Audit Notice of Special General Meeting (SGM) None in this FY -
assessment, mobilization of resources, returns from (Member Secretary) (Currently Mr. Subodh Lohani, Annual Report Public Notice in National Daily Newspaper 6th January 2023
portfolio, appreciation/depreciation on asset quality on Chief Internal Audit) and Bank’s website
a quarterly basis. Quarterly Report Public Notice in National Daily Newspaper
- Submission of report to the Board of Directors Committee relating to Staff Services and Facilities: First Quarter: 24th October 2022
Second Quarter: 21st January 2023
along with suggestions regarding strategy/policy to - Mr. Nirvana Kumar Chaudhary (Coordinator)
Third Quarter: 20th April 2023
be adopted for mitigation of impact on the overall - Mrs. Asha Rana Adhikary (Member) Fourth Quarter: 6th August 2023
financial position of the bank based on study report - Mr. Gyanendra Prasad Dhungana, Chief Executive And Bank’s website
regarding problem in any sector of the economy and Officer (Member) Notice on Price sensitive matters Correspondence to regulatory bodies and
its spillover effect. - Mr. Manoj Kumar Gyawali, DCEO (Member) public notice in daily newspaper
- Propose appropriate risk management system and - Mr. Diwas Karki, Head Human Resource (Member Others -
process to be adopted by the Bank to the Board of Secretary)
Directors and obtain approval for its implementation. b. Whether any action taken by SEBON or other authority for not publishing notice or for other reasons:
Committee related to Money Laundering None
c) Internal Control procedures in place or not: In place Prevention (AML Committee): c. Date of last AGM and Special General Meeting:
- Mr. A.R.M. Nazmus Sakib (Coordinator) 38th AGM: 13th January, 2023
d) Name of committee formed for Internal Control System - Mr. Ananta Poudyal (Member) SGM date: None
(Specify reason if no such committee is formed): There - Mrs. Namita Dixit, Chief Risk Officer (Member)
is board and board level committees such as Audit (Currently Mr. Bhaskar Awasthi, Acting CRO) 5. Organization Structure and details related to employees:
Committee, Risk Management Committee, Committee - Mrs. Anjuli Shrestha, Head Compliance (Member) a. Whether Employee Bylaws covering structure, recruitment, employee development, training, salary,
relating to staff services and facilities and Committee - Mr. Sandip Kumar Sigdel, Head – AML/CFT (Member allowance and other facilities, attendance and leave, code of conduct in place: Yes
relating to Money Laundering Prevention (AML Secretary) b. Organization Structure: Presented Separately in the annual Report
Committee) in place. Likewise, management level

252 NABIL BANK LIMITED ANNUAL REPORT 2022/23 253

 c. Details on Senior Management: b. Details related to Audit Committee
S.N. NAME DESIGNATION QUALIFICATION
S.N. EMPLOYEE’S NAME DESIGNATION QUALIFICATION EXPERIENCE
1. Mr. Pravin Tibrewala Coordinator of Audit Committee, Member of BOD M.B.A
1. Mr. Gyanendra Prasad Dhungana Chief Executive Office CA (The Institute of Chartered 2. Mr. Malay Mukherjee Member of Audit Committee (Member of BOD) M.S. C
Accountants of India) More than 28 years
3. Mr. Yugesh Lal Bijukchhe Member Secretary of Audit Committee,
Master of Financial Analysis,
(currently Mr. Subodh Lohani) Chief – Internal Audit M.B.A
(UNSW)Australia
2. Mr. Sujit Kumar Shakya Senior Deputy Chief PGDBM, Institute of Productivity &
Executive Officer Management, Lucknow, India More than 26 years
3. Mr. Binaya Kumar Regmi Deputy Chief Executive MBA, Tribhuwan University, Nepal Date of meeting and number of attendees:
Officer More than 36 years
S. NO. MEETING NO. DATE NO. OF ATTENDEES
4. Mr. Manoj Kumar Gyawali Deputy Chief Executive CA (The Institute of Chartered
Officer Accountants of India) More than 24 years 1. 213th 7/19/2022 3
5. Mr. Bhupendra Pandey Deputy Chief Executive CA (The Institute of Chartered 2. 214th 8/4/2022 3
Officer Accountants of India) More than 18 years 3. 215th 8/16/2022 3
MBS, Tribhuwan University, Nepal 4. 216th 8/26/2022 3
6. Mr. Adarsha Bazgain Deputy General Manager MBA, Kathmandu University, Nepal More than 20 years 5. 217th 8/31/2022 3
7. * Mr. Krishna Dutta Bhattarai Deputy General Manager MBA, Tribhuwan University, Nepal More than 31 years 6. 218th 9/23/2022 3
8. Mr. Ganesh Prasad Awasthi Deputy General Manager MBS., Tribhuwan University, Nepal More than 22 years 7. 219th 10/11/2022 3
9. * Mrs. Namita Dixit Assistant General Manager MBA, Tribhuwan University, Nepal More than 31 years
8. 220th 10/23/2022 3
10. Mr. Gyanendra Pratap Shah Assistant General Manager MPA, Tribhuwan University, Nepal More than 31 years
9. 221st 11/9/2022 3
*Currently not in service 10. 222nd 11/26/2022 3
11. 223rd 12/5/2022 3
12. 224th 12/10/2022 3
13. 225th 12/16/2022 3
d. Other details related to employees: 14. 226th 1/20/2023 3
15. 227th 1/30/2023 3
Whether vacant position is filled as per organization structure: Yes 16. 228th 2/16/2023 3
Procedure followed for recruitment of new employee: As per Employee Service Bylaw 17. 229th 3/10/2023 3
Number of employees in management level: 151 (currently 134) 18. 230th 3/16/2023 3
Number of employees: 2,252 (currently 2,253)
19. 231st 4/7/2023 3
Succession plan in place: Yes
20. 232nd 4/19/2023 3
Number of trainings and the number of employees trained during fiscal year No. of trainings: 441
21. 233rd 4/30/2023 3
No. of employees involved: 46,748
Employee training expense during fiscal year: Rs. 35,001,651 22. 234th 5/24/2023 3
Percentage of employee expense to total expense: 59.46% 23. 235th 5/26/2023 3
Percentage of employee training expense to total employee expense: 1.17% 24. 236th 6/26/2023 3
25. 237th 7/4/2023 3

6. Details on Accounts and Audit.

Meeting allowance per meeting:
a. Details on accounts:
1. Rs. 15,000.00 per meeting (Rs. 12,750.00 after
Whether financial statements of previous fiscal year prepared as per NFRS; if not, reason Yes (Financial Statements of FY 2022/23 deduction of 15% tax) – (213th to 227th meeting)
for the same: prepared as per NFRS)
Date of approval by BOD of financial statements of previous fiscal year: 11th December, 2022 2. Rs. 17,000.00 per meeting (Rs. 14,450.00 after
Date of publication of quarterly financials: As presented in point 4 (a) deduction of 15% tax) (228th to 237th meeting)
Latest date of completion of Statutory Audit: 11th December, 2022
Date of approval of financial statements by AGM: 13th January, 2023 Date of submission of report/activities by Audit Committee
to BOD: 26th July 2023
Details on internal audit:
i) Internal audit performed by in house Internal Audit Team or by external expertise: Conducted through external expert
ii) Details of external expertise appointed for audit (if any): S. R. Pandey and Company, Chartered
Accountants
iii) Frequency of Internal Audit: Annual basis

254 NABIL BANK LIMITED ANNUAL REPORT 2022/23 255

 Date of submission of minutes of meeting of Audit Committee for FY 2022/23 to BOD: POLICY FOR MAINTENANCE
MINUTE BOARD MEETING NO. DATE OF MINUTES PRESENTED AND BACKUP OF RECORDS The bank has entered into the record management
213th 606th 14/08/2022 Each department, unit, and branch of the bank function agreement with Blackbox Records Management Pvt. Ltd.
214th as per the predefined and pre-approved operating regarding Storage and Non-Storage Services. Storage
215th 610th 16/10/2022 procedures laid down in the Standing Instruction Manual Services imply storage of documents and records while
216th (SIM). Detailed guidelines on what is to be done, how it is Non-Storage Services include on premises pick up &
217th to be done and what information and documentation is to drop services, retrieving on demand or other services.
218th 618th 05/01/2023 The bank’s documents are stored in a storage facility
be done is mentioned in the manual. Each unit performs
219th built as per international standard so that documents are
its responsibilities and maintain adequate records as per
220th
the guideline. Each unit has its own system of maintaining protected against the risk of physical damage by natural
221st
the backup of records and it is also periodically replicated disaster, environmental factors, pests, etc. Documents are
222nd
in the IT server. Hard copies of important documents such stored in a PEB structure warehouse with 250,000 sq. ft.
223rd
as legal documents and security documents are stored of dedicated storage space in Paanchkhal, Kavre which
224th 638th 29/08/2023
225th 620th 06/02/2023 in fireproof cabinets. Backup of important documents in is strategically located to ensure that any sort of risk is
226th softcopies are maintained in computers at the Disaster mitigated or eliminated for the safety of documentary
227th 623th 14/03/2023 Recovery Site (DRS) or Cloud Storage as appropriate. records.
228th 628th 27/04/2023
229th The Bank also has an online replication DRS which To address the ongoing challenge of managing vast
230th captures the record of each transaction that takes place amounts of physical documents while striving to maintain
231st 632nd 05/07/2023 at the Production Server. Both the sites (Production Server efficiency, compliance, and data security, the bank has
232nd entered into contractual arrangement with Blackbox
and Disaster Recovery – Back up site) are housed in well-
233rd
conditioned and high shock resistant buildings and are at Records Management Pvt. Ltd. This arrangement is an
234th
different seismic zones, far from each other. outsourced physical document management service by
235th
virtue of which physical files/documents are managed and
236th 637th 20/08/2023
The DRS is outsourced to a professionally managed stored by the vendor at its warehouse at Paanchkhal. The
237th
company having expertise in the sector. Periodical drills project was started with transferring eligible documents,
are carried out to assess the smooth functioning of the of various joint/central stores and some Head Office
DRS. units inside Kathmandu Valley, which were incurring high
7. Other details
rental /storage costs, to the Blackbox facility. Documents
Whether the bank has obtained any loan, advance or any other amount in any other form Keeping in mind the possibility of business disruption of various other branches and units have also been
from any person, bank or financial institution in which the directors or their family members have due to natural and technical disasters or human-induced transferred to Blackbox.
financial interest. None events, the bank has put a Continuity of Business Plan
(COBP) in place. The purpose of the COBP guidelines is The Blackbox arrangement has been a key to effectively
Whether any director, shareholder, employee, consultant has received any facility/benefit other than
to prepare concerned staff in the event of service outages and efficiently handling paper-based records, reduce
facility/benefit as per prevailing laws by any person, firm, company, consultant having financial interest
and have used assets of the bank or not. None caused by factors beyond anyone’s control; internal operational burdens and enhance overall document
or external such as, natural disaster, fire breakouts, security and compliance. Additionally, it has been a
Whether the bank has complied with the terms and conditions prescribed while granting license by human-induced events, and to restore services to the breakthrough in extracting paper-based records of the
the regulatory body. Yes widest extent possible in a minimum time frame. The bank eligible for destruction as per Old Records/Paper
bank’s COBP guidelines have been developed to Destruction Policy and clearing out the rental/office space.
Whether the bank has compiled with the directions given by the regulatory body during inspection or supervision. Yes
manage the adverse impact of significant disruptions
Details of any ongoing litigations in the court of law against the company or its directors: None except that and to enable it to resume business and operations to an The Blackbox warehouse, is claimed to have been
occurs in the normal acceptable level within a reasonable time in the event of designed as per global safety standards. In addition to
course of business a disaster. From the onset of the COVID-19 pandemic, providing physical safety arrangements for mitigating
the bank has activated the COBP guidelines with clear both natural and human-induced operational risks during
instructions on the way forward for extending maximum the handling/transportation of documents as well as at
possible services to the public whilst also safeguarding the warehouse, the service delivery of the arrangement is
Name of Compliance Officer: Anjuli Shrestha staffs’ health and ensuring their well-being. During the highly effective. With this arrangement, the bank has been
Designation: Head Compliance nationwide lockdowns, services were provided through a able to keep a proper track record of all the documents
Date: 30th November, 2023 few branches and minimum possible staff. With maximum transferred to Blackbox with a perfect and timely retrieval
Stamp of organization: support from the IT unit, each staff was enabled to record.
Date of approval of the report by Board of Directors: 30th November, 2023 work from home and all the functions were carried out
smoothly.
256 NABIL BANK LIMITED ANNUAL REPORT 2022/23 257
 Code of conduct of bank requires the data, records and Information available on website
information held and managed must be accurate and -Details about Nabil bank, Board of Directors,
complete at all times and must retain records for the Management Team, Branches, Province Heads
appropriate period (as specified by law, policy, convention -Product briefing
or business need) to enable the bank to respond -Grievance handling
to questions that may arise from audits, regulatory -Nabil Chatbot
inspection/investigation, tax reviews, legal proceedings, -Notices
and other actions. -Downloadable documents
-Financial disclosures: AGM Minutes, Unclaimed dividend,
Communication with Shareholders quarterly financial reports, Annual Report, Disclosure
and other Stakeholders as per Basel III, GHG Disclosure, Interest Subsidy Loan,
The bank communicates with shareholders and Refinance Loan, Base rate, and Interest Spread Rate (Last
stakeholders via multiple channels. Commonly used 3 Years)
communication channels are: -Notice regarding the Right to Information
-CSR activities of the Bank, etc.
1) Website of the bank
2) Grievance handling mechanism of the bank within Evaluation of Quarterly Reports by Audit
branches Committee
3) Social media platforms like Facebook, Instagram, The Audit Committee reviews audit reports every quarter
LinkedIn, Viber, Twitter, etc. and provides instructions and recommendations to the
4) Nabil Call Centre management and Board. Similarly, quarterly report
5) Press release and published data in newspapers related to performance, significant risk exposure and
6) Annual General Meetings. control issues, and fraud risk are presented and discussed
in the Audit Committee as a separate agenda. Further,
a separate report on performance of Audit Committee
is also submitted to the Board on quarterly basis in
accordance with its Standard Operating Guidelines
(SOG).

Details of Audit Committee Meetings for Certification of Quarterly Financial Reports:

S. NO FINANCIALS FY 2079-80/2022-23 ACM NO. PRESENTED DATE

1. Certification of Q1 Financials 220th ACM 23 October 2022

2. Certification of Q2 Financials 226th ACM 20 January 2023
3. Certification of Q3 Financials 232nd ACM 19 April 2023
4. Certification of Q4 Financials 239th ACM 5 August 2023

258 NABIL BANK LIMITED ANNUAL REPORT 2022/23 259

 CRISP

PROFESSIONAL
We have always immensely valued
professionalism and proficiency.
We recognize the value of good
work ethics in an organization’s
progress and each of us has to
be competent, committed and a
true professional at heart. For us,
how we do something is just as
important as what we do.

260 NABIL BANK LIMITED ANNUAL REPORT 2022/23 261

 Risk management is a critical

ENVIRONMENT
RISK
MANAGEMENT
& CONTROL
and challenging part of
implementing the bank's
strategies. The focus should
be on the major areas of risk
viz. operational risk, credit
risk, reputation risk, market
risk etc, which arises on day
to day course of business. Risk
management has now become
a global phenomenon and it
has become more challenging
to manage the appropriate risk
level as per organization's risk
appetite. Organization needs
to manage the risk efficiently
to align with its strategies and
long term goals.

Risk management at the bank is guided by

risk management policy and risk management
committee (board level committee) oversights
over risk environment, probable risk scenarios,
risk events, and mitigation thereof.

The bank has endeavored to present its efforts

in managing various areas of risk. The section
hence forward has outlined the description of
risk management and control environment
framework, as well as the risk control &
mitigation methodology. Additionally, the bank
has disclosed its risk reporting approaches for
credit risk, operational risk, liquidity risk, interest
rate risk, foreign exchange risk, and compliance
risk. It has also provided insights into the Internal
Capital Adequacy Assessment Process (ICAAP)
along with its disclosure.

262 NABIL BANK LIMITED ANNUAL REPORT 2022/23 263

 DESCRIPTION OF RISK MANAGEMENT AND defined policies, structures, and control systems for Three Lines of Defense
CONTROL ENVIRONMENT FRAMEWORK proper risk management. It also ensures that there Based on its risk governance framework, Nabil Bank has put in place three lines of defense for each type of risk. The following
is proper reporting and communication of risk inside table provides the list of lines it has established to manage various types of risks.
Risk Management and outside the organization. To ensure effective risk
Nabil ensures that there are proper structures, rules, governance, the bank follows the three lines of defense Type of Risks and the Line of Defense
processes, and mechanisms through which decisions model which allows application of the principles of
RISK TYPE 1ST LINE OF DEFENSE 2ND LINE OF DEFENSE 3RD LINE OF DEFENSE
regarding risk management are taken and implemented. good risk governance for the identification, assessment,
The bank has proper organizational structure, well- measurement, monitoring, and mitigating the risk. Credit Risk SBUs
Province / Clusters Office
Branch Office
The bank’s risk governance framework is illustrated below: Market & Liquidity Risk Treasury Risk Management Internal Audit
Finance & Planning and Compliance Unit
Concentration Risk SBUs
BOARD OF DIRECTORS
Province / Clusters Office
AML Committee Audit Committee Risk Management Committee Staff Services and Facility Committee Branch Office
IT

Strategy, Plans, Policies and Oversight

HR
Administration
Senior Management Operational Risk Respective units/Departments
Other Risks:
Legal Risk
Reporting

Compliance Risk
First Line of Defense Second Line of Defense Third Line of Defense Strategic Risk
Risk Owners Risk Oversight Independent Assurance Environmental & Social Risk
Identification, assessment, Risk oversight unit level Independent assurance to
mitigation, and reporting as and organizationsl level. seniot management/Board
per approved policies Appropriate internal control on the effectiveness of risk Risk Principles n Infrastructure: Ensure sufficient resources and
and appetite. and compliance framework management system in
the bank. The bank follows following principles to manage risks: systems infrastructures are in place to enable effective risk
in place to ensure effective
Compliance with risk policies,
and efficient operations in management.
guidelines and procedures
the organization. n Risk appetite and strategy: Establishment of
risk appetite statement and strategy, which articulates Risk Management Framework
Figure: Risk Governance Framework of Nabil Bank the nature, type, and level of risk the bank is willing to Nabil Bank manages risk through an integrated risk
assume. management framework. While doing so, it ensures that
all staff follow risk management guidelines, the NRB
n Capital Management: Capital management is Risk Management Guidelines 2018. The framework sets
driven by bank’s strategic objective and accounts for the out the process of identifying, measuring, monitoring,
regulatory, economic, and commercial environment in and controlling the different types of risks and the
which bank operates. risk governance structure. The main objectives of the
framework are as follows:
n Governance and oversight: Proper governance
and oversight through a clear, effective, and robust n To establish common principles and standards for
governance structure with well-defined transparent and management and control of all risks.
consistent lines of responsibility. n Provide a shared framework and language to improve
awareness of risk management.
n Risk Culture: Promotion of strong risk culture that n Anticipate and mitigate risk events before they become
supports and provides appropriate standards and a reality.
incentive for professional and responsible behavior. n Protect against possible losses.
n Integrate risk management in all levels of decision
n Risk policies and process: Implementation of making.
policies to ensure that risk management practices and n Ensure earnings stability.
process are effective at all levels, and execution of sound n To provide clear accountability and responsibility for risk
risk management processes to actively identify, measure, management
control, monitor and report risk inherent in all products n Define the bank’s risk appetite and align the portfolios
activities, process, systems, and exposure. and business strategy accordingly.

264 NABIL BANK LIMITED ANNUAL REPORT 2022/23 265

 n Maintain the bank’s capital adequacy and liquidity Effective Internal Control and Limits: There are
position. approved risk limits in place for the purpose of monitoring Under this structure, the Chief Risk Officer (CRO) reports Risk Management Tools
n Further strengthen governance, controls, and the risks against the risk appetite. Internal controls to the RMC, a board level committee primarily responsible The bank uses various types of risk management tools
accountability across the organization. embedded on day-to-day business are designed to for risk management and oversight. This structure ensures that help it in effective risk management. The various tools
ensure, to the extent possible, that the banking activities an effective independent risk management function, used by bank for effective risk management are illustrated
The risk management framework of Nabil Bank has are efficient and effective, information is reliable, timely under the direction of the CRO, with sufficient stature, below:
following components: and complete and the bank is compliant with applicable independence, resources, and access to the Board.
laws and regulation.
Active Board and Senior Management Oversight:
Board-level control has been exercised on the Risk Appetite and Risk Tolerance: In line with the
management of risk across the bank. There is presence risk appetite statement and risk tolerance metric, there is
of a clear, effective, and robust governance structure a responsibility matrix for various risk areas and trigger-
with well-defined transparent and consistent lines of level monitoring. The risk appetite statement considers
responsibility. Board-level committees meet regularly to risk capacity, financial position, and strength of its core
review the risk profile and take necessary decisions. earnings. Risk appetite is set and approved by the Board
and is overseen on an ongoing basis.
Policies and Procedures: The bank has policies/
procedures to ensure that risk management practices and The Bank has also set risk tolerance level for different risk
Stress Testing
process are effective at all levels and ensures execution aspects. This details the amount of uncertainty that bank
of sound risk management process to actively identify, is willing to work with. Risk tolerance levels are defined Risk
measure, control, monitor and report risk inherent in all quantitatively and also serve as Key Risk Indicators that
Assest and
Automation &
Liability
products activities, process, systems, and exposure. trigger remedial measures in case of deviations. Process
Management
Efficiency
Risk Management Function: There are guidelines Risk Culture: Risk culture covers awareness, attitude,
on key responsibilities and escalation and risk reporting and behavior of staffs towards risk and risk management.
model in the bank. The RMC reports to the Board of The bank promotes a strong risk culture that supports
Directors for key risk issues on a periodic basis. appropriate standards for professional and responsible
behavior. It has, as explained earlier, three line of defense Risk
Appropriate Management Information System: first (Branch/Strategic Business Units), second (Risk Units) Disclosure Compliance
Sound and effective management information system and third (Internal Audit) for tackling risks. and Risk Assesment
(MIS) is crucial for the bank’s risk management. Assessment
Information generated by MIS helps Senior Management/ Training: The bank has provided and continues to
Board to take decisions regarding risks, credit portfolio provide trainings, as needed, to enhance skills and
decisions, and estimate capital requirements on a knowledge in the risk management for the staff.
Risk
Management
meaningful and timely basis. The MIS also assists
decisions regarding credit risk management. Risk Organization Structure
Nabil Bank follows an independent risk organization
structure provided by the Integrated Risk Management Risk Appetite
Capital
Framework. Statement
planning &
and Risk
Management
Board of Directors Tolerance

AML Committee Risk Management Committee Audit Committee HR Committee

Chief Executive Officer

Credit,
Operation
Chief Risk Officer Risk Models
and Market
Risks
People &
Integrated Risk Compliance Credit Control Change
Management

Credit Risk Market Risk Operations Risk Information Risk Others AML/CFT

266 NABIL BANK LIMITED ANNUAL REPORT 2022/23 267

 Risk Management Departments Credit Risks Considered by Nabil Table 98: Compliance with Single Obligor Limits NPR IN MILLION
The Bank has various risk management units such A) Default Risk: The risk arises when the borrower is MAXIMUM LOAN TO ASHADH END 2080 ASHADH END 2079 ASHADH END 2078 COMPLIANCE STATUS
as Treasury Mid Office (which is independent of the unable to repay the obligation. Nabil uses a robust credit SINGLE OBLIGOR (OVERALL) VOLUME VOLUME VOLUME

Front Office), Credit Risk Management Department, appraisal system to filter out possible defaulters or willful Fund based (% of Core Capital) 7.37% 8.93% 9.06% Compliant
Operational Risk Management Department, Compliance, defaulters at first stage of the relationship. Non-Fund Based (% of Core Capital) 3.83% 9.68% 0.77% Compliant
ISO etc. for identifying, assessing, monitoring, controlling, Maximum Loan to Single Obligor (% of Core Capital) 11.20% 18.61% 9.83% Compliant
and reporting of various risks. B) Pro Cyclical Risk: This arises due to changes in business Regulatory Ceiling (Unified Directive No 3) 25% of Core
cycle, whereby business cycle of the economy affects Capital
2) Risk Control & Mitigation Methodology and credit quality and repayment capacity of the borrower/
Disclosure of Risk Reporting business.
Table 99: Compliance with Single Obligor Limits (Margin Lending) NPR IN MILLION
a) Credit Risk C) Collateral Risk: The risk is associated with the exposure
ASHADH END 2080 COMPLIANCE STATUS
Credit Risk is the potential that a bank borrower/counter of quality and concentration of collateral. The quality of MAXIMUM LOAN TO SINGLE OBLIGOR (MARGIN LOAN) VOLUME
party fails to meet the obligations on agreed terms. The collateral is determined by the value of collateral obtained
Maximum Loan to Single Obligor 120.00 Compliant
objective of credit risk management is to minimize the during the disposal. The property valuation guideline of
Regulatory Ceiling (Unified Directive No 3/079) Maximum up to 120 million
risk and maximize bank’s risk adjusted rate of return the bank and the implementation of loan to value ratio as
by assuming and maintaining credit exposure within directed by NRB helps to mitigate collateral risk.
acceptable parameters.
D) Credit Concentration Risk: High concentration of credit Table 100: Exposure in Margin Lending NPR IN MILLION
Risk Control & Mitigation Methodology on a single borrower, group of borrowers or sector can ASHADH END 2080 ASHADH END 2079 ASHADH END 2078 COMPLIANCE
of Credit Risk lead to increased credit risk. The bank follows regulations PARTICULARS VOLUME VOLUME VOLUME STATUS

Overall responsibility of Credit Risk Management is regarding Single Obligor Limit and Sectoral Credit Report Total Margin Loan 9,179 7,515 5,929
vested in the Board of Directors. The Board approves the to mitigate concentration risk. Core Capital of last quarter 44,184 29,980 24,470
credit risk strategy in line with bank’s overall business % of Core Capital 20.77% 25.07% 24.23% Compliant
strategy and ensures that it has appropriate credit risk Credit Risk Mitigation Framework Regulatory Ceiling (Unified Directive No 2) Maximum up Maximum up Maximum up
management policies, plans, and procedures in place. 1) Fair valuation of property to 40% of core to 40% of core to 40% of core
capital of immidiately capital of immidiately capital of immidiately
The Board also ensures that the plans and policies are 2) Credit administration
preceding quarter preceding quarter preceding quarter
effectively implemented and reviews the strategy, policies, 3) NPA management
plans, and procedures on a periodic basis. 4) Data analysis and MIS
5) Stress testing
Table 101: Concentration of Top Borrowers NPR IN MILLION
The Senior Management is responsible for designing 6) Credit policies
ASHADH END 2080 ASHADH END 2079 ASHADH END 2078
well-defined credit risk management strategy, policies, 7) Credit appraisal
PARTICULARS VOLUME VOLUME VOLUME
and procedures, which are approved by the Board. It is 8) Dual signing and independent risk analysis
also responsible for the distribution, implementation, and 9) Risk modelling and risk rating Top 10 (% of Total Loan) 5.81% 7.00% 9.61%
Top 100 (% of Total Loan) 24.29% 25.56% 33.57%
compliance of approved policies and procedures, proper 10) Internal Credit Risk Rating Guideline
Total Loan 341,455 309,071 205,518
reporting system, internal control system, and monitoring 11) Simplified Standardized Approach to measure Credit
and controlling of the bank’s credit portfolio. Risk Exposure based on Capital Adequacy Framework
2015
Business solicitation, credit evaluation, credit approval, Table 102: Concentration of Real Estate Loan NPR IN MILLION

credit disbursal, and relationship management are ASHADH END 2080 ASHADH END 2079 ASHADH END 2078 COMPLIANCE STATUS
PARTICULARS VOLUME VOLUME VOLUME
managed separately. The bank has guidelines for
processing new loan, renewals, enhancement of loan, Total Real Estate Loan 23,306 18,339 13,023
and credit rating. Credit risk rating system is based on Total Loan 341,455 309,071 205,518
customers’ due diligence. The credit administration % of Core Capital 6.83% 5.93% 6.34% Compliant
function has been developed for review of loan Regulatory Ceiling (Unified Directive No 2) Maximum up Maximum up Maximum up
to 25% of to 25% of to 25% of
documents, monitoring of repayment, sole custody of loan
Total Loan Total Loan Total Loan
files and security documents, and periodic inspection of
borrowing units. The NPA management team oversees
the management of NPAs for best possible recovery from
graded loan accounts.

268 NABIL BANK LIMITED ANNUAL REPORT 2022/23 269

 Table 103: Sector Wise Loan and Advances % bank guarantee, SWIFT, security precaution, destruction c) Risk tolerance: Transaction limit, approval limit, expense
PARTICULARS 2023 2022 2021 2020 2019 policy, etc. limit, treasury dealer limit, cash reserve/cash in transit
limit, ATM/NCM and online transaction limit.
Agricultural and Forest Related 5.81 4.94 3.48 3.29 2.78 3) For IT system related risk
Fishery Related 0.20 0.19 0.01 0.00 0.00 IT policy, disaster recovery system, Business Continuity d) Use of closed-circuit television (CCTV)
Mining Related 0.10 0.12 0.06 0.09 0.07 Plan, IT Audit, control in core banking system and other
Agriculture, Forestry & Beverage system modules through transaction limit and password e) Updated KYC and related information of customers,
Production Related 6.28 6.04 8.09 7.78 8.56 protection system. customer risk grading, and appropriate due diligence,
Non-food Production Related 11.99 11.29 14.98 18.37 20.22 accounts/ transaction monitoring, and threshold
Construction 5.61 1.94 0.36 0.66 0.85 Information System (IS) Audit transaction limit and suspicious transaction limit for
Power, Gas and Water 6.47 5.74 5.21 5.64 5.97 As per NRB IT Guidelines 2012 “Since the increasing mitigating money laundering and Terrorist financing
Metal Products, Machinery & Electronic
complexity of IT environment in banks has created related risks.
Equipment & Assemblage 1.22 0.90 0.63 0.49 0.77
significant risk, comprehensive risk management
Transport, Communication and Public Utilities 0.79 0.86 0.76 0.79 0.57
comprising of various standard internal control f) Proper system for verification of inventory, cash, unused
Wholesaler & Retailer 22.45 21.46 24.76 27.41 25.88
framework, bank's own requirement and NRB prepaid cards, drafts, managers cheque, etc.
Finance, Insurance and Real Estate 3.18 3.55 4.49 4.67 5.77
Tourism Service 2.82 2.72 2.71 3.19 2.85 requirement. To ensure the effectiveness of implemented
Other Services 4.39 7.36 4.73 4.90 2.12 controls framework and adequacy of the adopted security 6) Basic Indicator Approach to segregate capital
Consumption Loans 16.58 11.41 1.58 2.46 3.27 plan and procedures, banks should conduct IS audit charge for operation risk as per Capital Adequacy
Local Government - - - - - annually.” Framework 2015
Others 12.11 21.46 28.14 20.25 20.31
Mix of Sector Wise Loan 100.00 100.00 100.00 100.00 100.00 Nabil has performed the Information System audit of its Committees responsible for maintaining oversight
Information Systems on periodic basis and implemented over Operation Risk are:
the suggestions and recommendations as per IS Audit
report for effectiveness of its IT System and Environment. Board of Directors, Integrated Risk Management
The latest audit is performed for period covering August Committee, Risk Management Committee,
Table 104: Proportion of Credit Risk to Total RWE
NPR IN MILLION 10, 2021 to November 21, 2021 by Biz Serve IT Pvt. Operational Risk Management Committee.
ASHADH END 2080 ASHADH END 2079 ASHADH END 2078 Ltd. and the audit report is duly received on January 10,
PARTICULARS VOLUME VOLUME VOLUME
2022.
RWE for Credit Risk 423,686 392,085 229,054
Total Risk Weighted Exposure 450,729 416,899 252,598 As per the report, adequate controls were in place or
% of Risk Weighted Exposure 94.00% 94.05% 90.68% in effect to provide reasonable assurance that control
objectives would be met for system confidentiality, integrity
and availability, effectiveness and efficiency of system and
systems comply with laws and regulations.
Operational Risk 6) Business disruption and system failure
Operational Risk is defined as the risk of loss resulting 7) Execution, delivery and process management 4) For legal risks
from inadequate or failed internal processes, people, Legal vetting of contracts, agreements, formats, letters
and systems or from external events. Operation risk Risk Control & Mitigation Methodology of of legal implication by legal department, proper
is the risk of negative effects on the financial results, Operation Risk maintenance of legal documents, and outsourcing of
capital, reputation, human resource, etc. of the bank legal specialists.
caused by commission or omission of work by employees, 1) For people related risk
inadequate internal procedures and processes, Employee by-Laws, code of conduct, delegation of 5) Additional prudential measures.
inadequate management of information and other authority, segregation of duties, succession planning a) Review of SIM, guideline and product papers by Chief
systems, or other external events. Types of Operation Risk and job rotation, compulsory annual leave, customer Risk Officer and Chief Operation Officer.
defined by the bank are: compliant handling, training, annual performance
appraisal, dual control on transactions, etc. b) Transferring of inherent risk outside the branch by cash,
1) Internal fraud fixed assts and securities where applicable.
2) External fraud 2) For process related risk
3) Employment practices and workplace safety Standing instruction manuals and operational guidelines
4) Clients, process and business practices covering aspects like cash, clearing, remittance, safe
5) Damage to physical asset deposit locker, information technology, Letter of Credit,

270 NABIL BANK LIMITED ANNUAL REPORT 2022/23 271

 Disclosure of Liquidity Risk Reporting
Table 105: Proportion of Operation Risk to Total RWE Table 107: Structural Liquidity Statement
NPR IN MILLION NPR IN MILLION

ASHADH END 2080 ASHADH END 2079 ASHADH END 2078 PERIOD: 1 - 90 DAYS 91 - 180 DAYS 181 - 270 DAYS 271 - 365 DAYS 1 YEAR ABOVE TOTAL
PARTICULARS VOLUME VOLUME VOLUME
Assets
RWE for Operation Risk 14,829 13,851 12,237
1. Cash Balances 5,721 - - - - 5,721
Total Risk Weighted Exposure 450,729 416,899 252,598
2. Balances held with Banks and
% of Risk Weighted Exposure 3.29% 3.32% 4.84%
Financial Institutions 1,053 - - - 25,262 26,316
Total Capital 56,527 54,557 32,247 3 Investments in Foreign Banks 11,502 172 - - - 11,674
Total Capital/RWE for Operation Risk 381.21% 393.88% 263.53% 4. Call Money 1,700 - - - - 1,700
Capital assigned for Operation Risk 1,631 1,524 1,346 5. Government Securities 20,033 6,203 7,035 7,283 23,171 63,724
6. NRB Bonds - - - - - -
7. Inter-Bank / Financial Lending - - - - - -
#Under the basic indicator approach, banks must hold capital to Deposit Ratio, Liquid Asset to Deposit Ratio, Cash / Investments in Local Banks
8. Loans and Advances
for operational risk equal to the average over the previous three Reserve Ratio, Statutory Liquidity Ratio and cash at
(including staff loans) 40,826 30,624 29,447 29,544 219,944 350,385
years of a fixed percentage (denoted alpha) of positive annual vault.
9. Accrued Interest Receivables 2,174 981 767 784 1,818 6,523
gross income.
(including AIR from staff loans)
2) Stress testing 10. Reverse Repo 5,200.00 - - - - 5,200
Liquidity Risk 11. Receivable under Commitment - - - - - -
Liquidity risk is defined as the potential inability to meet 3) Maintenance of: 12. Receivable under facility 43,067 28,510 15,286 12,491 48,845 148,199
the bank’s liabilities as they become due. It arises when a) Top 20 depositors and borrowers. mentioned in S. No. 20, 21 & 22
the bank is unable to generate cash to cope with a decline b) Periodic review of relationship. 13. Others 659 20 - - 7,151 7,831
in deposits or increase in assets. It originates from the Total Assets 131,935 66,510 52,535 50,102 326,192 627,273
c) Customer call and call reports.

mismatches in the maturity pattern of assets and liabilities. d) High level of customer visits.
Liabilities
14. Current Deposits (Including 2,673 - - - 42,006 44,679
Policy for managing liquidity risk is the Liquidity 4) Three line of defense: Margin Deposits and Matured
Management Policy and Contingent Plan. a) First line of defense for short-term situations: TDs)
Interbank borrowing, Overnight repo and liquidity 15. Savings Deposit 3,462 - - - 98,100 101,562
Committees: facility, repo, standing liquidity facility, outright sale, 16. Fixed Deposits 59,323 41,485 32,361 25,484 62,871 221,524
Board of Directors, Asset Liability Committee, Liquidity sale of government securities. 17. Bonds / Debentures - - - - 6,207 6,207
18. Borrowings: 434 - - - - 434
Crisis Management Team, Risk management Committee,
Call / Short Notice - - - - - -
and Internal Audit. b) Second line of defense for medium- and long-term
Inter-Bank / Financial Institutions 434 - - - - 434
situations: i) Money market borrowing, disposal of Refinance - - - - - -
Risk Control & Mitigation Methodology of Liquidity Risk assets. Others (Standing Liquidity Facility) - - - - - -
19. Other Liabilities and Provisions 12,264 700 271 271 1,237 14,743
1) Preparation and monitoring of liquidity profile & gap c) Third line of defense/ Lender of last resort: Sundry Creditors - - - - - -
analysis and monitoring liquidity indicators like Credit Refinance facility from NRB. Bills Payable 739 185 - - - 924
Accrued Interest Payable 312 - - - - 312
Provisions - - - - - -
Others 11,213 515 271 271 1,237 13,507
20. Payable to Institutions under
Disclosure of Liquidity Risk Reporting Commitment (Customer
Table 106: Resource Mobilization Acceptance) 9,369 4,257 2,102 217 142 16,087
NPR IN MILLION
21. Unutilized Credit Facilities 10,766 5,883 4,471 1,809 744 23,673
PARTICULARS REGULATORY ASHADH END ASHADH END ASHADH END
22. Letter of Credit / Guarantee (Net) 27,717 18,326 7,249 10,318 46,725 110,334
REQUIREMENT 2080 2079 2078
23. Repo - - - - - -
CD Ratio (%) Maximum 90 87.12 90.13 80.30 24. Payable of facilities under
LD Ratio (%) Minimum 20 27.86 22.79 23.49 mentioned in S. No. 11 - - - - - -
CRR (%) Minimum 4% 6.89 4.13 3.66 25. Call Deposit 2,109 - - - 32,765 34,874
% of Top 20 Individual Depositors to Total Deposit Not specified 0.96% 1.01% 1.09% 26. Others 38 - - - - 38
% of Top 20 Individual Depositors to Total Deposit Not specified 25.21% 24.62% 28.04% Total Liabilities 128,155 70,651 46,454 38,098 290,797 574,156
% of Top Single Depositor to Total Deposit Maximum 10% 3.95% 4.28% 4.68%
% of Retail deposit Minimum 50% 72.10% 71.55% 68.00% Net Assets 3,780 (4,141) 6,081 12,004 35,394 53,118
% of Institutional Deposit Maximum 50% 27.90% 28.45% 32.00% Cumulative Net Assets 3,780 (362) 5,719 17,723 53,118

272 NABIL BANK LIMITED ANNUAL REPORT 2022/23 273

 Market Risk risk of the current value of assets and liabilities (including Interest Rate of Deposit Products
NPR IN MILLION
Market Risk is risk related to possibility of risk of loss to off- balance sheet assets and liabilities) being affected by
the bank caused due to changes in the market variables. changes in interest rates, re-pricing risk, and yield curve PARTICULARS INTEREST RATE REGULATORY REQUIREMENT COMPLIANCE STATUS

Market risks predominantly arise from the bank’s treasury risk are taken into consideration.
Maximum Interest Rate in last 10.99% 10% deviation from minimum and maximum interest rate Compliant
operations and the liquid asset portfolio needed to month (Nabil Remittance FD) of last month
support these activities. The bank provides diversified The bank has developed and implemented policies/
Maximum Interest Rate in year-end 10.99% Compliant
tailored services to customers, which can give rise to procedures to address risk due to fluctuations in
month (Nabil Remittance FD)
foreign exchange risk and structural interest rate risk due interest rate. While designing a new product, the effect
of fluctuation in interest rate in the balance sheet is Difference in interest rate of savings 2% difference among savings products except for Remittance Compliant
to mismatches in the bank’s assets and liabilities in terms
account 2.00% Deposit Products
of currency composition, maturity profile and interest rate analyzed. Policies/procedures have also been formulated
characteristics. for competitive analysis including pricing/repricing on the Remittance related savings account 8.40% Maximum 3% above savings products having minimum Compliant
basis of interest rate risk. interest rate

The bank has developed and implemented policies/ Call Deposit 2.70% 50% of minimum saving account interest rate Compliant
procedures for minimization of market risk based on Committees: Maximum difference between LCY Maximum 5% difference in interest rate of LCY deposit Compliant
the indicators like price/interest rate. To offset exchange Board of Directors, Asset Liability Committee, Risk deposit products 4.50% products (Except Call and Remittance deposit products)
rate risk, foreign exchange risk management strategies Management Committee, and Internal Audit.
involve hedging currency exposures, diversifying risk, and
disciplined foreign exchange practices. Risk Control & Mitigation Methodology of Interest
Rate Risk Foreign Exchange Risk
The bank has a structure for market risk management, Interest rate risk is managed through following measures: It is the risk due to which a bank may suffer losses as
which envisages having an independent risk unit for a result of adverse exchange rate movements during
treasury operation and there is clear demarcation on a) Adhering to Base Rate calculation mechanism a period in which it has an open position, either spot
reporting line and responsibility of dealing desk, back prescribed by NRB. or forward, or a combination of the two, in foreign
office, and the treasury middle office. currency.
b) Adhering to interest rate determination of deposit as
The policy for managing liquidity risk is the Market Risk prescribed by NRB. The Market Risk Management Division (MRMD)
Management Policy measures and analyzes all the risks subject to
c) Monitoring Interest Rate Change mechanism as market risk management. It conducts market risk
Types of market risk: prescribed by NRB under Structural Liquidity Statement. measurement and analysis that could have material
Interest Rate Risk impact in the bank’s operation. Banks daily net
Interest rate risk is related to the financial condition of position of foreign exchange is monitored for
a bank due to adverse movements in interest rates. The compliance with regulatory requirement. MRMD,
in accordance with the Market Risk Management
Policy, conducts monitoring with regard to the status
of market risks faced by the bank in an appropriate
frequency against the financial institution’s internal
Table 108: Interest Rate Risk Monitoring Table
NPR IN MILLION environment (risk profile, the status of risk limits
PERIOD 0 - 90 DAYS 91 - 180 DAYS 181 - 270 DAYS 271 - 365 DAYS 1 YEAR ABOVE TOTAL usage, etc.) and external environment (economy,
market, regulatory policy etc.) and monitors the
Total Assets* 402,339 16,327 1,063 3,640 36,014 459,384
status of compliance with the risk limits and the status
Total Liabilities** 220,695 41,542 24,415 34,425 81,799 402,876
of the user limits assigned.
Gap (1 - 2) 181,643 (25,214) (23,352) (30,785) (45,785) 56,507
Cumulative Gap 181,643 156,429 133,077 102,292 56,507
Adjusted Interest Rate (IRC)*** 0.25% 0.25% 0.25% 0.26% 1.00% Risk Control & Mitigation Methodology of
Quarterly Earnings Impact 448 386 328 266 565 Foreign Exchange Risk
Accumulated Earnings Impact to date 448 834 1,162 1,428 1,993 Net Open Position: Net open position is uncovered
volume of assets and liabilities which are exposed
to change in exchange rate of currencies. The bank
strictly adheres to NRB guideline on permissible net
open position limit. It also computes, periodically, the
net open position as prescribed by NRB and allocates
charge on capital for capital adequacy computation.

274 NABIL BANK LIMITED ANNUAL REPORT 2022/23 275

 Disclosure of Foreign Exchange Risk Reporting Disclosure of Compliance Risk Reporting
Table 109: Market Risk Exposure Table 111:Compliance with Regulatory Parameters
NPR IN MILLION NPR IN MILLION

S. NO. CURRENCY OPEN POSITION (FCY) REVALUATION RATE OPEN POSITION RELEVANT OPEN POSITION REGULATORY PARAMETERS REGULATORY TARGET AS AT ASHADH END, 2080

1. CHF 0.04 152.61 6.08 6.08 Minimum Capital fund Core Capital = 8.5% Core Capital = 10.22%
2. HKD 0.05 16.83 0.89 0.89 Capital Fund = 11% Capital Fund = 12.54%
3. THB 0.10 3.8 0.37 0.37 Leverage Ratio 4% 6.62%
4. JPY 2.32 .9479 2.20 2.20 Net Liquidity Ratio Minimum 20% 27.86%
5. SAR 0.16 35.06 5.61 5.61
Margin lending Up to 40% of Core Capital 20.77%
6. AED 0.11 35.8 3.81 3.81
7. CNY (0.01) 18.42 (0.12) 0.12 Real Estate Loan Up to 25% of total loan 6.83%
8. DKK 0.01 19.82 0.13 0.13 Other Real Estate (Including Land Up to 10% of total loan 5.00%
9. KRW 1.44 .1037 0.15 0.15 Purchase & Plotting)
10. AUD 0.14 89.91 12.63 12.63
Daily net position of foreign exchange Maximum 30% of Core Capital 6.13%
11. MYR 0.09 29.07 2.72 2.72
12. QAR 0.14 36.1 4.96 4.96 Credit To Deposit Ratio Up to 90% 87.12%
13. KWD 0.00 428.28 0.53 0.53 Invest in shares/securities/mutual fund Up to 10% of its core capital 0.67%
14. USD 1.05 131.5 138.12 138.12
of any one corporate body
15. CAD (0.01) 99.5 (1.22) 1.22
16. EUR 0.18 147.64 25.87 25.87 Total investment in shares/securities Up to 30% of its core capital 8.56%
17. GBP 0.03 172.14 4.95 4.95 Investment in Company with Financial Interest Up to 20% of its core capital 3.90%
18. INR 1,669.09 1.60075 2,671.79 2,671.79 CRR 4% of total deposit /70% to be maintained 6.89% as of 16-July-2023 and
19. SEK 0.01 12.85 0.15 0.15 on daily basis 4.18% for fortnight ending
20. BHD 0.00 347.57 0.02 0.02 on 29 July- 2023
21. SGD 0.06 99.54 6.05 6.05
SLR 12% of LCY deposit 22.52%
Total Open Position (a) 2,885.71 2,888.40
α 5% Interest Spread rate 5% [As benefit of merger upto Ashadh 2080(4%+1%)] 4.99%
Capital Charge for Market Risk [c=(a×b)] 144.42 Difference in interest rate of saving accounts Maximum 2% 2 (Excluding Remittance Deposit)
Risk Weight (reciprocal of capital
Difference in interest rate (highest and Maximum 5% 4.59 (Excluding Remittance
requirement of 11%) in times (d) 9.09
lowest between deposit accounts) Deposit)
Equivalent Risk Weight Exposure [e=(c×d)] 1,312.78
Limit for Institutional Deposit Collection Up to 50% of total deposit 27.90%
Limit for Call account Max.10% of LCY deposit 8.48%
Debenture Issuance (in %) Min. 25% of Paid-up capital 22.94% (Debenture of
Table 110: Proportion of Foreign Exchange Risk to Total RWE NPR 3 Billion is in
NPR IN MILLION
process of approval)
ASHADH END 2080 ASHADH END 2079 ASHADH END 2078
Deprived Sector At least 5% of total lending 5.12%
PARTICULARS VOLUME VOLUME VOLUME
Prescribed Sector Lending-Agriculture 11% of total loan by Ashad end 2080 12.32%
RWE for Market/Foreign Exchange Risk 1,313 685 3,881
Prescribed Sector-Hydropower, Energy 6% of total loan by Ashad end 2080 6.84%
Total Risk Weighted Exposure 450,729 416,899 252,598
Prescribed Sector-SME (up to 10 million) 11% of total loan by Ashad end 2080 6.13% (As benefit of merger
% of Risk Weighted Exposure 0.29% 0.16% 1.53%
Except Agriculture waiver till Ashadh 2080)
Total Capital 56,527 54,557 32,247
Subsidy loan (Except Agricultural) 500 files or 10 files per branch 5,967
Total Capital/RWE for Market Risk 4305.91% 7963.50% 830.87%

Compliance Risk: The bank stays abreast with all new of the bank guides the mitigation of deviations as
regulatory instructions/guidance issued throughout the regards compliance risk. It also defines the roles and
year and remains committed to the highest regulatory responsibilities to ensure compliance with applicable laws,
and compliance standards, under the supervision of rules, and regulatory guidelines.
the Compliance Department. The Compliance Policy

276 NABIL BANK LIMITED ANNUAL REPORT 2022/23 277

 Information Security Risk AML/CFT Risk: The AML/CFT policy intends to protect DISCLOSURE OF ICAAP
Information security risk is the inability to assure that the the bank from being used for money laundering and
information created, acquired, or maintained by the bank for financing terrorism. It intends to enable the bank in Table 112: RWE Under all 11 Credit Risk Categories NPR IN MILLION
and its authorized users, is used in accordance with the maintaining a proper profile of clients, monitoring their CATEGORIES OF CREDIT RISK RISK WEIGHTED EXPOSURE
intended purpose. It is the inability to protect such information accounts/transactions, and reporting threshold and NABIL GROUP

and its infrastructure from external or internal threats and suspicious transactions as per the regulatory requirements 1. Claims on Government and Central Bank - -
failure to comply with statutory and regulatory requirements and international best practices. 2. Claims on Other Financial Entities - -
regarding information access, security, and privacy. 3. Claims on Banks 5,419,854,061 5,470,526,684
Environmental and Social Risk including Climate Risk: The 4. Claims on Domestic Corporates and Securities Firms 198,413,592,602 198,413,592,602
n Information Technology (IT) Policy and Information Security bank considers Climate Risk as a material risk. To manage 5. Claims on Regulatory Retail Portfolio 37,113,163,170 37,113,163,170
(IS) Policy have been developed /implemented by Nabil the risk, all the loan proposals are filtered through an 6. Claims secured by residential properties 11,915,430,005 11,915,430,005
Bank to ensure smooth/secured information technology exclusion list and critical sector list. Proposals falling under 7. Claims secured by Commercial real estate 3,557,715,022 3,557,715,022
operations, and to protect the confidentiality, integrity, exclusion list are not financed. In case where proposals 8. Past due claims 14,677,287,043 14,677,287,043
9. High Risk claims 61,462,016,404 61,707,532,625
and availability of information. The guidelines specify come under the critical sector, Environmental and Social
10. Other Assets 14,208,448,620 14,310,840,104
mandatory actions needed for effective implementation of Risk Due Diligence (ESDD) is conducted, and corrective
11. Off Balance Sheet Items 76,918,988,052 76,918,988,052
the policies. action plans are suggested based on the result of the
Total Credit Risk Weighted Exposure 423,686,494,980 424,085,075,308
n The bank has developed/implemented IT Disaster Recovery ESDD. Projects of over NPR 10 million are required to
and Business Continuity Planning to extensively cover the undergo ESDD screening, and to take corrective actions, as
process of IT systems resumption in case of disaster and is required. Table 113: RWE for Credit Risk, Market Risk and Operational Risk
NPR IN MILLION
an integral part of the “COBP Guidelines for Head Office”.
RISK WEIGHTED EXPOSURES AMOUNT
n The bank has implemented different layers of firewalls/ Nabil Bank believes that higher environmental and social
NABIL GROUP
control measures to protect against possible threats and risks also increase credit risk. Therefore, the bank has
unauthorized access. integrated environmental and social risk with the internal Risk Weighted Exposure for Credit Risk 423,686,494,980 424,085,075,308
Risk Weighted Exposure for Operational Risk 14,828,502,489 14,828,502,489
n The bank performs risk assessment of new system credit rating system. In this process, if the loan proposals
Risk Weighted Exposure for Market Risk 1,312,777,156 1,312,777,156
through set of security checklist/UAT as guided by IT have High and Medium Environmental and Social Risk, the
Add: 2% of the total RWE add by Supervisory Review 8,796,555,493 8,804,527,099
policy guidelines. Further, Information security audit and final rating should be downgraded by 2 steps and 1 step,
Add: 2% Capital Charge for Operational Risk 2,104,780,018 2,135,444,805
vulnerability assessment and penetration testing (VAPT) of respectively. E.g. AAA rated project will have final rating of
Total Risk Weighted Exposures (a+b+c) 450,729,110,136 451,166,326,857
critical systems is also done periodically. AA+ if it has Medium ES Risk, and AA rating if it has high
n The bank organizes information security awareness ES risk.
sessions for users including customers/relevant Table 114: Capital Adequacy Calculation
NPR IN MILLION
stakeholders through various medium like emails/websites/ Internal Capital Adequacy Assessment Process
RISK WEIGHTED EXPOSURES AMOUNT
awareness sessions, etc. Bank has an Internal Capital Adequacy Assessment Process
NABIL GROUP
n The bank monitors different systems through reports that (ICAAP) in place which is based on the principles set out
Credit Risk Exposure 423,686,494,980 424,085,075,308
are generated and any information security incident/threat in the ICAAP Guidelines issued by NRB in August 2012
Operational Risk Exposure 14,828,502,489 14,828,502,489
is reported to relevant stakeholders. (updated July 2013) and Capital Adequacy Framework
Market Risk Exposure 1,312,777,156 1,312,777,156
2015. The ICAAP review intends to access the sufficiency
Adjustments under Pillar II
Other Risks of bank’s capital plan in the context of dynamic and Add: 2% of the total RWE under Supervisory Review 8,796,555,493 8,804,527,099
Strategic Risk: The bank’s strategies are formulated complex business environment and develop a high-quality Add: 2% Capital Charge for Operational Risk 2,104,780,018 2,135,444,805
with both short- and long-term objectives, through wide risk management framework fortified by adequate capital Total Risk Weighted Exposures 450,729,110,136 451,166,326,857
discussions and are communicated across the organization. position in relation to the risk profile. While doing so, the Total Core Capital Fund 46,074,234,465 46,280,991,590
ICAAP review takes into account past events that call for Total Capital Fund 56,527,026,464 58,333,244,816
Legal Risk: The bank conducts its activities in conformity change in capital requirement with respect to sufficiency Common Equity Tier 1 Capital to Total Risk Weighted Exposures 10.22% 10.26%
with all business and contractual legal requirements as in the proportion of the risk weightage growth in the bank Total Tier 1 Capital to Total Risk Weighted Exposures 10.22% 10.26%
applicable. and prepare a plan to manage capital for both present Total Capital Fund to Total Risk Weighted Exposure 12.54% 12.93%
and future needs. It ensures that the bank has in place a
Reputational Risk: Banking business runs on peoples process for accessing overall capital adequacy in relation IN%
trust and therefore, reputation is of paramount importance to the risk profile and a strategy for maintaining its capital CAPITAL ADEQUACY RATIOS AMOUNT
for successful operation. The Bank is conscious about its levels, and that the bank has operated above the minimum NABIL GROUP

reputation and works to ensure that it is maintained and regulatory capital ratios. Common Equity Tier 1 Ratio 10.22% 10.26%
enhanced. Core Capital Ratio – Tier I 10.22% 10.26%
Total Capital Ratio – Tier I + Tier II 12.54% 12.93%

278 NABIL BANK LIMITED ANNUAL REPORT 2022/23 279

 REPORT
FINANCIAL

KEY TO UNDERSTANDING
THE FINANCIALS

The following infographic is the key to understanding the

financial statements of the bank presented in the section
hence forward. The financials of the bank are drawn as
per the forms and formats prescribed by Nepal Rastra
Bank. The regulator also prescribes many regulatory
adjustments to be incorporated in those statements. These
charts will help understand how the final distributable
profit is arrived at.

Note: For ease of comparision, the firgures of incomes and

expenses of previous FY have been presented by combining both
the figures of erstwhile Nepal Bangladesh Bank (NBBL) (achieved
till the date of acquisition) as well as of Nabil Bank (on standalone
basis). While preparing the financials of FY 2021-22, the net profit
earned by erstwhile NBBL was accounted directly into reserves and
the income statement refelcted the stand alone performance of
Nabil Bank only.

280 NABIL BANK LIMITED ANNUAL REPORT 2022/23 281

 FINANCIAL
STATEMENTS OF
LIMITED
NABIL BANK

288 NABIL BANK LIMITED ANNUAL REPORT 2022/23 289

290 NABIL BANK LIMITED ANNUAL REPORT 2022/23 291
292 NABIL BANK LIMITED ANNUAL REPORT 2022/23 293
 NABIL BANK LIMITED

Consolidated Statement of Financial Position

At 31 Ashadh 2080 (July 16, 2023)
NPR
GROUP BANK
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Assets
Cash and Cash Equivalents 4.1 6,963,371,006 11,213,405,777 6,774,258,189 11,051,539,126
Due from Nepal Rastra Bank 4.2 25,652,421,459 13,037,239,444 25,652,421,459 13,037,239,444
Placement with Banks and FIs 4.3 13,424,389,863 8,870,895,241 13,424,389,863 8,870,895,241
Derivative Financial Instruments 4.4 3,833,462,094 1,373,614,068 3,833,462,094 1,373,614,068
Other Trading Assets 4.5 92,810,034 192,282,454 - 29,728,860
Loans and Advances to Banks and FIs 4.6 8,283,059,448 10,366,938,262 8,283,059,448 10,366,938,262
Loans and Advances to Customers 4.7 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927
Investment Securities 4.8 77,109,537,072 63,196,882,381 76,452,984,943 62,455,044,394
Current Tax Assets 4.9 - 615,986,765 - 606,480,035
Investment in Subsidiaries 4.10 - - 1,798,000,000 298,000,000
Investment in Associates 4.11 179,066,633 178,177,470 80,000,000 80,000,000
Investment Property 4.12 1,827,068,811 1,318,597,583 1,827,068,811 1,318,597,583
Property and Equipment 4.13 3,884,182,848 3,546,355,137 3,871,272,890 3,536,100,347
Goodwill and Intangible Assets 4.14 292,547,964 294,529,350 285,455,306 291,720,723
Deferred Tax Assets 4.15 - - - -
Other Assets 4.16 7,930,583,654 6,338,504,669 7,798,004,088 6,296,549,940
Total Assets 480,595,671,541 420,749,061,528 481,203,547,746 419,818,100,950
Liabilities
Due to Banks and FIs 4.17 6,277,712,006 3,353,609,544 6,277,712,006 3,353,609,544
Due to Nepal Rastra Bank 4.18 - 4,657,437,355 - 4,657,437,355
Derivative Financial Instruments 4.19 3,812,946,431 1,390,736,904 3,812,946,431 1,390,736,904
Deposits from Customers 4.20 395,199,005,619 326,186,071,792 396,843,499,228 326,222,310,372
Borrowings 4.21 - 10,720,730,171 - 10,720,730,171
Current Tax Liabilities 4.9 492,878,880 - 482,351,672 -
Provisions 4.22 - - - -
Deferred Tax Liabilities 4.15 1,908,713,397 1,749,305,176 1,918,849,685 1,778,504,118
Other Liabilities 4.23 8,965,633,618 12,759,230,876 8,468,527,905 12,228,181,442
Debt Securities Issued 4.24 6,486,982,412 6,484,843,749 6,486,982,412 6,484,843,749
Subordinated Liabilities 4.25 - - - -
Total Liabilities 423,143,872,363 367,301,965,567 424,290,869,339 366,836,353,655

Continue: Consolidated Statement of Financial Position

294 NABIL BANK LIMITED ANNUAL REPORT 2022/23 295

Continue: Consolidated Statement of Financial Position
NPR Consolidated Statement of Profit or Loss
GROUP BANK For the period ended 31 Ashadh 2080 (July 16, 2023)
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
NPR
Equity
GROUP BANK
Share Capital 4.26 27,056,996,729 22,832,908,632 27,056,996,729 22,832,908,632
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Share Premium - 175,555 - 175,555
Retained Earnings 3,372,742,779 3,139,621,635 3,187,059,423 2,899,544,565 Interest Income 4.29 46,412,596,540 23,420,890,773 46,251,162,764 23,340,747,062
Reserves 4.27 26,758,784,299 27,253,541,510 26,668,622,255 27,249,118,543 Interest Expense 4.30 28,501,289,819 14,414,019,258 28,502,320,274 14,421,875,671
Total Equity Attributable to Equity Holders 57,188,523,807 53,226,247,332 56,912,678,407 52,981,747,295 Net Interest Income 17,911,306,721 9,006,871,515 17,748,842,490 8,918,871,391
Non Controlling Interest 263,275,371 220,848,629 - - Fee and Commission Income 4.31 3,697,011,505 2,211,751,216 3,545,845,637 2,043,273,963
Total Equity 57,451,799,178 53,447,095,961 56,912,678,407 52,981,747,295 Fee and Commission Expense 4.32 674,571,415 483,186,163 651,054,033 464,375,729
Total Liabilities and Equity 480,595,671,541 420,749,061,528 481,203,547,746 419,818,100,950 Net Fee and Commission Income 3,022,440,089 1,728,565,052 2,894,791,604 1,578,898,234
Contingent Liabilities and Commitments 4.28 240,689,861,138 251,172,394,535 240,689,861,138 251,172,394,535 Net Interest, Fee and Commisson Income 20,933,746,810 10,735,436,567 20,643,634,094 10,497,769,625
Net Assets Value per share 212.34 234.08 210.34 232.04 Net Trading Income 4.33 509,274,045 498,573,957 486,560,448 564,990,054
Other Operating Income 4.34 335,774,402 407,832,480 365,905,537 410,410,129
Total Operating Income 21,778,795,257 11,641,843,004 21,496,100,079 11,473,169,808
As per our report of even date
Impairment Charge/ (Reversal) for Loans 4.35 5,426,269,148 1,118,823,076 5,426,269,148 1,118,823,076
and Other Losses
Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel Net Operating Income 16,352,526,109 10,523,019,928 16,069,830,931 10,354,346,732
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates, Operating Expense
Chartered Accountants Personnel Expenses 4.36 4,582,664,202 2,719,330,394 4,525,098,630 2,658,925,044
Other Operating Expenses 4.37 1,556,627,138 1,072,650,784 1,528,762,853 1,023,800,285
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha Depreciation & Amortisation 4.38 513,242,822 400,319,089 503,209,613 390,030,033
Board Member Board Member Board Member Board Member Board Member Partner Operating Profit 9,699,991,947 6,330,719,661 9,512,759,834 6,281,591,369
P.J.P.N. & Co., Chartered
Non Operating Income 4.39 44,223,127 41,596,191 43,333,964 8,701,513
Accountants
Non Operating Expense 4.40 274,883,961 2,730,446 274,883,961 2,730,446
Date: November 23, 2023
Place: Kathmandu, Nepal
Profit Before Income Tax 9,469,331,113 6,369,585,406 9,281,209,837 6,287,562,436
Income Tax Expense 4.41
Current Tax 2,860,768,497 2,001,747,298 2,803,083,329 1,940,231,711
Deferred Tax 84,134,579 55,744,138 73,190,348 91,306,537
Profit for the Year 6,524,428,037 4,312,093,970 6,404,936,160 4,256,024,188
Profit Attributable to:
Equity-holders of the Bank 6,524,428,037 4,287,129,502 6,404,936,160 4,256,024,188
Non-Controlling Interest 37,136,559 24,964,468 - -
Profit for the Year 6,524,428,037 4,312,093,970 6,404,936,160 4,256,024,188
Earnings per Share
Basic Earnings per Share 24.11 18.89 23.67 18.64
Diluted Earnings per Share 24.11 18.89 23.67 18.64

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
Chartered Accountants

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: November 23, 2023
Place: Kathmandu, Nepal

296 NABIL BANK LIMITED ANNUAL REPORT 2022/23 297

Consolidated Statement of Comprehensive Income Consolidated Statement of Cash Flows
For the period ended 31 Ashadh 2080 (July 16, 2023) For the period ended 31 Ashadh 2080 (July 16, 2023)
NPR
NPR GROUP BANK
GROUP BANK PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
CASH FLOWS FROM OPERATING ACTIVITIES:
Profit / (loss) for the year 6,524,428,037 4,312,093,970 6,404,936,160 4,256,024,188
Interest Received 46,412,596,540 21,210,936,597 46,251,162,764 21,131,394,949
Other Comprehensive Income Fees and other income received 4,077,009,034 2,270,955,551 3,955,085,138 2,067,170,171
(net of income tax)
Dividend received - - - -
a) Items that will not be reclassified
Receipts from other operating activities 509,274,045 848,888,208 486,560,448 769,293,682
to profit or loss:
Interest paid (28,501,289,819) (14,080,375,571) (28,502,320,274) (14,083,905,172)
Gains/(losses) from investment in equity
instruments measured at fair value 194,491,769 (852,843,613) 202,415,311 (852,843,613) Commission and fees paid (674,571,415) (463,875,729) (651,054,033) (464,375,729)
Cash payment to employees (4,582,664,202) (2,285,462,107) (4,525,098,630) (2,231,583,004)
Gains/(losses) on revaluation - - - -
Other expense paid (1,831,511,099) (1,095,572,797) (1,803,646,814) (1,026,530,731)
Actuarial gains/(losses) on defined benefit 21,435,422 32,021,047 21,435,422 32,021,047
plans Operating cash flows before changes in
operating assets and liabilities 15,408,843,083 6,405,494,152 15,210,688,598 6,161,464,166
Less: Income tax expense relating to above (64,778,157) 246,246,770 (67,155,220) 246,246,770
items (Increase)/Decrease in operating assets
Net other comprehensive income that Due from Nepal Rastra Bank (12,615,182,015) (5,013,067,589) (12,615,182,015) (5,013,067,589)
will not be reclassified to profit or loss 151,149,034 (574,575,796) 156,695,513 (574,575,796) Placement with bank and financial institutions (4,553,494,622) 994,316,733 (4,553,494,622) 994,316,733
b) Items that are or may be reclassified Other trading assets 99,472,420 (53,363,336) 29,728,860 (29,728,860)
to profit or loss: Loan and advances to bank & financial institutions 2,083,878,814 (1,788,621,414) 2,083,878,814 (1,788,621,414)
Gains/(losses) on cash flow hedge - (31,744,821) - - Loan and advances to customers (36,343,786,876) (103,820,408,271) (36,343,786,876) (103,820,408,271)
Exchange gains/(losses)(arising from Other assets (4,051,927,011) 9,529,576,377 (3,961,302,174) 9,484,356,056
translating financial assets of foreign - - - - Increase/ (Decrease) in operating liabilites
operation)
Due to bank and financial institutions 2,924,102,462 (1,149,095,677) 2,924,102,462 (1,149,095,677)
Income tax relating to above items - 9,523,446 - - Due to Nepal Rastra Bank (4,657,437,355) (792,955,424) (4,657,437,355) (792,955,424)
Reclassify to profit or loss - - - - Deposit from customers 69,012,933,827 102,797,934,456 70,621,188,856 102,747,840,011
Net other comprehensive income Borrowings (10,720,730,171) 10,720,730,171 (10,720,730,171) 10,720,730,171
that are or may be reclassified to - (22,221,375) - - Other Liabilities (1,347,409,626) 10,734,333,164 (1,320,924,657) 11,444,059,384
profit or loss
Net cash flow from operating activities
c) Share of other comprehensive income
before tax paid 15,239,262,930 28,564,873,342 16,696,729,720 28,958,889,286
of associate accounted as per equity - - - -
method Income taxes paid (1,789,039,411) (2,307,364,498) (1,714,251,622) (2,239,698,931)
Other Comprehensive Income for the Net cash flow from operating activities (A) 13,450,223,519 26,257,508,844 14,982,478,098 26,719,190,355
year (net of income tax) 151,149,034 (596,797,171) 156,695,513 (574,575,796)
Total Comprehensive Income for the year 6,675,577,071 3,715,296,800 6,561,631,673 3,681,448,392

Total Comprehensive Income

attributable to:
Equity-Holders of the Bank 6,638,440,512 3,690,332,332 6,561,631,673 3,681,448,392
Non-Controlling Interest 37,136,559 24,964,468 - -
Total Comprehensive Income for the year 6,675,577,071 3,715,296,800 6,561,631,673 3,681,448,392

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
Chartered Accountants

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered Continue: Consolidated Statement of Cash Flows
Accountants
Date: November 23, 2023
Place: Kathmandu, Nepal

298 NABIL BANK LIMITED ANNUAL REPORT 2022/23 299

Continue: Consolidated Statement of Cash Flows
NPR Statement of distributable profit or loss
GROUP BANK
For the period ended 31 Ashadh 2080 (July 16, 2023)
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
(As per NRB Regulations) NPR

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (13,719,052,085) (23,885,713,838) (15,295,525,238) (23,890,655,838) Opening balance in retained earnings 273,760,074 (605,533,210)
Receipts from sale of investment securities - - - - Net profit / (loss) as per statement of profit or loss 6,404,936,160 4,256,024,188
Purchase of property and equipment (851,070,533) (2,219,077,213) (838,382,156) (2,214,757,533) Less: appropriations (-) / contributions (+):
Receipt from the sale of property and equipment - - - - a. General reserve (1,281,000,000) (852,000,000)
Purchase of intangible assets 1,981,386 (252,257,809) 6,265,417 (252,257,809) b. Foreign exchange fluctuation fund (35,600,000) (32,600,000)
Receipt from the sale of intangible assets - - - - c. Capital redemption reserve (Debenture Redemption Reserve) (923,406,889) (333,333,333)
Purchase of investment properties (508,471,228) (1,309,850,581) (508,471,228) (1,309,850,581) d. Corporate social responsibility fund (64,049,362) (42,560,242)
Receipt from the sale of investment properties - - - - e. Employees' training fund (6,369,016) (5,085,171)
Interest received - - - - f. Investment adjustment reserves (1,139,832) -
Dividend received - 187,424,267 - 206,624,267 g. Others: 21,332,438 (1,000,000)
Net cash used in investing activities (B) (15,076,612,460) (27,479,475,174) (16,636,113,205) (27,460,897,494) - Contingent reserve (1,000,000) (1,000,000)
- Cash dividend - -
CASH FLOWS FROM FINANCING ACTIVITIES - Bonus share - -
Receipt from issue of debt securities 2,138,663 4,196,903,354 2,138,663 4,196,903,354 - CSR Expenses routed through SoPL 22,332,438 -
Repayment of debt securities - - - - Transfer from Fair Value Reserve - -
Receipt from issue of subordinated liabilities - - - - Profit or (loss) before regulatory adjustment 4,114,703,499 2,989,445,442
Repayment of subordinated liabilities - - - - Regulatory adjustment :
Receipt from issue of shares - - - - a. Interest receivable (-)/previous accrued interest received (+) (902,502,697) 492,389,707
Dividends paid (2,625,784,493) 526,763,602 (2,625,784,493) 511,247,813 b. Short loan loss provision in accounts (-)/reversal (+) - -
Interest paid - (200,541,358) - (200,541,358) c. Short provision for possible losses on investment (-)/reversal (+) - -
Other receipt/payment - 1,789,165 - - d. Short loan loss provision on Non Banking Assets (-)/reversal (+) (320,336,874) (8,778,420)
Net cash from financing activities ( C) (2,623,645,830) 4,524,914,763 (2,623,645,830) 4,507,609,809 e. Deferred tax assets recognised (-)/ reversal (+) - -
Net increase (decrease) in cash and cash equivalents (4,250,034,771) 3,302,948,433 (4,277,280,937) 3,765,902,670 f. Goodwill recognised (-)/ impairment of Goodwill (+) - -
Cash and cash equivalents at Shrawan 01 g. Bargain purchase gain recognised (-)/reversal (+) - -
(beginning of the year) 11,213,405,777 7,910,457,344 11,051,539,126 7,285,636,456 h. Actuarial loss recognised (-)/reversal (+) 21,435,422 32,021,047
Effect of exchange rate fluctuations on cash i. Other (+/-) - -
and cash equivalents held - - - - Total Adjustment in Regulatory Reserve (1,201,404,149) 515,632,334
Cash and cash equivalents at Ashadh end 6,963,371,006 11,213,405,777 6,774,258,189 11,051,539,126 Distributable profit for the year 2,913,299,350 3,505,077,776
Total distributable profit 3,187,059,423 2,899,544,565
As per our report of even date
Note: Capital Adjustment Reserve of NPR 1.52 billion from business acquisition is also available for distribution.
As per our report of even date
Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Chartered Accountants
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Accountants
Board Member Board Member Board Member Board Member Board Member Partner
Date: November 23, 2023 P.J.P.N. & Co., Chartered
Place: Kathmandu, Nepal Accountants
Date: November 23, 2023
Place: Kathmandu, Nepal

300 NABIL BANK LIMITED ANNUAL REPORT 2022/23 301

 Consolidated Statement of Changes in Equity

302
For the period ended 31 Ashadh 2080 (July 16, 2023)
NPR
GROUP

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK

PARTICULARS SHARE SHARE GENERAL EXCHANGE REGULATORY FAIR VALUE REVALUATION RETAINED OTHER TOTAL NON- TOTAL

NABIL BANK LIMITED

CAPITAL PREMIUM RESERVE EQUALISATION RESERVE RESERVE RESERVE EARNING RESERVE CONTROLLING GROUP
INTEREST EQUITY
SHARE

Balance at Shrawan 01, 2078 18,181,173,043 158,859,983 11,776,794,796 719,512,612 2,878,092,437 4,651,269,640 47,911,831 3,732,586,338 7,923,521,589 50,069,722,269 196,793,783 50,266,516,052
(16-Jul-2021)

Comprehensive Income for the

FY 2078-79 (2021-22) :

Profit for the year - - - - - - - 4,287,129,502 - 4,287,129,502 24,964,468 4,312,093,970

Other Comprehensive Income (net of tax) - - - - - (596,990,529) - - - (596,990,529) - (596,990,529)

Gains/(losses) from investment in equity - - - - - (596,990,529) - - - (596,990,529) - (596,990,529)

instruments measured at fair value

Gains/(losses) on revaluation - - - - - - - - - - - -

Actuarial gains/(losses) on defined benefit plans - - - - - - - - - - - -

Gains/(losses) on cash flow hedge - - - - - - - - - - - -

Exchange gains/(losses)(arising from

translating financial assets of foreign operation) - - - - - - - - - - - -

Total Comprehensive Income for the year - - - - - (596,990,529) - 4,287,129,502 - 3,690,138,973 24,964,468 3,715,103,441

Transfer to Reserves during the year - - 852,000,000 32,600,000 - - 512,224,194 (1,270,062,046) 406,880,965 533,643,113 533,643,113

Transfer from Reserves during the year - - - - (515,632,334) (485,461,510) - 515,632,333 (38,515,351) (523,976,862) (523,976,862)

Transactions with Owners, directly recognized in - - - - - - - - - - -

Equity :

Right Share Issued - - - - - - - - - - - -

Share Based Payments - - - - 65,875,689 - - - - 65,875,689 - 65,875,689

Dividend to Equity-Holders

Bonus Shares Issued 4,651,735,589 (158,684,428) - - - - - (3,516,508,641) (976,542,520) - - -

Cash Dividend Paid - - - - - - (609,155,851) - (609,155,851) - (609,155,851)

Other - - - - - - - - - - (909,622) (909,622)

Total Contributions by and Distributions 4,651,735,589 (158,684,428) 852,000,000 32,600,000 (449,756,644) (485,461,510) 512,224,194 (4,880,094,205) (608,176,906) (533,613,911) (909,622) (534,523,533)

Balance at Ashadh 32, 2079 (16-Jul-2022) 22,832,908,632 175,555 12,628,794,796 752,112,612 2,428,335,793 3,568,817,601 560,136,025 3,139,621,635 7,315,344,682 53,226,247,332 220,848,629 53,447,095,961

Continue: Consolidated Statement of Changes in Equity

Continue: Consolidated Statement of Changes in Equity NPR

GROUP

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK

PARTICULARS SHARE SHARE GENERAL EXCHANGE REGULATORY FAIR VALUE REVALUATION RETAINED OTHER TOTAL NON- TOTAL
CAPITAL PREMIUM RESERVE EQUALISATION RESERVE RESERVE RESERVE EARNING RESERVE CONTROLLING GROUP
INTEREST EQUITY
SHARE

Reserves added through acquisition

Balance at Shrawan 01, 22,832,908,632 175,555 12,628,794,796 752,112,612 2,428,335,793 3,568,817,601 560,136,025 3,139,621,635 7,315,344,682 53,226,247,332 220,848,629 53,447,095,961
2079 (17-Jul-2022)

Comprehensive Income for the

FY 2079-80 (2022-23) :

Profit for the year - - - - - - - 6,487,291,478 - 6,487,291,478 37,136,559 6,524,428,037

Other Comprehensive Income (net of tax) - - - - - 136,144,238 - - 15,004,794 151,149,033 - 151,149,033

Gains/(losses) from investment in equity - - - - - 136,144,238 - - - 136,144,238 - 136,144,238

instruments measured at fair value

Gains/(losses) on revaluation - - - - - - - - - - - -

Actuarial gains/(losses) on defined benefit plans - - - - - - - - 15,004,794 15,004,794 - 15,004,794

Gains/(losses) on cash flow hedge - - - - - - - - - - - -

Exchange gains/(losses)(arising from

translating financial assets of foreign operation) - - - - - - - - - - - -

Total Comprehensive Income for the year - - - - - 136,144,238 - 6,487,291,478 15,004,794 6,638,440,511 37,136,559 6,675,577,070

Transfer to Reserves during the year - - 1,303,832,465 35,600,000 1,201,404,149 - - (3,536,801,713) 995,965,099 - - -

Transfer from Reserves during the year - - - - - (3,235,358) - 25,567,796 48,862,908 71,195,346 - 71,195,346

Transactions with Owners, directly

recognized in Equity : - - - - - - - - - - - -

Right Share Issued - - - - - - - - - - - -

Share Based Payments - - - - - - - - - - - -

Dividend to Equity-Holders - - - - - - - - - - - -

Bonus Shares Issued 4,224,088,097 (175,555) - - - - - - (4,223,912,542) - - -

Cash Dividend Paid - - - - - - (2,625,784,493) - (2,625,784,493) - (2,625,784,493)

Other - - (4,472,441) - - 13,587,753 - (117,151,924) (13,538,276) (121,574,889) 5,290,183 (116,284,706)

Total Contributions by and Distributions 4,224,088,097 (175,555) 1,299,360,024 35,600,000 1,201,404,149 10,352,395 - (6,254,170,334) (3,192,622,811) (2,676,164,036) 5,290,183 (2,670,873,853)

Balance at Ashadh 31, 2080 (16-Jul-2023) 27,056,996,729 - 13,928,154,820 787,712,612 3,629,739,942 3,715,314,234 560,136,025 3,372,742,779 4,137,726,665 57,188,523,807 263,275,371 57,451,799,178

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
Chartered Accountants

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
ANNUAL REPORT 2022/23

Accountants
Date: November 23, 2023
303

Place: Kathmandu, Nepal

 Consolidated Statement of Changes in Equity

304
For the period ended 31 Ashadh 2080 (July 16, 2023)
NPR
BANK

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK

PARTICULARS SHARE SHARE GENERAL EXCHANGE REGULATORY FAIR VALUE REVALUATION RETAINED OTHER TOTAL

NABIL BANK LIMITED

CAPITAL PREMIUM RESERVE EQUALISATION RESERVE RESERVE RESERVE EARNING RESERVE

Balance at Shrawan 01, 2078 (16-Jul-2021) 18,181,173,043 158,859,983 11,772,322,355 719,512,612 2,878,092,437 4,664,857,391 47,911,831 3,523,614,582 7,912,470,797 49,858,815,031

Comprehensive Income for the FY 2078-79 (2021-22):

Profit for the year - - - - - - - 4,256,024,188 - 4,256,024,188

Other Comprehensive Income (net of tax) - - - - - (596,990,529) - - - (596,990,529)

Gains/(losses) from investment in equity - - - - - (596,990,529) - - - (596,990,529)

instruments measured at fair value

Gains/(losses) on revaluation - - - - - - - - - -

Actuarial gains/(losses) on defined benefit plans - - - - - - - - - -

Gains/(losses) on cash flow hedge - - - - - - - - - -

Exchange gains/(losses)(arising from

translating financial assets of foreign operation) - - - - - - - - - -

Total Comprehensive Income for the year - - - - - (596,990,529) - 4,256,024,188 - 3,659,033,659

Transfer to Reserves during the year - - 852,000,000 32,600,000 - - 512,224,194 (1,270,062,046) 404,393,479 531,155,627

Transfer from Reserves during the year - - - - (515,632,334) (485,461,510) - 515,632,333 (38,515,350) (523,976,861)

Transactions with Owners, directly recognized in Equity :

Right Share Issued - - - - - - - - - -

Share Based Payments - - - - 65,875,689 - - - - 65,875,689

Dividend to Equity-Holders - -

Bonus Shares Issued 4,651,735,589 (158,684,428) - - - - - (3,516,508,641) (976,542,520) -

Cash Dividend Paid - - - - - - - (609,155,851) - (609,155,851)

Other - - - - - - - - - -

Total Contributions by and Distributions 4,651,735,589 (158,684,428) 852,000,000 32,600,000 (449,756,644) (485,461,510) 512,224,194 (4,880,094,205) (610,664,391) (536,101,395)

Balance at Ashadh 32, 2079 (16-Jul-2022) 22,832,908,632 175,555 12,624,322,355 752,112,612 2,428,335,793 3,582,405,352 560,136,025 2,899,544,565 7,301,806,406 52,981,747,295

Continue: Consolidated Statement of Changes in Equity

Continue: Consolidated Statement of Changes in Equity NPR

BANK

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK

PARTICULARS SHARE SHARE GENERAL EXCHANGE REGULATORY FAIR VALUE REVALUATION RETAINED OTHER TOTAL
CAPITAL PREMIUM RESERVE EQUALISATION RESERVE RESERVE RESERVE EARNING RESERVE

Reserves added through acquisition

Balance at Shrawan 01, 2079 (17-Jul-2022) 22,832,908,632 175,555 12,624,322,355 752,112,612 2,428,335,793 3,582,405,352 560,136,025 2,899,544,565 7,301,806,406 52,981,747,295

Comprehensive Income for the FY 2079-80 (2022-23) :

Profit for the year - - - - - - - 6,404,936,160 - 6,404,936,160

Other Comprehensive Income (net of tax) - - - - - 141,690,718 - - 15,004,794 156,695,512

Gains/(losses) from investment in equity - - - - - 141,690,718 - - - 141,690,718

instruments measured at fair value

Gains/(losses) on revaluation - - - - - - - - - -

Actuarial gains/(losses) on defined benefit plans 15,004,794 15,004,794

Gains/(losses) on cash flow hedge - - - - - - - - - -

Exchange gains/(losses)(arising from

translating financial assets of foreign operation) - - - - - - - - - -

Total Comprehensive Income for the year - - - - - 141,690,718 - 6,404,936,160 15,004,794 6,561,631,672

Transfer to Reserves during the year - - 1,281,000,000 35,600,000 1,201,404,149 - - (3,513,969,248) 995,965,099 -

Transfer from Reserves during the year - - - 22,332,438 (27,248,507) (4,916,069)

Transactions with Owners, directly recognized in Equity : - - - - - - - - - -

Right Share Issued - - - - - - - - - -

Share Based Payments - - - - - - - - - -

Dividend to Equity-Holders - - - - - - - - - -

Bonus Shares Issued 4,224,088,097 (175,555) - - - - - - (4,223,912,542) -

Cash Dividend Paid - - - - - - - (2,625,784,493) - (2,625,784,493)

Other - - - - - - - - - -

Total Contributions by and Distributions 4,224,088,097 (175,555) 1,281,000,000 35,600,000 1,201,404,149 - - (6,117,421,302) (3,255,195,950) (2,630,700,562)

Balance at Ashadh 31, 2080 (16-Jul-2023) 27,056,996,729 - 13,905,322,355 787,712,612 3,629,739,942 3,724,096,070 560,136,025 3,187,059,423 4,061,615,251 56,912,678,407

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Kumar CA Sunir Kumar Dhungel
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Chaudhary Managing Partner
Board Member S.A.R. Associates,
Chartered Accountants

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M. Nazmus Sakib CA Nirdesh Shrestha
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
ANNUAL REPORT 2022/23

Accountants
Date: November 23, 2023
305

Place: Kathmandu, Nepal

Notes to the Consolidated Financial Statements
For the year ended 31 Ashadh 2080 (at July 16, 2023)

1. REPORTING ENTITY 1.4. Subsidiary company operates its offices from I.J. Plaza, Durbarmarg, Significant accounting policies followed by
The Group represents the bank and its two Kathmandu, Nepal. The company is a full the Group in the preparation of financial
1.1. Corporate information subsidiaries, viz. Nabil Investment Banking service securities broker and dealer under statements for the reporting period are given in
Nabil Bank Limited (hereinafter referred to Limited and Nabil Securities Limited. license from SEBON and NEPSE. The company Note 3.
as “the Bank”) is a public limited company is not listed. Nabil Securities and NBBL Securities
domiciled in Nepal. It was incorporated on May Nabil Investment Banking Limited is a public Ltd., which were wholly owned subsidiaries of 2.1.1. Reporting pronouncements
11, 1984 under then Companies Act 1964 A.D. limited company domiciled in Nepal. It was the Bank, merged to form one entity during the The Accounting Standards Board of Nepal
of Nepal. It is a class “A” licensed commercial incorporated on February 07, 2010 under the reporting period. The company is yet to begin its has developed NFRS (updated 2018) by
bank regulated under the Banks and Financial then Companies Act 2006 A.D. of Nepal. It is a commercial operations and is in the process of converging with International Financial
Institutions Act 2017 A.D. It commenced Merchant Banker licensed under the Securities obtaining the license for the same. Reporting Standards (IFRS) as issued by the
banking operations on 12th July 1984 and Businessperson (Merchant Banker) Regulations, International Accounting Standards Board
has its registered head office in ‘Nabil Center’, 2008 A.D. It commenced its commercial 1.5. Principal activities of the Bank (IASB). The Institute of Chartered Accountants
Tindhara, Durbarmarg, Kathmandu, Nepal. It is operations on May 26, 2010 and operates Principal activities of the Bank comprise full- of Nepal has pronounced implementation of
listed on the Nepal Stock Exchange. from its registered office at Central Plaza, fledged commercial banking services including NFRS. Accordingly, the accompanying financial
Narayanchaur, Naxal, Kathmandu, Nepal. financial intermediation, trade finance services, statements for the year ended July 16, 2023
1.2. Consolidated financial statements The company is not listed. Nepal Bangladesh remittance, treasury, cards and e-banking, are prepared in accordance with NFRS.
The accompanying consolidated financial Capital Ltd., a merchant banker, which was agency services and other ancillary banking
statements comprise the Bank (Parent a wholly owned subsidiary of the Bank in the services to a diverse clientele encompassing 2.1.2. Carve-outs in NFRS
Company) and its Subsidiaries (together previous year merged with Nabil Investment individuals, corporates, multinationals, state The ICAN, on recommendation from ASBN,
referred to as the ‘Group’ and individually as Banking Limited during the reporting period to owned enterprises, public sector companies, has issued following carve-outs in the
‘Group entities’) and the Group’s interest in its form one entity. developmental aid agencies, embassies, NGOs implementation of NFRS at licensed banks and
associate company. The Bank is the ultimate and INGOs. financial institutions and has also prescribed
parent of the Group. The bank also has a wholly owned subsidiary alternative treatments explained below:
named Nabil Securities Limited. Nabil Securities 1.6. Principal activities of the Subsidiary
1.3. Ownerships held by the Bank in Limited is a public limited company domiciled Principal activities of the subsidiaries are issue a) Para 5.4 of NFRS 9 –
subsidiary and associate companies. in Nepal. It was incorporated on July 19, 2021 management, portfolio management services, “Financial Instruments”
with paid up capital of NPR 1.52 billion and underwriting of securities, securities trustee, Carve out from the requirement to recognize
registrar to shares, fund management and impairment loss for expected credit losses
depository services, depository participant on financial assets – loans and advances as
NAME OF COMPANY STATUS OWNERSHIP AT PRINCIPAL ACTIVITIES services in a central depository services, specified in para 5.4 of NFRS 9 unless the
16-JUL-2023
corporate advisory services, allied support reporting entity is a bank or a financial
Nabil Investment Banking Ltd. Subsidiary 60.00% Merchant Banker under license from Securities Board of Nepal services, etc. institution registered as per Bank and
Nabil Securities Ltd. Subsidiary 100.00% Securities Broker and Stock Dealer under license from Securities Financial Institutions Act 2073. Such entities
Board of Nepal and Nepal Stock Exchange 2. BASIS OF PREPARATION shall measure impairment loss on loans and
NADEP Laghubitta Bittiya Sanstha Ltd. Associate 25.00% Microfinance Institution under class “D” license from Central Bank advances at the higher of:
2.1. Statement of compliance
The consolidated financial statements of the n amount derived as per norms prescribed
Group have been prepared in accordance with by Nepal Rastra Bank for loan loss
Nepal Financial Reporting Standards (NFRS) provisioning; and
developed by the Accounting Standards Board,
Nepal (ASBN)and pronounced for application n amount determined as per para 5 of the
by the Institute of Chartered Accountants of carve out which specifies calculation of
Nepal (ICAN). These financial statements impairment loss on incurred loss model
comply with the regulations of Nepal Rastra
Bank, requirements of the Companies Act and The Group has adopted this mandatory
also provide appropriate disclosures required treatment. As a result of this treatment, the
under regulations of the Securities Board of Group has recognized impairment loss on
Nepal (SEBON). loans and advances at the higher of the amount

306 NABIL BANK LIMITED ANNUAL REPORT 2022/23 307

derived as per prudential norms specified in reflects a true and fair view of the financial prescribed by Nepal Rastra Bank. Assets and above, and which have significant effects on the
NRB directive no. 2/79 and the amount derived position and performance of the Group and liabilities are generally presented in the order of amounts recognized in the financial statements
from incurred loss model as specified in para 5 that of the Bank. The board is of the view that liquidity in the statement of financial position. are described in respective notes.
of the carve out. the financial statements in its entirety have Income and expenses are classified ‘by nature’ 2.4.1. Fair value of financial instruments
been prepared in conformity with the prevailing in the presentation of statement of profit or Fair value of financial assets and financial
The Group has recognized impairment loss on financial reporting standards, regulations of the loss. Cash flows from operations are derived liabilities, for which there is no observable
other financial assets measured at amortized Nepal Rastra Bank and the requirements of the using the direct method in the presentation of market prices, are determined using a variety
cost in accordance with para 5 of the carve out. Companies Act. statement of cash flows. of valuation techniques that include the use
of statistical models. The Group measures
b) Para 5.5 of NFRS 9 – The board of directors acknowledges their 2.4. Use of estimates, assumptions and fair value using a fair value hierarchy that
“Financial Instruments” responsibility for financial statements as set out judgments reflects the significance of input used in making
Carve out from the requirement to incorporate in the ‘Statement of Director’s Responsibility’ Preparation of financial statements in measurements. The use of fair value hierarchy
all fees and points paid or received under and in the certification on the statement of conformity with NFRS required the Group’s is described in Note 5.1.10.
contractual terms of a financial instrument in financial position. management to make critical judgments,
the calculation of ‘Effective Interest Rate’ for estimates and assumptions such that could 2.4.2. Classification of financial assets and
the financial instrument as specified in para These financial statements include the following potentially have a material impact on the liabilities
5.4 of NFRS 9 unless it is immaterial or components: reported financial figures. These affect the Significant accounting policies of the Group
impracticable to determine such fees and application of accounting policies and the provide scope for financial assets and financial
points reliably. n Statement of Financial Position [SoFP] reported amounts of assets, liabilities, income liabilities to be recognized under different
providing the information on the financial and expenses. accounting classifications. These are either
The Group has adopted this alternative position of the Group and the Bank as at the measured at fair value or at amortized cost and
treatment in the case of loans and advances. end of the reporting period; On an ongoing basis the management reviews can be presented under any of the following
As a result of this alternative treatment, the these estimates and underlying assumptions accounting classifications based on specific
Group has excluded the full amount of upfront n Statement of Profit or Loss [SoPL] and to ensure that they continue to be relevant circumstances.
loan management fees or commission received Statement of Other Comprehensive Income and reasonable. Any revisions to accounting
on loans and advances in the calculation of [SoCI] providing the information on the estimates are recognized prospectively in the n Financial assets or financial liabilities
effective interest rate for the loan. The upfront financial performance of the Group and the financial statements. subsequently measured at Amortized Cost; or
fees and commission are recognized as income Bank for the reporting period;
in the same period the loan is approved. The most significant areas of assumptions n Financial assets or financial liabilities
The Group has assessed that this election is n Statement of Changes in Equity [SoCE] and estimation applied in the application designated as at Fair Value Through Profit or
justifiable in line with the principal of cost and reporting all changes in the shareholders’ of accounting policies that have the most Loss (FVTPL); or
benefit of adopting certain provisions in NFRS. funds during the reporting period of the significant effect on the amounts recognized in
Group and the Bank; the financial statements are listed hereinafter n Financial assets or financial liabilities
2.2. Reporting period and approval of and their description follows: subsequently measured at Fair Value
financial statements n Statement of Cash Flows [SoCF] providing Through Profit or Loss (FVTPL); or
The accompanying financial statements cover the information to the users, on the ability n Fair value of financial instruments
annual reporting period between July 17, of the Group and the Bank to generate cash n Classification of financial assets and financial n Financial assets subsequently measured at
2022 and July 16, 2023 (the reporting period) and cash equivalents and utilization of those liabilities Fair Value through Other Comprehensive
and the status is reported as at the year-end cash flows; and n Impairment losses on financial assets Income (FVTOCI).
date of July 16, 2023 (the report date). These n Impairment losses on non-financial assets
financial statements, inclusive of comparative n Notes to the financial statements n Useful economic life of property and Presentation and / or measurement of the
figures for the year ended July 16, 2023 have comprising significant accounting policies, equipment amounts recognized in financial statements
been approved and authorized for issue by other disclosures and other explanatory n Taxation and deferred tax could be different for a particular financial
the board of directors as per its decision dated information relevant to the study of financial n Defined benefit obligations asset or financial liability under any two
and have recommended for its approval at the statements. n Provisions for liabilities, commitments and different accounting classifications. The
shareholders annual general meeting. contingencies Group’s management exercise judgment in the
2.3. Functional and presentation currency n Impairment of goodwill/intangibles application of appropriate accounting policy
2.2.1. Responsibility for financial statements Consolidated financial statements are presented to achieve correct accounting classifications
The board of directors of the Bank is in Nepalese Rupees (NPR), the functional Information about significant areas of for its financial assets and financial liabilities.
responsible for the preparation of financial currency of Group entities. Consolidated estimation and critical judgments in applying Accounting policy relating to classification
statements of the Group and the Bank which financial statements are prepared in the formats accounting policies, other than those stated of financial assets and financial liabilities

308 NABIL BANK LIMITED ANNUAL REPORT 2022/23 309

is presented in Note 3.4.3 and the related events or changes in circumstances necessitates, 2.4.6. Useful economic life of property and defined benefit obligation as may be available.
explanatory information is presented in Note the Group assesses whether there are indicators equipment The mortality rate is based on publicly available
5.3. of impairment for a non-financial asset. Where Management judgment is exercised in the mortality tables. Future salary increases and
2.4.3.Impairment losses on financial assets any indication of impairment exists, the Group estimation of residual values, useful lives pension increases are based on expected
Impairment loss on financial assets – loans and makes an estimation of the asset’s recoverable and methods of depreciation of property and future salary increase rates. The Group reviews
advances are determined at the higher of: amount. equipment. Management uses its experienced actuarial assumptions at each reporting date.
judgment in determining the useful lives of Additional disclosure on employee benefits is
n Loan loss provision amount derived as The ‘recoverable amount’ of an asset is the property and equipment. stated in Note 3.15.
prescribed in directive no. 02/79 of Nepal greater of its ‘Value in Use’ and it’s ‘Fair Value’
Rastra Bank; and less costs to sell. In determining the ‘Value in 2.4.7. Taxation and deferred tax 2.4.9. Provisions for liabilities, commitments
use’, future cash flow estimates are discounted The Group Entities are subject to income and contingencies
n Impairment loss amount determined as per to their present value using a pre-tax discount tax under Income Tax Act 2002 A.D. and The Group receives legal claims in the normal
Incurred Loss Model specified in para 5 of rate that reflects current market assessments of amendments thereto, and due to the potential course of business. Management has made
NFRS 9. the time value of money and the risks specific to differences that may exist between the Group judgments as to the likelihood of any claim
the asset. In determining ‘Fair Value’ less cost to Entities and the Income Tax Authorities with succeeding in making provisions. The time
There arises a need for the Group’s sell, an appropriate valuation model is used. regard to the interpretation of complex tax of concluding legal claims is uncertain, as is
management to apply judgment and estimation provisions, management judgment is required the amount of possible outflow of economic
in assessing and determining the amount of The whole impairment assessment exercise to determine the total provision for current tax benefits. Timing and cost ultimately depends
impairment loss on financial assets measured at requires the management to make estimates and deferred tax amounts. on the due processes in respective legal
amortized cost. Some of the areas that require of expected future cash flows, appropriate jurisdictions.
management judgment and estimation are discount rates and also select appropriate Deferred tax assets are recognized in respect of
listed herein below: valuation model. tax losses to the extent that it is probable that All discernible risks are accounted for in
future taxable profit will be available against determining the amount of all known liabilities.
n selection of appropriate impairment 2.4.5. Impairment of Goodwill which such losses can be utilized. Judgment is Contingent liabilities are possible obligations
assessment tool; Goodwill and intangible assets with infinite required to determine the amount of deferred whose existence will be confirmed only by
n defining individually significant assets; useful life such as license are not amortized, but tax assets that can be recognized, based upon uncertain future events or present obligations
n designing impairment assessment are assessed for impairment in each reporting the likely timing and level of future taxable where the transfer of economic benefit is not
questionnaire; period or as and when there is indication of profits, together with future tax planning probable or cannot be reliably measured.
n estimating future recoverable cash flows on impairment. The assessment of infinite life is strategies. Additional disclosure on income tax Contingent liabilities are not recognized in the
financial asset; and reviewed each reporting period to determine is stated in Note 3.10. statement of financial position but are disclosed
n adjusting results of historical data analysis whether the infinite life continues to be unless they are remote. Additional disclosure on
to incorporate the economic conditions and supportable. 2.4.8. Defined benefit obligations this is stated in Note 5.6.
portfolio factors that existed at the reporting The Group recognizes following two types
date. The Goodwill recognized upon acquisition of employee liabilities as defined benefit 2.5. Changes in accounting policies
of erstwhile United Finance Ltd. and Nepal obligations: The Group has consistently applied the
Exercise of judgment is an integral part of the Bangladesh Bank Ltd. has been assessed for accounting policies for all periods reported in
impairment assessment process and the Group impairment and indication of impairment of a) Gratuity Liability the financial statements. There were no changes
exercises its experienced judgment to adjust such goodwill has not been observed at the end b) Accumulated Leave Liability in accounting policy in the reporting period.
observable data for a group of financial assets of the reporting period. These acquisitions have
to reflect current circumstances. The use of resulted in synergistic growth in the business of The cost of the defined benefit obligations is 2.6. New standards
reasonable estimates is an essential part of the the Group with significant boost observed in determined using actuarial valuation from an issued but not yet effective
preparation of financial statements and does many key areas. As the assets acquired from independent actuary. The actuarial valuation The Institute of Chartered Accountants of Nepal,
not undermine their reliability. these acquisitions along with the goodwill will involves making assumptions about discount (ICAN) has issued a new version of NFRS on
continue to provide support in generation of rates, expected rates of return on assets, 2077 Ashadh, 11 (NFRS 2018) which covers
The Group's policy in accounting for future cash flows as well, the probability of attrition rate, future salary increases, mortality NFRS 17 Insurance Contracts.
impairment of financial assets is explained in the goodwill being impaired is assessed to be rates, future pension increases, etc.
Note 3.4.8. very low. The impairment indicators are being 2.7. New standards and
monitored regularly. In determining the appropriate discount rate, interpretations not adopted
2.4.4. Impairment losses on non-financial management considers the interest rates of All Accounting standards along with carve outs,
assets Nepal government bonds with maturities issued by the Institute of Chartered Accountants
At each reporting date, or more frequently if corresponding to the expected duration of the of Nepal (ICAN) has been incorporated.

310 NABIL BANK LIMITED ANNUAL REPORT 2022/23 311

2.8. Discounting the Statement of Profit or Loss unless required and appropriate disclosures have been made in statements unless specifically stated otherwise.
The Group determines amortized cost of a or permitted by an accounting standard or line with NAS 10 – “Events After the Reporting
financial asset or a financial liability using the interpretation and as specifically disclosed in Period”. Explanatory information on events after Index of significant accounting policies is
effective interest rate. The effective interest the Group’s accounting policy. the reporting date is presented in Note 5.10. produced below for easy reference.
rate is the rate that exactly discounts estimated
future cash payments or receipts throughout the 2.11. Materiality and aggregation 3. SIGNIFICANT ACCOUNTING POLICIES 3.1. Basis of measurement
expected life of a financial asset or a financial In the financial statements materiality and Financial Statements of the Group have been
liability to the net carrying amount of the aggregation is dealt with in compliance The Group has applied the accounting policies prepared on historical cost convention, except
financial asset or liability. If expected life cannot with Nepal Accounting Standard – NAS 1 set out below consistently to all periods for the following:
be determined reliably, then the contractual life “Presentation of Financial Statements” and presented in the accompanying financial
is used. within the scope of formats implemented by
Nepal Rastra Bank. Accordingly, each material
In case where the Group assesses that the class of similar items is presented separately
transaction amount of a financial asset or and items that are not similar in nature or PRINCIPAL NOTE ACCOUNTING POLICY TOPIC ADDITIONAL NOTE

a financial liability does not represent its function are also presented separately unless
fair value, the related future cash flows are these are immaterial. 3 Significant Accounting Policies
3.1 Basis of measurement
discounted at prevailing interest rate to
3.2 Basis of consolidation
determine the initial fair value. 2.12. Rounding
3.3 Cash and cash equivalent 4.1
The amounts in the financial statements are
3.4 Financial assets and financial liabilities 5.3
2.9. Going concern rounded off to the nearest Rupees, except where
3.5 Trading assets 4.5
The management has made an assessment otherwise indicated as permitted by NAS 1 – 3.6 Derivative assets and derivative liabilities 4.4, 4.19
of its ability to continue as a going concern “Presentation of Financial Statements”. 3.7 Property and equipment 4.13
and is satisfied that it has the resources to 3.8 Goodwill and intangible assets 4.14
continue in business for the foreseeable future. 2.13. Comparative information 3.9 Investment property 4.12
Furthermore, the management is not aware Accounting policies are consistently applied 3.10 Income Tax 4.41
of any material uncertainties that may cast across all periods reported. The presentation 3.11 Deposits, debt securities issued and subordinated liabilities 4.17, 4.20, 4.24, 4.25
significant doubt upon the Group’s ability and classification of financial figures relating to 3.12 Provisions 4.22
to continue as a going concern. Therefore, previous period are regrouped or reclassified 3.13 Revenue recognition 4.29, 4.31, 4.33, 4.34, 4.39
where relevant to facilitate consistent 3.14 Interest expense 4.30
financial statements of the Group continue to
3.15 Employee benefits 4.23.1 to 4.23.7
be prepared on a going concern basis. presentation and better comparability.
3.16 Leases 4.28.4
3.17 Foreign currency transactions, translation and balances
2.10.Offsetting 2.14. Events after the reporting date
3.18 Financial guarantee and loan commitment 4.28.1, 4.28.2
In the Statement of Financial Position, financial Events after the reporting date are those events, 3.19 Share capital and reserves 4.26, 4.27
assets and financial liabilities are netted off favorable and unfavorable, that occur between 3.20 Earnings per share
only when there is a legally enforceable right to the reporting date and the date when the 3.21 Segment reporting 5.4
offset the recognized amounts and there is an financial statements are authorized for issue. 3.22 Statement of cash flows
intention to settle on a net basis, or to realize
the assets and settle the liability simultaneously. All material and important events that occurred
Income and expenses are not netted off in after the reporting date have been considered

312 NABIL BANK LIMITED ANNUAL REPORT 2022/23 313

n Investments in equity instruments presented reflect the changes in their relative interests in The Group reassesses whether or not it controls 3.2.6. Special purpose entity
in SoFP line items Other Trading Assets and the Subsidiary. an investee if facts and circumstances indicate that There are no special purpose entities within the
Investment Securities measured at fair value there are changes to one or more of the above. Group's holding structure.
under NFRS 9 ‘Financial Instruments’. 3.2.3. Investment in subsidiary The financial statements of subsidiaries are
The Group has recognized Nabil Investment included in the consolidated financial statements 3.2.7. Transactions eliminated on
n Land and buildings held as non-banking Banking Ltd. as a Subsidiary company in from the date that control commences until the consolidation
assets presented in SoFP line item Investment which the Bank held 60% controlling interest date that control ceases. Where Subsidiaries The effect of all intra-group transactions and
Property measured at fair value under NAS at the report date. Furthermore, the group had have been sold or acquired during the year, outstanding balances, including realized and
40 ‘Investment Property’. recognized Nepal Bangladesh Capital Ltd and assets, liabilities, income and expenses of the unrealized income and expenses are eliminated
NBBL Securities Ltd., as a Subsidiary company said subsidiary are included in the consolidated in the preparation of the Consolidated Financial
n Liabilities for employee defined benefit in which the Bank has held 100% controlling financial statements from the date the Group gains Statements.
obligations and liabilities for long service interest in the previous reporting period. control until the date the Group ceases to control
leave presented in SoFP line item Other Nepal Bangladesh Capital Ltd. merged with the subsidiary. 3.2.8. Investment in associate
Liabilities measured at fair value under NAS Nabil Investment Banking Ltd. to form a single The Group has recognized NADEP Laghubitta
19 ‘Employee Benefits’. entity and NBBL Securities merged with Nabil When necessary, adjustments are made to the Bittiya Sanstha Ltd. as an Associate company in
Securities to form a single entity in the reporting financial statements of subsidiaries to bring which the Bank held 25% equity interest at the
3.2. Basis of consolidation period. The bank’s holding in Nabil Investment their accounting policies in line with the Group’s report date. There has been no change in the
The Group’s financial statements comprise Banking Limited changed from 52% in the accounting policies. All intra-group assets and Bank’s holding in the Associate for the reporting
consolidation of the financial statements of the corresponding previous period to 60% in the liabilities, equity, income, expenses and cash period and the previous comparative period.
Bank and those of the following entities: current reporting period. The bank holds 100% flows relating to transactions between members of Associates are those entities in which the Group
shares of Nabil Securities Limited. Group are eliminated in full on consolidation. has significant influence, but not control, over
a. The Subsidiary, in accordance with NFRS 10 the variable returns through the exercise of
– “Consolidated Financial Statements”; and Subsidiaries are investees that are controlled by There are no significant restrictions on the ability of its power over the financial and operating
the Group. Control is achieved when the Group the subsidiaries to transfer funds to the Bank in the policies of the investee. If an entity holds,
b. The proportionate share of the profit or loss is exposed, or has rights, to variable returns form of cash dividends or repayment of loans and directly or indirectly i.e. through subsidiary, 20%
and net assets of the Associate Company in from its involvement with the investee and has advances. or more of the voting power of the investee,
accordance with NAS – 28 “Investments in the ability to affect the returns of those investees it is presumed that the entity has significant
Associates and Joint Ventures”. through its power over the investee. Specifically, 3.2.4. Cost of acquisition influence, unless it can be clearly demonstrated
the Group controls an investee if, and only if, The cost of acquisition of a Subsidiary is measured that this is not the case.
3.2.1. Business combinations the Group has all of the following: as the fair value of the consideration, including
The Bank has not undertaken any mergers or contingent consideration, given on the date of Significant influence is usually evidenced in one
acquisitions in the reporting period. n power over the investee; transfer of title. The acquired identifiable assets, or more of the following ways:
n exposure or rights to variable returns from its liabilities and contingent liabilities are measured
3.2.2. Non- controlling interests (NCI) involvement with the investee; and at their fair values at the date of acquisition. n representation on the board of directors or
Non-controlling interest represent the n the ability to use its power over the investee Subsequent to the initial measurement, the equivalent governing body of the investee;
proportionate share of profit or loss and net to affect its returns. Bank continues to recognize the investments in n participation in policy-making processes,
assets of the subsidiaries not owned directly or Subsidiary at cost. including participation in decisions about
indirectly by the Group. The non-controlling Generally, there is a presumption that a dividends or other distributions;
interest is presented in the consolidated majority of voting rights results in control. To 3.2.5. Loss of control n material transactions between the entity and
statement of financial position within equity, support this presumption, and when the Bank On loss of control over a Subsidiary, the Group its investee;
separately from the equity attributable to the has less than a majority of the voting or similar derecognizes its assets and liabilities and any n interchange of managerial personnel; or
equity holders of the Group. Non-controlling rights of an investee, the Bank considers all related NCI and other components of equity. The n provision of essential technical information.
interest in the profit or loss of the Group relevant facts and circumstances in assessing resulting gain or loss is recognized in profit or loss.
is disclosed separately in the consolidated whether it has power over an investee, Investments in associate entities are accounted
statement of profit or loss. including: Any interest retained in the former subsidiary for using the equity method (equity-accounted
is measured at fair value when control is lost. investees) and are recognized initially at cost
A change in the ownership interest of a n the contractual arrangement with the other Subsequently, it is accounted for as an Associate or as required under the Nepal Accounting
subsidiary without a loss of control is accounted vote holders of the investee; in accordance with the Group’s Accounting Policy Standards – NAS 28 on “Investments in
for as equity transactions. This in effect is the n rights arising from other contractual for financial instruments depending on the level of Associates and Joint venture”. Accordingly, the
adjustment made in the carrying amounts of arrangements; and influence retained. group carries its associate investments at cost
the controlling and non-controlling interests to n the Group’s voting rights and potential voting plus post-acquisition changes in its share of the
rights.

314 NABIL BANK LIMITED ANNUAL REPORT 2022/23 315

associate’s net assets, after adjustments to align derivative assets and loans and advances. liability not at fair value through profit or loss, of money and for the credit risk associated
the accounting policies with those of the Group, transaction costs that are directly attributable to with the principal amount outstanding during a
wherever required. Financial liabilities are obligations that arise the acquisition or issue of the financial asset or particular period of time.
from contractual agreements and that require financial liability.
The Group discontinues the use of the equity settlement by way of delivering cash or another 3.4.3. Classification and subsequent All debt instruments that meet the above two
method from the date that it ceases to have financial asset. Settlement could also require measurement of financial assets conditions are subsequently measured at
significant influence over an associate and exchanging other financial assets or financial Financial assets are classified based on amortized cost applying the effective interest
accounts for any residual investments in liabilities under potentially unfavorable how the asset is measured subsequent to its rate (net of any write down for impairment),
accordance with the Group’s accounting policy conditions. Settlement may also be made initial recognition as per NFRS 9 – “Financial except when the Group designates an
for financial instruments. Any disposal gains or by issuing own equity instruments. Common Instrument”. Accordingly, at the time of initial instrument at fair value through profit or loss
loss is recognized in profit or loss. examples of financial liabilities are due to recognition, financial assets are classified as: (FVTPL). At the reporting date the Group does
banks, derivative liabilities, deposit accounts, not have any financial assets designated as
At each reporting date, the Group determines money market borrowings and debt capital n financial assets subsequently measured at FVTPL.
whether there is objective evidence that the instruments. amortized cost, and
investment in the associate is impaired. If n financial assets subsequently measured at All gains or losses on financial assets that are
there is such evidence, the Group calculates The contractual agreements, generally referred fair value. measured at amortized cost and are not part of
the amount of impairment as the difference to as financial instruments, are characterized a hedging relationship are recognized in profit
between the recoverable amount of the by the existence of counterparties and the Classification and subsequent measurement of or loss (through amortization process) when
associate and its carrying value, which is contract terms give rise to a financial asset to financial assets are arrived at on the basis of the financial asset is derecognized or impaired
charged to profit or loss as net impairment one counterparty and a corresponding financial both the following criteria: or reclassified to fair value. The amortization
charge / (reversal) for loans and other assets. liability or equity instrument to the other is presented as interest income and any
counterparty. n the entity’s business model for managing the impairment loss is presented as impairment
3.3. Cash and cash equivalents financial assets, and charge / (reversal) in profit or loss.
Cash and cash equivalent comprise of the total The Group has applied NFRS 9 – “Financial n the contractual cash flow characteristics of
amount of cash-in-hand, balances with other Instruments” in the classification and the financial asset. 3.4.3.2. Financial assets subsequently
bank and financial institutions, money at call measurement of its financial instruments. Para measured at fair value
and short notice, and highly liquid financial 5.2.2 of NFRS 9 prescribes the application of Details on different classes of financial assets Financial assets are measured at fair value
assets with original maturities of three months impairment requirements in paragraphs 58-65. and financial liabilities recognized on the unless it is measured at amortized cost. Within
or less from the acquisition date that are subject financial statements are presented in Note 5.3. the fair value classification there are two sub-
to an insignificant risk of changes in their 3.4.1. Date of recognition of financial classifications as under:
fair value, and are used by the group in the instruments 3.4.3.1. Financial assets subsequently
management of its short term commitments. All financial assets and financial liabilities are measured at amortized cost i.Fair value through profit or loss (FVTPL)
Restricted deposits are not included in cash initially recognized in the Statement of Financial Financial assets are measured at amortized cost ii.Fair value through other comprehensive
and cash equivalents. These are measured at Position when the entity becomes a party to when both of the following conditions are met: income (FVTOCI)
amortized cost and presented as a line item on the contractual provisions of the instrument.
the face of consolidated Statement of Financial A regular way of purchase or sale of financial i. Business model test For financial assets that are measured at FVTPL
Position (SoFP). assets is recognized on the trade date, which is The objective of the Group's business model all related fair value changes (realized and
the date on which the Group becomes a party is to hold the financial asset to collect the unrealized gains or losses) are recognized
3.4. Financial assets and financial to the contractual provisions of the financial contractual cash flows (rather than to sell the in the profit or loss except in the case of a
liabilities asset. Regular way trade means purchases or instrument prior to its contractual maturity to financial asset held as part of a hedging
Financial assets refer to assets that arise from sales of financial assets that required delivery realize its fair value changes). relationship. FVTPL classification is determined
contractual agreements that result in future of assets within the time frame generally based on the investment motive where the
cash inflows or from owning equity instruments established by regulation or convention in the ii. Cash flow characteristics test related asset is acquired principally for the
of another entity. Since financial assets derive market place. The contractual terms of the financial asset give purpose of selling or repurchasing in the near
their value from a contractual claim. These are rise on specified dates to cash flows that are term or is held as part of a portfolio that is
non-physical in form and are usually regarded 3.4.2. Initial recognition and measurement solely payments of principal and interest on the managed together for short-term profit or
as being more liquid than other tangible assets. of financial instruments principal amount outstanding. position taking.
Common examples of financial assets are cash, All financial assets and financial liabilities are
cash equivalents, bank balances, placements, initially measured at fair value plus or minus, Interest, for the purpose of contractual cash 3.4.3.3. Investment in equity instruments
investments in debt and equity instruments, in the case of a financial asset or financial flow test, is the consideration for the time value measured at FVTOCI
The Group has irrevocably elected at initial

316 NABIL BANK LIMITED ANNUAL REPORT 2022/23 317

recognition to measure certain investments in All resulting fair value changes are recognized in NFRS 9 does not permit reclassification in the rewards of the asset, but has transferred
equity instruments at FVTOCI. The election is profit or loss, except when a financial liability is following cases: control of the asset.
made in respect of equity investments that are designated as FVTPL and the Group is required n for equity investments measured at FVTOCI; On de-recognition of a financial asset, the
not held for trading. Only dividend income to present the effects of changes in the liability’s and difference between the carrying amount of the
arising on such investment is recognized in credit risk on other comprehensive income. At n where the fair value option has been exercised asset (or the carrying amount allocated to the
profit or loss. the reporting date the Group does not have any in any circumstance for a financial asset or a portion of the asset derecognized) and the sum
financial liability designated as FVTPL. financial liability. of the consideration received (including any new
Subsequent fair value changes (unrealized asset obtained less any new liability assumed)
gains or losses) on equity investments 3.4.4.2. Financial liabilities subsequently Where the Group’s management assesses and any cumulative gain or loss that had been
irrevocably elected for FVTOCI presentation is measured at amortized cost a reclassification as appropriate, it is done recognized in other comprehensive income is
recognized in other comprehensive income. In All other financial liabilities that are not prospectively from the reclassification date which recognized in profit or loss. Any residual interest
the event such fair value changes is realized classified as FVTPL are classified as subsequently is defined as the first day of the first reporting in transferred financial assets that qualify for
upon sale of the investment it is not reclassified measured at amortized cost. The general period following the change in business model. de-recognition that is created or retained by
to profit or loss, rather it is recognized directly substance of the contractual arrangement results The Group does not restate any previously the Group is recognized as a separate asset or
within equity. The related taxes payable and the in the Group having an obligation: recognized gains, losses or interest. liability.
statutory employee bonus payable in respect
of the realized fair value changes upon sale of n either to deliver cash or another financial Where financial asset is reclassified so that Where there is the Group’s continuing
the investment is recognized through expense asset to the holder; or it is ‘measured at fair value’, its fair value is involvement that takes the form of guaranteeing
charge to profit or loss. determined at the reclassification date. Any the transferred asset, the extent of the continuing
n to exchange financial assets or financial gain or loss arising from the difference between involvement is measured at the lower of the
Details on financial investments measured at liabilities with the holder under conditions that the previous carrying amount and fair value is original carrying amount of the asset and the
FVTOCI are presented in Note 5.1.10.2. are potentially unfavorable to the Group; or recognized in profit or loss. maximum amount of consideration received by
n to settle the obligation by delivering variable the Group and which it could be required to
3.4.4. Classification and subsequent number of own equity instruments. Where financial asset is reclassified so that it is repay.
measurement of financial liabilities ‘measured at amortized cost’, its fair value at the
Financial liabilities are classified based on After initial recognition, such financial liabilities reclassification date becomes its new carrying 3.4.6.2. De-recognition of financial liabilities
how the liability is measured subsequent to its are subsequently measured at amortized amount. The Group derecognizes a financial liability
initial recognition as per NFRS 9 – “Financial cost using the effective interest rate method. when its contractual obligations are discharged
Instrument”. Accordingly, at the time of initial Amortized cost is calculated by taking into 3.4.6. De-recognition of financial assets or cancelled or expired. Where an existing
recognition, financial liabilities are classified as: account any discount or premium on issuance and financial liabilities financial liability is replaced by another from the
and issuance costs that are an integral part of same lender on substantially different terms or
n subsequently measured at FVTPL, or the effective interest rate. 3.4.6.1. De-recognition of financial assets the terms of an existing liability are substantially
n subsequently measured at amortized cost. The Group derecognizes a financial asset, or modified, such an exchange or modification is
The amortization is presented as interest expense where applicable a part of financial asset or part treated as de-recognition of the original liability
Details on different classes of financial assets in profit or loss. Gains or losses are also of a group of similar financial assets, when: and the recognition of a new liability.
and financial liabilities recognized on the recognized in profit or loss when the liabilities
financial statements are presented in Note 5.3. are derecognized. n the contractual rights to the cash flows from The difference between the carrying value of the
the financial asset expire; or original financial liability and the consideration
3.4.4.1. Financial liabilities subsequently 3.4.5. Reclassification of n the Group transfers the rights to receive paid is recognized in profit or loss as a disposal
measured at FVTPL financial assets and liabilities the contractual cash flows in a transaction gain or loss.
A financial liability is classified as FVTPL if either Reclassification of financial assets and liabilities in which substantially all risks and rewards
it is held for trading or upon initial recognition are at the election of management and of ownership of the financial asset are 3.4.7. Fair value of financial assets and
it is designated as FVTPL. A financial liability is determined on an instrument by instrument transferred; or financial liabilities
held for trading if it is acquired principally for basis. Reclassification of financial assets is done n the Group has assumed an obligation to pay ‘Fair Value’ is the price that would be received
the purpose of selling or repurchasing in the if and only if the business model objective for the received cash flows in full without material on sell of an asset or paid for transfer of a
near term or held as a part of a portfolio that the financial asset changes so its previous model delay to a third party under a ‘pass-through’ liability in an orderly transaction between market
is managed together for short-term profit or assessment would no longer apply. arrangement and: participants at the measurement date. Fair value
position taking. n either the Group has transferred measurement is based on the presumption that
substantially all the risks and rewards of the the transaction to sell the asset or transfer the
asset; or liability takes place either:
n the Group has neither transferred nor
retained substantially all the risks and

318 NABIL BANK LIMITED ANNUAL REPORT 2022/23 319

n in the principal market for the asset or evidence of impairment includes observable data 3.4.8.2. Impairment of modification of terms and the loan is no longer
liability; or such as following: individually significant loans considered past due.
n in the absence of principal market, in the n significant financial difficulty of the issuer or The Group provides due consideration to the
most advantageous market for the asset or obligor; following factors while determining impairment Management continually reviews renegotiated
liability. n a breach of contract, such as a default or loss on individually significant loans: loans to ensure that all criteria are met and
delinquency in interest or principal payments; n aggregate exposure on the obligor; that future payments are likely to occur. The
The principal or the most advantageous market n the lender, for economic or legal reasons relating n viability of the customer’s business model loans continue to be subject to an individual or
must be accessible to the Group. to the borrower’s financial difficulty, granting to and their capacity to service debt obligations; collective impairment assessment, calculated
the borrower a concession that the lender would n amount and timing of expected repayments using the loan’s original effective interest rate.
The fair value of an asset or a liability is not otherwise consider; and recoveries;
measured using the assumptions that market n it becoming probable that the borrower will enter n realizable value of collateral security and 3.4.8.5. Loan loss provision determined as
participants would use when pricing the asset or bankruptcy or other financial reorganization; other credit mitigants; prescribed in directive no. 02/79 of Nepal
liability, assuming that market participants act n the disappearance of active market for the n likely residual interest on liquidation or Rastra Bank
in their economic best interests. financial asset because of financial difficulties; bankruptcy; There is a Carve out from the requirement to
n where observable data indicate that there is a determine impairment loss on financial assets
A fair value measurement takes into account measurable decrease in the estimated future 3.4.8.3. Collective impairment assessment – loans and advances as specified in para 5 of
a market participant’s ability to generate cash flows from a group of financial assets since Statistical methods are used to determine NFRS 9 unless the reporting entity is a bank or a
economic benefits by using the asset in its the initial recognition of those assets, although impairment losses on a collective basis for financial institution registered as per Bank and
highest and best use or by selling it to another the decrease cannot yet be identified with the homogenous portfolio of loan assets. The Financial Institutions Act 2073. Such entities shall
market participant that would use the asset in its individual financial assets in the group, including Group applies “net flow rate” methodology measure impairment loss on loans and advances
highest and best use. adverse changes in repayment patterns or to calculate historical loss experience on a at the higher of:
economic conditions that correlate with defaults. collective portfolio basis. Under this, loans are
Fair Value of non-financial assets such as land grouped into ranges according to the number n amount derived as per directive no. 2/79 of
and building are derived based on reports of 3.4.8.1. Impairment charge/(reversal) and write off of days in arrears and statistical analysis is Nepal Rastra Bank for loan loss provisioning
independent professional property valuators. The amount of the loss is measured as the difference used to estimate the likelihood that loans in generally applying a fixed percentage of
between the asset’s carrying amount and the present each range will progress through the various impairment allowance based on overdue
Explanatory information on fair value value of estimated future cash flows (excluding future stages of delinquency and ultimately turn into period; and
measurement of assets and liabilities, along credit losses that have not been incurred) discounted an uncollectible. The loss rates are regularly
with the fair value hierarchy adopted by the at the financial asset’s original effective interest rate reviewed against actual loss experience. n amount determined as per para 5 of the carve
Group in determining the fair value of financial (i.e. the effective interest rate computed at initial out which prescribes calculation of impairment
assets, is provided in Note 5.1.10.1. recognition). The amount of the loss is recognized 3.4.8.4. Impairment of rescheduled loans loss on incurred loss method
in profit or loss. The carrying amount of the asset is and advances
3.4.8. Impairment of financial assets reduced through the use of an impairment allowance Where possible, the Bank seeks to restructure The Group has adopted this mandatory
The Group, at the end of each reporting period, account. loans rather than to take possession of treatment. As a result of this treatment, the
assesses whether there is any objective evidence collateral. This may involve extending the Group has recognized the amount of impairment
that a financial asset or group of financial Subsequent reversal of impairment loss, due to repayment arrangements and the agreement of loss on loans and advances that has been
assets is impaired. A financial asset or a group factors such as an improvement in the debtor’s credit new loan covenants. Once the terms have been derived as per prudential norms specified in NRB
of financial assets is impaired and impairment rating, is recognized in profit or loss. The reversal re-negotiated, any impairment is measured directive no. 2/79 because this amount is higher
losses are incurred if, and only if, there is shall not result in a carrying amount of the financial using the original EIR as calculated before the than the amount determined from incurred loss
objective evidence of impairment as a result asset that exceeds what the amortized cost would model as specified in para 5 as stated in the
of one or more events that occurred after the have been had the impairment not been recognized table presented hereunder.
initial recognition of the asset (a ‘loss event’) at the date the impairment is reversed. NPR
and that loss event (or events) has an impact on
2080 ASHADH 31 2079 ASHADH 32
the estimated future cash flows of the financial Financial assets (and the related impairment
asset or group of financial assets that can be allowance accounts) are written off either partially Gross Loans and Advances to Customer and BFIs (principal amount, excluding staff loans, 341,454,755,067 309,070,913,925
reliably estimated. accrued interest and impairment)
or in full, when there is no realistic prospect of
Loss provision per NRB Directive – alternative 1 13,232,905,693 7,806,964,807
recovery. Where financial assets are secured, this is
Impairment Loss per NFRS – alternative 2 4,647,487,924 3,188,388,236
It may not be possible to identify a single, after receipt of any proceeds from the realization of
Loss provision recognized in financial statements (higher of the two alternative) 13,232,905,693 7,806,964,807
discrete event that caused the impairment. security.
Rather the combined effect of several events
may have caused the impairment. Objective

320 NABIL BANK LIMITED ANNUAL REPORT 2022/23 321

3.4.9. Loan to employees at below-market Consolidated Statement of Financial Position primarily for trading purpose. If a trading asset amounts, accumulated depreciation at the
interest rate when the Group holds a legally enforceable is a debt instrument, it is subject to the same beginning and at the end of the periods is
The Group has a policy of providing loans to right to offset the recognized amounts and there accounting policy applied to financial assets presented in Note 4.13.
its employees at below-market interest rate. is an intention to either settle on a net basis, measured at amortized cost. If a trading asset
This asset is bifurcated and recognized as two or realize the assets and settle the liabilities is an equity instrument, it is subject to the same 3.7.1. Basis of recognition
different elements viz. a prepaid employee simultaneously. accounting policy applied to financial assets Property and equipment are recognized if
benefits and a loan asset. Initially the fair value measured at FVTPL. it is probable that future economic benefits
of employee loan is determined by discounting Income and expenses are presented on a net associated with the asset will flow to the Group
the future loan repayments using a market basis only when permitted under NFRSs, or for 3.6. Derivative assets and derivative and the cost of the asset can be reliably
rate of interest. This fair value is recognized as gains and losses arising from a group of similar liabilities measured.
loan asset and any excess of the principal loan transaction such as in the Group’s trading Derivative assets and derivative liabilities
amount over the fair value is recognized as activity. (derivatives) create rights and obligations that 3.7.2. Basis of measurement
deferred employee expenditure. have the effect of transferring one or more of An item of property and equipment that
Deferred employee expenditure is amortized 3.4.12. Amortized cost measurement the financial risks inherent in an underlying qualifies for recognition as an asset is initially
over the loan tenure with the amortization An ‘amortized cost’ of a financial asset or primary financial instrument between the parties measured at cost. Cost includes expenditure
amount recognized as interest income and financial liability is the amount: to the instrument. However, they generally that is directly attributable to the acquisition of
a corresponding finance expense within the do not result in a transfer of the underlying the asset and eligible subsequent expenditure.
personnel expense. n at which the financial asset or liability is primary financial instrument on inception of the Subsequent expenditure is capitalized only
measured at initial recognition contract, nor does such a transfer necessarily when it is probable that the future economic
3.4.10. Repurchase and reverse repurchase n (minus) principal repayments take place on maturity of the contract. benefits of the expenditure will flow to the
agreements n plus / (minus) the cumulative amortization Group. Ongoing repairs and maintenance are
Securities sold under agreement to repurchase using the EIR method of any difference The value of a derivative changes with the expensed off as incurred.
at a specified future date are not derecognized between the initial amount and the maturity change in value of the underlying. Examples of
from the Statement of Financial Position as amount derivative are forward, futures, options or swap 3.7.3. Cost model
the Group retains substantially all of the risks n (minus)any reduction for impairment. contracts. The underlying could be specified The Group applies the cost model to all
and rewards of ownership. There being an interest rate, security price, commodity price, property and equipment and records
obligation to return the sales proceeds along The Group calculates amortized cost of a exchange rate, price index, etc. these at cost of purchase together with any
with the interest component on a subsequent financial asset or a financial liability using the incidental expenses thereon, less accumulated
buy-back event, it is recognized as a liability. effective interest rate. The effective interest Derivative financial instruments meet the depreciation and any accumulated impairment
This treatment reflects the transaction’s rate is the rate that exactly discounts estimated definition of a financial instrument and are losses. Cost also include the cost of replacing
economic substance to the Group. The future cash payments or receipts throughout the accounted for as derivative financial asset or part of the equipment when the recognition
difference between the sale and repurchase expected life of a financial asset or a financial derivative financial liability measured at FVTPL criteria are met.
prices is recorded as interest expense and is liability to the net carrying amount of the and corresponding fair value changes are
amortized over the life of the agreement using financial asset or liability. recognized in profit or loss. The Group has not 3.7.4. Revaluation model
the effective interest rate. designated derivative as a hedging instrument The Group does not apply revaluation model
The effective interest method is a method of in an eligible hedging relationship under NFRS for any class of property and equipment, except
Conversely, securities purchased under calculating the amortized cost of a financial 9 – “Financial Instrument” and has not applied for those acquired on business combination.
agreements to resell at future date are not instrument and of allocating the interest income hedge accounting.
recognized in the Statement of Financial or interest expense over the relevant period. 3.7.5. De-recognition
Position. The consideration paid, including The amortized cost is calculated by taking into 3.7. Property and equipment The carrying amount of an item of property
accrued interest, is recorded in the Statement account any discount or premium on acquisition Property and equipment are tangible items and equipment is derecognized upon disposal
of Financial Position as an asset, reflecting the that is an integral part of the effective interest that are held for and used in the provision or when no future economic benefits are
transaction’s economic substance to the Group. rate. of services, for rental to others, or for expected from its use. Any gain or loss arising
The difference between the purchase and resale administrative purposes, and are expected to on de-recognition of an asset (calculated as the
prices is recorded as ‘Interest Income’ and is 3.5. Trading assets be used for more than one-year period. The difference between the net disposal proceeds and
accrued over the life of the agreement using the Trading assets are those assets that are Group applies NAS 16 – “Property, Plant and the carrying amount of the asset) is recognized in
effective interest rate. acquired principally for the purpose of selling Equipment” in the accounting of property and profit or loss in the year the asset is derecognized.
in the near term, or held as part of a portfolio equipment.
3.4.11. Offsetting of financial instruments that is managed together for short-term profit. When replacement costs are recognized in the
Financial assets and financial liabilities are It includes non-derivative financial assets such Additional information on property and carrying amount of an item of property and
offset and the net amount presented in the as bonds, treasury bills, equities, etc. held equipment with a reconciliation of carrying equipment, the remaining carrying amount of
the replaced part is derecognized.

322 NABIL BANK LIMITED ANNUAL REPORT 2022/23 323

3.7.6. Capital work-in-progress 3.8. Goodwill and intangible assets at the end of the periods is presented in Note Amortization methods, useful lives and residual
These are expenses of a capital nature directly 3.8.1. Goodwill 4.14. values are reviewed at each reporting date and
incurred in the construction of buildings and Goodwill arising out of acquisition is initially adjusted if appropriate.
system development, awaiting capitalization. measured at cost. Goodwill is measured at the 3.8.3. Intangible assets with indefinite useful
These are stated in the Statement of Financial excess of the aggregate of the consideration lives 3.8.6. Pledge or title restriction
Position at cost less any accumulated transferred taken together with the amount Intangible assets with indefinite useful lives are At the reporting date none of the Intangible
impairment losses. Capital work-in-progress recognized for any non-controlling interests not amortized but are tested for impairment Asset items were pledge as securities for
is transferred to the relevant asset when it is and any previous interest held, over the net annually either individually or at the Cash liabilities, and there were no restrictions on the
available for use, i.e. when it is in the location identifiable assets acquired and liabilities Generating Unit level as appropriate, when Group’s title over any of the assets.
and condition necessary for it to be capable assumed. circumstances indicate that the carrying value
of operating in the manner intended by is impaired. The useful life of an intangible 3.9. Investment property
management. Subsequent to initial recognition, goodwill is asset with an indefinite life is reviewed annually Investment properties are land or building or
measured at cost less accumulated impairment to determine whether the ‘indefinite life both other than those classified as property
3.7.7. Depreciation losses. At the reporting date, the Group has assessment’ continues to remain valid. If not, and equipment under NAS 16 – “Property,
The Group provides depreciation from the date recognized the goodwill as intangible asset the change in the useful life assessment from Plant and Equipment”; and assets classified
the assets are available for use up to the date that has been arisen from the acquisition of indefinite to finite is made on a prospective as non-current assets held for sale under
of disposal. Assets are depreciated on a straight erstwhile Nepal Bangladesh Bank Limited basis. At the reporting date the Group does NFRS 5 – “Non - Current Assets Held for Sale
line basis over its estimated useful lives. (NBBL) and erstwhile United Finance Co. Ltd. not have intangible assets with indefinite useful & Discontinued Operations”. The Group has
(UFL). lives. recognized as investment property such land or
CLASS OF FIXED ASSETS ESTIMATED USEFUL LIFE land and building acquired by the Bank as non-
Freehold Building Up to 50 years
3.8.2. Intangible assets 3.8.4. De-recognition of intangible assets banking assets in course of recovery of loans
Motor Vehicles Up to 10 years Intangible assets are identifiable non-monetary Intangible assets are de-recognized on disposal and advances to borrowers that have turned
Metal Furniture Up to 10 years asset without physical substance, which are held or when future economic benefits are no more into chronic defaulters.
Wooden Furniture & Fixture Up to 10 years for and used in the provision of services, for expected from their use. Gains or losses arising
Information Technology Hardware Up to 15 years rental to others or for administrative purposes. from de-recognition of an intangible asset are Non-banking assets (only land and building)
Office Equipment Up to 10 years An intangible asset appearing in the Group’s measured as the difference between the net are initially recognized at cost. Subsequent
Leasehold Assets Up to 10 years books is computer software. The Group applies disposal proceed and the carrying amount of to initial recognition the Group has chosen
NAS 38 – “Intangible Assets” in accounting for the asset. Such a gain or loss is recognized in to apply the cost model allowed by NAS
its intangible assets. profit or loss. 40 – “Investment Property” and since it is
Depreciation of an asset ceases at the earlier of not intended for owner-occupied use, a
the date that the asset is classified as held for The Group recognizes an intangible asset 3.8.5. Amortization and impairment of depreciation charge is not raised.
sale or the date that the asset is de-recognized. when: intangible assets
Depreciation does not cease when the assets The useful lives of intangible assets are 3.10. Income Tax
become idle or is retired from active use unless n the cost of the asset can be measured assessed as either finite or infinite. Except for Tax expense is the aggregate amount included
the asset is fully depreciated. Depreciation reliably; goodwill other intangible assets with finite lives in the determination of profit or loss for the
methods, useful lives and residual values are n there is control over the asset as a result of are amortized on a straight line basis in profit period in respect of current and deferred taxes.
reassessed at each reporting date and adjusted past events (for example, purchase or self- or loss from the date when the asset is available The Group applies NAS 12 – “Income Taxes”
if appropriate. creation); and for use, over the estimated useful economic life. for the accounting of Income Tax. Income tax
n future economic benefits (inflows of cash or expense is recognized in profit or loss, except to
3.7.8. Changes in estimates other assets) are expected from the asset. the extent it relates to items recognized directly
CLASS OF INTANGIBLE ASSETS ESTIMATED USEFUL LIFE
The asset’s residual values, useful life and in equity or directly in other comprehensive
methods of depreciation are reviewed, and Software Up to 5 years
Intangibles can be acquired by separate income. Tax expense relating to items
adjusted if appropriate, at each financial year purchase; as part of a business combination; by recognized directly in other comprehensive
end. a government grant; by exchange of assets; or Intangible assets are assessed for impairment income is recognized in the Statement of Other
by self-creation (internal generation). These are whenever there is an indication that the Comprehensive Income.
3.7.9. Pledge or title restriction measured at cost less accumulated amortization intangible asset may be impaired. Expenditure
At the reporting date none of the Property and and any accumulated impairment losses. on an intangible item that was initially 3.10.1. Current Tax
Equipment items were pledge as securities recognized as an expense by the Group in Current tax comprises the amount of income
for liabilities, and there were no any kind of Additional information on intangible assets previous annual financial statements or interim taxes payable (or recoverable) in respect of
restrictions on the Group’s title over any of the with a reconciliation of carrying amounts, financial statements are not recognized as part the taxable profit (or tax loss) for the reporting
assets. accumulated amortization at the beginning and of the cost of an intangible asset at a later date. period, and any amount adjusted to the tax

324 NABIL BANK LIMITED ANNUAL REPORT 2022/23 325

payable (or receivable) in respect of previous in Other Comprehensive Income. Explanatory unavoidable cost of meeting its obligations amortized cost of a financial asset and of
years. It is measured using tax rates enacted, or information on deferred tax calculation is stated under the contract. The provision is measured allocating the interest income over the relevant
substantively enacted, at the reporting date. in Note 4.15. as the present value of the lower of the period.
expected cost of terminating the contract and
The Group has determined tax provision for the 3.11. Deposits, debt securities issued and the expected net cost of continuing with the The Group has adopted the alternative
reported period based on its accounting profit subordinated liabilities contract. The Group does not have any onerous treatment as provided by the Carve Out in
for that period, and incorporating the effects of contracts at the reporting date. NFRS implementation as explained in Note
adjustments for taxation purpose as required 3.11.1. Deposits from customers and BFIs 2.1.2 (b). Resultant of this the Group has
under the Income Tax Act 2002 A.D. (2058 B.S.) The Group presents deposit accounts held by 3.12.3. Other provisions excluded the full amount of upfront loan
and amendments thereto, using a corporate tax customers and those held by BFIs in the Bank A provision is recognized if, as a result of a management fees or commission received
rate of 30%. under respective line items in the face of the past event, the Group has a present legal or on loans and advances in the calculation of
consolidated statement of financial position. constructive obligation that can be estimated effective interest rate.
The Group recognizes a current tax liability These are classified as financial liabilities reliably, and it is probable that an outflow of
to the extent that the current tax expense for measured at amortized cost. economic benefits will be required to settle the Nepal Rastra Bank has issued “Guideline on
current and prior periods remain unpaid. obligation. Recognition of Interest Income 2019” vide
Conversely, a current tax asset is recognized 3.11.2. Debt securities issued circular no. Bai. Bi. Ni.Bi./Niti/Paripatra/
if the tax paid in respect of current and prior The Group presents debenture issued by the The amount of provisions is determined by KaKhaGa/01/76/77 for implementation in
periods exceed the amount payable for those Bank under this line item. These are classified discounting the expected future cash outflows the financial statements of current reporting
periods. Explanatory information on current tax as financial liabilities measured at amortized at a pre-tax rate that reflects current market period. This document has provided guidance
calculation is stated in Note 4.41. cost. assessments of the time value of money and the on application of judgments in assessing the
risks specific to the liability. The unwinding of collectability of interest on loans and advances
3.10.2. Deferred Tax 3.11.3. Subordinated liabilities the discount is recognized as interest expense in and determining whether there is a need to
Deferred tax is recognized at the reporting These comprise of liabilities subordinated to profit or loss. recognize interest suspense or to cease interest
date in respect of temporary differences the claims of depositors, debt securities issued accrual. The bank has implemented this
between the carrying amounts of assets or and other creditors at the event of winding up. Before a provision is established, the Group guideline and recognized interest suspense
liabilities for financial reporting purposes and Items eligible for presentation under this line recognizes any impairment loss on the assets and stopped interest accrual in qualifying
the corresponding amounts used for taxation item include redeemable preference share, associated with that contract. The expense accounts while determining the interest income
purposes (i.e. tax base). subordinated notes issued, borrowings etc. relating to any provision is presented in profit or for the current reporting period. Explanatory
These are subject to the same accounting loss net of any reimbursement. information on interest income is stated in
Deferred tax assets are recognized for all policies applied to financial liabilities measured Notes 4.29.
deductible temporary differences, carried at amortized cost. The Group does not have 3.13. Revenue recognition
forward unused tax credits and carried forward any subordinated liabilities at the reporting Revenue is recognized to the extent that it 3.13.2. Fees and commission income
unused tax losses (if any), to the extent that it date. is probable that the economic benefits will Fees and Commissions are recognized at an
is probable that future taxable profits will be flow to the Group and the revenue can be amount that reflects the consideration to which
available against which they can be claimed. 3.12. Provisions measured reliably. The Group applies NFRS 15 the bank expects to be entitled in exchange
Deferred tax liabilities are the amounts of The Group applies NAS 37 – “Provisions, – “Revenue from contract with customers” in the for providing the services. The performance
income taxes payable in future periods in Contingent Liabilities & Contingent Assets” in accounting of revenue, unless otherwise stated. obligations, as well as the timing of their
respect of taxable temporary differences. the accounting of provisions. satisfaction are identified, and determined,
3.13.1. Interest income at the inception of the contract. Fees and
The carrying amount of deferred tax assets is 3.12.1. Provision for restructuring Interest income is recognized in profit or loss Commissions from services are recognized
reviewed at each reporting date and reduced to Provision for restructuring is recognized when using the effective interest rate (EIR) method for evenly over the period, based on time-elapsed
the extent that it is no longer probable that the the Group has approved a detailed and formal all financial assets measured at amortized cost. where performance obligations are satisfied
related tax benefit will be realized. restructuring plan, and the restructuring either Interest income is earned on bank balances, over time. Where performance obligations are
has commenced or has been announced investments in money market and capital satisfied at a point in time, fees and commission
Deferred tax assets and liabilities are measured publicly. The Group does not have any market instruments, loans and advances, etc. are recognized typically on completion of
at the tax rates that are expected to be provision for restructuring at the reporting date. underlying service.
applied to temporary differences when they EIR is the rate that exactly discounts estimated
will be reversed, using tax rates enacted, or 3.12.2. Provisions for onerous contracts future cash receipts or cash payments through The Group earns fee and commission income
substantively enacted, at the reporting date. A provision for onerous contracts is recognized the expected life of the financial asset to the on providing a diverse range of services to its
Deferred tax income or expense relating to when the expected benefits to be derived by net carrying amount of the financial asset. customers. Such income earned on services
items recognized directly in equity is recognized the Group from a contract are lower than the EIR method is a method of calculating the including account maintenance, remittance

326 NABIL BANK LIMITED ANNUAL REPORT 2022/23 327

transactions, agency commissions, e-commerce 3.13.5.1. Foreign exchange revaluation gain the economic benefit arising from service benefit plan other than a defined contribution
transactions, letter of credits, bank guarantees, / (loss) provided by an employee in exchange for plan. The Group has one DBP in the form of
loan management, etc. are recognized as Gains and losses arising from day-to-day employee benefits. ‘Gratuity’.
the related services are performed. Fee and revaluations of foreign currency denominated
commission earned for the provision of services assets and liabilities, exclusively due to the effect Explanatory information on personnel expense 3.15.3.1. Description of DBP – Gratuity
over a period of time are accrued over that of changes in foreign currency exchange rates, is stated in Note 4.36. The Group has recognized gratuity obligations
period. Explanatory information on net fees and are recognized in profit or loss in the period in towards gratuity entitlement of individual
commission income is stated in Note 4.31. which they arise. 3.15.1. Short term employee benefits employees and meets the funding requirement
These are employee benefits which fall due to the related DBP which is managed by Nabil
3.13.3. Dividend income 3.13.5.2. Gain / (loss) on disposal of wholly within twelve months after the end of Bank Limited Retirement Fund (NRF).
Dividend income is recognized when the right property and equipment the period in which the employees render
to receive income is established, which is the ex- Gain or loss on the disposal of property and the related service. This includes salary, In case of the Bank, an actuarial valuation is
dividend date for quoted equity instruments and equipment is determined on the difference allowances, medical insurance, statutory carried out every year using the Projected Unit
unit investments. In line with the requirements between the asset’s carrying amount on bonus to employees, etc. These are measured Credit Method to ascertain the full liability
of the Income Tax Act 2002, dividends received disposal date and the disposal proceeds, net on an undiscounted basis and are charged under gratuity. The Projected Unit Credit
from domestic companies are recognized as of any disposal costs. This is recognized as an to profit or loss in the period the services are Method involves estimating the amount of
final withholding income, while those received item of Other Operating Income in the year in received. Prepaid benefits on loans advanced future benefit that employees have earned in
in respect of unit investments in mutual funds which significant risks and rewards incidental to to employees at below-market interest rate are return for their service in the current and prior
and equity interest in foreign companies are the asset’s ownership is transferred to the buyer. amortized over the full period of the loan. periods and discounting the benefit amount to
recognized in gross amounts and respective determine its present value.
withholding taxes are recognized as tax 3.14. Interest expense 3.15.2. Defined contribution plan (DCP)
receivables. Interest expense is recognized in profit or loss DCPs are post-employment benefit plans under The increase in gratuity liabilities attributable
using the effective interest rate (EIR) method for which an entity pays fixed contributions into to the services provided by employees during
3.13.4. Net trading income all financial liabilities measured at amortized a separate entity (a fund) and will have no the reporting period i.e. current service cost
Trading income comprises of gains or losses cost except for in cases specified in the carve legal or constructive obligation to pay further (gratuity expense), together with the related
relating to financial assets and liabilities held in out to Para 5.4 of NFRS 9. Interest expense contributions if the fund does not hold sufficient finance charge are recognized as personnel
the Group’s trading books. The Group presents is incurred on inter-bank borrowings, deposit assets to pay all employee benefits relating expense in profit or loss. Actuarial gains or
all accrued interest, dividend, unrealized fair from customers, debenture issued, refinance to employee service in the current and prior losses are recognized in other comprehensive
value changes and disposal gains or losses in borrowing, etc. Explanatory information on periods. The Group has one DCP in the form of income.
respect of trading assets and liabilities under interest expense is stated in Note 4.30. ‘Provident Fund’.
this head. The Group also presents foreign In case of the Subsidiary, an actuarial valuation
exchange trading gains or losses arising on 3.15. Employee benefits Contributions by the Group to a DCP in is not carried out considering the small
foreign exchange buy and sell transactions Employee benefits are all forms of proportion to the services rendered by its organization structure and hence actuarial
under trading income. Explanatory information consideration given by an entity in exchange for employees are recognized as incurred in profit gains or losses are not recognized. Instead
on net trading income is stated in Note 4.33. service rendered by employees. The Group’s or loss in the same period. If there stands any the gratuity liability is fully funded to the
remuneration package includes both short payable to the DCP at the reporting date, a corresponding DBP to the extent of gratuity
3.13.5. Other Operating Income term and long term benefits and comprise of corresponding liability is also recognized in the entitlement earned by the employees in the
The Group presents income other than those items such as salary, allowances, paid leave, consolidated SoFP. same period. Employer’s contribution to DBP is
presented under interest income, fees and accumulated leave, gratuity, provident fund and recognized as gratuity expense in profit or loss.
commission income and trading income under annual statutory bonus. 3.15.2.1. Description of DCP – Provident
this heading. Income recognized here includes Fund 3.15.3.2. Recognition of Defined benefit
items such as foreign exchange revaluation The Group applies NAS 19 – “Employee The Group entities contribute a fixed amount obligation (DBO)
gain or loss; dividend on equity investments Benefits” in accounting of all employee benefits linked to the salary of individual employees on The net DBO comprises the present value of
that are measured at FVTOCI; dividend from and recognizes the followings in its financial a monthly basis to an approved provident fund the defined benefit obligation, less past service
subsidiary and associates; gain or loss on statements: managed by Nabil Bank Limited Retirement cost not yet recognized and less the fair value
disposal of property and equipment; gain and Fund (NRF). Related party information on the of plan assets out of which the obligations are
loss on disposal of investment property; and n a liability when an employee has provided Group’s dealings with NRF is stated in Note to be settled directly. The net DBO is recognized
gain or loss on disposal of investment securities service in exchange for employee benefits to 5.7.5. as a liability and presented as other liabilities in
except for equity investments measured at be paid in the future; and the consolidated SoFP.
FVTOCI. Explanatory information on other n an expense when the Group consumes 3.15.3. Defined benefit plans (DBP)
operating income is stated in Note 4.34. A defined benefit plan is a post-employment In case where there is a net defined benefit
asset, the value of any asset is restricted to the

328 NABIL BANK LIMITED ANNUAL REPORT 2022/23 329

sum of any past service cost not yet recognized are discounted. The Group does not have any estimate of any costs to dismantle and remove Assets/Liabilities
and the present value of any economic benefits terminal benefit plan for the reporting period. the asset at the end of the lease, and any recognized as per NFRS 16
available in the form of refunds from the plan lease payments made in advance of the lease
PARTICULARS AMOUNT (NPR)
or reductions in the future contributions to the 3.16. Leases commencement date (net of any incentives
Less than or equals 12 Months 239,815,701
plan. NFRS 16 – Leases has introduced a single received).
More than 12 Months 2,415,836,645
In order to calculate the present value of lessee accounting model and requires a lessee
Total Committed Cash flow 2,655,652,347
economic benefits, consideration is given to any to recognize assets and liabilities for all leases The Group depreciates the right-of-use
Interest Portion 103,457,549
minimum funding requirement that apply to the with a term of more than 12 months, unless assets on a straight-line basis from the lease
Lease Liability 2,552,194,798
plan. An economic benefit is available to the the underlying asset is of low value. A lessee commencement date to the earlier of the end Right of Use Assets (ROU) 2,388,216,592
Bank if it is realizable during the life of the plan, is required to recognize a right-of-use asset of the useful life of the right-of-use asset or the Addition during the year 354,801,356
or on settlement of the plan liabilities. representing its right to use the underlying end of the lease term. The Group also assesses Gross Right of Use Assets (ROU) 2,743,017,948
leased asset and a lease liability representing its the right-of-use asset for impairment when such Accumulated Depreciation – ROU -259,675,828
Explanatory information on DBOs, the related obligation to make lease payments. The Group indicators exist. Net Right of Use Assets (ROU) 2,483,342,120
expenses, liabilities and details on actuarial has applied NFRS 16 effective from FY 2078- Lease payment during the year 294,280,699
valuations are stated in Note 4.23. 79. At the commencement date, the Group
measures the lease liability at the present value apply this standard, the lessee shall recognize
3.15.4. Other long term employee benefits For any new contracts entered into, the Group of the lease payments unpaid at that date, a lease liability at the date of initial application
The Group’s net obligation in respect of long considers whether a contract is, or contains discounted using the interest rate implicit in for leases previously classified as an operating
term employee benefits, other than gratuity, is a lease. A lease is defined as ‘a contract, or the lease if that rate is readily available or the lease applying NAS 17 and Recognize a right-
the amount of future benefits that employees part of a contract, that convey the right to use Group’s incremental borrowing rate. of-use asset at the date of initial application for
have earned in return for their service in the an asset (the underlying asset) for a period of leases previously classified as an operating lease
current and prior periods. That benefit is time in exchange for consideration’. To apply Subsequent to initial measurement, the liability applying NAS 17. Accordingly, the group has
discounted to determine its present value, and this definition, the Group assesses whether the will be reduced for payments made and measured the lease liability at the present value of
the fair value of any related assets is deducted. contract meets three key evaluations which are increased for interest. It is re measured to reflect the remaining lease payments, discounted using
The Group has recognized accumulated leave whether: any reassessment or modification, or if there the lessee’s incremental borrowing rate at the
liability as other long term employee benefits. are changes in in-substance fixed payments. date of initial application.
n The contract contains an identified asset,
The discount rate is the yield at the reporting which is either explicitly identified in the When the lease liability is re measured, the In line with this requirement, previously recognized
date on current government bonds that have contract or implicitly specified by being corresponding adjustment is reflected in the operating lease liability has been regrouped in to
maturity dates approximating to the terms of identified at the time the asset is made right-of-use asset, or profit and loss if the right- Lease liability and Right of Use Assets.
the employee benefit obligations, or if required available to the Group; of-use asset is already reduced to zero.
adjusting those rate to incorporate mismatches n The Group has the right to obtain 3.17. Foreign currency transactions,
in respective maturities of the bond and the substantially all of the economic benefits The Group has elected to account for short-term translation and balances
obligation. from use of the identified asset throughout leases and leases of low-value assets using the All foreign currency transactions are translated
the period of use, considering its rights within practical expedients. Instead of recognizing into the functional currency, which is Nepalese
3.15.4.1. Description of accumulated staff the defined scope of the contract. a right-of-use asset and lease liability, the Rupees, using the spot exchange rates
leave payments in relation to these are recognized as prevailing at respective transaction dates. All
The Group’s net obligation towards The Group has the right to direct the use of the an expense in profit or loss on a straight-line foreign exchange gains and losses resulting
accumulated staff leave is determined using identified asset throughout the period of use. basis over the lease term. from the settlement of such transactions are
the Projected Unit Credit Method. Net change The Group assess whether it has the right to recognized in profit or loss.
in liability for accrued leave, including any direct ‘how and for what purpose’ the asset is On the statement of financial position, right-of-
actuarial gain and loss, are recognized in profit used throughout the period of use. use assets have been included in property, plant All monetary assets and liabilities denominated
or loss as staff expense. and equipment and lease liabilities have been in foreign currencies are translated into the
3.16.1. Measurement and recognition of included in trade and other payables. functional currency by applying the year end
3.15.5. Terminal benefits leases as Lessee exchange rates, and the resulting foreign
Termination benefits are expensed at the earlier At lease commencement date, the Group As per NFRS 16 – Leases, if the lessee elects to exchange gains and losses are recognized in
of when the Group can no longer withdraw the recognizes a right-of-use asset and a lease Expenses recognized as per NFRS 16: profit or loss.
offer of those benefits and when the Group liability on the balance sheet. The right-of-use All non-monetary assets and liabilities held
PARTICULARS AMOUNT (NPR)
recognizes costs for a restructuring. If benefits asset is measured at cost, which is made up of at historical cost are translated at historical
are not expected to be wholly settled within the initial measurement of the lease liability, any Depreciation 259,675,928 exchange rates (rate prevailing at transaction
Interest Expenses 103,457,549 date), and those held at fair value are
12 months of the reporting date, then they initial direct costs incurred by the Group, an

330 NABIL BANK LIMITED ANNUAL REPORT 2022/23 331

translated at year-end exchange rate. The The various reserve headings are explained 3.19.4. Asset revaluation reserve
resulting exchange gains and losses are hereinafter: This is a non-statutory reserve and is a requirement in the application of accounting policy for non-
recognized in profit or loss OR in other financial assets such as property, equipment, investment property and intangible assets that are
comprehensive income. When gain or loss 3.19.1. General reserve measured following a re-valuation model. Revaluation reserve often serves as a cushion against
on a non-monetary item is recognized in This is a statutory reserve under domestic unexpected losses but may not be fully available to absorb unexpected losses due to the subsequent
other comprehensive income, any exchange banking regulations specified in NRB directive deterioration in market values and tax consequences of revaluation. The amount presented under
component of that gain or loss is also no. 4/79. The Bank is required to appropriate the revaluation reserve represents the amount of revaluation gain on assets acquired from erstwhile
recognized in other comprehensive income. a minimum 20% of current year’s net profit into Nepal Bangladesh Bank and United Finance Co. Limited. The following is the position of the reserve
Similarly, when gain or loss on a non-monetary this reserve heading each year until it becomes at the end of the reporting period:
item is recognized in profit or loss, any double of paid up capital and thereafter a
exchange component of that gain or loss is also minimum 10% of profit each year. This reserve
NPR
recognized in profit or loss. is not available for distribution to shareholders
in any form and requires specific approval of Reserve created on assets acquired from erstwhile UFL 47,911,831
3.18. Financial guarantee and loan the central bank for any transfers from this Reserve created on assets acquired from erstwhile NBBL 512,224,194
commitment heading. The Subsidiary (Nabil Investment Balance in reserve 560,136,025
Financial guarantees are contracts that require Banking Ltd.) is also required to create a
the Group to make specified payments to General reserve as per section 25(ka) of
reimburse the holder for a loss that it incurs Securities Business person (Merchant Banker) 3.19.5. Capital reserve making payment towards redeemable non-
because a specified debtor fails to make Regulations, 2008 which mandates to allocate This is a non-statutory reserve and represents convertible preference shares. The Group does
payment when it is due in accordance with the 10% of Net Profit as reserve for the purpose of the amount of all capital nature reserves such not have any amount to present under capital
terms of a debt instrument. Loan commitments strengthening financial position and managing as the amounts arising from share forfeiture, redemption reserve.
are firm commitments to provide credit under institutional risk. Bank’s another subsidiary capital grants and capital reserve arising
pre-specified terms and conditions. (Nabil Securities Ltd.) is also required to create out of business combinations. Funds in this 3.19.8. Dividend equalization fund
a General reserve as per section 35(ka) of reserve are not available for distribution of This is a non-statutory reserve created for
Liabilities arising from financial guarantees or Securities Business person (Securities Dealer cash dividend but can be capitalized by issuing supporting the dividend payout policy by
commitments to provide a loan at a below- and Securities Businessperson) Regulations, bonus shares upon obtaining approval from appropriating amounts from current year’s
market interest rate are initially measured at fair 2064 which mandates to allocate 10% of Net the central bank. The Group has reclassified profit to fund for future period’s payout. Fund
value and the initial fair value is amortized over Profit as reserve. the balance in debenture redemption reserve in this heading is available for distribution to
the life of the guarantee or the commitment. into capital reserve after full repayment of the shareholders upon approval of the board of
The liability is subsequently carried at the higher 3.19.2. Exchange equalization reserve corresponding debenture liability at maturity. directors and endorsement of the share holders’
of this amortized amount and the present This is a statutory reserve under domestic general meeting. The Group does not have any
value of any expected payment to settle the banking regulations specified in NRB directive 3.19.6. Special reserve amount to present under dividend equalization
liability when a payment under the contract has no. 4/79. The Bank is required to appropriate This is a statutory reserve under domestic fund.
become probable. 25% of current year’s total foreign exchange banking regulations specified in NRB
revaluation gain (except gain from revaluation circular 12/072/73. The Bank is required to 3.19.9. Capital adjustment / equalization
3.19. Share capital and reserves of Indian Currency) into this heading. There is appropriate an amount equivalent to 100% fund
Ordinary shares in the Bank are recognized no such statutory requirement for the Subsidiary. of capitalized portion of interest income on This is a non-statutory reserve created by
at the amount paid per ordinary share. Nabil borrowing accounts where credit facility was appropriating amounts from current year’s
Bank Ltd.’s shares are listed at Nepal Stock 3.19.3. Fair value reserve rescheduled or restructured, resultant of the profit and by crediting amounts for calls in
Exchange Ltd. The holders of ordinary shares This is a non-statutory reserve and is a great earthquake that struck the nation in April advance towards raising capital. The amount
are entitled to one vote per share at general requirement in the application of accounting 2015. Fund in this account can be reclassified presented under this heading is the difference
meetings of the bank and are entitled to receive policy for financial assets. NFRS 9 requires to retained earnings upon full and final of swap adjusted paid up capital of erstwhile
the annual dividend payments. The Bank that cumulative net change in the fair value repayment of the credit facility. There is no such Nepal Bangladesh Bank Limited which was
does not have any other form of share capital of financial assets measured at FVTOCI is statutory requirement for the Subsidiary. acquired by the Bank in the previous reporting
(preference shares, convertible instruments, recognized under fair value reserve heading period, net of the distribution made out of the
share based payments, etc.) apart from the until the fair valued asset is de-recognized. 3.19.7. Capital redemption reserve same in the previous year.
ordinary shares. Any realized fair value changes upon disposal This is a non-statutory reserve created for
of the re-valued asset is reclassified from this
There are a number of statutory and non- reserve heading to retained earnings. The
statutory reserve headings maintained by the Group has complied with this accounting policy
Group in order to comply with regulatory application.
framework and other operational requirements.

332 NABIL BANK LIMITED ANNUAL REPORT 2022/23 333

3.19.10. Corporate social responsibility fund 3.19.13. Regulatory reserve TITLE NABIL DEBENTURE 2082 NABIL DEBENTURE 2085 NBBL DEBENTURE 2085
This is a statutory reserve under domestic This is a statutory reserve under domestic
banking regulations specified in NRB directive banking regulations specified in NRB Face Value NPR 1,000 per unit NPR 1,000 per unit NPR 1,000 per unit
no. 6/79. The Bank is required to appropriate directive no. 4/79. In the transition to NFRS Maturity Period 7 Years 7 Years 10 Years
an amount equivalent to 1% of net profit from previous GAAP the Bank is required to Interest Rate 10% p.a. 8% p.a. 10.25% p.a.
into this fund annually. The fund is created reclassify all amounts that are resultant of No. of Units Issued 2 million units 2.207 million units 2 million units
towards funding the Bank’s corporate social re-measurement adjustments and that are Date of Issue 15-Mar-20 25-Jul-21 4-Jul-19
Issue Size NPR 2 billion NPR 2.207 billion NPR 2 billion
responsibility expenditure during the subsequent recognized in retained earnings into this
Redemption Reserve NPR 1,000,000,000.33 NPR 367,851,333.33 NPR 888,888,889.22
year. The Subsidiary (Nabil Investment Banking reserve heading. The amount reclassified to this
Ltd.) is also required to create a Corporate reserve includes re-measurement adjustments
social responsibility fund as per section 30(ka) such as interest income recognized against
Employees training and capacity development fund
of Securities Business person (Merchant interest receivables; amount of deferred tax
This is a statutory reserve under domestic banking regulations specified in NRB directive no. 6/79.
Banker) Regulations, 2008 which mandates to assets, actuarial loss recognized in other
The Bank is required to incur expenses towards employee training and development for an amount
allocate and utilize at least 1% of Net Profit for comprehensive income, amount of goodwill
that is equivalent to at least 3% of the preceding year’s total salary and allowances. Any shortfall
corporate social responsibility. The following recognized under NFRS, etc. Balance in this
amount in meeting this mandatory expense requirement in the current year will have to be transferred
is the position of the reserve at the end of the reserve is not regarded as free for distribution
to this reserve fund through appropriation of net profit and the amount shall accumulate in the fund
reporting period: of dividend. The Bank has complied with
NPR available for related expenses in the subsequent year. Balance in this fund is directly reclassified
this regulatory requirement. There is no such
to retained earnings in the subsequent year to the extent of expenses made for employees training
statutory requirement for the Subsidiary. The
Opening balance in reserve 90,391,686 related activities. The following is the position of the reserve at the end of the reporting period:
Add: Appropriation from 64,049,362
details of movement in the reserve has been
current year profits laid out in Note 5.13. NPR
Less: Expenses incurred from (22,332,438)
fund during the year 3.19.14. Other reserve fund Opening balance in reserve (a) 22,630,408
Closing balance in reserve 132,108,610 Movement for the year:
Contingent reserve Mandatory training expense budget for the year (3% of previous year's expense) 41,370,667
3.19.11. Investment adjustment reserve Less: Eligible training expenses incurred in the year (35,001,651)
This is a non-statutory reserve and is created
Less: Training expenses made from directly from Fund (b) (4,916,069)
This is a statutory reserve under domestic by the Bank towards meeting operational
Net amount to be transferred to training fund during the year (c) 6,369,016
banking regulations specified in NRB directive requirements. A fixed amount (NPR 1 million) is
Closing balance in reserve (a+b+c) 24,083,355
no. 4/79 and 8/79. The Bank is required to annually appropriated from net profit into this
maintain balance in this reserve heading which fund. Balance in this fund is utilized towards
is calculated at fixed percentages of the cost of providing financial support to employees for
equity investments that are not held for trading. treatment of severe cases of life threatening
There is no requirement to create such funds in all dilutive potential ordinary shares, such as
Changes in this reserve requirement are ailments that are not adequately covered under
case of any of the subsidiaries. share options granted to employees and hybrid
reclassified to retained earnings. There is no medical insurance policy. Amount paid to
capital instruments.
such statutory requirement for the Subsidiary. staff from this fund is re-classified to retained
3.20. Earnings per share
earnings and is recognized as personnel
The Group calculates basic and diluted The Group does not hold any dilutive potential
3.19.12. Actuarial gain / loss reserve expense in profit or loss. No such reserve is
Earnings Per Share (EPS) data for its ordinary ordinary shares, and as such the Basic EPS is
This is a non-statutory reserve and is a maintained by the Subsidiary.
shares as required under Nepal Accounting also the Diluted EPS of the Group.
requirement in the application of accounting
Standards – NAS 33 on “Earnings Per Share”.
policy for employee benefits. NAS 19 requires Debenture Redemption Reserve
Basic EPS is calculated by dividing the profit or 3.21. Segment reporting
that actuarial gain or loss resultant of the This is a statutory reserve under domestic
loss that is attributable to ordinary shareholders The Group has disclosed information on
change in actuarial assumptions used to banking regulations specified in NRB directive
of the Bank by the weighted average number operating segments to enable users of financial
value defined benefit obligations be presented no.16/79. The Bank is required to maintain
of ordinary shares outstanding during the statements to evaluate the nature and financial
under this reserve heading. Any change in a redemption reserve in respect of borrowing
reported period. Diluted EPS is calculated by effects of the Group’s business activities and
this reserve heading is recognized through raised through debenture issuance. The reserve
adjusting the profit or loss that is attributable that of the economic environment in which
other comprehensive income and is not has been maintained on two out of the three
to the ordinary shareholders of the Bank and the Group operates. Detail information on the
an appropriation of net profit. The Group debenture issued by the bank. The following
the weighted average number of ordinary Group’s operating segment is presented in Note
has complied with this accounting policy is the position of the reserve at the end of the
shares outstanding adjusted for the effects of 5.4.
application. reporting period:

334 NABIL BANK LIMITED ANNUAL REPORT 2022/23 335

3.22. Statement of cash flows n Operating Activities: are the principal 4.1 Cash and Cash Equivalent NPR
The Group has reported its cash flow statement revenue generating activities of the reporting
applying the ‘Direct Method’ in accordance entity and other activities that are not GROUP BANK

with NAS 07 – “Statement of Cash Flows”. classified as investing or financing activities. PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Application of the direct method in presenting Cash in Hand 5,720,994,783 5,161,464,551 5,720,994,783 5,161,464,551
cash flow statement discloses major classes of n Investing Activities: are the acquisition and Balances with BFIs (Domestic BFIs) 387,380,102 412,681,104 198,267,285 250,814,453
gross cash receipts and gross cash payments, disposal of long-term assets and other long Money at Call and Short Notice - 1,731,728,959 - 1,731,728,959
thereby provides information which may be term investments. Other 854,996,120 3,907,531,163 854,996,120 3,907,531,163
Total 6,963,371,006 11,213,405,777 6,774,258,189 11,051,539,126
useful in estimating future cash flows of an
entity. n Financing Activities: are activities that result
in changes in the size and composition of the
‘Cash and Cash Equivalents’, as referred to contributed equity and borrowed capital of 4.1.1 Balances with BFIs (Domestic BFIs)
in the statement of cash flows are the same the Group. NPR in '000'
as presented on the face of the consolidated PARTICULARS LEDGER STATEMENT
statement of financial position. ‘Cash Flows’ 4. SCHEDULES OF EXPLANATORY Unreconciled balance as on 16.07.2023 198,267 204,241
are inflows and outflows of cash and cash INFORMATION We Debit -
equivalents. TO FINANCIAL STATEMENTS They Debit (57)
We Credit -
The statement of cash flows reports cash flows Following explanatory information relating to They Credit 6,030
during the period classified by operating, figures presented in the consolidated statement Reconciled balance as on 16.07.2023 204,241 204,241

investing and financing activities as defined of financial position and in the consolidated
hereunder: statement of profit or loss is presented in this
section as per formats prescribed in directive
4.1.2 Balance with Foreign Banks and Financial Institutions
4/79 of the Nepal Rastra Bank. NPR in '000'
PARTICULARS LEDGER STATEMENT

Unreconciled balance as on 16.07.2023 854,996 1,824,805

We Debit (322,487)
They Debit (444,858)
We Credit 1,395,033
They Credit 342,120
Reconciled balance as on 16.07.2023 1,824,805 1,824,805

4.2 Due from Nepal Rastra Bank

NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Statutory Balances with NRB 12,651,160,819 9,163,783,148 12,651,160,819 9,163,783,148

Securities purchased under Resale Agreement - - - -
Other Deposit and Receivable from NRB 13,001,260,641 3,873,456,296 13,001,260,641 3,873,456,296
Total 25,652,421,459 13,037,239,444 25,652,421,459 13,037,239,444

4.2.1 Due from Nepal Rastra Bank

NPR in '000'
PARTICULARS LEDGER STATEMENT
Unreconciled balance as on 16.07.2023 25,274,334 25,306,009
We Debit -
They Debit (536)
We Credit 21,485
They Credit 10,726
Reconciled balance as on 16.07.2023 25,306,009 25,306,009

336 NABIL BANK LIMITED ANNUAL REPORT 2022/23 337

4.3 Placements with Banks and Financial Instutions 4.6.1 Allowances for Impairment
NPR NPR
GROUP BANK
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Placement with Domestic BFIs 1,700,195,205 - 1,700,195,205 - Balance at Shrawan 01 (start of the year) 136,545,286 113,293,208 136,545,286 113,293,208
Placement with Foreign BFIs 11,724,194,657 8,870,895,241 11,724,194,657 8,870,895,241 Impairment Loss for the year:
Less: Allowances for Impairment - - - - Charge for the year - 23,252,078 - 23,252,078
Total 13,424,389,863 8,870,895,241 13,424,389,863 8,870,895,241 Recoveries/Reversal 27,447,239 - (27,447,239) -
Amount Written Off - - - -
Balance at Ashadh end (end of the year) 163,992,525 136,545,286 109,098,047 136,545,286

4.4 Derivative Financial Instruments

NPR
GROUP BANK 4.7 Loans and Advances to Customers
NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
GROUP BANK
Held for Trading - - - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Interest Rate Swap - - - -
Loans and Advances measured at Amortized Cost 344,246,978,301 307,876,072,448 344,246,978,301 307,876,072,448
Currency Swap - - - -
Less: Impairment Allowances (13,123,807,646) (7,670,419,521) (13,123,807,646) (7,670,419,521)
Forward Exchange Contracts - - - -
Collective Impairment (5,576,519,151) (4,352,832,507) (5,576,519,151) (4,352,832,507)
Others - - - -
Individual Impairment (7,547,288,495) (3,317,587,014) (7,547,288,495) (3,317,587,014)
Held for Risk Management 3,833,462,094 1,373,614,068 3,833,462,094 1,373,614,068
Net Amount 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927
Interest Rate Swap - - - -
Loans and Advances measured at FVTPL - - - -
Currency Swap - - - -
Total 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927
Forward Exchange Contracts 3,833,462,094 1,373,614,068 3,833,462,094 1,373,614,068
Others - - - - Note - Collective Impairment reflect loan loss provision against loans graded pass and allocated 1.3% loss provision and Individual impairment reflect
Total 3,833,462,094 1,373,614,068 3,833,462,094 1,373,614,068 loan loss provision against all other loans, categorized as per NRB Directive 2/079.

4.5 Other Trading Assets 4.7.1: Analysis of Loans and Advances - By Product
NPR NPR
GROUP BANK GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Treasury Bills - - - - Products:

Government Bonds - - - - Long Term Loans 90,122,403,827 58,459,810,327 90,122,403,827 58,459,810,327
NRB Bonds - - - - Personal 106,860,599 - 106,860,599 -
Domestic Corporate Bonds - - - - Business 73,016,989,586 58,459,810,327 73,016,989,586 58,459,810,327
Equities 92,810,034 148,295,803 - 29,728,860 Working Capital 16,998,553,642 - 16,998,553,642 -
Other(Mutual Fund) - 43,986,651 - - Overdraft (Personal) 6,494,446,056 6,793,560,174 6,494,446,056 6,793,560,174
Total 92,810,034 192,282,454 - 29,728,860 Cash Credit Loan 22,416,055,889 - 22,416,055,889 -
Pledged - - - - Trust Receipt/Import Loans 8,375,226,879 10,938,687,407 8,375,226,879 10,938,687,407
Not pledged - 192,282,454 - 29,728,860 Short Term WC/ Demand Loans 83,354,180,155 119,482,123,154 83,354,180,155 119,482,123,154
Personal Residential Loans 20,241,696,628 16,529,191,257 20,241,696,628 16,529,191,257
Real Estate Loans 22,601,507,162 17,874,907,554 22,601,507,162 17,874,907,554
Margin Lending Loans 9,178,556,600 7,514,987,876 9,178,556,600 7,514,987,876
4.6 Loans and Advances to BFIs Hire Purchase Loans 7,477,957,258 7,182,925,110 7,477,957,258 7,182,925,110
NPR Deprived Sector Loans 7,780,326,481 7,274,262,384 7,780,326,481 7,274,262,384
GROUP BANK Bills Purchased 52,812,900 7,233,069 52,812,900 7,233,069
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Staffs Loans 4,806,217,565 5,221,745,636 4,806,217,565 5,221,745,636
Loans to Micro-Finance Institutions 8,392,157,495 10,503,483,548 8,392,157,495 10,503,483,548 Other 41,843,620,091 38,839,322,545 41,843,620,091 38,839,322,545
Other - - - - Sub-Total 324,745,007,491 296,118,756,492 324,745,007,491 296,118,756,492
Less: Allowances for Impairment (109,098,047) (136,545,286) (109,098,047) (136,545,286) Interest Receivable on loans & advances to customers 6,378,163,164 4,086,896,435 6,378,163,164 4,086,896,435
Total 8,283,059,448 10,366,938,262 8,283,059,448 10,366,938,262 Grand Total 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927

338 NABIL BANK LIMITED ANNUAL REPORT 2022/23 339

4.7.2: Analysis of Loans and Advances - By Currency 4.7.4: Allowance for Impairment
NPR NPR
GROUP BANK GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Nepalese Rupee 327,436,557,287 294,869,560,728 327,436,557,287 294,869,560,728 Specific Allowance for Impairment
Indian Rupee - - - - Balance at Shrawan 01 (start of year) 3,317,587,014 1,010,304,060 3,317,587,014 1,010,304,060
United States Dollar 3,677,380,051 5,335,644,259 3,677,380,051 5,335,644,259 Impairment Loss for the year 4,229,701,481 2,307,282,954 4,229,701,481 2,307,282,954
Great Britain Pound 535,192 447,940 535,192 447,940 Charge for the year - - - -
Euro 8,698,126 - 8,698,126 - Recoveries/Reversals during the year 4,229,701,481 2,307,282,954 4,229,701,481 2,307,282,954
Japanese Yen - - - - Write-Offs - - - -
Chinese Yuan - - - - Exchange Rate Variance on Foreign Currency Impairment - - - -
Other - - - - Other Movement - - - -
Grand Total 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927 Balance at Ashadh end (end of year) 7,547,288,495 3,317,587,014 7,547,288,495 3,317,587,014
Collective Allowances for Impairment
Balance at Sharawan 01 (start of year) 4,352,832,507 2,927,466,915 4,352,832,507 2,927,466,915
Impairment Loss for the year 1,223,686,644 1,425,365,592 1,223,686,644 1,425,365,592
4.7.3: Analysis of Loans and Advances - By Collateral Charge/(Reversal) for the year 1,223,686,644 1,425,365,592 1,223,686,644 1,425,365,592
NPR
Exchange Rate Variance on Foreign Currency Impairment - - - -
GROUP BANK
Other Movement - - - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Balance at Ashadh end (end of year) 5,576,519,151 4,352,832,507 5,576,519,151 4,352,832,507
Secured -
Total Allowances for Impairment 13,123,807,646 7,670,419,521 13,123,807,646 7,670,419,521
Moveable/Immoveable Assets 324,467,810,958 286,714,062,196 324,467,810,958 286,714,062,196
Gold and Silver - - - -
Guarantee of Domestic BFIs - - - -
Government Guarantee - - - - 4.8 Investment Securities
NPR
Guarantee of International Rated Bank - - - -
GROUP BANK
Collateral of Export Document 786,983,043 921,018,776 786,983,043 921,018,776
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Collateral of Fixed Deposit Receipt 2,858,229,358 2,265,016,010 2,858,229,358 2,265,016,010
Investment Securities measured at Amortized Cost 70,017,300,307 56,516,704,863 69,427,003,759 55,838,607,453
Collateral of Government Securities - 12,402,458 - 12,402,458
Investment in Equity measured at FVTOCI 7,092,236,764 6,680,177,518 7,025,981,183 6,616,436,941
Counter Guarantee - - - -
Total 77,109,537,072 63,196,882,381 76,452,984,943 62,455,044,394
Personal Guarantee - - - -
Other Collateral 2,329,101,136 9,840,773,035 2,329,101,136 9,840,773,035
Subtotal 330,442,124,495 299,753,272,476 330,442,124,495 299,753,272,476
Unsecured 681,046,160 452,380,451 681,046,160 452,380,451 4.8.1: Investment Securities measured at Amortized Cost
Grand Total 331,123,170,655 300,205,652,927 331,123,170,655 300,205,652,927 NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Debt Securities 1,877,333,764 123,093,000 1,627,633,764 -

Government Bonds 36,350,986,240 37,222,637,772 36,350,986,240 37,222,637,772
Government Treasury Bills 26,445,395,731 17,624,079,681 26,445,395,731 17,624,079,681
Nepal Rastra Bank Bonds - - - -
Nepal Rastra Bank Deposit Instruments 5,002,988,025 - 5,002,988,025 -
Other 340,596,548 1,546,894,410 - 991,890,000
Less: Specific Allowances for Impairment - - - -
Total 70,017,300,307 56,516,704,863 69,427,003,759 55,838,607,453

4.8.2: Investment in Equity measured at Fair Value Through Other Comprehensive Income
NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Equity Instruments
Quoted Equity Securities 4,989,309,816 4,929,672,462 4,963,042,499 4,865,931,885
Unquoted Equity Securities 956,775,241 711,401,065 956,775,241 711,401,065
Mutual fund units 1,146,151,707 1,039,103,991 1,106,163,443 1,039,103,991
Total 7,092,236,764 6,680,177,518 7,025,981,183 6,616,436,941

340 NABIL BANK LIMITED ANNUAL REPORT 2022/23 341

 4.8.3 Information relating to investment in equities

342
Presented below are information relating the the Group's investments in equities and mutual funds classified as FVTOCI investments.
NPR
2080 ASHADH 31 2079 ASHADH 32
SECURITIES COST FAIR VALUE COST FAIR VALUE FAIR VALUE HIERARCHY

1. Investments in equitiy instruments - Quoted 478,480,466 4,963,042,499 445,241,713 4,865,931,885

NABIL BANK LIMITED

1.1 Rural Microfinance Development Centre Ltd. - 55,251,000 643,833,575 55,251,000 552,516,026 Level 3 - Adjusted MTM
ordinary shares promoter [1,661,506 units @ NPR 100 each]
1.2 Nirdhan Utthan Bank Ltd. - ordinary shares promoter 16,711,200 938,499,705 16,711,200 1,132,982,729 Level 3 - Adjusted MTM
[2,453,594 units @ NPR 100 each]
1.3 Chhimek Laghubitta Bikas Bank Ltd. - ordinary shares promoter 24,377,900 1,237,726,500 24,377,900 1,115,982,450 Level 3 - Adjusted MTM
[2,475,453 units @ NPR 100 each]
1.4 Deprosc Laghubitta Bikas Bank Ltd. - ordinary shares promoter 43,044,794 593,848,157 43,044,794 511,975,230 Level 3 - Adjusted MTM
[1,437,889 units @ NPR 100 each]
1.5 Sanakisan Bikas Bank Ltd. - ordinary shares promoter 9,561,600 268,717,393 9,561,600 252,647,820 Level 3 - Adjusted MTM
[597,814 units @ NPR 100 each]
1.6 Swabalamban Laghubitta Bikas Bank Ltd. - ordinary shares promoter 6,864,154 497,955,249 12,490,500 748,660,917 Level 3 - Adjusted MTM
[1,105,830 units @ NPR 100 each]
1.7 Swabalamban Laghubitta Bikas Bank Ltd. - ordinary shares public 2,139,976 19,381,813 - - Level 3 - Adjusted MTM
[43,042 units @ NPR 100 each]
1.8 Grameen Bikash Laghubitta Bittiya Sanstha Ltd. - 19,385,800 71,423,922 19,385,800 85,302,504 Level 3 - Adjusted MTM
ordinary shares promoter [225,668 units @ NPR 100 each]
1.9 National Microfinance Laghubitta Bittiya Sanstha Ltd. - 4,000,000 32,495,003 4,000,000 49,036,770 Level 3 - Adjusted MTM
ordinary shares promoter [58,287 units @ NPR 100 each]
1.10 Citizen Investment Trust - ordinary shares promoter 39,686,800 108,243,624 39,686,800 100,245,385 Level 1 - MTM
[51,816 units @ NPR 100 each]
1.11 IGI Prudential Insurance Limited. - promoter shares 97,470,738 305,871,160 97,470,738 145,260,224 Level 3 - Adjusted MTM
[1,092,397 units @ NPR 100 each ]
1.12 IGI Prudential Insurance Limited. - ordinary shares 42,242,105 121,963,520 13,755,693 100,825,370 Level 1 - MTM
[217,792 units @ NPR 100 each]
1.13 Prabhu Insurance Co. Ltd. [49,533 units @ NPR 100 each] 25,802,780 37,001,151 37,028,431 21,911,460 Level 1 - MTM
1.14 SuryaJyoti Life Insurance Co. Ltd. [48,466 units @ NPR 100 each] 29,651,184 29,564,260 29,651,184 18,756,342 Level 1 - MTM
1.15 Himalayan Everest Insurance Limited. [17,119 units @ NPR 100 each] 7,573,852 10,271,400 11,359,643 9,115,080 Level 1 - MTM
1.16 Himalayan Life Insurance Limited. [45,339 units @ NPR 100 each] 31,466,432 22,986,873 31,466,432 20,466,515 Level 1 - MTM
1.17 Siddhartha Premier Insurance Co. Ltd. [10,000 units @ NPR 100 each] 7,000,808 7,785,000 - - Level 1 - MTM
1.18 National Life Insurance Company Ltd. [23,991 units @ NPR 100 each] 16,249,344 15,474,195 - - Level 1 - MTM
1.19 Neco Insurance Company Ltd. - - - 247,064 Level 1 - MTM
[356 units bonus shares acquired from erstwhile NBBL]
2. Investments in equitiy instruments - Unquoted 33,438,793 956,775,241 32,564,353 711,401,065
2.1 Karja Suchana Kendra Ltd. [336,855 units @ NPR 100 each] 2,687,000 173,553,080 2,687,000 78,851,583 Level 3 - Equity Valuation
2.2 National Banking Training Institute Ltd. 3,669,720 14,545,684 3,669,720 14,484,283 Level 3 - Equity Valuation
[36,697 units @ NPR 100 each]

NPR
2080 ASHADH 31 2079 ASHADH 32
SECURITIES COST FAIR VALUE COST FAIR VALUE FAIR VALUE HIERARCHY

2.3 Nepal Clearing House Ltd. [279,481 units @ NPR 100 each] 5,351,500 64,806,054 5,351,500 17,827,329 Level 3 - Equity Valuation
2.4 Visa Inc. - Class C Common Stock [6,166 units @ USD 0.0001 each] - 381,458,155 - 331,417,789 Level 3 - Adjusted MTM
2.5 MasterCard Incorporated - Class B Common Stock - 285,202,365 237,016,486 Level 3 - Adjusted MTM
[11,140 units @ USD 0.0001 each]
2.6 SWIFT Investment (denominated in €) [14 units @ EUR 125 each] 6,720,573 8,970,982 5,846,133 16,660,394 Level 3 - Equity Valuation
2.7 Nepal Stock Exchange Ltd. [1,432 units @ NPR 100 each] 10,000 1,058,786 10,000 143,200 Level 3 - Equity Valuation
2.8 Nepal Electronic Payment System Co. Ltd. 15,000,000 27,180,136 15,000,000 15,000,000 Level 3 - Equity Valuation
[150,000 units @ NPR 100 each]

3. Investments in Mutual Fund Units 1,193,924,680 1,106,163,443 1,020,908,942 1,039,103,991
3.1 Nabil Balance Fund 2 [19,800,000 units @ NPR 10 each] 198,000,000 174,240,000 198,000,000 213,444,000 Level 1 - MTM
3.2 Global IME Sammunat Scheme 1 [4,746,586 units @ NPR 10 each] 47,465,860 45,709,623 47,465,860 47,465,860 Level 1 - MTM
3.3 Nabil Equity Fund [18,626,504 units @ NPR 10 each] 186,265,040 179,000,703 186,265,040 186,265,040 Level 1 - MTM
3.4 NMB Hybrid Fund L-1 [2,523,842 units @ NPR 10 each] 25,238,420 27,232,255 25,238,420 28,267,030 Level 1 - MTM
3.5 NIBL Pragati Fund [856,177 units @ NPR 10 each] 8,561,770 8,313,479 8,561,770 8,578,894 Level 1 - MTM
3.6 Laxmi Equity Fund [7,697,116 units @ NPR 10 each] 75,767,895 73,815,342 58,495,612 57,910,882 Level 1 - MTM
3.7 Siddartha Equity Fund [967,748 units @ NPR 10 each] 23,291,150 21,963,564 23,291,150 23,011,666 Level 1 - MTM
3.8 Sanima Equity Fund [4,426,825 units @ NPR 10 each] 44,268,250 52,236,535 48,194,990 61,448,612 Level 1 - MTM
3.9 Citizen Mutual Fund [3,659,258 units @ NPR 10 each] 34,952,132 34,323,840 22,500,000 19,800,000 Level 1 - MTM
3.10 NIC Asia Growth Fund [1,500,000 units @ NPR 10 each] 15,000,000 15,435,000 15,000,000 16,725,000 Level 1 - MTM
3.11 NIBL Sahabhagita Fund [150,000 units @ NPR 10 each] 1,500,000 1,500,000 1,500,000 1,500,000 Level 1 - MTM
3.12 NIC Asia Dynamic Debt Fund [664,830 units @ NPR 10 each] 6,648,300 6,648,300 6,648,300 6,648,300 Level 1 - MTM
3.13 Kumari Equity Fund [3,000,000 units @ NPR 10 each] 30,000,000 30,510,000 30,000,000 30,210,000 Level 1 - MTM
3.14 Sanima Large Cap Fund [2,345,056 units @ NPR 10 each] 22,929,032 20,917,900 20,000,000 18,640,000 Level 1 - MTM
3.15 Prabhu Select Fund [2,468,100 units @ NPR 10 each] 24,681,000 21,842,685 24,681,000 23,718,441 Level 1 - MTM
3.16 Nabil Balance Fund - 3 [17,500,000 units @ NPR 10 each] 175,000,000 132,475,000 175,000,000 165,025,000 Level 1 - MTM
3.17 Mega Mutual Fund I [732,093 units @ NPR 10 each] 6,744,631 5,849,423 4,363,400 3,486,357 Level 1 - MTM
3.18 Kumari Dhanabridhhi Scheme [1,500,000 units @ NPR 10 each] 15,000,000 15,060,000 15,000,000 15,000,000 Level 1 - MTM
3.19 Citizens Mutual Fund - II [5,000,000 units @ NPR 10 each] 50,000,000 51,950,000 50,000,000 50,600,000 Level 1 - MTM
3.20 NMB 50 Mutual Fund [2,000,000 units @ NPR 10 each] 20,000,000 21,000,000 20,000,000 25,800,000 Level 1 - MTM
3.21 Sunrise First Mutual Fund [70,340 units @ NPR 10 each] 703,400 779,367 703,400 808,910 Level 1 - MTM
3.22 Sunrise Blue Chip Mutual Fund [1,815,341 units @ NPR 10 each] 16,907,800 14,250,427 10,000,000 8,740,000 Level 1 - MTM
3.23 NIBL Sambridhhi Fund - II [3,000,000 units @ NPR 10 each] 30,000,000 27,330,000 30,000,000 26,010,000 Level 1 - MTM
3.24 Global IME Balance Fund - I [2,000,000 units @ NPR 10 each] 20,000,000 18,680,000 - - Level 1 - MTM
3.23 Nabil Flexi Cap Fund [10,500,000 units @ NPR 10 each] 105,000,000 105,000,000 - - Level 1 - MTM
3.24 RBB Mutual Fund - II [1,000,000 units @ NPR 10 each] 10,000,000 100,000 - - Level 1 - MTM
Total investment securities at FVTOCI 1,705,843,938 7,025,981,183 1,498,715,009 6,616,436,942
ANNUAL REPORT 2022/23

Unit count of shares and mutual fund units presented in the above table are as of Jul 16, 2023. Cost and fair values presented are actual at respective reporting date.
343
4.9 Current Tax Assets
NPR
4.10.4: Non Controlling Interest of the Subsidiaries
GROUP BANK NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 NABIL INVESTMENT BANKING LTD.

Current Tax Assets 27,358,352,797 24,756,630,771 27,293,222,982 24,747,102,983 2080 ASHADH 31 2079 ASHADH 32

Current year Income Tax Assets 27,358,352,797 24,756,630,771 27,293,222,982 24,747,102,983 Equity Interest held by NCI (%) 40 48
Tax Assets of Prior Periods - - - - Profit / (loss) allocated during the year 37,136,559 24,964,468
Current Tax Liabilities 27,851,231,677 24,140,644,006 27,775,574,654 24,140,622,948 Accumulated Balances of NCI as on Ashadh end (end of year) 263,275,371 220,848,629
Current year Income Tax Liabilities 27,851,231,677 24,140,644,006 27,775,574,654 24,140,622,948 Dividend Paid to NCI 21,600,000 19,200,000
Tax Liabilities of Prior Periods - - - -
Total (492,878,880) 615,986,765 (482,351,672) 606,480,035

4.11 Investment in Associates

NPR
4.10 Investment in Subsidiaries GROUP BANK
NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Investment in Quoted Associates 179,066,633 178,177,470 80,000,000 80,000,000
Investment in Unquoted Associates - - - -
Investment in Quoted Subsidiaries - - - -
Total Investment 179,066,633 178,177,470 80,000,000 80,000,000
Investment in Unquoted Subsidiaries - 1,798,000,000 298,000,000
Less: Impairment Allowances - - - -
Total Investment - - 1,798,000,000 298,000,000
Net Carrying Amount 179,066,633 178,177,470 80,000,000 80,000,000
Less: Impairment Allowances - - - -
Net Carrying Amount - - 1,798,000,000 298,000,000

4.10.1: Investment in Quoted Subsidiaries 4.11.1: Investment in Quoted Associates

NPR
NPR
GROUP BANK
BANK
2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
2080 ASHADH 31 2079 ASHADH 32 PARTICULARS COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
PARTICULARS COST FAIR VALUE COST FAIR VALUE
NADEP Laghubitta Bittiya Sanstha Ltd. 80,000,000 179,066,633 80,000,000 178,177,470 80,000,000 80,000,000 80,000,000 80,000,000
None - - - - (1,214,400 ordinary shares
@ NPR 100 paid up)
Total - - - - Total 80,000,000 179,066,633 80,000,000 178,177,470 80,000,000 80,000,000 80,000,000 80,000,000

Note - Associate company obtained listing in the year 2075/76 and is recognized at cost in the Bank's separate financial statements and at fair
4.10.2: Investment in Unquoted Subsidiaries value (equity method) in the Group's financial statements.
NPR

BANK
2080 ASHADH 31 2079 ASHADH 32
PARTICULARS COST FAIR VALUE COST FAIR VALUE 4.11.2: Investment in Unquoted Associates
NPR
Nabil Investment Banking Ltd. 278,000,000 278,000,000 278,000,000 78,000,000
GROUP BANK
(1,944,000 ordinary shares @ NPR 100 paid up
2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
including 624,000 unit bonus shares)
PARTICULARS COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
Nabil Securities Ltd. 1,520,000,000 1,520,000,000 1,520,000,000 220,000,000
(15,200,000 ordinary shares @ NPR 100 paid up)
Total - - - - - - - -
Total 1,798,000,000 1,798,000,000 1,798,000,000 298,000,000

4.10.3: Information relating to Subsidiaries of the Bank

PERCENTAGE OF OWNERSHIP HELD BY BANK 4.11.3: Information relating to Associates of the Bank
2080 ASHADH 31 2079 ASHADH 32
GROUP BANK
Nabil Investment Banking Ltd. 60% 52% % OF OWNERSHIP HELD BY GROUP % OF OWNERSHIP HELD BY BANK
Nepal Bangladesh Capital Ltd.* 0% 100% PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Nabil Securities Ltd. 100% 0%
1. NADEP Laghubitta Bittiya Sanstha Ltd. 25% 25% 25% 25%
Total

*Nabil Investment Banking Ltd. and Nepal Bangladesh Capital Ltd. merged to form one entity.

344 NABIL BANK LIMITED ANNUAL REPORT 2022/23 345

346
Total
Net Amount
Net Amount

Adjustment/Transfer
Adjustment/Transfer

NABIL BANK LIMITED

Accumulated Depreciation
Accumulated Impairment Loss
Addition/(Disposal) during the year
Addition/(Disposal) during the year

Balance as on Shrawan 01 (start of year)

Net Changes in fair value during the year
Balance as on Shrwawan 01 (start of year)
4.11.4: Equity Value of Associates

1. NADEP Laghubitta Bittiya Sanstha Ltd.

PARTICULARS

4.12 Investment Properties

-
-
-
-
-
-
-
508,471,228
1,318,597,583

-
1,827,068,811
2080 ASHADH 31

1,827,068,811
PARTICULARS

1,318,597,583
-
-
-
-
-
-
-
2079 ASHADH 32

1,308,522,520
10,075,063

-
1,318,597,583
GROUP
2080 ASHADH 31

-
-
-
-
-
-
-
508,471,228
1,318,597,583

-
1,827,068,811
2080 ASHADH 31

1,827,068,811
BANK
GROUP

Investment Properties measured at Fair Value

Investment Properties measured at Cost

1,318,597,583
-
-
-
-
-
-
1,318,597,583
-
-
2079 ASHADH 32

1,308,522,520
10,075,063
2079 ASHADH 32

179,066,633 178,177,470

NPR
NPR

4.13 Property and Equipment

NPR
GROUP
PARTICULARS LAND BUILDING LEASEHOLD COMPUTER & VEHICLES FURNITURE & MACHINERY EQUIPMENT & TOTAL ASHADH TOTAL ASHADH
PROPERTIES ACCESSORIES FIXTURES OTHERS END 2080 END 2079

Cost
As on Shrawan 01, 2078 513,746,737 326,531,248 318,959,217 344,917,436 511,107,232 240,068,833 - 568,849,065 2,824,179,768 2,329,989,428
Addition during the year - - 64,949,909 36,553,785 53,676,130 24,572,677 - 42,777,704 222,530,204 146,439,667
Acquisition - - 64,949,909 36,553,785 53,676,130 24,572,677 - 42,777,704 222,530,204 146,439,667
Capitalization - - - - - - - - - -
Disposal during the year - - (52,111,965) (3,758,964) (56,394,360) (1,591,994) - (11,810,021) (125,667,303) (95,374,393)
Adjustment/Revaluation 412,326,972 - - - - - - - 412,326,972 67,117,412
Acquired during the year 1,046,103,440 - 264,250,182 - 163,192,426 243,764 219,282,129 526,818,220 2,219,890,160 443,125,067
Balance as on Ashadh end 2079 1,972,177,149 326,531,248 596,047,343 377,712,256 671,581,427 263,293,280 219,282,129 1,126,634,968 5,553,259,801 2,891,297,180
Addition during the Year - - 64,949,909 36,553,785 53,676,130 24,572,677 - 42,777,704 222,530,204 222,530,204
Acquisition - 20,575,004 140,375,882 65,412,509 107,759,500 41,044,497 - 89,587,198 464,754,590 222,530,204
Capitalization - - - - - - - - - -
Disposal during the year - - (39,145,280) (4,232,706) (36,218,130) (5,052,474) - (3,193,421) (87,842,010) (125,667,303)
Adjustment/Revaluation - - 61,074,538 153,066,505 (32,765,571) 105,439,661 (219,282,129) (271,200,596) (203,667,592) 345,209,560
Acquired during the year - - - - - - - - - 2,219,890,160
Capital WIP 142,835,749 142,835,749 180,000
Balance as on Ashadh end 2080 1,972,177,149 489,942,002 758,352,484 591,958,564 710,357,226 404,724,964 - 941,828,149 5,869,340,538 5,553,259,801
Depreciation and Impairment
As on Shrawan 01, 2078 - 140,195,567 89,189,644 196,317,226 225,252,254 142,834,928 - 327,779,962 1,121,569,580 999,813,676
Depreciation charge for the year - 4,395,457 42,032,235 13,278,424 57,320,131 13,637,582 - 36,332,222 166,996,052 122,134,929
Impairment for the year - - - - - - - - - -
Disposals - - (43,456,348) (3,144,938) (43,920,483) (1,255,263) - (14,697,028) (106,474,059) (77,170,768)
Adjustment - - - - - - - - - -
Acquired during the year - - 105,004,973 - 102,052,863 - 176,003,453 442,851,054 825,912,342 76,791,744
As on Ashadh end 2079 - 144,591,025 192,770,504 206,450,712 340,704,764 155,217,247 176,003,453 792,266,210 2,008,003,915 1,121,569,580
Impairment for the year - - - - - - - - - -
Depreciation charge for the year - 4,961,115 61,383,835 18,848,678 72,296,139 20,800,325 - 50,957,183 229,247,274 166,996,052
Disposals - - (1,369,786) (4,390,411) (44,978,074) (730,793) - (1,520,412) (52,989,478) (106,474,059)
Adjustment - - 56,948,564 123,470,700 (27,871,500) 74,343,071 (176,003,453) (249,991,403) (199,104,021) -
Acquired during the year - - - - - - - - - 825,912,342.32
As on Ashadh end 2080 - 149,552,139 309,733,116 344,379,678 340,151,329 249,629,850 - 591,711,578 1,985,157,690 2,008,003,915
Net book value of Capital Work in Progress 142,835,749 142,835,749 1,099,250
As on Ashadh end 2079 1,972,177,149 181,940,224 403,276,839 171,261,544 330,876,663 108,076,033 43,278,676 334,368,759 3,546,355,137
As on Ashadh end 2080 1,972,177,149 340,389,862 448,619,368 247,578,886 370,205,898 155,095,114 - 350,116,571 3,884,182,848
ANNUAL REPORT 2022/23
347
 4.13 Property and Equipment

348
NPR
BANK

PARTICULARS LAND BUILDING LEASEHOLD COMPUTER & VEHICLES FURNITURE & MACHINERY EQUIPMENT & TOTAL ASHADH TOTAL ASHADH
PROPERTIES ACCESSORIES FIXTURES OTHERS END 2080 END 2079

Cost

NABIL BANK LIMITED

As on Shrawan 01, 2078 513,746,737 326,531,248 307,588,017 310,047,847 513,656,852 230,116,653 63,151,784 538,584,716 2,803,423,855 2,289,614,522
Addition during the year - - 64,681,353 35,573,360 53,676,130 24,480,382 - 42,539,625 220,950,849 145,273,633
Acquisition - - 64,681,353 35,573,360 53,676,130 24,480,382 - 42,539,625 220,950,849 145,273,633
Capitalization - - - - - - - - - -
Disposal during the year - - (52,111,965) (3,681,966) (56,394,360) (1,591,994) - (11,725,031) (125,505,315) (95,370,853)
Adjustment/Revaluation 412,326,972 - (44,486) 26,282,555 (11,371,919) 2,838,854 (63,151,784) 24,665,295 391,545,486 67,117,412
Acquired during the year 1,046,103,440 - 263,951,779 - 163,192,426 - 219,282,129 526,375,438 2,218,905,211 463,906,553
Balance as on Ashadh end 2079 1,972,177,149 326,531,248 584,064,698 368,221,796 662,759,128 255,843,895 219,282,129 1,120,440,044 5,509,320,086 2,870,541,267
Addition during the Year - 20,575,004 140,375,882 64,747,755 101,469,500 41,044,497 - 89,001,773 457,214,411 220,950,849
Acquisition - 20,575,004 140,375,882 64,747,755 101,469,500 41,044,497 - 89,001,773 457,214,411 220,950,849
Capitalization - - - - - - - - - -
Disposal during the year - - (39,145,280) (4,206,681) (36,218,130) (5,052,474) - (3,219,445) (87,842,010) (125,505,315)
Adjustment/Revaluation 61,372,941 152,849,258 (32,765,571) 105,683,424 (219,282,129) (270,773,036) (202,915,112) 324,428,074
Acquired during the year - 2,218,905,210.89
Balance as on Ashadh end 2080 1,972,177,149 347,106,253 746,668,242 581,612,127 695,244,927 397,519,342 - 935,449,335 5,675,777,375 5,509,320,086
Depreciation and Impairment
As on Shrawan 01, 2078 - 140,195,571 81,194,334 175,868,352 229,171,352 138,030,955 34,482,393 311,846,291 1,110,789,247 971,500,038
Depreciation charge for the year - 4,395,457 41,303,773 12,464,143 56,466,697 13,185,107 - 35,988,035 163,803,212 118,886,747
Impairment for the year - - - - - - - - - -
Disposals - - (43,456,348) (3,077,928) (43,920,483) (1,255,263) - (14,613,554) (106,323,576) (77,170,768)
Adjustment - (0) (235,163) 13,590,882 (11,371,919) (211,050) (34,482,393) 11,928,157 (20,781,486) -
Acquired during the year - - 105,004,973 - 102,052,863 - 176,003,453 442,851,054 825,912,342 97,573,230
As on Ashadh end 2079 - 144,591,028 183,811,569 198,845,450 332,398,509 149,749,749 176,003,453 787,999,981 1,973,399,739 1,110,789,246
Impairment for the year - - - - - - - - - -
Depreciation charge for the year - 4,961,115 60,598,693 18,205,623 71,231,132 20,342,392 50,566,790 225,905,744 163,803,212
Disposals - - (1,369,786) (4,382,899) (44,978,074) (730,793) (1,527,925) (52,989,478) (106,323,576)
Adjustment 56,948,564 123,489,212 (27,871,500) 74,343,071 (176,003,453) (250,009,915) (199,104,021) (20,781,486)
Acquired during the year - 825,912,342.32
As on Ashadh end 2080 - 149,552,143 299,989,040 336,157,386 330,780,067 243,704,418 - 587,028,932 1,947,211,985 1,973,399,739
Net book value of Capital Work in Progress 142,707,499 142,707,499
As on Ashadh end 2079 1,972,177,149 182,120,220 400,253,129 169,376,346 330,360,618 106,094,146 43,278,676 332,440,062 3,536,100,347
As on Ashadh end 2080 1,972,177,149 340,261,609 446,679,202 245,454,742 364,464,860 153,814,924 - 348,420,403 3,871,272,890

Disposals
Disposals
Adjustment
PARTICULARS

Acquisition
Acquisition

Capitalization
Capitalization

Adjustment/Revaluation

Impairment for the year

Addition during the year

Addition during the Year

Disposal during the year

Disposal during the year

Acquired during the year

Acquired during the year

As on Shrawan 01, 2078

As on Shrawan 01, 2078

As on Ashadh end 2080

As on Ashadh end 2079
As on Ashadh end 2080
As on Ashadh end 2079
Amortisation charge for the year

Depreciation charge for the year

Balance as on Ashadh end 2080
Balance as on Ashadh end 2079

174,315,223
170,153,724
-
-
-
-
-
-
-
-
-
-
174,315,223
4,161,499
-
-
-
-
-
170,153,724
-
65,875,689
-
65,875,689
104,278,034
GOODWILL

Impairment for the year

Acquired during the year
Adjustment/Revaluation

4.14 Goodwill and Intangible Assets

119,527,153
87,992,965
237,759,895
212,368,592

66,417,176
23,243,636
84,624,998
129,661,933
PURCHASED

-
-
-
-
-
-
-
-
SOFTWARE
GROUP

-
-
-
-
-
OTHER

Capital Work in Progress (Net Book Value)

-
(3,583,155)
-

35,117,344
-
50,773,647
-
23,664,126
-
3,277,667
(1,130,000)
-
23,243,636
54,225,313
-
84,624,998
DEVELOPED

TOTAL ASHADH
END 2080

118,232,742 292,547,964
-
- 119,527,153
-
(3,583,155)
-
87,992,965
-
-

35,117,344
50,773,647
(52,861,985) (52,861,985)
23,664,126
66,417,176
4,161,499
3,277,667
(1,130,000)
23,243,636
23,243,636
54,225,313
-
(56,143,652) (56,143,652)
65,875,689
84,624,998
150,500,687
233,939,967

ANNUAL REPORT 2022/23

Amortisation and Impairment
Cost :
TOTAL ASHADH

124,375,627 294,529,350
-
87,992,965
-
66,417,176
-
-
- 412,075,118 382,522,315
- 382,522,315 233,939,967
-
104,278,034
END 2079

50,773,647
(52,861,985)
23,664,126
3,260,442
22,926,028
40,230,706
54,225,313
-
(56,143,652)
65,875,689
84,624,998
150,500,687
1,130,000
2,134,442
13,751,715
118,029,749
112,645,776
NPR

349
350
Disposals
Disposals
Adjustment
PARTICULARS

Acquisition
Acquisition
Capitalization

NABIL BANK LIMITED

Adjustment/Revaluation

Impairment for the year

Impairment for the year
Addition during the year

Addition during the Year

Disposal during the year

Disposal during the year

Acquired during the year

Acquired during the year
Acquired during the year

As on Shrawan 01, 2078

As on Shrawan 01, 2078

As on Ashadh end 2080

As on Ashadh end 2079
As on Ashadh end 2080
As on Ashadh end 2079
Amortisation charge for the year

Depreciation charge for the year

Balance as on Ashadh end 2080
Balance as on Ashadh end 2079

Capital Work in Progress (Net Book Value)

170,153,724
170,153,724
-
-
-
-
-
-
-
-
-
-
-
-
-
170,153,724
-
-
-
-
-
170,153,724
-
-
-

170,153,724
170,153,724
GOODWILL

Capitalization
Acquired during the year

4.14 Goodwill and Intangible Assets

115,301,582
121,566,999
-
115,140,277
-
(3,583,155)
-
84,752,659
-

33,970,773
50,332,476
(52,861,985)
-
230,441,859
-

23,189,622
64,092,546
3,277,667
(1,130,000)
-
206,319,659

21,974,533
21,974,533
(56,143,652)
-
82,312,167
82,312,167
126,745,081
PURCHASED

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
SOFTWARE
BANK

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
OTHER

53,406,063
Adjustment/Revaluation
DEVELOPED

TOTAL ASHADH
END 2080

- 285,455,306
-
-
(3,583,155)
-
84,752,659
-

33,970,773
50,332,476
(52,861,985)
-
-

23,189,622
64,092,546
3,277,667
(1,130,000)
-
-
-

21,974,533
21,974,533
(56,143,652)
170,153,724
82,312,167
252,465,891
126,745,081

Amortisation and Impairment

Cost
TOTAL ASHADH

- 291,720,723
- 115,140,277 115,140,277
(52,861,985)
-
64,092,546
-
-
-
- 400,595,583 400,595,583
-
END 2079

50,332,476
23,189,622
3,260,442
22,688,015
38,144,089
53,406,063
(56,143,652)
- 323,067,320 231,023,115
-
-

65,875,689
82,312,167
148,187,856
104,278,034
16,851,177
121,129,211
109,893,904
NPR

4.15 Deferred Tax

NPR
GROUP BANK
PREVIOUS FY 2078-79 PREVIOUS FY 2078-79
PARTICULARS DEFERRED TAX DEFERRED TAX NET DEFERRED TAX DEFERRED TAX DEFERRED TAX NET DEFERRED
ASSETS LIABILITIES ASSETS /(LIABILITIES) ASSETS LIABILITIES ASSETS /(LIABILITIES)

Deferred tax on temporary differences on following items

Loans and Advances to BFIs - - - - - -
Loans and Advances to Customers - - - - - -
Investment Properties - - - - - -
Investment Securities 35,949,921 (1,543,023,817) (1,507,073,896) - (1,535,316,579) (1,535,316,579)
Property and Equipment 6,923,734 (460,979,898) (454,056,164) 6,897,360 (460,791,509) (453,894,149)
Employees' Defined Benefit Plan 214,805,645 - 214,805,645 213,839,411 - 213,839,411
Lease Liabilities 7,360,097 (29,020,287) (21,660,191) 7,208,058 (29,020,287) (21,812,229)
Provisions 22,833,002 - 22,833,002 22,833,002 - 22,833,002
Other Temporary Differences - (4,153,572) (4,153,572) - (4,153,572) (4,153,572)
Deferred tax on temporary differences 287,872,399 (2,037,177,575) (1,749,305,176) 250,777,831 (2,029,281,948) (1,778,504,117)
Deferred tax on carry forward of unused tax losses -
Deferred tax due to changes in tax rate -
Net Deferred Tax Asset / (Liabilities) as on year end of 2079 (1,749,305,176) (1,778,504,117)
Recognised in profit or loss 251,922,477 (494,153,758) (242,231,280) 250,777,831 (493,965,369) (243,187,538)
Recognised in other comprehensive income 35,949,921 (1,543,023,817) (1,507,073,896) - (1,535,316,579) (1,535,316,579)
Recognised directly in equity - - - - - -
Deferred Tax Asset/ (Liabilities) as on Shrawan 01, 2078 (1,826,438,690) (1,810,551,786)
Origination / (Reversal) during the year (77,133,514) (32,047,668)
Deferred Tax expense (income) recognized in profit or loss 55,744,138 91,306,537
Deferred Tax expense (income) recognized in OCI (146,241,921) (136,718,475)
Deferred Tax expense (income) recognized directly in Equity 240,058,297 240,058,297

Note - Deferred tax is calculated on a stand alone basis for the Bank and the Subsidiary and has not been netted off at a Group Level.
ANNUAL REPORT 2022/23
351
 NET DEFERRED
ASSETS /(LIABILITIES)

(1,596,041,174)
(637,597,771)
298,792,997

15,996,263

(1,918,849,685)

(1,918,849,685)
(322,808,512)
(1,596,041,174)

(1,778,504,117)
-
-
-

-
-

140,345,568
73,190,348
67,155,220
-
NPR

4.16 Other Assets

Deferred tax on temporary differences on following items

NPR
GROUP BANK
CURRENT FY 2079-80

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Assets held for Sale - - - -

BANK

Other Non-Banking Assets - - - -

(1,908,713,397)

(1,749,305,176)
159,408,221
84,134,578
64,778,157
10,495,485
DEFERRED TAX
LIABILITIES

(1,596,041,174)
(637,597,771)

(2,233,638,944)

(637,597,771)
(1,596,041,174)
-
-
-

-
-
-
-

-
-

-
Bills Receivable - - - -
Accounts Receivable 460,683,528 496,229,382 337,418,941 471,976,857
Accrued Income - - - -
Prepayments and Deposits 242,361,129 265,032,896 241,090,414 263,595,467
Income Tax Deposit 352,150,129 199,853,692 352,150,129 199,853,692
298,792,997

15,996,263

314,789,259

314,789,259
-
-
-
-
-

-
-

-
-
DEFERRED TAX
ASSETS

Deferred Employee Expenditure 4,145,046,026 2,846,751,500 4,145,046,026 2,846,751,500

Other Assets 2,730,342,841 2,530,637,199 2,722,298,577 2,514,372,424
Total 7,930,583,654 6,338,504,669 7,798,004,088 6,296,549,940

4.17 Due to Banks and Financial Institutions

Note - Deferred tax is calculated on a stand alone basis for the Bank and the Subsidiary and has not been netted off at a Group Level.
NPR
Deferred tax on carry forward of unused tax losses
Deferred tax due to changes in tax rate
NET DEFERRED TAX
ASSETS /(LIABILITIES)

(1,586,881,855)

15,996,263

(1,908,713,397)

(321,831,542)
(1,586,881,855)
-
-
-

(637,665,456)
299,728,543
109,108

- GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Money Market Deposits - -

Interbank Borrowing 434,105,828 - 434,105,828 -
CURRENT FY 2079-80

Other Deposits from BFIs - -

Settlement and Clearing Accounts - -
Net Deferred Tax Asset / (Liabilities) as on year end of 2080

Deferred Tax Asset/ (Liabilities) as on Shrawan 01, 2079

Origination / (Reversal) during the year
Deferred Tax expense (income) recognized in profit or loss
Deferred Tax expense (income) recognized in OCI
Deferred Tax expense (income) recognized directly in Equity
(1,597,723,360)

(637,556,348)
(1,597,723,360)
-
-
-

(637,665,456)
-
109,108
-
-
37,094,568

-
GROUP

Other Deposits from BFIs 5,843,606,178 3,353,609,544 5,843,606,178 3,353,609,544

DEFERRED TAX
LIABILITIES

Total 6,277,712,006 3,353,609,544 6,277,712,006 3,353,609,544

4.18 Due to Nepal Rastra Bank

NPR
10,841,505

299,728,543

15,996,263

315,724,805
10,841,505
-
-
-

-
326,566,310

-
DEFERRED TAX
ASSETS

GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Refinance from NRB - 4,657,437,355 - 4,657,437,355

Standing Liquidity Facility - - - -
Lender of Last Resort facility from NRB - - - -
Securities sold under repurchase agreements - - - -
Other Payable to NRB - - - -
Total - 4,657,437,355 - 4,657,437,355

4.19 Derivative Financial Instruments

NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Held for Trading - - - -

Deferred tax on temporary differences

Recognised in other comprehensive income

4.15 Deferred Tax

Interest Rate Swap - - - -

Loans and Advances to Customers

Currency Swap - - - -
Employees' Defined Benefit Plan

Other Temporary Differences

Forward Exchange Contracts - - - -

Loans and Advances to BFIs

Others - - - -
Recognised directly in equity
Property and Equipment

Recognised in profit or loss

Investment Properties

Held for Risk Management 3,812,946,431 1,390,736,904 3,812,946,431 1,390,736,904

Investment Securities

Interest Rate Swap - - - -

Lease Liabilities

Currency Swap - - - -
PARTICULARS

Provisions

Forward Exchange Contracts. 3,812,946,431 1,390,736,904 3,812,946,431 1,390,736,904

Others - - - -
Total 3,812,946,431 1,390,736,904 3,812,946,431 1,390,736,904

352 NABIL BANK LIMITED ANNUAL REPORT 2022/23 353

4.20 Deposits from Customers 4.22 Provisions
NPR NPR
GROUP BANK GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Institutional Customers:
Provisions for Redundancy - - - -
Term Deposits 96,552,100,262 90,692,913,008 98,032,100,262 90,692,913,008
Provisions for Restructuring - - - -
Call Deposits 34,204,308,525 24,873,942,412 34,368,802,134 24,890,220,992
Pending Legal Issues and Tax Litigation - - - -
Current Deposits 30,641,091,050 27,343,093,947 30,641,091,050 27,363,053,947
Onerous Contracts - - - -
Others 10,306,147,936 14,790,476,713 10,306,147,936 14,790,476,713
Other - - - -
Individual Customers:
Total - - - -
Term Deposits 123,491,962,616 84,659,657,841 123,491,962,616 84,659,657,841
Saving Deposits 95,482,402,688 81,974,367,325 95,482,402,688 81,974,367,325
Current Deposits 4,420,001,053 1,667,747,951 4,420,001,053 1,667,747,951
Others 100,991,396 183,872,596 100,991,396 183,872,596
4.22.1: Movement in Provision
NPR
Total 395,199,005,619 326,186,071,792 396,843,499,228 326,222,310,372 GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Balance at Shrawan 01 (start of year) - - - -

4.20.1: Currency wise analysis of deposit from customers
NPR Provisions made during the year - - - -
GROUP BANK Provisions used during the year - - - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Provisions reversed during the year - - - -
Unwind of Discount - - - -
Nepalese Rupee 384,290,128,003 314,501,944,797 385,934,621,520 314,538,183,378
Balance at Ashadh end (end of year) - - - -
Indian Rupee - -
United States Dollar 9,615,625,760 10,211,052,115 9,615,625,760 10,211,052,115
Great Britain Pound 307,098,888 580,471,133 307,098,888 580,471,133
Euro
Japanese Yen
636,458,174
253,978,485
605,228,263
140,807,249
636,458,174
253,978,485
605,228,263
140,807,249
4.23 Other Liabilities
NPR
Chinese Yuan 3,297,917 - 3,297,917 - GROUP BANK
Other 62,019,549 141,541,686 62,019,549 141,541,686 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Total 395,168,606,775 326,181,045,243 396,813,100,293 326,217,283,823
Accrued interest payable 30,398,844 5,026,549 30,398,844 5,026,549 Liabilities for employees defined benefit obligations 55,296,181 74,244,393 37,365,268 62,939,197
Total Customer deposit including accrued 395,199,005,619 326,186,071,792 396,843,499,228 326,222,310,372 Liabilities for long service leave 642,852,937 566,010,763 642,852,937 565,431,660
interest payable Short term employee benefits - - - -
Bills payable 904,786,251 1,622,089,230 904,786,251 1,622,089,230
Creditors and accruals 1,557,771,361 4,664,123,895 1,522,306,581 4,647,512,962
Interest payable on deposits - - - -
4.21 Borrowings Interest payable on borrowing - - - -
NPR Liabilities on deferred grant income - 1,047,845 - 1,047,845
GROUP BANK Unpaid Dividend 546,950,304 864,172,659 546,950,304 790,282,369
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Liabilities under Finance Lease - - - -
Domestic Borrowings Employee bonus payable 1,041,461,990 855,254,412 1,041,461,990 855,254,412
Nepal Government - - - - Other Liabilities: - -
Other Institutions - 8,103,106,849 - 8,103,106,849 Proposed Cash Dividend Payable to Shareholders - - - -
Other - - - - Other Liabilities 4,216,514,593 4,112,287,678 3,772,804,574 3,683,623,767
Sub Total - 8,103,106,849 - 8,103,106,849 Total 8,965,633,618 12,759,230,876 8,468,527,905 12,228,181,442
Foreign Borrowings
Foreign Banks and Financial Institutions - 2,617,623,322 - 2,617,623,322
Multilateral Development Banks - - - -
Other Institutions - - - -
Sub Total - 2,617,623,322 - 2,617,623,322
Total - 10,720,730,171 - 10,720,730,171

354 NABIL BANK LIMITED ANNUAL REPORT 2022/23 355

4.23.1: Defined Benefit Obligation 4.23.5: Amount recognised in profit or loss
NPR
The amounts recognised in the statements of financial positions are as follows :
NPR GROUP BANK
GROUP BANK PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Current service costs 63,335,665 72,085,290 63,335,665 72,085,290
Interest on obligation 86,267,982 82,735,904 86,267,982 82,735,904
Present value of unfunded obligations - - - -
Expected return on plan assets - - - -
Present value of funded obligations 1,053,184,337 989,670,080 1,053,184,337 989,670,080
Total 149,603,647 154,821,194 149,603,647 154,821,194
Total present value of obligations 1,053,184,337 989,670,080 1,053,184,337 989,670,080
Fair value of plan assets 1,015,819,069 922,225,900 1,015,819,069 922,225,900
Present value of net obligations 37,365,268 67,444,180 37,365,268 67,444,180
Recognised liability for defined 4.23.6: Amount recognised in other comprehensive income
benefit obligations 37,365,268 67,444,180 37,365,268 67,444,180 NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

4.23.2: Plan Assets Acturial (gain)/loss (21,435,422) (32,021,047) (21,435,422) (32,021,047)

Plan assets comprise of the following: Total (21,435,422) (32,021,047) (21,435,422) (32,021,047)
NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Equity securities - - - - 4.23.7: Actuarial assumptions

Government bonds - - - -
GROUP BANK
Bank deposit - - - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Other 1,015,819,069 922,225,900 1,015,819,069 922,225,900
Total 1,015,819,069 922,225,900 1,015,819,069 922,225,900 Discount rate 10% 9% 10% 9%
Actual return on plan assets - - - - Expected return on plan asset 0% 0% 0% 0%
Future salary increase 8% 8% 8% 8%
Withdrawal rate 5% 5% 5% 5%

4.23.3: Movement in the present value of defined benefit obligations

NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
4.24 Debt securities issued
NPR
Defined benefit obligations at Shrawan 1
GROUP BANK
(start of the year) 989,670,080 960,759,841 989,670,080 960,759,841
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Actuarial losses (21,435,422) (32,021,047) (21,435,422) (32,021,047)
Debt securities issued designated as
Benefits paid by the plan (64,653,968) (93,889,908) (64,653,968) (93,889,908)
at fair value through profit or loss - - - -
Current service costs and interest 149,603,647 154,821,194 149,603,647 154,821,194
Debt securities issued at amortised cost 6,486,982,412 6,484,843,749 6,486,982,412 6,484,843,749
Defined benefit obligations at Ashadh end 1,053,184,337 989,670,080 1,053,184,337 989,670,080
Total 6,486,982,412 6,484,843,749 6,486,982,412 6,484,843,749
(end of year)

4.23.4: Movement in the fair value of plan assets

GROUP BANK
NPR
4.25 Subordinated Liabilities
NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Fair value of plan assets at Shrawan 1
(start of the year) 889,505,793 899,414,596 889,505,793 899,414,596 Redeemable preference shares - - - -
Contributions paid into the plan 190,967,244 116,701,212 190,967,244 116,701,212 Irredemable cumulative preference shares
Benefits paid during the year (64,653,968) (93,889,908) (64,653,968) (93,889,908) (liabilities component) - - - -
Actuarial (losses) gains - - - - Other - - - -
Expected return on plan assets - - - - Total - - - -
Fair value of plan assets at Ashadh end 1,015,819,069 922,225,900 1,015,819,069 922,225,900
(end of the year)

356 NABIL BANK LIMITED ANNUAL REPORT 2022/23 357

4.26 Share capital 4.27 Reserves
NPR NPR
GROUP BANK GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Ordinary shares 27,056,996,729 22,832,908,632 27,056,996,729 22,832,908,632 Statutory general reserve 13,928,154,820 12,628,794,796 13,905,322,355 12,624,322,355
Convertible preference shares (equity component only) - - - - Exchange equilisation reserve 787,712,612 752,112,612 787,712,612 752,112,612
Irredemable preference shares (equity component only) - - - - Corporate social responsibility reserve 133,524,106 90,724,131 132,108,610 90,391,687
Perpetual debt (equity component only) - - - - Capital redemption reserve - - -
Total 27,056,996,729 22,832,908,632 27,056,996,729 22,832,908,632 Regulatory reserve 3,629,739,942 2,428,335,793 3,629,739,942 2,428,335,793
Investment adjustment reserve 6,720,573 5,580,742 6,720,573 5,580,742
Capital reserve 120,061,832 120,061,832 120,061,832 120,061,832
Assets revaluation reserve 560,136,025 560,136,025 560,136,025 560,136,025
4.26.1: Ordinary Shares Fair value reserve 3,715,314,234 3,568,817,601 3,724,096,070 3,582,405,352
NPR
Dividend equalisation reserve - - - -
BANK
Actuarial Gain / (Loss) on DBP (32,957,643) (47,962,439) (32,957,643) (47,962,439)
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Special reserve 5,141,156 5,141,156 5,141,156 5,141,156
Authorized Capital 28,000,000,000 23,000,000,000
Other reserve 3,905,236,641 7,141,799,260 3,830,540,723 7,128,593,428
- 280,000,000 Ordinary Shares @ NPR 100 nominal value
Total 26,758,784,299 27,253,541,510 26,668,622,255 27,249,118,543
Issued Capital 27,056,996,729 22,832,908,632
- 270,569,967.29 Ordinary Shares @ NPR 100 nominal value
Subscribed and Paid Up Capital 27,056,996,729 22,832,908,632
- 270,569,967.29 Ordinary Shares @ NPR 100 paid up
Total 27,056,996,729 22,832,908,632 4.27.1 Other Reserve break-up
NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

4.26.2: Ordinary share ownership Special Contingency Fund 22,373,837 21,373,837 22,373,837 21,373,837
NPR Debenture Redemption Reserve 2,256,740,221 1,333,333,332 2,256,740,221 1,333,333,332
BANK Interest Spread Reserve 2,578,000 2,578,000 2,578,000 2,578,000
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 Staff Training and Development Fund 24,083,355 22,630,408 24,083,355 22,630,408
PERCENT AMOUNT PERCENT AMOUNT Capital Adjustment Fund 1,524,765,309 5,748,677,851 1,524,765,309 5,748,677,851
Domestic ownership 52.35 14,164,792,911 52.35 11,953,411,616 Other reserves 74,695,918 13,205,832 - -
Nepal Government - - Total 3,905,236,641 7,141,799,260 3,830,540,723 7,128,593,428
"A" class licensed institutions - -
Other licensed intitutions - -
Other Institutions 8.69 2,351,439,539 8.69 1,984,337,848
Public 41.56 11,244,874,422 41.56 9,489,345,782 4.27.1.1 Movements in Staff Training and Development Fund
NPR
Other 2.10 568,478,950 2.10 479,727,986
GROUP BANK
Foreign ownership 47.65 12,892,203,818 47.65 10,879,497,016
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Total 100.00 27,056,996,729 100.00 22,832,908,632
Opening balance in reserve 22,630,408 7,113,005 22,630,408 7,113,005
Mandatory training expense budget for the year 41,370,667 63,262,333 41,370,667 63,262,333
Total amount available for training expenses 64,001,075 70,375,338 64,001,075 70,375,338
Ordinary shareholders holding > 0.5% shares NPR Less: Eligible training expenses incurred in the year (39,917,720) (47,744,931) (39,917,720) (47,744,931)
BANK Closing balance in reserve 24,083,355 22,630,408 24,083,355 22,630,408
SHAREHOLDER 2080 ASHADH 31 2079 ASHADH 32
PERCENT AMOUNT PERCENT AMOUNT

1. NB International Limited 39.44 10,670,624,284 39.44 9,004,746,200

2. IFIC Bank PLC 7.77 2,101,726,406 7.77 1,773,608,800
3. Rastriya Beema Company 7.63 2,063,698,681 7.54 1,722,421,400
4. Mr. Nirvana Kumar Chaudhary 0.70 189,745,900 0.70 160,123,200
5. Mr. Varun Chaudhary 0.67 180,898,500 0.67 152,657,000

358 NABIL BANK LIMITED ANNUAL REPORT 2022/23 359

4.28 Contingent liabilities and commitments 4.28.4: Lease commitments
NPR
NPR
GROUP BANK
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Contingent liabilities 154,675,836,633 164,083,956,071 154,675,836,633 164,083,956,071 Operating lease commitments

Undrawn and undisbursed facilities 83,461,829,707 84,736,594,750 83,461,829,707 84,736,594,750 Future minimum lease payments under non
Capital commitment - - - - cancellable operating lease, where the bank is lessee
Lease Commitment 2,552,194,798 2,351,843,714 2,552,194,798 2,351,843,714 Not later than 1 year - - - -
Litigation - - - - Later than 1 year but not later than 5 years - - - -
Total 240,689,861,138 251,172,394,535 240,689,861,138 251,172,394,535 Later than 5 years - - - -
Sub total - - - -

Finance lease commitments

4.28.1: Contingent Liabilities Future minimum lease payments under non
NPR cancellable finance lease, where the bank is lessee -
GROUP BANK Not later than 1 year 230,473,084 221,935,300 230,473,084 221,935,300
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Later than 1 year but not later than 5 years 1,002,050,047 1,097,960,117 1,002,050,047 1,097,960,117
Acceptance and documentary credit 29,571,842,234 26,436,124,674 29,571,842,234 26,436,124,674 Later than 5 years 1,319,671,667 1,031,948,298 1,319,671,667 1,031,948,298
Bills for collection 2,095,897,076 1,646,105,612 2,095,897,076 1,646,105,612 Sub total 2,552,194,798 2,351,843,714 2,552,194,798 2,351,843,714
Forward exchange contracts 3,812,946,431 1,390,736,904 3,812,946,431 1,390,736,904 Grand total 2,552,194,798 2,351,843,714 2,552,194,798 2,351,843,714
Guarantees 94,321,363,374 112,094,528,133 94,321,363,374 112,094,528,133
Underwriting commitment - - - -
Other commitments 24,873,787,518 22,516,460,749 24,873,787,518 22,516,460,749
Total 154,675,836,633 164,083,956,071 154,675,836,633 164,083,956,071

4.28.5: Litigation
Under the self-assessment process, Bank (Along with Acquired BFI’s) files its Income Tax returns which is then reviewed by
4.28.2: Undrawn and undisbursed facilities respective Inland Revenue Office (IRO) usually within four years’ period from the end of respective Financial Year. On completion
NPR
of assessments till FY 2075-76, IRO has raised assessment orders for disputed tax liability of NPR 1,029,589,257.16 Bank has
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
contended such tax liability and has filed appeal to higher authorities. These cases are under Administrative Review and pending
before Revenue Tribunal/Supreme Court.
Undisbursed amount of loans 59,789,135,665 69,282,072,860 59,789,135,665 69,282,072,860
Undrawn limits of overdrafts 22,273,421,076 14,385,600,231 22,273,421,076 14,385,600,231
Undrawn limits of credit cards 1,399,272,966 1,068,921,660 1,399,272,966 1,068,921,660
Undrawn limits of letter of credit - - - -
Undrawn limits of guarantee - - - -
Total 83,461,829,707 84,736,594,750 83,461,829,707 84,736,594,750 4.29 Interest Income
NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

4.28.3: Capital commitments Cash and cash equivalent 136,760,166 12,765,130 131,138,604 10,435,775
NPR
Due from Nepal Rastra Bank 10,241,881 2,089,856 10,241,881 2,089,856
GROUP BANK
Placement with bank and financial institutions 381,417,463 168,359,114 381,417,463 168,359,114
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Loan and advances to banks and financial institutions - - - -
Capital commitments in relation to
Loans and advances to customers 41,142,775,554 20,930,596,894 41,142,775,554 20,930,596,894
Property and Equipment
Investment securities 3,894,556,993 1,880,865,549 3,738,744,779 1,802,704,513
Approved and contracted for - - - -
Loan and advances to staff 333,372,091 224,377,997 333,372,091 224,377,997
Approved but not contracted for - - - -
Other Interest Income 513,472,392 201,836,233 513,472,392 202,182,913
Sub total - - - -
(Amortization of Deferred Employee Expenditure)
Capital commitments in relation to Intangible assets
Total interest income 46,412,596,540 23,420,890,773 46,251,162,764 23,340,747,062
Approved and contracted for - - - -
Approved but not contracted for - - - - Note: Interest income presented under loans and advances to customer is inclusive of interest income on loans and advances to BFIs.
Sub total - - - -
Total - - - -

360 NABIL BANK LIMITED ANNUAL REPORT 2022/23 361

4.30 Interest Expenses 4.33 Net Trading income
NPR NPR
GROUP BANK GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Due to bank and financial institutions 287,832,804 235,421,499 287,832,804 235,421,499 Changes in fair value of trading assets (8,797,673) (94,931,904) - -
Due to Nepal Rastra Bank 58,197,181 123,160,983 58,197,181 123,160,983 Gain/loss on disposal of trading assets 31,511,270 28,515,807 - -
Deposits from customers 27,556,868,366 13,561,037,678 27,559,262,245 13,569,713,959 Interest income on trading assets - - - -
Borrowing 15,459,404 55,562,442 15,459,404 55,562,442 Dividend income on trading assets - - - -
Debt securities issued 581,568,640 367,053,454 581,568,640 367,053,454 Gain/loss foreign exchange transation 486,560,448 564,990,054 486,560,448 564,990,054
Subordinated liabilities - - - - Other - - - -
Other Charges 1,363,424 71,783,202 - 70,963,334 Net trading income 509,274,045 498,573,957 486,560,448 564,990,054
Total Interest expense 28,501,289,819 14,414,019,258 28,502,320,274 14,421,875,67

Note: Interest expense presented under deposits from customers also includes interst expense on deposits from BFIs.

4.34 Other Operating Income

NPR
GROUP BANK
4.31 Fees and Commission Income

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
NPR
GROUP BANK
Foreign exchange revauation gain 142,282,080 130,069,994 142,282,080 130,069,994
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Gain/loss on sale of investment securities 94,855,229 3,746,416 94,855,229 (2,164,390)
Fair value gain/loss on investment properties - - - -
Loan administration fees 818,870,898 492,942,808 818,870,898 492,942,808
Dividend on equity instruments 113,060,407 197,763,997 143,375,638 206,624,267
Service fees 32,793,245 29,192,490 32,793,245 29,192,490
Gain/loss on disposal of property and equipment (34,560,390) (4,451,385) (34,560,390) (4,451,385)
Consortium fees - - - -
Gain/loss on sale of investment property 5,965,792 - 5,965,792 -
Commitment fees 4,367,833 3,702,412 4,367,833 3,702,412
Operating lease income - - - -
DD/TT/Swift fees 47,870,130 39,161,033 47,870,130 39,161,033
Gain/loss on sale of gold and silver 13,987,188 16,397,206 13,987,188 16,397,206
Credit card/ATM issuance and renewal fees 852,257,477 627,370,137 852,257,477 627,370,137
Locker rent - - - -
Prepayment and swap fees - - - -
Other Operating Income 184,096 64,306,252 - 63,934,437
Investment and merchant banking fees 114,752,710 155,576,827 - -
Total 335,774,402 407,832,480 365,905,537 410,410,129
Asset management fees - - - -
Brokerage fees - - - -
Remittance fees 192,091,852 124,139,345 192,091,852 124,139,345
Commission on letter of credit 311,286,887 218,742,909 311,286,887 218,742,909
Commission on guarantee contracts issued 963,847,321 287,473,399 963,847,321 287,473,399 4.35 Impairment Charge/(reversal) for loan and other losses
Commission on share underwriting/issue 9,756,784 6,298,836 - - NPR
Locker rental 27,721,255 21,293,681 27,721,255 21,293,681 GROUP BANK
Other fees and commision income 321,395,113 205,857,338 294,738,739 199,255,749 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Total Fees and Commission Income 3,697,011,505 2,211,751,216 3,545,845,637 2,043,273,963 Impairment charge/(reversal) on (27,447,239) 23,252,078 (27,447,239) 23,252,078
loan and advances to BFIs
Impairment charge/(reversal) on 5,453,388,124 1,094,734,513 5,453,388,124 1,094,734,513
loan and advances to customers
Impairment charge/(reversal) - - - -
4.32 Fees and Commission Expense on financial Investment
NPR
Impairment charge/(reversal) - - - -
GROUP BANK
on placement with BFIs
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Impairment charge/(reversal) - - - -
ATM management fees 6,606,938 5,987,481 6,606,938 5,987,481
on property and equipment
VISA/Master card fees 556,623,099 348,328,718 556,623,099 348,328,718
Impairment charge/(reversal) - - - -
Guarantee commission - - - -
on goodwill and intangible assets
Brokerage - - - -
Impairment charge/(reversal) - - - -
DD/TT/Swift fees 17,689,090 13,337,737 17,689,090 13,337,737
on investment properties
Remittance fees and commission 28,841,678 24,168,664 28,841,678 24,168,664
Impairment charge/(reversal) 328,263 836,485 328,263 836,485
Other fees and commission expense 64,810,610 91,363,563 41,293,228 72,553,129
on other assets
Total Fees and Commission Expense 674,571,415 483,186,163 651,054,033 464,375,729
Total 5,426,269,148 1,118,823,076 5,426,269,148 1,118,823,076

362 NABIL BANK LIMITED ANNUAL REPORT 2022/23 363

4.36 Personnel Expenses 4.37.1 Office Administration Expense
NPR
NPR
GROUP BANK
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Salary 916,726,906 543,226,981 902,013,943 527,577,263 Water and Electricity 86,270,027 48,177,713 73,070,358 47,132,403
Allowances 1,358,279,638 877,601,646 1,338,900,432 851,444,985 Repair and Maintenance
Gratuity Expense 243,063,489 156,330,506 241,670,301 154,821,194 (a) Building 7,487,688 4,088,104 7,097,319 3,973,188
Provident Fund 91,852,068 54,569,396 90,212,941 52,757,742 (b) Vehicle 11,159,908 6,234,248 11,159,908 6,045,981
Uniform 41,508,308 23,240,000 41,508,308 23,240,000 (c) Computer and Accessories 354,614 1,274,630 354,614 1,123,889
Training & development expense 35,538,098 35,905,062 35,001,651 34,835,254 (d) Office Equipment and Furniture 39,441,245 17,213,263 39,441,245 17,059,519
Leave encashment 211,332,119 88,609,425 210,462,395 86,814,233 (e) Other - - -
Medical 4,575,080 3,831,361 4,575,080 3,831,361 Insurance 74,918,287 44,756,002 74,745,548 44,653,694
Insurance 22,342,128 16,492,420 21,464,206 15,596,356 Postage, Telex, Telephone, Fax 70,685,898 51,525,677 70,020,721 50,564,021
Employees incentive 4,063,113 - 4,063,113 - Printing, Stationery and Small Purchase 77,547,792 59,506,440 76,733,496 58,260,905
Cash-settled share-based payments - - - - Newspaper, Books and Journal 196,233 64,307 162,648 29,232
Pension expense - - - - Advertisement 75,308,319 73,914,337 73,697,279 71,461,966
Finance expense under NFRS 513,472,392 202,182,913 513,472,392 202,182,913 Donation - - - -
Other expenses related to staff 93,852,898 9,842,152 90,508,331 7,205,695 Security Expenses 199,894,232 142,530,519 199,894,232 142,005,267
Prior period employee bonus - - - - Deposit and Loan Guarantee Premium 100,433,375 50,817,862 100,433,375 50,817,862
Subtotal 3,536,606,237 2,011,831,862 3,493,853,093 1,960,306,996 Travel Allowance and Expenses 18,540,770 7,271,844 18,380,085 7,074,018
Employees bonus 1,046,057,964 707,498,532 1,031,245,537 698,618,048 Customer Entertainment 13,053,312 17,402,876 13,053,312 17,402,876
Grand total 4,582,664,202 2,719,330,394 4,525,098,630 2,658,925,044 Annual / Special General Meeting Expenses 2,920,169 1,758,196 2,920,169 1,758,196
Other Expenses:
(a) Sponsorship 13,394,180 10,748,903 13,394,180 10,748,903
(b) Outsourced HR Services 175,557,819 111,844,613 173,388,507 110,435,420

4.37 Other Operating Expense (c) Fuel

(d) Janitorial and Cleaning
58,312,734
35,487,460
29,020,958
28,987,066
57,459,766
35,272,734
28,375,858
28,852,581
NPR
GROUP BANK (e) Technical Service Fees 41,530,975 57,683,107 41,582,959 28,725,746
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 (f) Tea, Coffee and Snacks 22,238,438 13,468,343 21,624,594 12,990,051
(g) Vehicle Registration and Renewal 7,575,142 5,302,668 7,518,362 5,220,168
Directors' fee 6,342,680 6,933,670 5,913,000 6,530,170
(h) Software Subscription Charges 64,850,556 34,166,822 64,850,556 34,148,177
Directors' expense 5,377,705 3,325,452 5,377,705 3,325,452
(i) Small Purchase 11,667,416 4,165,696 11,667,416 4,165,696
Auditors' remuneration 4,191,500 2,515,000 4,011,500 2,222,000
Total 1,208,826,589 821,924,196 1,187,923,383 783,025,617
Other audit related expense - 2,165 - -
Professional and legal expense 52,141,324 58,717,153 51,405,410 58,347,998
Office administration expense 1,208,826,589 821,924,196 1,187,923,383 783,025,617
Operating lease expense 151,290,786 107,516,534 150,346,495 105,942,217
4.38 Depreciation and Amortisation
Operating expense of investment properties - - - - NPR
Corporate social responsibility expense 22,332,438 952,198 22,332,438 - GROUP BANK
Onerous lease provisions - - - - PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32
Other Expenses 106,124,116 70,764,416 101,452,922 64,406,831 Depreciation on property and equipment 481,853,810 376,491,113 472,589,090 366,840,411
Total 1,556,627,138 1,072,650,784 1,528,762,853 1,023,800,285 Depreciation on investment property - - - -
Amortisation of intangible assets 31,389,012 23,827,976 30,620,523 23,189,622
Total 513,242,822 400,319,089 503,209,613 390,030,033

4.39 Non Operating Income

NPR
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Recovery of loan written off 43,333,964 8,701,513 43,333,964 8,701,513

Other income 889,163 32,894,678 - -
Total 44,223,127 41,596,191 43,333,964 8,701,513

364 NABIL BANK LIMITED ANNUAL REPORT 2022/23 365

4.40 Non Operating Expenses 4.41.1: Reconciliation of tax expense and accounting profit of the Bank
NPR
NPR
BANK
GROUP BANK
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32

Loan written off 210,719,586 - 210,719,586 - Profit before tax stated in Statement of Profit or Loss 9,281,209,837 6,287,562,436
Redundancy provision - - - -
Expense of restructuring - - - - Add: Tax effect of expenses that are not deductible for tax purpose
Other expense 64,164,375 2,730,446 64,164,375 2,730,446 Leave Provision - increase / (decrease) 77,421,277 174,201,969
Total 274,883,961 2,730,446 274,883,961 2,730,446 Loss on disposal of Fixed Assets 36,757,413 4,506,703
Capital nature expense charged on revenue 6,648,718 1,714,844
Liabilities under operating lease - -
Repairs disallowed as per IT Act (in excess of 7% of the block) - -
4.41 Income Tax Expenses Depreciation charged on Books 246,618,707 390,030,033
NPR Provision on Accounts Receivable 328,263 836,485
GROUP BANK Impairment Provision on Investments - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 2080 ASHADH 31 2079 ASHADH 32 Interest expenses as per NFRS 16 70,963,334
Current tax expense - Less: Tax effect on exempt income
Current year 2,860,499,300 1,998,758,418 2,803,083,329 1,940,231,711 Provision written back on Other Assets - -
Adjustments for prior years 269,197 2,988,880 - - Deductible grauity expense paid from Gratuity Fund (2,686,373) (4,504,983)
Deferred tax expense 73,190,348 - 73,190,348 - Depreciation allowed as per Income Tax (261,423,072) (214,048,209)
Origination and reversal of temporary differences 10,944,231 55,744,138 - 91,306,537 Gain on disposal of Fixed Assets (155,206)
Changes in tax rate - - - - Final Withholding Income - Meeting Fees - (265,625)
Recognition of previously unrecognised tax losses - - - - Final Withholding Income - Dividend (79,860,204) (4,484,059)
Total income tax expense 2,944,903,076 2,057,491,435 2,876,273,677 2,031,538,248 Gratuity Provision (fair value changes through SoPL) - decrease (25,573,929) (38,119,982)
-
Rent expenses claimed on the basis of actual payment (200,798,706)
Taxable Income 9,343,611,098 6,467,439,035
Current Tax Expense @ 30% of taxable income 2,803,083,329 1,940,231,711
Deferrred Tax Expense/ (Income) 91,306,537
Total income tax expense 2,803,083,329 2,031,538,248
Effective tax rate 30% 30%

366 NABIL BANK LIMITED ANNUAL REPORT 2022/23 367

4.42 Statement of distributable profit or loss 5. DISCLOSURE AND ADDITIONAL approved by its board of directors. These
For the period ended 31 Ashadh 2080 (July 16, 2023) INFORMATION encompass identification, measurement and
(As per NRB Regulations) mitigation of risks across various facets of
NPR
5.1. Risk management banking operations.
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Effective risk management has been the key
Opening balance in retained earnings 273,760,074 (605,533,210) to the Bank’s success over the years and it 5.1.1. Risk Governance Framework
Net profit / (loss) as per statement of profit or loss 6,404,936,160 4,256,024,188 is integral to the Bank’s long term business The Bank follows three lines of defenses model
Less: appropriations (-) / contributions (+): sustainability. The Bank’s risk management in its risk governance framework. This model
a. General reserve (1,281,000,000) (852,000,000) objective is to strike balance between risk and has been effective in practical application
b. Foreign exchange fluctuation fund (35,600,000) (32,600,000) return towards delivering optimum risk-adjusted of the principles of good risk governance in
c. Capital redemption reserve (Debenture Redemption Reserve) (923,406,889) (333,333,333) return on capital over a longer time horizon. the identification, evaluation, measurement,
d. Corporate social responsibility fund (64,049,362) (42,560,242) Towards achieving this objective, the Bank monitoring and mitigation of risks across all
e. Employees' training fund (6,369,016) (5,085,171)
has implemented robust risk management functional areas of the organization.
f. Investment adjustment reserves (1,139,832) -
architecture as well as policies and processes
f. Others: 21,332,438 (1,000,000)
- Contingent reserve (1,000,000) (1,000,000)
- Cash dividend -
- Bonus share - -
BANK’S RISK GOVERNANCE FRAMEWORK
- CSR Expenses routed through SoPL 22,332,438 -
Transfer from Fair Value Reserve - -
Profit or (loss) before regulatory adjustment 4,114,703,499 2,989,445,442
Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) (902,502,697) 492,389,707
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) - - BOARD OF DIRECTORS
d. Short loan loss provision on Non Banking Assets (-)/reversal (+) (320,336,874) (8,778,420)
e. Deferred tax assets recognised (-)/ reversal (+) - - AML Committee Audit Committee Risk Management Committee Staff Services and Facility Committee

f. Goodwill recognised (-)/ impairment of Goodwill (+) - -

Strategy, Plans, Policies and Oversight

g. Bargain purchase gain recognised (-)/reversal (+) - -
h. Actuarial loss recognised (-)/reversal (+) 21,435,422 32,021,047 Senior Management
i. Other (+/-) - -
Total Adjustment in Regulatory Reserve (1,201,404,149) 515,632,334
Distributable profit for the year 2,913,299,350 3,505,077,776

Reporting
Total distributable profit 3,187,059,423 2,899,544,565 First Line of Defense Second Line of Defense Third Line of Defense
Risk Owners Risk Oversight Independent Assurance
Note: Capital Adjustment Reserve of NPR 1.52 billion from business acquisition is also available for distribution.
Identification, assessment, Risk oversight unit level Independent assurance to
mitigation, and reporting as and organizationsl level. seniot management/Board
per approved policies Appropriate internal control on the effectiveness of risk
and appetite. and compliance framework management system in
in place to ensure effective the bank.
Compliance with risk policies,
and efficient operations in
guidelines and procedures
the organization.

368 NABIL BANK LIMITED ANNUAL REPORT 2022/23 369

The Bank follows following principles to 5.1.2. Risk Management Framework 5.1.3. Components in Risk Management designed to ensure, to the extent possible,
manage risks in the organization: Nabil Bank manages risk through integrated Framework that the banking activities are efficient and
n Risk appetite and strategy: Establishment of risk management framework of the Bank. It is The Bank’s risk management framework has effective, information is reliable, timely and
risk appetite statement and strategy which built upon the principles of Basel Committee following components: complete and the bank is compliant with
articulates the nature, type and level of risk on Banking Supervision and follows the Risk applicable laws and regulation.
the Bank is willing to assume. Management Guideline issued by Nepal Rastra n Active Board and Senior Management
n Capital management: Capital management Bank. Oversight n Risk Appetite and Risk Tolerance
is driven by Bank’s strategic objective and Board level control has been exercised on the In line with the Risk Appetite Statement and
accounts for the regulatory, economic and The main objectives of the framework are to: management of risk across the Bank. There Risk Tolerance metric, responsibility matrix
commercial environment in which the Bank n Establish common principles and standards is presence of clear, effective and robust has been developed for various risk areas
operates. for management and control of all risks. structure with well-defined transparent and and trigger level monitoring. The risk appetite
n Governance and oversight: Proper n Provide a shared framework and language to consistent lines of responsibilities. Board level statement considers risk capacity, financial
governance and oversight through a clear, improve awareness of risk management. committees like Audit, Risk, AML Committee position, and strength of its core earnings.
effective and robust governance structure n Anticipate and mitigate risk events before meets regularly to review the risk profile and Risk appetite is set and approved by the
with well-defined transparent and consistent they become a reality. take decision accordingly. Board and is overseen on an ongoing basis.
lines of responsibility. n Protect against possible losses.
n Risk culture: Promotion of strong risk culture n Integrate risk management in all levels of n Policies and Procedures: The Bank has also set risk tolerance level for
that support and provides appropriate decision making. The Bank has implemented policies/ different risk aspect such triggers level sets
standard and incentive for professional and n Ensure earnings stability. procedures to ensure that risk management risk appetite of the Bank and the amount of
responsible behavior. n Provide clear accountability and responsibility practices and process are effective at all levels uncertainty that Bank is willing to take. Risk
n Risk policies and process: Implementation for risk management and execution of sound risk management Tolerance levels are defined in quantitative
of policies to ensure that risk management n Define the Bank’s risk appetite and align process to actively identify, measure, control, aspects which also work as Key Risk Indicators
practices and process are effective at the Bank’s portfolios and business strategy monitor and report risk inherent in all which shall trigger remedial measures in case
all levels and execution of sound risk accordingly. products activities, process, systems and such indicators are crossed.
management process to actively identify, n Maintain the Bank’s capital adequacy and exposure.
measure, control, monitor and report risk liquidity position. n Risk Culture
inherent in all products activities, process, n Further strengthen governance, controls and n Risk Management Function Risk culture covers awareness, attitude
systems and exposure. accountability across the organization. There are guidelines on key responsibilities and behavior of staffs towards risk and
n Risk management infrastructure: To facilitate risk management Bank has and escalation and risk reporting model risk management. The Bank promotes
Ensure sufficient resources and systems following risk organizational structure in place: in the Bank. Risk Management Committee strong risk culture that support appropriate
infrastructures are in place to enable effective (RMC) reports to the Board of the Bank for standard for professional and responsible
risk management. key risk areas on a periodic basis. behavior. The bank has defined three line of
defense towards fostering risk culture across
n Appropriate Management Information organization: first (Branch/Strategic Business
System Units), second (Risk Units) and third (Internal
Sound and effective management information Audit).
BOARD OF DIRECTORS
system (MIS) is crucial for Bank’s credit
management. Information generated by MIS n Training
helps Senior Management/Board to take Training has been provided internally and
AML/KYC Committee Risk Management Committee Audit Committee HR Committee decisions regarding risks, credit portfolio externally as per need to enhance skill and
decisions, and estimate capital requirements knowledge in the area of risk management
on a meaningful and timely basis. The for the officials of the Bank.
Chief Executive Officer
Bank has an effective MIS that helps senior
management/board to take decisions 5.1.4. Board Level Committees
Chief Risk Officer Integrated Risk Management Committee regarding credit risk management. For effective management and active oversight
of risk, Bank’s board of directors has constituted
n Effective Internal Control and Limits four board level committees for oversight in
Information Security Risk Market Risk Credit Risk Credit Control Compliance Risk Operation Risk/AML/CFT Risk Others For the purpose of monitoring the risks with specific risks areas. Each committee has its own
the risk appetite of the Bank, approved risk standard operating guideline which defines
limits are in place. Internal controls are objectives, responsibilities and operating
embedded on day-to-day business and are procedures of the committee. Brief description of
the committees is given below:

370 NABIL BANK LIMITED ANNUAL REPORT 2022/23 371

5.1.4.1. Risk Management Committee Major roles and responsibilities of the Risk 5.1.4.2. Audit Committee security position of the Bank in respect of
The committee is constituted in line with the Management Committee are: The Committee is constituted and it functions exposure to credit risk, operations risk,
spirit of Risk Management Guidelines (RMG) n To devise appropriate risk management in compliance to the regulatory provisions of market risk and other risks.
of Nepal Rastra Bank and the NRB Unified system and procedures and obtain the NRB Unified Directives and the provisions of n Advising and recommending the board on
Directives. This committee highlights on risk board’s approval for its implementation. Sections 164 and 165 of Company Act 2063. management actions required for achieving
governance and identifies the need of a strong n To keep the directors informed on the The Committee’s role is extensive and strongly the desired level of effectiveness and
risk management framework, well defined adequacy and appropriateness of existing supports the board in dealing with aspects of compliance in response to above reviews.
risk management processes and effective risk risk identification and risk management good corporate governance, internal control,
assessment, measurement and mitigation system and contribute in the systems risks management, financial reporting, legal Recommending the board on appointing
mechanism. development. and regulatory compliance and ethical conduct statutory auditor, auditor’s remuneration and
n To regularly review the level of risk inherent of business. reviewing that the auditor’s actions in course
Member secretary of this committee is Bank’s to business activities, risk tolerance capacity, of the bank’s audit, do not contravene with
Chief Risk Officer (CRO) who leads the risk risk management strategy, policies and Member secretary of this committee is the applicable laws and provisions.
management function in the Bank. Within guidelines, and submit its observation reports Bank’s Head of Internal Audit function. Within
Bank’s organization structure, CRO has direct to the board on the adequacy of the same. the Bank’s organization structure, Head of 5.1.4.3. Anti Money
reporting line to board’s Risk Management n To receive risk management report from the Internal Audit has direct reporting line to Laundering (AML) Committee
Committee and a dotted line to the CEO. This management on regular basis and discuss board’s Audit Committee. Internal Audit is The Committee is constituted in line with the
structure ensures an effective independent risk on the methodology of risk assessment, conducted in line with the spirit of risk based provision of directives of the Nepal Rastra
management function with sufficient stature, evaluation, monitoring and control; and audit. Internal Auditors and Statutory Auditors Bank. The Committee oversees implementation
independence, resources and a direct access to submit necessary inputs to the board. have direct access to the Audit Committee. of Assets (Money) Laundering Prevention Act,
the board. n To conduct regular discussion and analysis 2064, Assets (Money) Laundering Prevention
of capital adequacy corresponding to risk The Audit Committee reviews and discusses a Rules, 2073, NRB Unified Directives and other
The Committee oversees overall risk asset, Internal Capital Adequacy Assessment number of internal audit reports, statutory audit legal and regulatory requirements related to
governance framework of the Bank. It Process (ICAAP), adequacy of systems and report and regulator’s inspection report. The prevention of money laundering. The committee
ensures that proper risk management policy policies in line of business strategy and risk Committee updates the board of its actions oversees risk arising from noncompliance of
and procedures are in place and effectively tolerance and provide necessary inputs/ by submitting copies of its minutes, which are AML policies and procedures based on national
practiced at all levels within the Bank. In suggestions to the board. discussed at board meetings. It also provides and international best practices.
doing so it assesses whether or not the Bank’s n To provide suggestions to the board for recommendations for strengthening the bank’s
policies and procedures are adequate and the development of policy and structures system of internal controls and its effectiveness Member secretary of this committee is the
implemented. It also reviews the adequacy according to central bank’s directives/ in practice. The committee also invites members Bank’s Head of AML and KYC, who reports
and effectiveness of Management Information guidelines, bank’s internal thresholds, from the Bank’s senior management team to the CRO, thereby ensuring independence
System and Internal Control System within the and national as well as international best for facilitating effective discussions on specific of this function within the Bank’s organization
Bank. practices. agenda on need basis. structure.
n To suggest the board on necessary policy
The Committee, on an ongoing basis, defines formulation or decision process based on Major responsibilities of the Audit Committee Major roles and responsibilities of the AML
and reviews risk appetite of the Bank in relation stress testing results. are: Committee are:
to overall business risk with specific focus on n To submit reports to the board with necessary n Reviewing the Bank’s overall system of n To review AML/CFT related policies and
credit risk, market risk, operation risk and suggestions after conducting analysis of the internal controls. programs and recommend its review/
liquidity risk. It advises the board on overall limit and rationale of the authority delegated n Reviewing observations and approval to the board as required.
risk tolerance levels of the bank throughout the by the board. recommendations made in audit reports n To review the quarterly reports on
strategic implementation process. By doing so, n To submit reports to the board on the issued by internal auditors, statutory auditors implementation status of the AML/CFT
it aims to achieve the following objectives: Bank’s asset structure and status of asset and regulators. framework in the Bank.
n To ensure that the Bank has developed mobilization, anticipation of income from n Reviewing the Bank’s financial statements n To provide feedback/recommendations to the
and implemented proper risk management their mobilization, increase or decrease in for accuracy and compliance in relation to board on issues pertaining to AML/CFT.
system as required by directives and risk their quality and the tasks performed by Asset prevailing financial reporting standards and n To accomplish any other additional
management guidelines of regulatory Liability Committee (ALCO). regulatory provisions. responsibilities that may be entrusted upon
authority. n To study impact on financial position of the n Reviewing compliance in relation to the the committee from time to time as per the
n To ensure adequacy and appropriateness of bank due to change in economy and submit Bank’s internal policy and prevailing requirement of prevailing laws, instructions/
the Bank’s risk management system. the report along with adequate mitigation regulatory and legal provisions. directions of the regulatory authority or the
strategies to the board. n Reviewing risk management systems and Bank’s board of directors.

372 NABIL BANK LIMITED ANNUAL REPORT 2022/23 373

To make assessment of AML/KYC risk to the The Bank’s objective in credit risk management set of skills for analyzing risks in these different Besides, periodic review of same by the Internal
Bank in national level perspective taking is to minimize the risk and maximize the credit functions and all of them report to the Audit Department or Statutory Audit also assists
consideration of events and factors happening risk adjusted rate of return by on-boarding Chief Risk Officer. Besides, the Bank has a in identifying the status of exposure/relationship
in domestic and international markets. and maintaining credit exposure within the system to check and analyze the health of credit in line with guiding documents of the Bank.
acceptable parameters. The Bank seeks portfolio minutely at each borrowing unit level Any weaknesses on the part of the business
5.1.4.4. Committee Relating to achieve this objective through effective irrespective of size of the exposure on defined of borrower and the relationship strength are
to Staff Services and Facilities implementation of its Credit Policy and periodic manner. At all times this system ensures independently assessed by Internal Audit and
The Committee is constituted in line with the its Investment Policy within its overall risk that any borrowing unit showing smoke signal the advice is taken positively for necessary
provision of directives of the Nepal Rastra Bank. management structure. These policy documents gets prompt doses of correction as deemed changes. Similarly, a separate division,
The Committee’s roles and responsibilities are guide on the dos and the donts in business appropriate. CreditAdministration Department (CAD)
extensive and the committee strongly supports generation. Any generation of risk assets and which has reporting lines to the COO and
the board in formulating policies, guidelines, their impact on long term value generation is The Bank makes credit extension decision by takes responsibility for exposure accounting,
and rules relating to human resource function. well deliberated in every credit proposal. Risks assessing each business proposal thoroughly. disbursement and settlement.
The Committee functions and discharges its and returns are properly weighed and risk It also ensures that the inherent credit risks that
duties and responsibilities in compliance to mitigating measures are explicitly spelled out. are associated with the business are addressed Within the Credit Risk Management, processes
regulatory requirements. appropriately through coverage of better safety are well defined where checking, control and
Credit Risk Management function is primarily margin, additional collateral back up and lower independence of the credit extension, risk
Major responsibilities of the Committee Relating divided into two units, Credit Control Division exposure to keep the business at low leverage. assessment, review, monitoring and exposure
to Staff Services and Facilities are: and Credit Risk Division. The heads of both accounting is fully complied with.
n To assist the board in the formulation/update credit risk management functions report There is separate Credit Administration
of human resource related policies. to Chief Risk Officer, thereby ensuring the Department (CAD), which prepares security All such actions and processes are properly
n To conduct periodic study and analysis of independence of credit risk function from documents and retains custody of same. This is a recorded, reported and discussed. These reports
remuneration structure of the Bank vis.a.vis. business generation. These divisions neither four eyes concept in verifying the security aspects on need basis and on a defined frequency are
industry. have any business level targets, nor have any in line with the approved conditions. CAD is put to the oversight of Senior Management,
n To recommend to the board revisions in pay incentive for growth in business. The Credit Risk also independent to business division and it Risk Management Committee and the Board.
scale within prevailing rules, guidelines. Division oversees risk at macro level, prepares ensures, on an ongoing basis, on the safety and Internal Audit Department of the Bank too
n To review systems and processes covering job plans, policies and other reference document, going concern of the borrowers, through post takes up the matter on credit observations and
description, key performance indicators and conducts credit risk review at portfolio level, relationship assessment. Periodic review of all discusses the same at Audit Committee. Senior
performance appraisal. and focuses on capacity development of credit accounts under credit exposure is one of the Management or the Board, on need basis, issue
n To develop plan, policy and standard of staffs. The division oversees global, macro, prudent practices that the Bank follows in order instructions as appropriate.
manpower planning related functions micro and unit level risk that arise out of daily to take necessary steps to avert/minimize the
such as recruitment and selection, business operation as well as out of changes risk. Quarterly on-site inspection of the borrower 5.1.6. Market Risk
appointment, placement, remuneration, in market conditions that affect particular and suggestion for timely corrective actions itself Market Risks are discussed at Asset Liability
transfer, promotion, career development, borrowing customers/counterparties. help protect borrowers as well. Besides, in case Management Committee (ALCO) of the Bank
performance appraisal, reward and any borrower faces difficulties and pose a risk to and even discussed at respective division level
punishment and labor relations. The Credit Control division is responsible for the Bank in terms of fall in the value of assets, on open position on daily basis. The limits for
n To review employee bye-laws, organization credit risk review/assessment of individual the Bank sets aside adequate loan loss provision. open position are controlled level wise, which
structure and succession planning. borrowers. It reviews credit proposals received Any business decision for credit exposure is taken ensures in-depth knowledge of the market and
from business division and assesses inherent only if it is vetted and approved by the credit movement before taking decision (by choice).
5.1.5. Managing Credit Risk credit risk of the proposal. The division risk division. Business generation unit singly The monthly reports on such aspects are well
Banking business in Nepal is exposed to credit conducts onsite/offsite reviews, reviews risk cannot take a credit exposure decision except on discussed and dealt in ALCO.
risk to a much larger extent and the Bank’s ratings, and supports capacity development of instrument purchase where security is instrument
business is also concentrated around its credit front line staffs. It also reviews credit lending itself and the loan gets settled once instrument is ALCO ensures functioning of the jobs in line
risk exposure. Bulk of the earnings is generated authorities assigned to credit business division realized. with the policies and procedures and suggests/
from credit related business, be it in form of and recommends CEO for delegation of credit recommends for necessary steps collectively
interest income, fee income or forex income. approval authority based such reviews. Bank has standardized Product Papers that to address the risk on interest rate movement,
The Bank operates in a dynamic economic stipulate proper governance and procedure exchange rate movement and equity price
environment where the margin between The Bank’s credit functions are broadly for all credit relationship. Similarly, periodic changes.
performing assets and non-performing assets categorized as Large and Corporate (including monitoring of business and annual review of
can often be very thin. Therefore, it is always infrastructure financing), SME and Retail credit. credit relationship provides the Bank a fair idea Most of the market operations (investments)
a major threat that any of the Bank’s credit Credit Control Division is manned with separate on whether or not to continue the relationship. are done from the Treasury Front Office which
exposure may experience default.

374 NABIL BANK LIMITED ANNUAL REPORT 2022/23 375

directly reports to the CEO and exposure Bank has separate division to oversee operation In operations, the Bank has put in place sufficient capital/cushion for perceived
accounting including booking of income/ risk including Compliance of KYC and AML. a maker and checker concept in which a operational risks.
expense is done from Treasury Back Office The division is headed by senior level staff with transaction has to compulsorily go through
(TBO) which reports to the Chief Operating adequate access to the daily report, operational two individuals from a control standpoint with 5.1.8. Liquidity Risk
Officer. processes and right to recommend the changes proper transaction right to capture deviations, Liquidity risk is the Bank’s inability to meet its
in the system and procedures. The head of if any. Similarly, MIS Reports are generated contractual and contingent financial obligations
Overall investment made and necessary operation risk directly reports to the Chief Risk to check correctness of transactions and any as they fall due, without incurring unacceptable
analysis of the investments, including Officer. Bank has SIMs (Standing Instruction errors are promptly addressed and rectified. losses. The obligations could be both ‘On’ and
appropriate suggestions, are issued from Manuals) for all businesses of the Bank. All The activities of a personnel and division / ‘Off’ balance sheet. By the inherent nature of its
Treasury Middle Office (TMO) which reviews the the activities are undertaken in line with the branch can be viewed and monitored centrally business model, banks are always vulnerable to
portfolio periodically. TMO is independent from set criteria in the SIMs, policies and guidelines through an integrated system, which helps liquidity and solvency problems that can arise
other treasury units and reports to Chief Risk including Directives and circulars from central in minimizing the risk of misconduct, if any. from mismatches in the tenor of its assets and
Officer. Any credit impairment in the investment bank. Similarly, daily functions at operations The Bank has an on-line replication Disaster liabilities.
books are accounted for, for fair assessment of are independently reported through separate Recovery Site (DRS) which captures the record
the portfolio. reporting line other than business generation of each transaction that takes place at the The Bank’s primary liquidity risk management
and credit risk where independence of checking Production Server. Both the sites (Production objective is to assess the funding requirement
The Bank assesses the open position on daily and control is complied with. Server and Disaster Recovery – Back up site) towards meeting its obligations and to
basis and calculates risk exposure for allocation are housed in well-conditioned and high ensure that adequate funds are available at
of required capital in line with Basel provisions. Processes are reviewed periodically so that shock resistant buildings and are at different appropriate times, both under normal and
Likely impact on earnings due to change in the their perfection can be weighed and any seismic zone, far from each other. DRS is stressed conditions. Towards this the Bank has
market condition and change in the standing of shortcoming can be addressed. Most of the outsourced to a professionally managed its ALCO functioning as the main platform
the counterparty are well assessed periodically functions, like line approval, bill payment, company having expertise in the sector. Drill for its liquidity risk management. The ALCO
and necessary actions are taken as appropriate. loan disbursement, are centralized which is being done periodically and is being tested reviews the liquidity risk management policies
controls activities that can cause errors due occasionally to assess the functioning of DRS. and procedures. Setting and reviewing liquidity
Treasury Front Office (TFO) is equipped with to inadequate knowledge on the part of staff. targets, reviewing liquidity concentrations,
advanced dealing platform for timely and Similarly, awareness to the public is made Each desktop is implemented with Active assessing default probability of liquid assets,
effectively concluding the deals. Similarly, the on our services and products periodically by Directory System (ADS) which does not allow diversifying sources of funding and maturity
unit is equipped with modern and advanced placing notices in the website of the Bank, or in user to take away the data in devices like of deposits, monitoring the liquidity impact of
information system on global news, market branches or publishing notices as appropriate. data traveler (pen drive) or bring in data for off-balance sheet transactions are some of the
movements and any incidents so that bank can Staffs are given orientation on the job including processing or any other purposes posing primary jobs of the ALCO towards achieving
manage and maintain the position favorably. that of system of the Bank before they are threat to the repository. Similarly, individual effective asset liability management.
The Bank in line with Basel provisions calculates placed for the job and are guided to follow data in desk are also stored and backed up in
risk exposure and allocates sufficient capital/ the SIMs for the job. Any staff for the first periodic interval at data center so that any loss The ALCO uses tools such as structural liquidity
cushion for perceived market risks. time in any job is put under the supervision of of data in desktop can be retrieved from data statements, interest rate risk monitoring tables,
an experienced staff and is allowed to work center. stress test reports, and liquidity profile of the
5.1.7. Operation Risk independently after attaining required skills. Bank and that of the industry, liquidity ratio
Operations Risk that arises out of inefficient Bank has Whistle Blowing Policy to report to The Bank has a separate Legal division which analysis, and trend analysis and forecasting
processes and people inside and outside the senior or management directly on anyone’s is adequately manned by qualified and in reviewing and managing the liquidity risk.
Bank is increasing these days. Operation risk, suspicious conduct outside and inside the experienced staff. All legal agreements, deeds Minutes of the ALCO meeting are discussed at
market risk and other risks are discussed in Bank. Skill development and skill enhancement and documents including claims and charges the board meetings to ensure senior oversight.
the Asset Liability Management Committee programs are conducted on periodic basis are thoroughly studied prior to making
(ALMC) in line with ALM Policy. Banking System and staffs identified for the program get the any decision involving such documents. The Bank mitigates liquidity risk by maintaining
(BS) is another area of concern and vulnerable opportunity for training, seminar and workshop. Compliance with existing rules and regulations adequate liquid assets towards meeting its short
to threats from outside. Information and Adequate numbers of trainings are conducted and business practices practiced globally and term and predictable outflows. Liquid funds are
Technology Division in the Bank reviews and and staffs required with training are given the locally are taken into account before arriving parked in many institutions and instruments to
checks the security aspects in line with IT Policy opportunity for skill enhancement. Knowledge at the decision. Professional services of experts achieve the required diversification.
of the Bank. Bank has conducted an IS Audit sharing is one of the core methods of skill are sought after wherever the Bank needs
of the Bank’s system and suggestions given development. If a staff gets any training, s/he is expert's opinion on pertinent issues. Contingency funding arrangements are in
by the audit with respect to safety and security encouraged to share the same among the peers place in the form of unutilized credit limits in
standards are being put in place. in the division/branch. The Bank in line with Basel provisions inter-bank market and the accessibility to the
calculates risk exposure and allocates repo market. In normal circumstances the Bank

376 NABIL BANK LIMITED ANNUAL REPORT 2022/23 377

operates with adequate buffer liquidity over the The Group measures fair value of an instrument fair value of that instrument is evidenced by rates, risk premiums in estimating discount
regulatory required liquidity ratios and has been at active market price without adjustment for comparison with other observable current rates, bond and equity prices, foreign exchange
able to manage its liquidity risk satisfactorily. factors such as transaction costs. market transactions in the same instrument, rates, expected price volatilities and corrections.
i.e. without modification or repackaging, or
5.1.9. Legal and compliance risk Level 2 based on a valuation technique whose variables Fair values reflect the credit risk of the
management Fair value measurements are derived based on include only data from observable markets. instrument and include adjustments to take
The Bank has a separate Legal division which observable inputs, which are either observed account of the credit risk of counterparties
is adequately manned by qualified and directly such as in terms of prices or observed When transaction price provides the best involved where appropriate. Fair value
experienced staff. All legal agreements, deeds indirectly such as in terms of factors that are evidence of fair value at initial recognition, the estimates obtained from models are adjusted
and documents including claims and charges derived from prices. Such observable inputs financial instrument is initially measured at the for any other factors, such as liquidity risk
are thoroughly studied prior to making any include: transaction price and any difference between or model uncertainties; to the extent that the
decision involving such documents. In case this price and the value subsequently obtained Group assumes a third-party market participant
where the Bank needs expert’s opinion on n quoted prices for similar instruments in active from a valuation model is subsequently would take them into account in a pricing
particular issue, experts from the industry are markets; recognized in profit or loss on an appropriate transaction.
consulted. n quoted prices for identical or similar basis over the life of the instrument but not later
instruments in inactive markets; than when the valuation is supported wholly by
Bank has a separate division to oversee n financial instruments are valued using observable market data or the transaction is
operation risk including Compliance of KYC models where all significant inputs are closed out. 5.1.10.2. Financial assets and liabilities
and AML. The division is headed by senior level observable. measured at fair value
official with adequate access to the daily report, Level 3 The Group carries the following financial
operational processes and right to recommend If a market for a financial instrument is Fair value measurements are derived using instruments at fair value:
the changes in the system and procedures. The not active, then the Group establishes fair valuation techniques in which current market
head of Operation Risk and AML/CFT directly value using a valuation technique. Valuation transactions or observable market data are n derivative financial instruments
reports to the Chief Risk Officer. techniques include using recent arm’s length not available. Under this, instruments are fair n trading assets (equities and mutual funds
transactions between knowledgeable, willing valued using valuation models which have been measured at FVTPL)
5.1.10. Fair value of financial assets and parties (if available), reference to the current tested against prices or inputs to actual market n equity investments measured at FVTOCI
liabilities fair value of other instruments that are transactions and make use of the Group’s
substantially the same, discounted cash flow best estimate of the most appropriate model Derivative financial instruments such as forward
5.1.10.1. Fair value hierarchy analysis and option pricing models. assumptions. Unobservable inputs have a foreign exchange contracts are valued using
All financial assets and financial liabilities for significant effect on the instrument's value. forward pricing model which incorporates
which fair value is measured or disclosed in the The chosen valuation technique makes various inputs (Level 2) including foreign
financial statements are categorized within the maximum use of market inputs, relies as Valuation models are adjusted to reflect the exchange spot and forward premiums.
following fair value hierarchy, which reflects the little as possible on estimates specific to the spread for bid and ask prices to reflect costs to
significance of the inputs used in making the Group, incorporates all factors that market close out positions, credit and debit valuation Investment in equity instruments and mutual
measurement, ranging from Level 1 inputs to participants would consider in setting a price, adjustments, liquidity spread and limitations in funds are valued at closing market prices
Level 3 inputs. and is consistent with accepted economic the models. Also, profit or loss calculated when (Level 1) for quoted securities. Where quoted
methodologies for pricing financial instruments. such financial instruments are first recorded securities are not frequently traded to guarantee
Level 1 (day 1 profit or loss) is deferred and recognized a fair market value, those are valued using
Fair value measurements are derived based on Inputs to valuation techniques reasonably only when the inputs become observable or on observable market inputs taking reference
the input of unadjusted quoted market prices represent market expectations and measures de- recognition of the instrument. price of similar securities (Level 2). Where the
in an active market, for identical instruments. of the risk-return factors inherent in the securities are unquoted, those are valued at net
These could be stock exchanges or dealer financial instrument. The Group calibrates Valuation techniques include, among others, worth per share (Level 3).
price quotations (assets and long positions are valuation techniques and tests them for validity applying Net Present Value and Discounted
measured at a bid price, liabilities and short using prices from observable current market Cash Flow Models over similar instruments Information on financial instruments carried
positions are measured at an asking price), transactions in the same instrument or based on for which observable market prices exists and at fair value and their position in the fair value
without any deduction for transaction costs. other available observable market data. comparing the results. hierarchy is presented below.

A market is considered as active if transactions The best evidence of the fair value of a Assumptions and inputs used in valuation
for assets or liabilities take place with sufficient financial instrument at initial recognition is models include risk-free and benchmark interest
frequency and volume to provide reliable the transaction price, i.e. the fair value of the
pricing information on an arm’s length basis. consideration given or received, unless the

378 NABIL BANK LIMITED ANNUAL REPORT 2022/23 379

Group - at 16-Jul-2023 (2080 Ashadh 31) 5.1.10.3. Fair value determination of Capital planning is an integral part of the
NPR
financial assets measured at FVTOCI Bank’s medium term strategic planning and
LEVEL 1 LEVEL 2 LEVEL 3
The Group has classified certain investments annual budget formulation process. Total
Other Trading Assets 92,810,034 - - made in equity instruments and in mutual fund risk weighted exposures for the projected
- Equity instruments - quoted 92,810,034 - - units as financial assets measured at FVTOCI. level of business operations is calculated, the
- Equity instruments - not quoted - - - Equity Instrument wise details of financial assets required capital level is projected, and a plan is
- Mutual Funds Units - - - measured at FVTOCI is presented in Note formulated to maintain the required capital.
Equity Investments measured at FVTOCI 1,525,709,047 - 5,566,527,717 4.8.3. Information for the Group and the Bank
- Equity instruments - quoted 379,557,340 - 4,609,752,476
are the same because the Subsidiary has not Ever since its establishment 34 years ago,
- Equity instruments - not quoted - - 956,775,241
classified any financial assets at FVTOCI. the Bank has been able to generate and
- Mutual Funds Units 1,146,151,707 - -
retain substantial earnings in order to ensure
Total 1,618,519,081 - 5,566,527,717
5.2. Capital Management adequate capital formation, as required for its
Capital is crucial component in any business business growth. The Bank is well capitalized
Bank - at 16-Jul-2023 (2080 Ashadh 31) and even more so in case of banks. Hence, and able to maintain the required capital
NPR bank capital is regulated so as to withstand through internal generation, and equally
LEVEL 1 LEVEL 2 LEVEL 3 the impact of adverse developments in its through other means if needed.
internal operations and its external operating
Other Trading Assets - - -
environment. Similarly, the Bank needs to 5.2.1. Qualitative disclosures
- Equity instruments - quoted - - -
- Equity instruments - not quoted - - -
maintain sufficient capital for business growth. The bank has issued no new capital instruments
- Mutual Funds Units - - - The Bank has adopted ICAAP and it follows Risk in the reporting period.
Equity Investments measured at FVTOCI 1,459,453,466 - 5,566,527,717 Management Guidelines while taking decision
- Equity instruments - quoted 353,290,023 - 4,609,752,476 on any business.
- Equity instruments - not quoted - - 956,775,241
- Mutual Funds Units 1,106,163,443 - -
Total 1,459,453,466 - 5,566,527,717

Group - at 16-Jul-2022 (2079 Ashadh 32)

NPR
LEVEL 1 LEVEL 2 LEVEL 3

Other Trading Assets 192,282,454 - -

- Equity instruments - quoted 148,295,803 - -
- Equity instruments - not quoted - - -
- Mutual Funds Units 43,986,651 - -
Equity Investments measured at FVTOCI 1,419,426,623 - 5,260,750,895
- Equity instruments - quoted 380,322,632 - 4,549,349,830
- Equity instruments - not quoted - - 711,401,065
- Mutual Funds Units 1,039,103,991 - -
Total 1,611,709,078 - 5,260,750,895

Group - at 16-Jul-2022 (2079 Ashadh 32)

NPR
LEVEL 1 LEVEL 2 LEVEL 3

Other Trading Assets 29,728,860 - -

- Equity instruments - quoted 29,728,860 - -
- Equity instruments - not quoted - - -
- Mutual Funds Units - - -
Equity Investments measured at FVTOCI 1,355,686,046 - 5,260,750,895
- Equity instruments - quoted 316,582,055 - 4,549,349,830
- Equity instruments - not quoted - - 711,401,065
- Mutual Funds Units 1,039,103,991 - -
Total 1,385,414,906 - 5,260,750,895

380 NABIL BANK LIMITED ANNUAL REPORT 2022/23 381

5.2.2. Quantitative disclosures Tier II Capital and a breakdown of its Components
NPR
AMOUNT
5.2.2.1. Capital structure and capital adequacy
PARTICULARS NABIL GROUP
Tier I Capital and a breakdown of its Components
NPR
a. Cumulative and/or Redeemable Preference Share - -
AMOUNT
b. Subordinated Term Debt 3,950,367,779 3,950,367,779
PARTICULARS NABIL GROUP c. Hybrid Capital Instruments - -
d. Stock Premium - -
Tier 1 Capital (Core Capital) (CET1 +AT1)
e. General loan loss provision 5,685,617,198 5,685,617,198
Common Equity Tier 1 (CET 1)
f. Exchange Equalization Reserve 787,712,612 787,712,612
a. Paid up Equity Share Capital 27,056,996,729 27,056,996,729
g. Investment Adjustment Reserve 6,720,573 6,720,573
b. Equity Share Premium - -
h. Assets Revaluation Reserve - -
c. Proposed Bonus Equity Shares - -
i. Other Reserves 22,373,837 1,621,835,064
d. Statutory General Reserves 13,905,322,355 13,928,154,820
Supplementary Capital (Tier II) 10,452,791,999 12,052,253,226
e. Retained Earnings 3,187,059,423 3,372,742,779
f. Un-audited current year cumulative profit/(Loss) - -
g. Capital Redemption Reserve - -
Detailed information about the Subordinated Term Debts with information on the outstanding amount,
h. Capital Adjustment Reserve (Debenture Redemption Reserve) 2,256,740,221 2,256,740,221
maturity, amount raised during the year and amount eligible to be reckoned as capital funds:
i. Dividend Equalization Reserves - -
j. Dividend Redemption Reserve - TITLE NABIL DEBENTURE 2082 NABIL DEBENTURE 2085 NBBL DEBENTURE 2085
k. Bargain Purchase Gain - -
Face Value NPR 1,000 per unit NPR 1,000 per unit NPR 1,000 per unit
l. Other Free Reserve 1,652,546,297 1,652,546,297
Maturity Period 7 Years 7 Years 10 Years
m. Less: Goodwill - -
Interest Rate 10% p.a. 5% p.a. 10.25% p.a.
n. Less: Intangible Assets (153,472,917) (155,231,614)
No. of Units Issued 2 million units 2.207 million units 2 million units
o. Less: Deferred Tax Assets - -
Issue Size NPR 2 billion NPR 2.207 billion NPR 2 billion
o. Less: Fictitious Assets - -
p. Less: Investment in equity in licensed Financial Institutions - -
q. Less: Investment in equity of institutions with financial interests (1,798,000,000) (1,798,000,000)
r. Less: Investment in equity of institutions in excess of limits - - The amount of debenture outstanding netted off by the amount of debenture redemption reserve is included in Tier II capital.
s. Less: Investments arising out of underwriting commitments - - The debenture redemption reserve of NPR 2.26 billion is eligible for inclusion under Tier I Capital.
t. Less: Reciprocal crossholdings - -
u. Less: Purchase of land & building in excess of limit & unutilized - - Deductions from Capital:
v. Less: Cash Flow Hedge - - The bank has deducted the following items in calculation of Tier I Capital Fund:
w. Less: Defined Benefit Pension Assets - - n NPR 153.47 million in Software applications (net)
x. Less: Unrecognized Defined Benefit Pension Liabilities - - n NPR 1.798 billion invested in the equity capital of the subsidiary companies
y. Less: Negative balance of reserve accounts (32,957,643) (32,957,643) n NPR 32.96 million in negative balance of actuarial reserve
z. Less: Other Deductions - -
Adjustments under Pillar II - -
Total Qualifying Capital
Less: Shortfall in Provision (6.4 a 1) - - NPR
Less: Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) - - AMOUNT
Common Equity Tier 1 (CET 1) 46,074,234,465 46,280,991,590 QUALIFYING CAPITAL NABIL GROUP
a. Perpetual Non Cumulative Preference Share Capital - -
b. Perpetual Debt Instruments - - Core Capital (Tier 1 Capital) 46,074,234,465 46,280,991,590
c. Stock Premium - - Supplementary Capital (Tier II) 10,452,791,999 12,052,253,226
Additional Tier 1 (AT1) - - Total Capital Fund (Tier I and Tier II) 56,527,026,464 58,333,244,816
Tier 1 Capital (Core Capital) (CET1 +AT1) 46,074,234,465 46,280,991,590

Capital Adequacy Ratio NPR

AMOUNT
CAPITAL ADEQUACY RATIOS NABIL GROUP

Common Equity Tier 1 Ratio 10.22% 10.26%

Core Capital Ratio – Tier I 10.22% 10.26%
Total Capital Ratio – Tier I + Tier II 12.54% 12.93%

382 NABIL BANK LIMITED ANNUAL REPORT 2022/23 383

Summary of the Bank’s internal approach minimize their impact. Increasing complexities Risk Weighted Exposures under each 11 Categories of Credit Risk NPR
to assess the adequacy of its capital to in risks, vulnerabilities of businesses and fast RISK WEIGHTED EXPOSURE

support current and future activities, if changing world with intense competition pose CATEGORIES OF CREDIT RISK NABIL GROUP
applicable: a threat to sustainability. The Bank, in order to 1. Claims on Government and Central Bank - -
address the varieties of risk that keep coming out 2. Claims on Other Financial Entities - -
Nabil Bank adopts robust risk management of business operations, has identified different 3. Claims on Banks 5,419,854,061 5,470,526,684
framework. The Bank’s policies and procedures risks and adopted different measures to minimize 4. Claims on Domestic Corporates and Securities Firms 198,413,592,602 198,413,592,602
that guides on management of risk are approved them. 5. Claims on Regulatory Retail Portfolio 37,113,163,170 37,113,163,170
by the Board of Directors. These documents guide 6. Claims secured by residential properties 11,915,430,005 11,915,430,005
on independent identification, measurement and Capital planning is an integral part of the Bank’s 7. Claims secured by Commercial real estate 3,557,715,022 3,557,715,022
management of risks across various businesses. medium term strategic planning and annual 8. Past due claims 14,677,287,043 14,677,287,043
budget formulation process. Total risk weighted 9. High Risk claims 61,462,016,404 61,707,532,625
10. Other Assets 14,208,448,620 14,310,840,104
The Bank follows Internal Capital Adequacy exposures for the projected level of business is
11. Off Balance Sheet Items 76,918,988,052 76,918,988,052
Assessment Process (ICAAP) and Risk Management calculated, the required capital level is projected,
Total Credit Risk Weighted Exposure 423,686,494,980 424,085,075,308
Guideline while taking decision on any business. and a plan is formulated to retain the required
It has always taken note of ICAAP and has taken capital.
steps accordingly in ensuring soundness of capital
Total Risk Weighted Exposure Calculation Table NPR
position and sustainability of the business. Bank’s Ever since its establishment, the Bank has been
different committees like Audit Committee, Risk able to generate and retain substantial earnings AMOUNT
RISK WEIGHTED EXPOSURES NABIL GROUP
Management Committee review the business and in order to ensure adequate capital formation,
risks periodically and take account of stress test as required for its business growth. The Bank is Credit Risk Exposure 423,686,494,980 424,085,075,308
results, scenario analysis so as to align risk, return well capitalized and able to maintain the required Operational Risk Exposure 14,828,502,489 14,828,502,489
and capital in sustainable manner. capital through internal generation, and equally Market Risk Exposure 1,312,777,156 1,312,777,156
through capital markets if needed. Adjustments under Pillar II
While emanating businesses in the bank, Add: 2% of the total RWE under Supervisory Review 8,796,555,493 8,804,527,099
principles of risk, return, capital charge and return Summary of the terms, conditions and Add: 3% Capital Charge for Operational Risk 2,104,780,018 2,135,444,805
Total Risk Weighted Exposures 450,729,110,136 451,166,326,857
against capital consumption (charge) are taken main features of all capital instruments,
Total Core Capital Fund 46,074,234,465 46,280,991,590
into account. The bank also defines risk aspects, especially in case of subordinated term
Total Capital Fund 56,527,026,464 58,333,244,816
taking stock of domestic economic scenario, and debts including hybrid capital instruments.
Common Equity Tier 1 Capital to Total Risk Weighted Exposures 10.22% 10.26%
puts in place the system to minimize and remove Total Tier 1 Capital to Total Risk Weighted Exposures 10.22% 10.26%
such risk. The risk appetite and approach towards The Bank has not raised any capital through Total Capital Fund to Total Risk Weighted Exposure 12.54% 12.93%
risk taking is well discussed in management level hybrid capital instruments.
and board level. It is always aligned with the
business, its return and capital. Information on the terms, conditions and main Amount of Non-Performing Assets (Both Gross and Net)
NPR
features of debenture issued by the Bank is stated
CURRENT YEAR
Basel disclosures have been complied with, in the preceding Note 5.2.2.1.
GROSS AMOUNT LOSS PROVISION NET AMOUNT
addressing the risks and adopting measures to
Performing Loans
a Pass 307,053,420,802 3,954,463,679 303,098,957,123
5.2.2.2. Risk Exposure b Watchlist 18,632,522,244 921,111,720 17,711,410,524
Risk weighted exposures for Credit Risk, Market Risk and Operational Risk c Restructured due to COVID 4,198,776,526 809,938,826 3,388,837,700
NPR
Total 329,884,719,572 5,685,514,225 324,199,205,347
AMOUNT

RISK WEIGHTED EXPOSURES NABIL GROUP

Non-Performing Loans
Risk Weighted Exposure for Credit Risk 423,686,494,980 424,085,075,308 a Restructured and rescheduled 202,055,697 109,224,959 92,830,739
Risk Weighted Exposure for Operational Risk 14,828,502,489 14,828,502,489 b Sub-Standard 2,691,129,248 653,925,273 2,037,203,975
Risk Weighted Exposure for Market Risk 1,312,777,156 1,312,777,156 c Doubtful 3,626,887,057 1,796,563,046 1,830,324,011
Add: 2% of the total RWE add by Supervisory Review 8,796,555,493 8,804,527,099 d Loss 5,049,963,492 4,987,678,190 62,285,302
Add: 3% Capital Charge for Operational Risk 2,104,780,018 2,135,444,805 Total 11,570,035,494 7,547,391,468 4,022,644,027
Total Risk Weighted Exposures (a+b+c) 450,729,110,136 451,166,326,857 Grand Total 341,454,755,067 13,232,905,693 328,221,849,374

384 NABIL BANK LIMITED ANNUAL REPORT 2022/23 385

 NPR 5.3. Classification of financial assets and financial liabilities
PREVIOUS YEAR Financial assets and financial liabilities are measured on an ongoing basis either at fair value or at amortized cost. The
GROSS AMOUNT LOSS PROVISION NET AMOUNT summary of significant accounting policies describes how different classes of financial assets and financial liabilities are
Performing Loans measured, and how income and expenses, including fair value gains and losses, are recognized.
a. Pass 284,958,946,914 3,719,432,655 281,239,514,259
b. Watchlist 13,185,316,584 769,945,139 12,415,371,444 The following tables provide a reconciliation of the carrying amounts of financial assets and financial liabilities presented in the
c. Restructured due to COVID 5,922,610,703 296,130,535 5,626,480,167 consolidated statement of financial position and as per their classification in accordance with NFRS 9.
Total 304,066,874,200 4,785,508,329 299,281,365,871
Group - at 16-Jul-2023 (2080 Ashadh 31)
Non-Performing Loans NPR
a. Restructured and rescheduled 209,657,641 110,103,840 99,553,801
MEASURED AT FAIR VALUE MEASURED AT
b. Sub-Standard 1,651,813,071 407,923,726 1,243,889,346
FVTPL FVTOCI AMORTIZED COST TOTAL
c. Doubtful 1,253,086,163 621,996,209 631,089,955
d. Loss 1,889,482,849 1,881,432,705 8,050,144 Financial Assets :
Total 5,004,039,725 3,021,456,478 1,982,583,246 Cash and Cash Equivalents - - 6,963,371,006 6,963,371,006
Grand Total 309,070,913,925 7,806,964,807 301,263,949,117 Due from Nepal Rastra Bank - - 25,652,421,459 25,652,421,459
Placement with BFIs - - 13,424,389,863 13,424,389,863
Derivative Financial Instruments 3,833,462,094 - - 3,833,462,094
Other Trading Assets 92,810,034 - - 92,810,034
5.2.3. Compliance with external requirement Loans and Advances to BFIs - - 8,283,059,448 8,283,059,448
The Bank is subject to compliance requirement under NRB Directive No.1/79 which stipulated a minimum Total Capital Loans and Advances to Customers - - 331,123,170,655 331,123,170,655
Adequacy Ratio (CAR) of 11.00%. The Bank complied with this requirement at all times during the reporting period. Compliance Investment Securities - - - -
position at the reporting date is presented hereunder: Total Financial Assets 3,926,272,128 - 385,446,412,431 389,372,684,559
Financial Liabilities :
CAPITAL PARAMETER REQUIREMENT NABIL BANK
Due to BFIs - - 6,277,712,006 6,277,712,006
Due to Nepal Rastra Bank - - - -
Minimum Common Equity Capital Ratio 4.50% 8.22%
Derivative Financial Instruments 3,812,946,431 - - 3,812,946,431
Capital Conversation Buffer 2.00% 2.00%
Deposits from Customers - - 395,199,005,619 395,199,005,619
Minimum common equity plus capital conservation buffer 7.00% 10.22%
Debt Securities Issued - - 6,486,982,412 6,486,982,412
Minimum Tier 1 Capital (Excluding conservation buffer) 6.00% 8.22%
Subordinated Term Debt - - - -
Minimum Total Capital (Excluding conservation buffer) 8.50% 10.54%
Total Financial Liabilities 3,812,946,431 - 407,963,700,037 411,776,646,468
Minimum Total Capital (Including conservation buffer) 11.00% 12.54%
Leverage Ratio 4.00% 6.62%

Bank - at 16-Jul-2023 (2080 Ashadh 31) NPR

MEASURED AT FAIR VALUE MEASURED AT
FVTPL FVTOCI AMORTIZED COST TOTAL

Financial Assets :
Cash and Cash Equivalents - - 6,774,258,189 6,774,258,189
Due from Nepal Rastra Bank - - 25,652,421,459 25,652,421,459
Placement with BFIs - - 13,424,389,863 13,424,389,863
Derivative Financial Instruments 3,833,462,094 - - 3,833,462,094
Other Trading Assets - - - -
Loans and Advances to BFIs - - 8,283,059,448 8,283,059,448
Loans and Advances to Customers - - 331,123,170,655 331,123,170,655
Investment Securities - - - -
Total Financial Assets 3,833,462,094 - 385,257,299,614 389,090,761,708
Financial Liabilities :
Due to BFIs - - 6,277,712,006 6,277,712,006
Due to Nepal Rastra Bank - - - -
Derivative Financial Instruments 3,812,946,431 - - 3,812,946,431
Deposits from Customers - - 396,843,499,228 396,843,499,228
Debt Securities Issued - - 6,486,982,412 6,486,982,412
Subordinated Term Debt - - - -
Total Financial Liabilities 3,812,946,431 - 409,608,193,646 413,421,140,077

386 NABIL BANK LIMITED ANNUAL REPORT 2022/23 387

Group - at 16-Jul-2022 (2079 Ashadh 32) NPR
5.4. Operating Segment The products and services offered by the Bank
Information for the Bank can be broadly divided into the following
MEASURED AT FAIR VALUE MEASURED AT
categories:
FVTPL FVTOCI AMORTIZED COST TOTAL
5.4.1. General Information
Financial Assets :
n Financial Intermediation: The core business
Cash and Cash Equivalents - - 11,213,405,777 11,213,405,777
(a) Factors that management used of deposit mobilization and lending activities
Due from Nepal Rastra Bank - - 13,037,239,444 13,037,239,444
to identify the entity's reportable segments along with other auxiliary banking services
Placement with BFIs - - 8,870,895,241 8,870,895,241
The Bank has adopted “Management other than treasury, cards and trade finance
Derivative Financial Instruments 1,373,614,068 - - 1,373,614,068
Other Trading Assets 192,282,454 - - 192,282,454 Approach” for identifying the operating operations are reported under financial
Loans and Advances to BFIs - - 10,366,938,262 10,366,938,262 segments i.e. seven segments based on the intermediation.
Loans and Advances to Customers - - 300,205,652,927 300,205,652,927 geographic locations of its offices in the 7
Investment Securities - 6,680,177,518 56,516,704,863 63,196,882,381 provinces of the country. Interest earnings and n Treasury Operations: The Bank's entire
Total Financial Assets 1,565,896,522 6,680,177,518 400,210,836,514 408,456,910,554 foreign exchange gains/losses generated while investment book and foreign currency
Financial Liabilities : conducting businesses under different segments operations comes under treasury operations.
Due to BFIs - - 3,353,609,544 3,353,609,544 are reported under the respective segment. Treasury is responsible for overall liquidity
Due to Nepal Rastra Bank - - 4,657,437,355 4,657,437,355 Equity and Tax Expense are not allocated to the management, open market operations and
Derivative Financial Instruments 1,390,736,904 - - 1,390,736,904
individual segments. For segmentation purpose, investment portfolio.
Deposits from Customers - - 326,186,071,792 326,186,071,792
all business transactions of offices and business
Debt Securities Issued - - 6,484,843,749 6,484,843,749
units located in a particular province are n Trade Finance Operations: The Bank's entire
Subordinated Term Debt - - - -
grouped together. All transactions between the trade finance operations like LC, Guarantee
Total Financial Liabilities 1,390,736,904 - 340,681,962,440 342,072,699,344
units are conducted on arm's length basis, with are handled by trade finance.
intra unit revenue and cost being nullified at the
bank level. n Cards, e-banking and alternate channels: All
the debit and credit card issuance, merchant
Bank - at 16-Jul-2022 (2079 Ashadh 32) NPR
(b) Description of the types of products and relationships, e-banking, m-banking and
MEASURED AT FAIR VALUE MEASURED AT services from which each reportable segment ATM management are reported here.
FVTPL FVTOCI AMORTIZED COST TOTAL derives its revenues
Financial Assets :
Cash and Cash Equivalents - - 11,051,539,126 11,051,539,126
Due from Nepal Rastra Bank - - 13,037,239,444 13,037,239,444
Placement with BFIs - - 8,870,895,241 8,870,895,241
Derivative Financial Instruments 1,373,614,068 - - 1,373,614,068
Other Trading Assets 29,728,860 - - 29,728,860
Loans and Advances to BFIs - - 10,366,938,262 10,366,938,262
Loans and Advances to Customers - - 300,205,652,927 300,205,652,927
Investment Securities - 6,616,436,941 55,838,607,453 62,455,044,394
Total Financial Assets 1,403,342,928 6,616,436,941 399,370,872,453 407,390,652,322
Financial Liabilities :
Due to BFIs - - 3,353,609,544 3,353,609,544
Due to Nepal Rastra Bank - - 4,657,437,355 4,657,437,355
Derivative Financial Instruments 1,390,736,904 - - 1,390,736,904
Deposits from Customers - - 326,222,310,372 326,222,310,372
Debt Securities Issued - - 6,484,843,749 6,484,843,749
Subordinated Term Debt - - - -
Total Financial Liabilities 1,390,736,904 - 340,718,201,020 342,108,937,924

388 NABIL BANK LIMITED ANNUAL REPORT 2022/23 389

 5.4.3. Measurement of operating
NPR

50,692,808,350
65,937,913,125
10,312,455,374
46,251,162,764
(28,502,320,274)
17,748,842,491
(503,209,614)
10,312,455,374

402,687,105,406
339,406,230,103
-

(5,426,269,148)
481,203,547,746
424,290,869,339
TOTAL

segment profit or loss, assets and liabilities C. Nature of any differences between the
A. Basis of accounting for any transactions measurements of the reportable segment's
between reportable segments: assets and the entity's assets.
Interest earnings and foreign exchange gains/ None
losses generated while conducting businesses

Other material non-cash items

KARNALI SUDUR PASHCHIM

905,403,467
818,994,952
45,159,363
1,104,367,109
(377,302,603)
727,064,506
(11,172,511)
45,159,363

6,122,538,424
8,739,933,409
-

(324,589,249)
9,277,141,631
9,277,141,631
under different segments are reported under D. Nature of any changes from prior periods in
the respective segment. Equity and Tax Expense the measurement methods used to determine
are not allocated to the individual segments. reported segment profit or loss and the effect, if
For segmentation purpose, all business any,
transactions of offices and business units The Bank previously used to have segmental
301,809,320
251,513,099
140,438,280
334,785,511
(97,298,863)
237,486,648
(3,723,489)
140,438,280

2,622,451,239
2,604,784,085
-

(6,106,637)
2,802,218,548
2,802,218,548
located in a particular province are grouped division on the basis of business segment and
together. All transactions between the units are geographical segment. The same has now
conducted on arm's length basis, with intra unit been changed to geographical segment on the
revenue and cost being nullified at the bank basis of points of representation present in 7
level. provinces of the country.
2,838,938,078
2,825,152,887
888,811,075
3,847,225,793
(1,187,657,464)
2,659,568,328
(19,367,209)
888,811,075

19,326,149,206
29,727,779,025
-

(429,588,492)
32,091,135,276
32,091,135,276
LUMBINI

B. Nature of any differences between the E. Nature and effect of any asymmetrical
measurements of the reportable segment's allocations to reportable segments
profits or losses and the entity's profit or loss None
before income tax
2,449,157,706
2,152,264,437
839,089,603
2,840,270,591
(1,247,521,925)
1,592,748,666
(14,195,207)
839,089,603

17,582,472,030
14,597,181,911
-

(138,289,058)
15,826,204,569
15,826,204,569
GANDAKI

None

5.4.4. Reconciliations of reportable segment Revenues, Profit or Loss, Assets and Liabilities

Revenues
38,329,777,029
54,321,897,118
7,297,609,952
30,726,836,505
(22,818,275,710)
7,908,560,795
(412,091,972)
7,297,609,952

316,359,238,307
227,206,587,032
(3,247,228,603)
359,764,429,789
302,853,203,438
-
BAGMATI

PARTICULARS AMOUNT

Total Revenues for reportable segments 116,630,721,475

Other Revenues -
Elimination of intersegment revenues (65,937,913,125)
5.4.2. Information about profit or loss, assets and liabilities

Entity's Revenues 50,692,808,350

2,247,526,004
2,551,127,393
539,187,246
3,337,632,633
(921,771,393)
2,415,861,240
(19,768,127)
539,187,246

14,824,042,762
26,288,952,634
(490,084,445)
28,647,530,951
28,647,369,945
-
MADHESH

Note: -

Profit or Loss
PARTICULARS AMOUNT

Total profit or loss for reportable segments 10,312,455,374

3,620,196,745
3,016,963,239
562,159,854
4,060,044,624
(1,852,492,315)
2,207,552,308
(22,891,098)
562,159,854

25,850,213,438
30,241,012,008
(790,382,664)
32,794,886,982
32,793,595,932
-
KOSHI

Other profit or loss (staff bonus) -

Elimination of intersegment profits
Unallocated amounts: (1,031,245,537)
Profit before income tax 9,281,209,837
Note: -
Revenues from external customers

Entity's interest in the profit or loss

Depreciation and amortisation

of associates accounted for using

Assets
PARTICULARS AMOUNT
Net Interest Revenue (b)
Intersegment revenues

Impairment of assets
Segment profit/(loss)

Total assets for reportable segments 481,203,547,746

m Segment liabilities
Interest Revenue
Interest Expense

Other assets -
Segment assets
Net Revenue

Unallocated amounts
- Deposits
equity method
PARTICULARS

Entity's assets 481,203,547,746

- Loans

Note: -
b

g
a

h
e

k
c

390 NABIL BANK LIMITED ANNUAL REPORT 2022/23 391

Liabilities In the normal course of business, the Group Bank has contended such tax liability and has
PARTICULARS AMOUNT makes various irrevocable commitments and filed appeal to higher authorities. These cases
incurs certain contingent liabilities with legal are under Administrative Review and pending
Total liabilities for reportable segments 424,290,869,339
recourse to its customers. Even though these before Revenue Tribunal/Supreme Court.
Other liabilities -
obligations may not be recognized on reporting
Unallocated amounts
date, they do contain credit risk and are 5.7. Related parties disclosures
Entity's liabilities 424,290,869,339
Note: - therefore a part of the overall risk profile of the In the ordinary course of its business
Group. Accordingly, they are disclosed unless operation the Bank has conducted commercial
remote. transactions with parties who are defined
5.4.5. Information about products and services as related parties in NAS 24 - ‘Related Party
PARTICULARS AMOUNT Under the self-assessment process, Bank (Along Disclosures’. All those transactions were
with Acquired BFI’s) files its Income Tax returns conducted on an arm's length basis.
a. From Financial Intermediation 111,870,207,033
which is then reviewed by respective Inland
b. From Treasury Operations 3,280,735,254
c. From Trade Finance Operations 1,271,504,832
Revenue Office (IRO) usually within four years’ In considering each possible related party
d. Cards, e-banking and alternate channels 208,274,356 period from the end of respective Financial relationship, attention is directed to the
Year. On completion of assessments till FY substance of the relationship and not merely the
2075-76, IRO has raised assessment orders for legal form.
5.4.6. Information about geographical areas disputed tax liability of NPR 1,029,589,257.16

PARTICULARS AMOUNT
5.7.1. List of related parties
a. Domestic 116,618,427,971
- Koshi 6,637,159,984 S. NO. NAME OF RELATED PARTY RELATIONSHIP

- Madhesh 4,798,653,397
1. Mr. Upendra Prasad Poudyal Chairman, Board of Directors
- Bagmati 92,639,380,643
2. Mr. Nirvana Kumar Chaudhary Member, Board of Directors
- Gandaki 4,601,422,142
3. Mr. Malay Mukherjee Member, Board of Directors
- Lumbini 5,664,090,966
4. Mrs. Asha Rana Adhikary Independent Director
- Karnali 553,322,419
5. Mr. Ananta Poudyal Member, Board of Directors
- Sudur Pashchim 1,724,398,419
6. Mr. Pravin Tibrewala Member, Board of Directors
7. Mr. A.R.M. Nazmus Sakib Member, Board of Directors
b. Foreign 12,293,504
8. Mr. Gyanednra Prasad Dhungana Chief Executive Officer
Total (a+b) 116,630,721,475
9. Nabil Investment Banking Ltd. Subsidiary Company
10. Nabil Securities Limited Subsidiary Company
5.4.7. Information about major customers where the transfer of economic benefits is not 11. NADEP Laghubitta Bittiya Sanstha Ltd. Associate Company
12. Nabil Bank Ltd. Retirement Fund Post Employment Benefit Plan
There is no concentration in revenue generation probable or cannot be reliably measured.
13. NBBL Retirement Fund Post Employment Benefit Plan
of the Group or the Bank to such extent that The Group applies NAS 37 - “Provisions,
the revenue from a single external customer Contingent Liabilities and Contingent Assets”
amounts to 10 percent or more of the Group’s in accounting of contingent liabilities and 5.7.2. Key management personnel (KMP)
or the Bank’s revenue. commitments. Key Management Personnel are those persons having authority and responsibility for planning,
directing and controlling the activities of the entity directly or indirectly. The Board of Directors and
5.5. Share options and share based To meet the financial needs of customers, the Chief Executive Officer (CEO) of the bank are identified as KMP of the bank.
payment Group enters into various contracts that result
The Group did not have any share options in irrevocable commitments and contingent
5.7.2.1 Transactions with Board of Directors NPR
or share-based payment transactions in liabilities to the Group. These consist of
the reporting period or the earliest period financial guarantees, letter of credit and other 2023 2022

presented in this financial statements. undrawn commitments to lend. Guarantees,

Board meeting fees/allowances 5,913,000 6,530,170
Letters of Credit and Acceptances under Letters
Travel, accommodation and other board expenses 5,377,705 3,325,452
5.6. Contingent liabilities and of Credit commits the Group to make payments Total 11,290,705 9,855,622
commitment on behalf of customers in the event of a specific
Contingent Liabilities are possible obligations act, generally related to trade transactions and All board of directors are non-executive directors. The directors are entitled to meeting fees on
whose existence will be confirmed only by performance under contracts. They carry a attending board and board committee meetings as well as monthly allowances to cover for expenses
uncertain future events or present obligations similar credit risk to loans. towards communication and periodicals.

392 NABIL BANK LIMITED ANNUAL REPORT 2022/23 393

5.7.2.2 Transactions with Chief Executive Officer NPR 5.7.5. Transactions with post-employment benefit plan
PARTICULARS 2023 2022
The Group’s post-employment benefit plan is managed by Nabil Bank Ltd. Retirement Fund and Nepal Bangladesh Bank
Retirement Fund. Following transactions were conducted with the plan.
Short Term Employee Benefits 15,128,633 26,930,330
Gross Salary Payments 7,920,000 12,856,250 Statement of Profit or Loss
Other current benefits and payments 7,208,633 14,074,080 NPR
Post-employment benefits 792,000 1,413,930 NABIL BANK RF

Total 15,920,633 28,344,260 PARTICULARS 2023 2022

Interest Income - -
Interest Expense 444,203,951 120,527,653
5.7.3. Transactions and agreements involving KMP and their Close Family Members (CFM)
Other Income 6,171,179 4,561,976
CFMs of a KMP are those family members who may be expected to influence, or be influenced by, that KMP in their dealings Other Expense (gratuity and provident fund contributions) - -
with the Group. They may include KMP’s spouse and children, children of the KMP’s spouse and dependents of the KMP or of
the KMP’s spouse. CFM are related parties to the Bank and the Group.

Statement of Financial Position

For the reported period there have been no payments or transactions with CFM of KMP except in the normal course of banking NPR
business like loans, deposits and interest on the same, both for the Bank and the Group. NABIL BANK RF

PARTICULARS 2023 2022

5.7.4. Transactions with Subsidiary and Associate companies Total Assets - -

Loans and advances - -
Statement of Profit or Loss NPR
Other receivables - -
TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE Total Liabilities 6,647,164,498 2,722,766,947
PARTICULARS 2023 2022 2023 2022
Customer deposits 6,517,010,498 2,590,831,738
Other Payables (debenture liabilities) 130,154,000 131,935,209
Interest Income - - 6,736,648 7,663,012
Interest Expense 4,813,092 3,577,650 10,268,259 7,663,012
Other Income 500,000 500,000 - -
Other Expense 450,833 2,219,355 - - Statement of Financial Position
NPR
Dividend Income (net) 32,400,000 55,300,000 - -
NBBL RF
PARTICULARS 2023 2022

Statement of Financial Position NPR Total Assets - -

Loans and advances - -
TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE
Other receivables - -
PARTICULARS 2023 2022 2023 2022 Total Liabilities 730,070,634 -
Customer deposits 216,648,634 -
Total Assets - 4,317,689 56,250,000 93,250,000
Other Payables (debenture liabilities) 513,422,000 -
Loans and advances - - 56,250,000 9,352,000
Other receivables - 4,317,689 - -
Total Liabilities 164,493,609 114,069,947 1,753,484 377,354
Customer deposits 164,493,609 114,069,947 1,753,484 377,354 Statement of Profit or Loss
Other Payables - - - - NPR
NBBL RF
PARTICULARS 2023 2022
Commitments and Contingencies NPR
Interest Income - -
TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE Interest Expense 23,034,443 -
PARTICULARS 2023 2022 2023 2022
Other Income 1,032,034 -
Other Expense (gratuity and provident fund contributions) - -
Undrawn Credit Limits - - - -
Other Contingencies - - - -
Total - - - -

394 NABIL BANK LIMITED ANNUAL REPORT 2022/23 395

5.8. Writ Petition filed in Supreme Court 5.9. Additional disclosures of non-

NPR in '000

IMMEDIATE PREVIOUS YEAR ENDING

consolidated entities

11,051,539
13,037,239
8,870,895
1,373,614
29,729
10,366,938
300,205,653
62,455,044
606,480
298,000
80,000
1,318,598
3,536,100
291,721
-
6,296,550
419,818,101

3,353,610
4,657,437
1,390,737
326,222,310
10,720,730
-
-
1,778,504
12,228,181
6,484,844
-
366,836,354

22,832,909
176
2,899,545
27,249,119
52,981,747
-
52,981,747
419,818,101
As per the Amnesty Provisions mentioned in
Finance Act 2080, If Tax Liability applicable on
Bonus Shares distributed from Bargain Purchase The Group does not have any non-consolidated

Liabilities

Equity
Gain raised from Merger & Acquisition and entities to report for the reporting period and in
Share Premium raised from Further Public the comparative previous period.
Offering (FPO) till FY 2078/79 is paid within
Mangsir End 2080, no further Interest and 5.10. Events after reporting date
Penalty charge shall be levied by government.
5.10.1. Recognition of interest income

BANK
In this regard Nabil Bank Limited and erstwhile
United Finance Limited (UFL) had distributed The Bank has availed the facility in NRB

THIS QUARTER ENDING

6,774,258
25,640,413
13,424,390
3,833,462

332,698,854
-
8,283,059

76,875,430
-
1,798,000
80,000
1,827,069
3,864,803
304,330
-
7,606,990
483,011,058

6,277,712
-
3,812,946
396,843,499
-
293,105
-
2,429,534
8,766,754
6,498,689
-
424,922,239

27,056,997
-
3,961,099
27,070,722
58,088,818
-
58,088,818
483,011,058
bonus shares from share premium received Directive 4/79 that allows licensed institutions
on FPO issued by erstwhile UFL to Muthoot to recognize in distributable profit for the year
Finance Limited, India during FY 2075/76 such interest income on loans and advance to
and FY 2077/78 respectively. Further, Nabil customers that stood accrued at year end but
Bank Limited has acquired erstwhile UFL with was subsequently recovered in cash within 15
Swap ratio of 100:35 during FY 2077/78 and days after the year-end date.

Condensed Consolidated Statement of Financial Position (As on Quarter ended 31 Ashadh 2080)
acquired erstwhile Nepal Bangladesh Bank
Limited (NBBL) with swap ratio of 100:43 5.10.2. Merger between subsidiaries
during FY 2078/79. Bank has distributed Bonus The merger between two subsidiaries of the

11,213,406
13,037,239
8,870,895
1,373,614
192,282
10,366,938
300,205,653
63,196,882
615,987
-
178,177
1,318,598
3,546,355
294,529
-
6,338,505
420,749,062

3,353,610
4,657,437
1,390,737
326,186,072
10,720,730
-
-
1,749,305
12,759,231
6,484,844
-
367,301,966

22,832,909
176
3,139,622
27,253,542
53,226,247
220,849
53,447,096
420,749,062
IMMEDIATE PREVIOUS YEAR ENDING
Shares from Capital Adjustment Reserve raised bank namely Nabil Investment banking limited
from adjustment of Swap Ratio on Paid up and Nepal Bangladesh Capital Limited as well
Capital of Acquired BFI’s during FY 2077/78 as Nabil Securities Ltd. and NBBL Securities Ltd.
and FY 2078/79. As bank has recognized was executed in the reporting period.
goodwill on both the acquisitions as per NFRS
3 – Business Combination, there is no case 5.10.3. Proposed dividend
of bargain purchase gain arising in both The 644th meeting of the board of directors
cases. Hence, the Bank collectively with other of the bank held on 23rd November, 2023
Banks has filed Writ Petition at Supreme Court has recommended distribution of 11% cash

GROUP
against such retrospective tax implication on dividend for the financial year ending July
distribution. 16, 2023 to be put up for approval at the

THIS QUARTER ENDING

6,967,638
25,640,413
13,424,390
3,833,462
92,811
8,283,059
332,698,854
77,532,409
-
-
179,067
1,827,069
3,877,694
307,261
9,599
7,777,449
482,451,176

6,277,712
-
3,812,946
395,221,431
-
327,089
-
2,429,534
9,259,219
6,498,689
-
423,826,621

27,056,997
-
4,131,931
27,173,956
58,362,884
261,671
58,624,555
482,451,176
upcoming shareholders’ annual general
meeting of the Bank. The equivalent amount

5.11. Interim financial reports – Unaudited for Q4

thus recommended for distribution would be
NPR 2,976,269,640.21 cash dividend from
retained earnings.

Total Equity Attributable to Equity Holders

Loans and Advances to Banks and FIs
Loans and Advances to Customers
Derivative Financial Instruments

Derivative Financial Instruments

Goodwill and Intangible Assets

Total Liabilities and Equity

Placement with Banks and FIs
Due from Nepal Rastra Bank

Non Controlling Interest

Cash and Cash Equivalent

Due to Nepal Rastra Bank

Investment in Subsidiaries

Deposits from Customers

Property and Equipment
Investment in Associates

Subordinated Liabilities
Deferred Tax Liabilities

Debt Securities Issued

Current Tax Liabilities
Due to Banks and FIs
Other Trading Assets

Investment Securities

Investment Property

Deferred Tax Assets

Current Tax Assets

Retained Earnings
Total Liabilities
Other Liabilities

Share Premium
Share Capital
Total Assets

Total Equity
Other Assets

Borrowings

Provisions

Reserves
ASSETS

396 NABIL BANK LIMITED ANNUAL REPORT 2022/23 397

 Condensed Consolidated Statement of Profit or Loss (For the Quarter ended 31 Ashadh 2080) NPR in '000

398
GROUP BANK

ASSETS CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS
QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD)

NABIL BANK LIMITED

Interest Income 13,560,447 46,543,356 7,036,209 23,420,891 13,504,948 46,381,986 7,020,021 23,340,747
Interest Expense 7,622,970 28,396,771 4,685,744 14,414,019 7,622,896 28,398,776 4,691,407 14,421,876
Net Interest Income 5,937,477 18,146,585 2,350,465 9,006,872 5,882,053 17,983,211 2,328,614 8,918,871
Fees and Commission Income 1,127,726 3,692,645 826,064 2,211,751 1,082,653 3,542,648 786,023 2,043,274
Fees and Commission Expense 190,642 665,614 394,186 483,186 182,210 643,469 388,022 464,376
Net Fees and Commission Income 937,084 3,027,032 431,877 1,728,565 900,442 2,899,179 398,002 1,578,898
Net Interest, Fees and 6,874,562 21,173,616 2,782,343 10,735,437 6,782,495 20,882,389 2,726,615 10,497,770
Commission Income
Net Trading Income 120,470 507,490 66,711 498,574 107,347 484,776 110,708 564,990
Other Operating Income 100,278 282,424 74,351 407,832 100,094 312,556 84,687 410,410
Total Operating Income 7,095,309 21,963,531 2,923,405 11,641,843 6,989,936 21,679,721 2,922,010 11,473,170
Impairment Charge/ (Reversal) for 557,817 3,889,529 508,247 1,118,823 557,817 3,889,529 508,311 1,118,823
Loans and Other Losses
Net Operating Income 6,537,492 18,074,002 2,415,158 10,523,020 6,432,119 17,790,192 2,413,700 10,354,347
Personnel Expenses 2,255,764 4,750,189 491,090 2,719,330 2,239,867 4,692,669 468,204 2,658,925
Other Operating Expenses 598,612 1,841,093 194,273 1,072,651 583,292 1,812,437 186,288 1,023,800
Depreciation & Amortization 82,093 279,128 267,739 400,319 79,603 269,076 260,115 390,030
Operating Profit 3,601,023 11,203,593 1,462,055 6,330,720 3,529,357 11,016,010 1,499,092 6,281,591
Non-Operating Income 15,815 44,223 4,819 41,596 15,815 43,334 1,595 8,702
Non-Operating Expense 69,604 274,884 1,711 2,730 69,604 274,884 1,711 2,730
Profit Before Income Tax 3,547,234 10,972,932 1,465,163 6,369,585 3,475,567 10,784,460 1,498,976 6,287,562
Income Tax Expense 1,090,115 3,325,993 594,166 2,057,491 1,064,593 3,257,311 594,994 2,031,538
Current Tax 1,087,725 3,314,640 515,491 2,001,747 1,064,593 3,257,311 503,688 1,940,232
Deferred Tax 2,390 11,352 78,675 55,744 - - 91,307 91,307
Profit /(Loss) For the Period 2,457,119 7,646,939 870,997 4,312,094 2,410,975 7,527,149 903,981 4,256,024

Ratios as per NRB Directive (%)

GROUP BANK

ASSETS CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS
QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD)

Capital Fund to RWA 12.68 13.19 12.66 13.09

Gross Non-Performing Loan (NPL) 3.20 1.62 3.20 1.62
Net Non-Performing Loan (NPL) 1.23 0.64 1.23 0.64
Total Loan Loss Provision to Total NPL 107.12 156.01 107.12 156.01
(As per NRB Directive)
Costs of Funds 7.81 7.17 7.81 7.17
Credit to Deposit Ratio (As per NRB Directive) 87.12 89.79 87.12 89.79
Base Rate (As per NRB Directive) 9.52 8.77 9.52 8.77
Interest Rate Spread (As per NRB Directive) 4.99 4.22 4.99 4.22

Condensed Consolidated Statement of Comprehensive Income NPR in '000

GROUP BANK

ASSETS CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS THIS UPTO THIS
QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD) QUARTER QUARTER (YTD)

Profit /(Loss) For the Period 2,457,119 7,646,939 870,997 4,312,094 2,410,975 7,527,149 903,981 4,256,024
Other Comprehensive Income 1,289,604 220,856 789,677 (596,797) 1,294,851 226,103 811,899 (574,576)
Total Comprehensive Income 3,746,723 7,867,795 1,660,674 3,715,297 3,705,826 7,753,252 1,715,880 3,681,448
Basic Earnings Per Share 28.26 18.89 27.82 18.64
Diluted Earnings Per Share 28.26 18.89 27.82 18.64
Profit Attributable To:
Equity holders of the Bank 3,735,224 7,830,754 1,665,133 3,690,332 3,705,826 7,753,252 1,715,880 3,681,448
Non - controlling interest 11,499 37,041 (4,459) 24,964 - - - -
ANNUAL REPORT 2022/23
399
 5.12. Comparison of unaudited and audited financial statements for Q4

400
Comparision Unadudited and Audited Financial Statements (For the Period Ended 31 Ashadh 2080) NPR
STATEMENT OF FINANCIAL POSITION UN-AUDITED AUDITED VARIANCE REASON FOR VARIANCE

PARTICULARS AMOUNT %

Assets

NABIL BANK LIMITED

Cash and Cash Equivalents 6,774,257,989 6,774,258,189 200 0.0% Adjustments made after year end
Due from Nepal Rastra Bank 25,640,412,813 5,652,421,459 12,008,646 0.0% Payables against old LC and Remittance margin
grouped to Payables
Placement with Banks and FIs 13,424,389,863 13,424,389,863 - 0.0%
Derivative Financial Instruments 3,833,462,094 3,833,462,094 - 0.0%
Other Trading Assets - - - 0.0%
Loans and Advances to Banks and FIs 8,283,059,448 8,283,059,448 - 0.0%
Loans and Advances to Customers 332,698,854,059 331,123,170,655 (1,575,683,404) -0.5% Impact of additional provision made
by statutory auditors and the regulator
Investment Securities 76,875,429,860 76,452,984,943 (422,444,917) -0.5% FVTOCI investments updated per balance
confirmation from investee companies
Current Tax Assets - - - 0.0%
Investment in Subsidiaries 1,798,000,000 1,798,000,000 - 0.0%
Investment in Associates 80,000,000 80,000,000 - 0.0%
Investment Property 1,827,068,811 1,827,068,811 - 0.0%
Property and Equipment 3,864,802,955 3,871,272,890 6,469,935 0.2% Adjustments made after year end
Goodwill and Intangible Assets 304,330,130 285,455,306 (18,874,824) -6.2% Adjustments made after year end
Deferred Tax Assets - - - 0.0%
Other Assets 7,606,989,512 7,798,004,088 191,014,576 2.5% Regrouping, netting and fair value measurement effect
Total assets 483,011,057,534 481,203,547,746 (1,807,509,788) -0.4%
Capital and Liabilities
Due to Banks and FIs 6,277,712,006 6,277,712,006 - 0.0%
Due to Nepal Rastra Bank - - - 0.0%
Derivative Financial Instruments 3,812,946,431 3,812,946,431 - 0.0%
Deposits from Customers 396,843,499,228 396,843,499,228 - 0.0%
Borrowings - - - 0.0%
Current Tax Liabilities 293,104,794 482,351,672 189,246,878 64.6% Remeasurement of tax liability
Provisions - - - 0.0%
Deferred Tax Liabilities 2,429,534,038 1,918,849,685 (510,684,353) -21.0% Remeasurements
Other Liabilities 8,766,753,727 8,468,527,905 (298,225,822) -3.4% Regrouping, netting and fair value measurement effect
Debt Securities Issued 6,498,688,989 6,486,982,412 (11,706,577) -0.2% Recognition of unamortised debenture issuance cost
Subordinated Liabilities - - - 0.0%
Total Liabilities 424,922,239,213 424,290,869,339 (631,369,874) -0.1%
Equity
Share Capital 27,056,996,729 27,056,996,729 - 0.0%
Share Premium - - - 0.0%

NPR
UN-AUDITED AUDITED VARIANCE REASON FOR VARIANCE

PARTICULARS AMOUNT %

Retained Earnings 3,961,099,482 3,187,059,423 (774,040,059) -19.5% Appropriation to reserves from current year
profit effected in Audited
Reserves 27,070,722,111 26,668,622,255 (402,099,856) -1.5% Appropriation to reserves from current year
profit effected in Audited
Total Capital and Liabilities 483,011,057,534 481,203,547,746 (1,807,509,788) -0.4%

Comparision Unadudited and Audited Financial Statements (For the Year Ended 31 Ashadh 2080) NPR
STATEMENT OF PROFIT OR LOSS UN-AUDITED AUDITED VARIANCE REASON FOR VARIANCE

PARTICULARS AMOUNT %

Interest Income 46,381,986,157 46,251,162,764 (130,823,393) -0.3% Effect of update in interest derecognised as per
NRB guidelines
Interest Expense 28,398,775,595 28,502,320,274 103,544,679 0.4% Interest expense as per NFRS 16 - Leases recognised
Net Interest Income 17,983,210,562 17,748,842,490 (234,368,072) -1.3%
Fee and Commission Income 3,542,647,661 3,545,845,637 3,197,976 0.1% Effect of incomes/expenses pertaining to the fiscal
year accounted after year end
Fee and Commission Expense 643,468,804 651,054,033 7,585,230 1.2% Effect of incomes/expenses pertaining to the fiscal
year accounted after year end
Net Fee and Commission Income 2,899,178,857 2,894,791,604 (4,387,254) -0.2%
Net Interest, Fee and Commisson Income 20,882,389,419 20,643,634,094 (238,755,326) -1.1%
Net Trading Income 484,775,875 486,560,448 1,784,573 0.4% Effect of incomes/expenses pertaining to the fiscal
year accounted after year end
Other Operating Income 312,555,667 365,905,537 53,349,870 17.1% Effect of incomes/expenses pertaining to the fiscal
year accounted after year end
Total Operating Income 21,679,720,961 21,496,100,079 (183,620,883) -0.8%
Impairment Charge/ (Reversal) for Loans 3,889,528,572 5,426,269,148 1,536,740,576 39.5% Additional provision expense recognised as per
and Other Lossess statutory auditors/regulators
Net Operating Income 17,790,192,389 16,069,830,931 (1,720,361,459) -9.7%
Operating Expense
Personnel Expenses 4,692,669,436 4,525,098,630 (167,570,806) -3.6% Effect of incomes/expenses pertaining to the fiscal
year accounted after year end
Other Operating Expenses 1,812,437,381 1,528,762,853 (283,674,528) -15.7% Lease expense recognised as per NFRS 16 and effect
of incomes/expenses pertaining to the fiscal year
accounted after year end
ANNUAL REPORT 2022/23

Depreciation & Amortisation 269,075,793 503,209,613 234,133,820 87.0% Depreciation expense recognised as per NFRS
16 - Leases
401
 UN-AUDITED AUDITED VARIANCE REASON FOR VARIANCE

402
PARTICULARS AMOUNT %

Operating Profit 11,016,009,779 9,512,759,834 (1,503,249,945) -13.6%

Non Operating Income 43,333,964 43,333,964 - 0.0%
Non Operating Expense 274,883,961 274,883,961 - 0.0%

NABIL BANK LIMITED

Profit Before Income Tax 10,784,459,782 9,281,209,837 (1,503,249,945) -13.9%
Income Tax Expense
Current Tax 3,257,310,919 2,803,083,329 (454,227,590) -13.9% Update in income tax computation in line with
income tax act
Deferred Tax - 73,190,348 73,190,348 0.0% Deferred tax income recognition
Profit/(loss) for the period 7,527,148,863 6,404,936,160 (1,122,212,703) -14.9%
Other Comprehensive income 226,103,042 156,695,513 (69,407,529) -30.7% Impact of updates to fair value changes in
FVTOCI investments and impact of actuarial gain / (loss).
Total Comprehensive income 7,753,251,905 6,561,631,673 (1,191,620,232) -15.4%

Distributable Profits
Net profit/(loss) as per profit or loss 7,527,148,863 6,404,936,160 (1,122,212,703) -14.9%
Add/Less: Regulatory adjustment as per NRB Directive 0.0%
Add: Interest receivable recognized income (999,629,625) (902,502,697) 97,126,928 -9.7% Interest suspense recognition
Add: Reversal of provision on loan accounts - - - 0.0%
Add: Reversal of deferred tax expense - - - 0.0%
Add: Loan loss provision on NBAs (320,336,874) (320,336,874) - 0.0%
Less: Actuarial loss recognized on DBOs 21,435,422 21,435,422 - 0.0%
Less: Impairment charged under NFRS - - - 0.0%
Free profit/(loss) after regulatory adjustments 6,228,617,787 5,203,532,011 (1,025,085,776) -16.5%
Add : opening balance in retained earnings 273,760,074 273,760,074 - 0.0%
Less : Appropriations to reserves and dividends paid out (2,541,278,378) (2,290,232,661) - 0.0%
Total Distributable profit 3,961,099,483 3,187,059,423 (774,040,060) -19.5% Assessment of cummulative distributable profit
Distributable profit per share 14.64 11.78

5.13. Comparison of projected financial statements for debenture issuance and audited financial statements NPR in '000
Statement of Financial Position (For the Period Ended 31 Ashadh 2080)
PARTICULARS PROJECTED AUDITED VARIANCE REASON FOR VARIANCE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS

AMOUNT %

Assets
Cash and Cash Equivalents 29,277,818 6,774,258 -22,503,560 -76.86% Actual deposit volume lower than projected
Due from Nepal Rastra Bank 10,786,565 25,652,421 14,865,856 137.82% Actual deposit volume higher than projected
Placement with Banks and FIs 12,299,735 13,424,390 1,124,655 9.14% Actual deposit volume higher than projected
Derivative Financial Instruments 10,859,598 3,833,462 -7,026,136 -64.70% Actual business volume lower than projected
Other Trading Assets - - - 0.00%
Loans and Advances to Banks and FIs 9,416,688 8,283,059 -1,133,629 -12.04% Actual business volume lower than projected
Loans and Advances to Customers 252,042,222 331,123,171 79,080,949 31.38% Actual business volume higher than projected
Investment Securities 50,143,012 76,452,985 26,309,973 52.47% Actual business volume higher than projected
Current Tax Assets 561,654 - -561,654 -100.00% Actual business volume lower than projected
Investment in Subsidiaries 78,000 1,798,000 1,720,000 2205.13% Due to additio of investment in Nabil Stock Dealer Ltd.
Investment in Associates 80,000 80,000 - 0.00%
Investment Property 8,219 1,827,069 1,818,850 22129.82% Addition of NBA higher than projected.
Property and Equipment 2,104,929 3,871,273 1,766,344 83.91% Actual purchase higher than projected
Goodwill and Intangible Assets 110,785 285,455 174,670 157.67% Due to acquisition of Erstwhile NBBL and UFL
Deferred Tax Assets - - - 0.00%
Other Assets 3,693,410 7,798,004 4,104,594 111.13% Actual receivable higher than projected.
Total Assets 381,462,625 481,203,548 99,740,922 26.15%
Liabilities
Due to Banks and FIs 3,389,819 6,277,712 2,887,893 85.19% Actual higher than projected
Due to Nepal Rastra Bank 70,923 - -70,923 -100.00% Actual lower than projected
Derivative Financial Instruments 10,764,203 3,812,946 -6,951,257 -64.58% Actual business volume lower than projected
Deposits from Customers 308,187,557 396,843,499 88,655,942 28.77% Actual business volume higher than projected
Borrowings - - - 0.00%
Current Tax Liabilities - 482,352 482,352 0.00%
Provisions - - - 0.00%
Deferred Tax Liabilities 1,438,830 1,918,850 480,020 33.36% Effect of other variance in deffered tax liability.
Other Liabilities 12,670,448 8,468,528 -4,201,920 -33.16% Actual liability lower than projected
Debt Securities Issued 5,222,876 6,486,982 1,264,106 24.20% Effect of Accrued interest payable.
Subordinated Liabilities - - - 0.00%
Total Liabilities 341,744,656 424,290,870 82,546,214 24.15%
Equity
Share Capital 13,480,159 27,056,997 13,576,838 100.72% Due to acquisition of Erstwhile NBBL and UFL
Share Premium 74 - -74 -100.00%
ANNUAL REPORT 2022/23

Retained Earnings 8,468,957 3,187,059 -5,281,898 -62.37% Actual profit lower than projected and distribution
of dividend higher than projected
403
 NPR in '000

404
PARTICULARS PROJECTED AUDITED VARIANCE REASON FOR VARIANCE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS

AMOUNT %

Reserves 17,768,779 26,668,622 8,899,843 50.09% Due to acquisition of Erstwhile NBBL and UFL

NABIL BANK LIMITED

Total Equity Attributable to Equity Holders 39,717,969 56,912,678 17,194,709 43.29%
Contingent Liabilities and Commitments - - - 0.00%
Total Liabilities and Equity 381,462,625 481,203,548 99,740,922 26.15%

Statement of Profit or Loss (For the Period Ended 31 Ashadh 2080) NPR in '000
PARTICULARS PROJECTED AUDITED VARIANCE REASON FOR VARIANCE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS

AMOUNT %

Interest Income 23,858,246 46,251,163 22,392,917 93.86% Higher income earned than projected and impact
of Increase in volume due to acquisition of
Erstwhile NBBL and UFL.
Interest Expense 14,320,885 28,502,320 14,181,435 99.03% Higher expenses than projected and impact of
Increase in volume due to acquisition of Erstwhile
NBBL and UFL.
Net Interest Income 9,537,361 17,748,842 8,211,481 86.10%
Fee and Commission Income 2,157,961 3,545,846 1,387,885 64.31% Higher income earned than projected and impact
of Increase in volume due to acquisition of Erstwhile
NBBL and UFL.
Fee and Commission Expense 104,245 651,054 546,809 524.54% Higher expenses incurred than projected and impact
of Increase in volume due to acquisition of Erstwhile
NBBL and UFL.
Net Fee and Commission Income 2,053,716 2,894,792 841,076 40.95%
Net Interest, Fee and Commisson Income 11,591,077 20,643,634 9,052,557 78.10%
Net Trading Income 724,282 486,560 -237,722 -32.82% Lower income than projected.
Other Operating Income 478,460 365,906 -112,554 -23.52% Lower income than projected.
Total Operating Income 12,793,819 21,496,100 8,702,281 68.02%
Impairment Charge/ (Reversal) for Loans 630,634 5,426,269 4,795,635 760.45% Higher provision than projected and and impact
and Other Losses of Increase in volume due to acquisition of Erstwhile
NBBL and UFL.And increase in rate of general LLP.
Net Operating Income 12,163,185 16,069,831 3,906,646 32.12%
Operating Expense
Personnel Expenses 2,856,193 4,525,099 1,668,906 58.43% Higher expenses than projected due to increase
in number of staffs.

NPR in '000
PARTICULARS PROJECTED AUDITED VARIANCE REASON FOR VARIANCE
FINANCIAL STATEMENTS FINANCIAL STATEMENTS

AMOUNT %

Other Operating Expenses 1,394,924 1,528,763 133,839 9.59% Higher expenses than projected due to increase
in number of branch networks
Depreciation & Amortisation 158,121 503,210 345,089 218.24% Higher expenses than projected due to increase
in number of branch networks and fixed assests.
Operating Profit 7,753,947 9,512,760 1,758,813 22.68%
Non Operating Income 5,147 43,334 38,187 741.93% Higher income earned than projected and impact
of Increase in volume due to acquisition of Erstwhile
NBBL and UFL.
Non Operating Expense 3,026 274,884 271,858 8984.07% Higher Expenses than projected.
Profit Before Income Tax 7,756,068 9,281,210 1,525,142 19.66%
Income Tax Expense
Current Tax 2,326,820 2,803,083 476,263 20.47%
Deferred Tax - 73,190 73,190 0.00%
Profit for the Year 5,429,247 6,404,936 975,689 17.97%

5.14. Movement in Regulatory Reserve

NPR in '000

FY INTEREST SHORT LOAN SHORT PROVISION SHORT DEFERRED GOODWILL GAIN ON ACTUARIAL FAIR VALUE OTHER TOTAL
RECEIVABLE LOSS FOR POSSIBLE LOSSES PROVISION TAX BARGAIN LOSS RECOGNIZED
PROVISION ON INVESTMENT ON NBA ASSETS PURCHASE RECOGNISED IN OCI

2074/75 663,365 - - 8,219 - - - 55,332 - - 726,915

2075/76 81,373 - - - - - - 95,471 - - 176,844
2076/77 (39,197) - - - - - - (191,447) - - (230,644)
2077/78 - 104,812 - - 336 2,483 - - - 396 - 108,027
From UFL
2077/78 86,966 - - (3,044) (2,483) - - 141,183 (396) - 222,227
2078/79 1,198,375 - - 572,071 - - - - - - 1,770,446
From NBBL
2078/79 (492,390) - - 8,778 - 170,154 - (32,021) - - (345,479)
2079/80 902,503 - - 320,337 - - - (21,435) - - 1,201,404
ANNUAL REPORT 2022/23

Total 2,505,807 - - 906,697 - 170,154 - 47,082 - - 3,629,740

405
5.15. COVID -19 related disclosures NPR 5.16. Major financial indicators

As of Ashadh end 2080

S.N. PARTICULARS INDICATORS 2018/19 2019/20 2020/21 2021/22 2022/23
PARTICULARS NO. OF CUSTOMERS AMOUNT (NPR)
1 Net Profit / Gross Income % 24.25 18.55 21.72 16.15 12.65
Accrued Interest Received after Ashadh end 2080 till 15 Shrawan 2080 18,068 616,510,459.85 2 Earnings Per Share NPR 50.57 36.16 33.57 18.64 23.67
Additional 0.3% Loan Loss Provision created on Pass Loan Portfolio - - 3 Market Value per Share NPR 800 765 1,359 824 599
Extension of moratorium period of loan provided to Industry or Project under construction - 4 Price Earning Ratio Times 15.82 21.15 40.48 44.21 25.31
Restructured/Rescheduled Loan with 5% Loan Loss Provision 670 4,198,776,525.84 5 Dividend (including bonus) on share capital % 34.00 35.26 38.00 30.00 11.00
Enhancement of Working Capital Loan by 20% to COVID affected borrowers - - 6 Cash Dividend on Share Capital % 22.00 1.76 4.40 11.50 11.00
Enhancement of Term Loan by 10% to COVID affected borrowers - - 7 Interest Income / Loans and Advances % 11.41 10.98 9.37 10.28 13.89
Expiry Date of Additional 20% Working Capital Loan (COVID Loan) extended for upto - - 8 Employee Expense / Total Operating Expense % 17.65 15.80 24.73 14.02 12.67
1 year with 5% provisioning 9 Interest Expense on Total Deposit and Borrowings % 4.96 5.39 4.35 5.77 7.84
Expiry Date of Additional 10% Term Loan (COVID Loan) extended for upto 1 year with 5% provisioning - - 10 Exchange Gain / Total Income % 4.66 4.14 3.68 2.64 1.24
Time Extension provided for repayment of Principal and Interest for upto two years as per 110 609,185,083.27 11 Staff Bonus / Total Employee Expenses % 34.43 28.17 20.37 26.27 22.79
clause 41 of NRB Directives 2 12 Net Profit / Loans and Advances % 3.38 2.33 2.49 1.88 1.94
13 Net Profit / Total Assets % 2.11 1.58 1.71 1.20 1.42
14 Total Credit / Deposit % 81.96 79.72 89.84 92.49 84.19
NPR
15 Total Operating Expenses / Total Assets % 5.49 5.80 5.22 5.33 7.93
As of Ashadh end 2080 16 Adequacy of Capital Fund on Risk Weighted Assets
a. Core Capital % 11.40 10.67 10.67 10.77 10.22
PARTICULARS NO. OF CUSTOMERS AMOUNT (NPR)
b. Supplementary Capital % 1.10 2.40 2.09 2.32 2.32
Refinance Loan - - c. Total Capital Fund % 12.50 13.07 12.77 13.09 12.54
Business Continuity Loan - - 17 Liquidity (CRR) % 4.78 11.20 3.66 4.13 6.89
18 Non Performing Loans / Total Loans % 0.74 0.98 0.84 1.62 3.39
19 Base Rate % 8.09 7.32 5.86 8.77 9.52
NPR 20 Weighted Average Interest Rate Spread % 4.19 3.51 3.31 2.75 3.80
21 Book Net Worth per Share NPR 257 256 251 232 210
As of Ashadh end 2080
22 Total Shares Outstanding Number 90,118,454 100,974,974 138,444,512 228,329,086 270,569,967
PARTICULARS NO. OF CUSTOMERS AMOUNT (NPR) 23 Total Permanent Employees Number 1,080 1,128 1,271 2,130 2,235
24 Return on Equity % 17.76 13.61 15.19 9.78 11.66
Subsidized Loan 8,820 11,341,563,448.47
25 Return on Assets % 2.11 1.58 1.71 1.20 1.42
26 Dividend Payout Ratio % 67.24 97.51 113.18 160.95 46.47
27 Earnings Yield % 6.32 4.73 2.47 2.26 3.95
28 Dividend Yield % 4.25 4.61 2.80 3.64 1.84
29 Cost to Income Ratio % 63.20 68.13 66.17 71.92 70.51
30 Total Assets to Shareholders' Fund times 8.67 9.19 8.60 7.92 8.46
31 Shareholders' Fund to Liability including % 9.80 9.07 9.88 9.94 8.56
Contingent Liability
32 Number of Offices Number 82 118 135 231 265
33 Number of ATMs Number 136 185 185 250 298

406 NABIL BANK LIMITED ANNUAL REPORT 2022/23 407

Note: 8. The CD Ratio calculated as per audited

NPR

1,161,106
12,046,278
5,605,223
1,685,232
-
196,700
800,000
804,000
33,900
22,332,438
TOTAL
financial statements are different than
1. Gross Income in S.N. 1 comprises of Gross that of CD Ratio calculated as per NRB
Interest Income, Commission and Discount, Directive due to inclusion of Staff Loan,
Other Operating Income and Accrued Interest Receivable in loan amount
Exchange Income. as per NFRS and inclusion of AIP in deposit

Staff COVID Expenses

KARNALI SUDUR PASHCHIM

70,000
630,417
46,000
11,000

46,700
114,286
-
4,843
923,246
2. EPS computation policy is disclosed in amount.
"Significant Accounting Policies". 9. Total Assets in S.N. 13 and S.N. 15 are
3. Market Value per Share in S.N. 3 is the average balance of assets computed by
closing price of ordinary shares quoted in averaging outstanding balance of previous
Nepal Stock Exchange on Sunday, 16th financial year and current financial year.

209,108
825,735
25,000
98,000

-
114,286
742,000
4,843
2,018,972
July 2023, the last trading day in the 10. Credit and Deposit in S.N. 14 is the
reporting period. outstanding balance as of balance sheet
4. The Interest Income in S.N. 7 is the interest date.
income from loans and advances (excluding 11. Return on Equity in S.N. 24 is computed by
staff loans) only. The loans and taking average Equity including Proposed

-
608,714
535,000
40,000

100,000
114,286
-
4,843
1,402,843
LUMBINI
advances are the average loans and Dividend of previous year till the date
advances for the entire financial year. of AGM and average after-tax net profit
5. Total Operating Expense in S.N. 8 of current year. Figures of previous years
comprises Gross Interest Expense, Staff have been restated accordingly wherever
Expense and Other Operating Expense. necessary.

55,998
627,032
446,125
187,500

-
114,286
-
4,843
1,435,784
GANDAKI
6. The Deposits and Borrowings in S.N.9 12. Earnings Yield represent earning
are the average deposits and borrowings (attributable to equityholders) per market
(including debentures) for the entire value of share.
financial year. 13. Dividend Yield represent dividend per
7. Total Income in S.N. 10 is same as Gross market value of share.

15,000
7,215,466
3,853,098
1,290,847

50,000
114,286
-
4,843
12,543,539
Income in S.N. 1 comprising of Gross

BAGMATI
Interest Income, Commission and Discount,
Other Operating Income and Exchange
Income.

112,100
928,727
200,000
-

-
114,286
62,000
4,843
1,421,956
MADHESH
5.17. CSR Expenses made during FY 2079/80

698,900
1,210,185
500,000
57,885

-
114,286
-
4,843
2,586,099
KOSHI

Orphanage and Old age home

Sustainable Development Goal

Kholaun Bank Khata Abhiyan

Digital Promotional Expenses
Financial Literacy
PROJECT AREAS

Contingencies
Social Project

Direct Cost

Total
S.N

1
2
3
4
5
6
7
8
9
408 NABIL BANK LIMITED ANNUAL REPORT 2022/23 409
 The following laws and regulations apply to the Our clients are given personalized services in areas
operation of Nabil Invest: such as Portfolio Management Service through
FINANCIAL n Established as per Companies Act, 2006. appointment of specific Relationship Managers,

STATEMENTS OF
NABIL INVESTMENT
BANKING LIMITED
(SUBSIDIARY)
n Licensed by the Securities Board of Nepal under while services under Depository Participant and
the Securities Businessperson (Merchant Banker’s Real Time System (RTS) are given with customer
Regulation) 2008. service as the core focus.
n Depository Membership aligns with the stipulations Our focus is to ensure retention of existing staff
outlined in the Securities Act of 2007, as well as the through competitive packages to ensure they are
comprehensive rules and regulations promulgated motivated to serve better.
by CDS and Clearing Limited in accordance with
the legislation. PERFORMANCE DRIVEN:
n Registered with Inland Revenue Department as per We are one of the leading investment banks in the
Nabil Bank established Nabil Income Tax Act 2002 and Income Tax Regulations country and are driven by generating good & stable
Investment in 2010 to expand into 2002. returns for our customers. We have been rendering
investment banking, aiming to n Service Level Agreement with the Nabil Bank. professional merchant banking services while our
become a leading investment bank mutual funds schemes have consistently provided
in Nepal. On 16 December 2022, good returns to its unit holders.
NB Capital Ltd., a subsidiary of Accounting Standards:
Nepal Bangladesh Bank, merged Nepal Financial Reporting Standards. We regularly review our products in line with
with Nabil Investment, bolstering Auditors: market expectations to ensure they continue to meet
both capital strength and service SAR Associates, Chartered Accountants (For 2079-80) our customers' needs.
offerings. Nabil holds 60% of Nabil Regulator
Investment Banking. Nabil Investment Securities Board of Nepal. IN-DEPTH MARKET DATA & ANALYSIS:
has prioritized personalized customer Vision The data and information we have from our expert
service and strategic investment since To be the leading investment bank in Nepal. research team is the heart of Nabil Investment. We
its inception, setting the industry work with facts to ensure our clients achieve their
standard in the process. Nabil Mission goals through informed decision-making.
Investment Banking Limited (Nabil To establish and maintain a strong professional
Invest), licensed by Securities Board expertise to introduce innovative investment banking ACTIVE MANAGEMENT:
of Nepal (SEBON) as a Securities and merchant banking services for customers. We are consistently active and never rest on our
Businessperson (Merchant Banker) laurels; we are always striving to be better and do
provides financial solutions and Strengths: better.
advice to individuals and corporate PEOPLE:
clients worldwide. Nabil Invest has Our people are our greatest assets as they drive CONVICTION:
three business divisions: Merchant our growth and success with their expertise and We stand by our principles and always act with
Banking, Corporate Advisory, knowledge, and ensure the company maintains its integrity.
Investment Banking and Mutual Fund. drive of placing clients above itself.

410 NABIL BANK LIMITED ANNUAL REPORT 2022/23 411

412 NABIL BANK LIMITED ANNUAL REPORT 2022/23 413
 Nabil Investment Banking Limited

Statement of Financial Position

As at Ashadh 2080 (July 16, 2023)
NPR
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 2079 ASHADH 32

Assets
Cash and Cash Equivalents 1 241,901,387 90,055,857 90,055,857
Financial Investments - at Amortized Cost (HTM) 2 590,296,548 613,123,000 613,123,000
Financial Investments - at FVTPL (HFT) 3 92,810,034 127,293,915 127,293,915
Financial Investments at FVOCI (AVS) 4 66,255,581 - -
Property Plant & Equipment 5 12,245,201 9,269,839 9,269,839
Goodwill and Intangible Assets 6 7,092,659 2,430,546 2,430,546
Right-of-use Assets 7 5,968,649 11,891,839 11,891,839
Other Assets 8 126,585,918 27,312,910 27,312,910
Current Tax Assets 9 1,010,545 9,491,068 9,491,068
Deferred Tax Assets 10 10,152,906 20,221,158 20,221,158
Total Assets 1,154,319,428 911,090,132 911,090,131
Liabilities
Refundable to Investors 11 436,427,564 410,509,733 410,509,733
Other Financial Liabilities 12 35,115,575 16,424,169 16,424,169
Other Liabilities 13 18,280,118 11,656,285 11,656,285
Lease Liabilities 14 6,307,741 12,398,634 12,398,634
Current Tax Liabilities 9
Deferred Tax Liabilities 10 -
Total Liabilities 496,130,998 450,988,821 450,988,820
Equity
Share Capital 15 324,000,000 270,000,000 270,000,000
Retained Earnings 16 183,918,353 164,705,480 164,705,480
Other Reserves 17 164,906,470 25,395,831 25,395,831
Other Component of Equity 17 (14,636,393)
Total Equity 658,188,430 460,101,311 460,101,311
Total Liabilities and Equity 1,154,319,428 911,090,132 911,090,131

Schedules and Explanatory Notes forms integral part of Statement of Position

As per our report of even date

Dhirendra Joshi Varun Chaudhary Adarsha Bazgain CA. Aman Uprety

Head Operation & Finance Director Director Partner
S.A.R. Associates

Manish Narayan Joshi Ganesh Prasad Awasthi Shankar Prasad Pandey

Chief Executive Officer Director Professional Independent Director

Date: September 29, 2023

Place: Naxal, Kathmandu

414 NABIL BANK LIMITED ANNUAL REPORT 2022/23 415

Statement of Comprehensive Income Statement of Other Comprehensive Income
For the period ended 31 Ashadh 2080 (July 16, 2023) For the period ended 31 Ashadh 2080 (July 16, 2023)
NPR NPR
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Income Profit For the Year 92,841,397.00 52,009,308

Income from Merchant Banking Activity 18 28,434,083 45,359,318
Income from Mutual Fund Operations 19 63,511,348 71,699,187 Other Comprehensive Income - -
Interest Income 20 64,840,551 83,071,248 A. Items that will not be reclassified into Income Statement - -
Other Income 21 62,440,135 51,078,719 Acturial Gains/(losses) on retirement benefit obligations - -
Net gain/(loss) on Financial Investments Held through Profit or Loss 22 22,713,597 (43,326,313) Taxation relating to items that will not be reclassified to profit or loss - -
Total Income 241,939,714 207,882,160 Total - -
Expense A. Items that will not be reclassified subsequently to Income Statement - -
Personnel Expense 23 57,107,352 53,879,103 Net Valuation Gains/(Losses) on FVTOCI investment taken to equity (7,923,541.70) -
Depreciation on Property and Equipment 5 3,341,530 3,192,840 Taxation relating to items that may be reclassified to income statement (2,377,062.51) -
Depreciation on Right-of-use Asset 7 5,923,190 5,923,190 Total Other Comprehensive Income (5,546,479) -
Amortization of Intangible Assets 6 768,489 474,504 Total Comprehensive Income 87,294,918.00 52,009,308.00
Other Operating Expenses 24 41,097,903 63,861,998
Finance Cost 25 389,410 626,173 Schedules and Explanatory Notes forms integral part of Statement of Position
Impairment
As per our report of even date
Total Expenses 108,627,874 127,957,808
Profit Before Tax from Continuing Operations 133,311,840 79,924,352
Income Tax Expense - Current Tax 29,273,633 53,361,522
Dhirendra Joshi Varun Chaudhary Adarsha Bazgain CA. Aman Uprety
Income Tax Expense - Previous Year 269,197 2,988,880 Head Operation & Finance Director Director Partner
Deferred Tax Expense (Income) 10,927,613 (28,435,358) S.A.R. Associates
Profit For the Year 92,841,397 52,009,308
Profit for the year 92,841,397 52,009,308 Manish Narayan Joshi Ganesh Prasad Awasthi Shankar Prasad Pandey
Total other comprehensive income /(loss) - - Chief Executive Officer Director Professional Independent Director
Income tax income /(expense) relating to components of
Other Comprehensive Income - -
Other comprehensive income for the year, net of tax 92,841,397 52,009,308 Date: September 29, 2023
Place: Naxal, Kathmandu
Annualized Earning per share (EPS) 28.65 19.26

Schedules and Explanatory Notes forms integral part of Statement of Position

As per our report of even date

Dhirendra Joshi Varun Chaudhary Adarsha Bazgain CA. Aman Uprety

Head Operation & Finance Director Director Partner
S.A.R. Associates

Manish Narayan Joshi Ganesh Prasad Awasthi Shankar Prasad Pandey

Chief Executive Officer Director Professional Independent Director

Date: September 29, 2023

Place: Naxal, Kathmandu

416 NABIL BANK LIMITED ANNUAL REPORT 2022/23 417

Statement of Changes in Equity Statement of Cash Flow
For the period ended 31 Ashadh 2080 (July 16, 2023) For the period ended 31 Ashadh 2080 (July 16, 2023)
NPR NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS SHARE RETAINED GENERAL OTHER OTHER TOTAL
CAPITAL EARNINGS RESERVE RESERVE COMPONENTS SHAREHOLDERS' Operating Activities
OF EQUITY FUNDS Cash Flow from Operating Activities (A) 89,488,870 (599,865,331)
1. Cash Received from Income 250,737,387 279,724,279
Balance as at July 16, 2021 200,000,000 189,374,841 18,946,068 1,666,137 409,987,046
1.1 Income from Merchant Banking Operation 28,434,083 45,359,318
Adjustments - - - -
1.2 Income from Mutual Fund Operation 63,511,348 71,699,187
Issue of Bonus Share 70,000,000 (70,000,000) - - - -
1.3 Interest Income 64,840,551 83,071,248
Dividend Declared & Paid - (3,684,211) - - - (3,684,211)
1.4 Other Income 93,951,405 79,594,526
Prior period adjustments (309,256) - - - (309,256)
2. Cash Payment 145,039,684 191,449,236
Transfer from CSR reserve to Retained Earning 937,398 - (937,398) - -
2.1 Personnel Expenses 57,107,352 53,879,103
Net profit for the year - 52,009,311 - - - 52,009,311
2.2 Office Operating Expenses 41,097,903 63,861,998
Previous year Tax Adjustment 2,098,421 - - - 2,098,421
2.3 Income Tax Paid 40,436,629 67,665,567
General Reserve - (5,200,931) 5,200,931 - - -
2.4 Lease Payment 6,397,800 6,042,568
Fair Value Reserve - - - -
Cash Flow before changes in Working Capital 105,697,703 88,275,043
Other Reserves (CSR) - (520,093) - 520,093 - -
(Increase)/Decrease in Current Assets (61,351,010) 21,585,844
Balance as at July 16, 2022 270,000,000 164,705,480 24,146,999 1,248,832 - 460,101,311
1. (Increase)/Decrease in Investments 25,686,208 (23,634,476)
Adjustments
2. (Increase)/Decrease in Other Financial Assets 12,235,790 (12,398,634)
Issue of Bonus Share - - - - - -
3. (Increase)/Decrease in Other Assets (99,273,008) 57,618,954
Transfer from NB Capital due to Merger 54,000,000 - 4,472,441 332,444 (18,469,847) 40,335,038
Increase/(Decrease) in Current Liabilities 45,142,177 (709,726,218)
Share Premium Reserve - - - 124,493,200 - 124,493,200
1. Increase/(Decrease) in Public Dues 25,917,831 (90,597,700)
Dividend Declared & Paid - (54,000,000) - - - (54,000,000)
2. Increase/(Decrease) in Other Financial Liabilities 12,600,513 (603,766,559)
Net Profit for the Period - 92,841,400 - - - 92,841,400
3. Increase/(Decrease) in Other Liabilities 6,623,833 (15,361,959)
Prior Period Adjustments - (9,415,973) - - - (9,415,973)
Cash Flow from Investing Activities (B) (63,100,163) 622,320
CSR Expenses Incurred from CSR Reserve - - - - - -
1. (Increase)/Decrease in HTM Investment 22,826,452 4,942,000
Transfer from CSR Reserve to Retained Earning - - 150,529 (150,529) - -
2. (Increase)/Decrease in Fixed Assets (11,747,492) (4,319,680)
Previous year Tax Adjustment - - - - - -
3. (Increase)/Decrease in AVS Investment (74,179,123)
General Reserve - (9,284,140) 9,284,140 - - -
Cash Flow from Financing Activities (C) 125,456,823 (1,895,046)
Fair Value Reserve - - - - (5,546,479) (5,546,479)
1. Increase/(Decrease) in Share Capital 54,000,000 -
Disposal of Financial assets held through OCI - - - - 9,379,933 9,379,933
2. Share Premium - -
Other Reserves (CSR) - (928,414) - 928,414 - -
3. Payment of Dividend (54,000,000) (3,684,211)
Balance as at July 16, 2023 324,000,000 183,918,353 38,054,109 126,852,361 (14,636,393) 658,188,430
4. Increase/ (Decrease) in Retained Earning and Reserve 125,456,823 1,789,165
(d) Net increase/(decrease) in cash and cash equivalents (A+B+C) 151,845,530 (601,138,056)
Schedules and Explanatory Notes forms integral part of Statement of Position
As per our report of even date (e) Cash and cash equivalents at the beginning of the year 90,055,857 691,193,913
(f) Cash and cash equivalents at the end of the year 241,901,387 90,055,857

Dhirendra Joshi Varun Chaudhary Adarsha Bazgain CA. Aman Uprety

Schedules and Explanatory Notes forms integral part of Statement of Position
Head Operation & Finance Director Director Partner
As per our report of even date
S.A.R. Associates

Manish Narayan Joshi Ganesh Prasad Awasthi Shankar Prasad Pandey

Dhirendra Joshi Varun Chaudhary Adarsha Bazgain CA. Aman Uprety
Chief Executive Officer Director Professional Independent Director
Head Operation & Finance Director Director Partner
S.A.R. Associates

Date: September 29, 2023 Manish Narayan Joshi Ganesh Prasad Awasthi Shankar Prasad Pandey
Place: Naxal, Kathmandu Chief Executive Officer Director Professional Independent Director

Date: September 29, 2023

Place: Naxal, Kathmandu

418 NABIL BANK LIMITED ANNUAL REPORT 2022/23 419



420
PARTICULARS
PARTICULARS
PARTICULARS
PARTICULARS

Bank Balance

NABIL BANK LIMITED

Investment in Debentures
Fixed Deposits with Banks

Investment in Quoted Equities

Investments in Quoted Equities
Other Fixed Income Instrument
1. Cash & Cash Equivalent

Investment in Quoted Mutual Fund Units

Investment in Unquoted Mutual Fund Units
Investment in Unquoted Mutual Fund Units
For the year ended 31 Ashadh 2080 (July 16, 2023)

3. Financial Investments -at FVTPL (HFT)

4. Financial Investments - at FVTOCI (AVS)

2. Financial Investments - at Amortized Cost (HTM)
Notes to the Financial Statements

66,255,581
26,267,317
-
39,988,264
92,810,034
-
92,810,034
590,296,548
241,901,387
-

249,700,000
340,596,548
241,901,387

2080 ASHADH 31
2080 ASHADH 31
2080 ASHADH 31
2080 ASHADH 31

Investment in Quoted Mutual Fund Units

Investments in Unquoted Equities (Process of Listing)

2079 ASHADH 32
2079 ASHADH 32
2079 ASHADH 32
2079 ASHADH 32

-
-
-
-
127,293,915
-
37,870,623
729,448
88,693,844
613,123,000
90,055,857
-

74,123,000
539,000,000
90,055,857

NPR
NPR
NPR
NPR

5. Property, Plant & Equipment NPR

ASSETS 2080 ASHADH 31 2079 ASHADH 32

PARTICULARS BUILDING VEHICLES FURNITURE COMPUTER OFFICE LEASEHOLD CWIP TOTAL TOTAL
HARDWARE EQUIPMENT

1. Cost Price
a. Previous Year Balance - 8,822,300 7,205,622 9,475,241 5,767,364 11,684,242 919,250 43,874,019 42,017,651
b. Addition during the period 6,290,000 585,425 355,950 7,231,375 3,939,355
c. Revaluation/Write Back This Year - - - - - - - - -
d. Sold during the Year - - - - - - - - (161,988)
e. Write off during the Year - - - - - - - - -
f. Transferred to Fixed assets - - - - - - (1,146,950) (1,146,950) (1,921,000)
g. Transferred from NB Capital - 232,466 232,466
Total Cost (a+b+c+d+e) - 15,112,300 7,205,622 9,707,707 6,352,789 11,684,242 128,250 50,190,910 43,874,018
2. Depreciation
a. Up to Previous Year - 8,306,256 5,467,498 7,591,358 4,280,132 8,958,935 - 34,604,179 31,561,823
b. For This period - 1,065,007 457,933 643,055 390,393 785,142 - 3,341,530 3,192,840
c. Revaluation/Write Back This Year - - - - - - - - -
d. Depreciation on Sold Assets - - - - - - - - (150,484)
e. Depreciation on Writen Off Assets - - - - - - - - -
Total Depreciation - 9,371,263 5,925,431 8,234,413 4,670,525 9,744,077 - 37,945,709 34,604,179
3. Book Value (WDV*) (1-2) - 5,741,037 1,280,191 1,473,294 1,682,264 1,940,165 128,250 12,245,201 9,269,839
ANNUAL REPORT 2022/23
421
6. Goodwill and Intangible Assets 9. Current Tax Assets/Liabilities NPR
NPR
PARTICULARS GOODWILL SOFTWARES PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Balance at 15 July, 2021 - 2,916,852 Advance Income Tax 50,196,894 62,852,590

Additions - Current Tax Liability 49,186,349 53,361,522
Disposals or classified as held for sale - 2,312,831 Total 1,010,545 9,491,068
Balance at 16 July, 2022 - 5,229,683
Additions 4,161,499 1,269,103
Disposals or classified as held for sale - -
Balance at 16 July, 2023 4,161,499 6,498,786 10. Deferred Tax Assets NPR
Accumulated amortization and impairment - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Balance at 15 July, 2021 - 2,324,633
Amortization expense - 474,504 Deferred Tax Assets/(Liabilities) 10,152,906 20,221,158
Disposals or classified as held for sale - - Total 10,152,906 20,221,158
Balance at 16 July, 2022 - 2,799,137
Amortization expense - 768,489
Disposals or classified as held for sale - -
Balance at 16 July, 2023 - 3,567,626 11. Refundable To Investors NPR
Carrying amount - -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
At 16 July 2022 - 2,430,546
At 16 July 2023 4,161,499 2,931,160 Refundable to Investors 436,427,564 410,509,733
Total 436,427,564 410,509,733

7. Right-of-use Asset
NPR 12. Other Financial Liabilities NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Cost or Deemed Cost
Opening Balance 11,891,839 17,815,029 Creditors and Accounts Payable 35,115,575 16,424,169
Addition - - Total 35,115,575 16,424,169
Disposal or Classified as held for sale - -
Closing Balance 11,891,839 17,815,029
Accumulated Depreciation - -
Opening Balance - - 13. Other Liabilities NPR
Depreciation 5,923,190 5,923,190
Disposal or Classified as held for sale - - PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Closing Balance 5,923,190 5,923,190 Employee Benefit Liability (12(A)) 17,930,913 11,305,196
Carrying Amount - - Accrued Rent (As per NFRS) 24,600 9,840
At 16th July 2022 - - TDS Payable 324,605 341,249
At 17th October 2022 5,968,649 11,891,839 Other Liablities
Total 18,280,118 11,656,285

8. Other Assets
NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 13 (A). Employee Benefit Liability NPR

Account Receivables 123,264,588 24,252,525 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Deposit 534,280 529,280
Non Current Liability
Staff Advances 2,050,615 1,832,834
Payable for Leave 3,118,486 2,424,712
Prepayments 736,435 698,272
Current Liability
Total 126,585,918 27,312,910
Bonus Payable 14,812,427 8,880,484
Total 17,930,913 11,305,196

422 NABIL BANK LIMITED ANNUAL REPORT 2022/23 423

14. Leasehold Liabilities NPR 19. Income from Mutual Fund Operations NPR

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Current Lease Liabilities 2,871,602 6,480,302 Fund Management Fees - NBF II 16,978,428 23,074,634
Lease Liabilities 3,436,139 5,918,332 Depository Fees - NBF II 2,263,790 3,076,618
Total 6,307,741 12,398,634 Fund Management Fees - NEF 18,916,667 25,572,397
Depository Fees - NEF 2,522,222 3,409,653
Fund Management Fees - NBF III 15,938,640 14,616,958
Depository Fees - NBF III 2,125,152 1,948,928
15. Share Capital NPR Fund Management Fees - NFCF 4,205,690 -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Depository Fees - NFCF 560,759 -
Total 63,511,348 71,699,187
Ordinary Shares as at 1st Shrawan 324,000,000 270,000,000
Issue of Share Capital -
Total 324,000,000 270,000,000
20. Interest Income NPR

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Interest from FD 41,292,150 66,965,771

16. Retained Earnings NPR Interest from Call Deposit 6,319,408 3,830,101
Interest from Debentures/Bonds 15,532,960 11,195,264
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 Interest from Merchant Banking Activity 1,696,033 1,080,111
Retained Earnings 183,918,353 164,705,480 Total 64,840,551 83,071,248
Total 183,918,353 164,705,480

21. Other Income NPR

17. Other Reserves NPR PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Business Advisory 27,156,374 3,282,009

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Dividend Income 2,084,769 9,553,256
General Reserve 38,054,109 24,146,999 Income from Depository Participant Service 33,014,896 38,216,638
Other Reserve (Corporate Social Responsibility) 2,359,161 1,248,832 Gain or Loss on Sale of Fixed Assets - 25,135
Share Premium Reserve 124,493,200 - Miscellaneous Income 184,096 1,681
Other Components of Equity (14,636,393) - Total 62,440,135 51,078,719
Total 150,270,077 25,395,831

22. Net Gain/(Loss) On Financial Investments-HFT NPR

18. Income from Merchant Banking Activity NPR
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Unrealized gain/(loss) on financial investments-HFT (8,797,673) (71,842,120)
Issue Management Income 9,756,784 6,298,836 Gain on Sale of Securities 31,511,270 28,515,807
Registrar to Shares 2,883,562 2,320,205 Total 22,713,597 (43,326,313)
Portfolio Management Services 15,718,737 36,739,277
Income from Auction of Shares Management 75,000 1,000
Total 28,434,083 45,359,318

424 NABIL BANK LIMITED ANNUAL REPORT 2022/23 425

23. Personnel Expenses NPR
Continue: Other Operating Expenses
NPR

PARTICULARS 2080 ASHADH 31 2079 ASHADH 32 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32

Salary 14,254,744 13,591,026

Rent Expenses 180,000 120,000
Allowances 15,061,105 23,093,225
Deferral Rent Expenses 14,760 9,840
Contribution to Provident Fund 1,639,127 1,599,276
Semi-annual & Budget Review Expenses 453,269 392,812
Overtime 4,263 16,791
Legal Fees & Expenses 19,200 323,505
Training Expenses 536,447 933,625
Issue Management Expenses 720 -
Dashain Expenses 2,234,077 2,220,874
Local Conveyance 36,235 24,874
Staff Insurance Premium 877,922 863,577
Postage & Courier 37,241 66,517
Leave Encashment 869,724 1,229,755
Farewell to CEO - -
Gratuity Expenses 1,393,188 1,332,401
Sebon Licence Renewal 800,000 800,000
Staff Recruitment Expense 21,823 21,143
DP & PMS Commission Expenses 9,786,157 12,079,583
Hardship/Teller Allowance - 38,900
Corporate Advisory Expense 8,489,702 121,790
Staff Welfare 25,529 58,026
Escrow Expense 662,466 29,819,861
Contract staff expense - -
Share Transaction Cost 354,764 -
Lunch Allowance 2,079,761 PMS Expense - 398,849 -
Performance Incentive 3,297,215 -
Issue Management Commission - -
Staff Bonus 14,812,427 8,880,484
CSR Expense 150,529 937,398
Total 57,107,352 53,879,103
Other Interst Expenses 974,014 193,695
Other Fees and Taxes 45,877 671,778
SLA Service Expenses 500,000 500,000
PMS Adjustment Expense 235,981 91,606
24. Other Operating Expenses NPR Business Tax 195,050 -
PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Hoarding Board 45,000 -
Total 41,097,903 63,861,998
General Operating Expenses
Supplies and Stationeries 814,296 1,198,385
Communication Expenses 627,936 646,545
Expenses relating to Audit
a.External Audit Fees and Expenses 180,000 180,000
25. Finance Cost NPR
b. Internal Audit Fees and Expenses 226,000 239,150
Repairs & Maintenance 390,369 626,314 PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
Water 273,568 239,620
Interest Cost on Lease 389,410 626,173
Electricity 717,490 792,808
Total 389,410 626,173
Janitorial 214,726 134,485
Advertisement Expenses/Marketing 1,611,040 2,452,371
Insurance - Fire & Others 172,739 102,308
Board Meeting Fees & Allowances 429,680 246,000
Professional Services - Others 262,725 -
Fuel Expenses - Vehicle 824,989 465,614
Fuel Expenses - Generator 27,979 33,700
Newspapers/Periodicals/ Books 33,585 32,075
Refreshment Expenses 613,844 478,292
Membership Fees 105,000 105,000
Sebon Commission Expense 5,241,523 5,654,073
Vehicle Registration & Renewal 56,780 82,500
Outsourced Service Expenses 2,169,312 1,934,445
Miscellaneous Expenses 119,019 160,729
General Meeting Expenses 16,369 7,594
Travelling Expenses 124,450 6,000
AMC Charges 1,695,740 1,419,770
Bank Charges 19,399 16,484
Leasehold Expenses- Rental expense 749,531 454,477
Continue: Other Operating Expenses

426 NABIL BANK LIMITED ANNUAL REPORT 2022/23 427

 Vision QUALITY:
NSDL’s aspiration is to become a reliable investment We maintain a commitment to excellence in all our
FINANCIAL partner, dedicated to streamlining investments interactions with stakeholders, media, investors,

STATEMENTS OF
LIMITED (SUBSIDIARY)
NABIL STOCK DEALER
and optimizing returns for customers across all and the general public.
demographics and regions of the country.
We are steadfast in our commitment to continuous Services :-
innovation and surpassing the expectations of our BROKERAGE SERVICES
valued customers and other stakeholders. NSDL is currently providing smooth brokerage
services to over 2500 clients, ensuring they receive
Mission timely notifications regarding their transactions.
n Utilize cutting-edge technologies and embrace This approach keeps our clients well-informed and
a culture of continuous improvement to ensure involved in their investments, thereby bolstering
efficient operations and provide exceptional transparency and trust in our services.
customer service.
n Enhance customer trust and confidence in the UNDERWRITING SECURITIES
Nabil Stock Dealer Ltd. (NSDL) was established on capital market. Backed by a capital base of NPR 1.52 billion,
19 July 2021 and licensed as stock dealer company n Contribute actively to the development and growth strong support from the parent company, and
by the Securities Board of Nepal (SEBON) and of the capital market, taking it to new heights. considerable assets under management, NSDL is
Nepal Stock Exchange (NEPSE) on 7 June 2023 n Establish ourselves as the foremost authority in proficient in underwriting securities on a significant
and 4 August 2023, respectively. NSDL is a wholly Capital Market Research. scale, which has enabled it to adeptly manage
owned subsidiary of Nabil Bank Ltd., and has paid n Exemplify the highest standards of ethics and public offerings. The company has already
up capital of NPR. 1.52 billion. It is one of only two compliance within the capital market landscape. provided underwriting services to more than six
stock dealers in Nepal that serve over 2,500 clients n Nurture and develop our human capital to foster public companies, facilitating transactions of over
and with a market share of over 2.5%. NSDL serves organized growth and build strong customer NPR 5 billion.
as both a Securities Dealer and Securities Broker, relationships.
providing liquidity to the market and acting as an n Establish ourselves as the foremost authority in PORTFOLIO MANAGEMENT SERVICES (PMS)
intermediary in trade execution between buyers Capital Market Research. NSDL provides specialized and customized portfolio
and sellers. The company contributes to capital management services which includes a range
market growth by enhancing market efficiency Core Values :- of specialized investment strategies designed
and promoting price discovery through Qualified INTEGRITY: in response to client’s need to capitalize on the
Institutional Investor (QII) initiatives. Beyond trading We adhere to principles of honesty, transparency, market opportunities and to meet the client’s
functions, NSDL offers valuable market insights ethics, and fairness in every action and decision we financial goals. When customer invests in NSDL’s
and advice, supports investors in making informed make. PMS, the company creates a personalized portfolio
decisions through services like investment advisory, based on risk return appetites of the clients and
corporate advisory, and portfolio management for INNOVATION: comprising of investment in equity, fixed income
both individual and institutional clients. Notably, We cultivate an environment of perpetual securities, etc. Customers have the freedom and
NSDL's impact extends beyond the secondary market, innovation aimed at enriching the customer flexibility to tailor their portfolio to address personal
with significant contributions to the primary market experience. preferences and financial goals.
through IPO issue underwriting, streamlining the
process for companies to go public. NSDL has TRANSPARENCY: MARGIN LENDING SERVICE
cultivated trust and confidence in the Nepali financial We ensure transparency in every interaction with NSDL provides margin lending facilities, which
market and has contributed to the development and stakeholders, media, investors, and the broader involves extending credit facilities using a
expansion of the capital market. public. preapproved list of shares held by our clients. The

428 NABIL BANK LIMITED ANNUAL REPORT 2022/23 429

 margin lending solution presents investors with between CDS and Clearing Limited and investors
the chance to amplify their investments beyond with DEMAT accounts, NSDL provides the
their existing capacity, thereby enhancing potential opportunity for customers to access online services
returns. This service is offered against a pre- such as applying for IPOs, FPOs, and Right shares,
approved roster of securities, with a predetermined as well as viewing portfolio details with just a few
margin requirement. Through this provision, clicks upon opening a DEMAT account.
investors have the option to secure funds for the
acquisition of supplementary securities without INVESTMENT ADVISORY AND CORPORATE
liquidating their holdings in the long-term. ADVISORY
NSDL offers investment consultancy and
advisory services for financing, loan swapping,
QUALIFIED INSTITUTIONAL INVESTOR (QII) or fundraising. A team of experts is available to
As a Qualified Institutional Investor (QII), NSDL provide support in identifying optimal funding
can be a significant source of capital for entities sources, negotiating favourable teams, and
seeking to raise funds through various means, managing associated risks. Additionally, it also
such as initial public offerings (IPOs), bonds, and provides assistance with planning, budgeting, and
other securities, thereby aiding in the growth and financial activity reporting. NSDL aims to facilitate
development of such entities. the acquisition of necessary funds to foster the
Further, NSDL actively participates in pre-market growth of businesses with confidence and ease.
price determination such as the book building
process. With extensive research and analysis, INVESTMENT LITERACY PROGRAM
NSDL helps to ensure that market prices reflect NSDL is conducting investment literacy program
available information and are accurately valued. with the aim to make targeted groups aware
of investment. It carried out Investment Literacy
DEPOSITORY PARTICIPANT Programs for 250 students in Kathmandu Valley
As an authorized Depository Participant (DP) through the collaboration with Liberty College
agent licensed by SEBON and a member of CDS and the Academy of Culinary Arts and Hospitality
and Clearing Limited, NSDL offers Depository Management.
Participant services. Acting as an intermediary

430 NABIL BANK LIMITED ANNUAL REPORT 2022/23 431

432 NABIL BANK LIMITED ANNUAL REPORT 2022/23 433
Nabil Stock Dealer Limited (Formerly Nabil Securities Limited)
Statement of Profit or Loss and Other Comprehensive Income
For the period ended 31 Ashadh 2080 (July 16, 2023)
Statement of Financial Position NPR
As at 31 Ashadh 2080 (16 July 2023) PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32
NPR
PARTICULARS NOTE 2080 ASHADH 31 2079 ASHADH 32 Income
Revenue from Operations 11 - -
Non Current Assets
Other Income 12 98,987,104 -
Property, Plant and Equipment 1 664,754 -
Total 98,987,104 -
Financial Assets:
Employee Benefit Expenses 13 458,219 -
Investment Securities - -
Operating Expenses 14 12,208,611 62,600
Other Assets - -
Depreciation and Amortization Expenses 1 - -
Total Non-Current Assets 664,754 -
Profit from Operations 86,320,273 (62,600)
Current Assets
Finance Cost - -
Financial Assets:
Profit Before Tax 86,320,273 (62,600)
Cash and Cash Equivalent 2 111,705,038 -
Current Tax Expenses 15 26,437,075 -
Investment Securities 3 1,480,000,000 -
Deferred Tax Expenses/(Income) 6 16,619 -
Other Assets 4 25,000 -
Net profit for the year 59,866,579 (62,600)
Current Tax Assets 5 14,932,921 -
Other Comprehensive Income
Total Current Assets 1,606,662,960 -
Fair value measurement of investment securities - -
Total Assets 1,607,327,714 -
Tax relating to items that will not be reclassified to profit or loss - -
Liabilities
Revaluation on PPE - -
Non-Current Liabilities:
Other Comprehensive Income - -
Deferred Tax Liability 6 16,619 -
Total Comprehensive Income 59,866,579 (62,600)
Lease Liability - -
Financial Liabilities - - Significant Accounting Policies and Notes to Account form integral part of financial statements As per our report of even date
Total Non-Current Liabilities 16,619 -
Current Liabilities
Financial Liabilities - - Madan Timilsina Suresh Devkota Bharat Adhikari CA Gyanendra B. Bhari
Other Current Liabilities: Head - Finance & Operation Acting C.E.O. Chairman Partner
Current Tax Liabilities 7 26,470,674 - B.R.S. Neupane & Co.
Chartered Accountants
Other Liabilities 8 974,710 62,600
Current Liabilities 27,445,384 62,600 Vipin Vihari Pangeni Kabindra Dahal
Director Director
Total Liabilities 27,462,002 62,600
Equity
Share Capital 9 1,520,000,000 -
Reserves and Retained Earnings 10 59,865,711 (62,600) Date: August 28 , 2023
Place: Teendhara, Kathmandu
Total Equity 1,579,865,711 (62,600)
Total Equity and Liabilities 1,607,327,714 -

Significant Accounting Policies and Notes to Account form integral part of financial statements As per our report of even date

Madan Timilsina Suresh Devkota Bharat Adhikari CA Gyanendra B. Bhari

Head - Finance & Operation Acting C.E.O. Chairman Partner
B.R.S. Neupane & Co.
Chartered Accountants

Vipin Vihari Pangeni Kabindra Dahal

Director Director

Date: August 28 , 2023

Place: Teendhara, Kathmandu

434 NABIL BANK LIMITED ANNUAL REPORT 2022/23 435

Statement of Changes in Equity Statement of Cash Flow
For the period ended 31 Ashadh 2080 (July 16 2023) For the period ended 31 Ashadh 2080 (July 16 2023)
NPR NPR
PARTICULARS SHARE CORPORATE FAIR VALUE GENERAL RETAINED TOTAL PARTICULARS 2080 ASHADH 31 2079 ASHADH 32
CAPITAL SOCIAL RESERVE RESERVE EARNINGS
RESPONSIBILITY FUND Cash Flow from Operating Activities
Net Profit Before Tax 86,320,273 (62,600)
Balance at 1 Shrawan 2078 - - - - - - Add: Depreciation and amortization expenses - -
Profit for the year - - - - (62,600) (62,600) Cash flow before changes in working capital 86,320,273 (62,600)
Appropriation to general reserve - - - - - - Changes in working capital
Balance at 32 Ashadh 2079 - - - - (62,600) (62,600) (Increase)/Decrease in Other Financial Assets - -
Issue of Share Capital 1,500,000,000 - - - - 1,500,000,000 (Increase)/Decrease in Other Assets (25,000) -
Share Issued on Acquisition of NBBL 20,000,000 - - - - 20,000,000 (Increase)/Decrease in Current Tax Assets (14,932,921) -
Securities Limited Increase/(Decrease) in Lease Liability - -
Reserve of NBBL Securities - - - - 61,732 61,732 Increase/(Decrease) in Other Liabilities 912,110 62,600
Profit for the year - - - - 59,866,579 59,866,579 Cash Generated from Operations 72,274,461 -
Appropriation to general reserve - - - - - - Share Capital of Acquired Company 20,000,000 -
Balance at 31 Ashadh 2080 1,520,000,000 - - - 59,865,711 1,579,865,711 Reserve transferred from acquired company 61,732 -
Tax Liability transferred of Acquired Company 33,599 -
Payment of income tax - -
Significant Accounting Policies and Notes to Account form integral part of financial statements As per our report of even date Net Cash Flows from Operating Activities 92,369,792 -
Cash Flow from Investing Activities
Acquisition of Property, Plant & Equipment (664,754) -
Madan Timilsina Suresh Devkota Bharat Adhikari CA Gyanendra B. Bhari (Increase)/Decrease in Cost of Investment (1,480,000,000) -
Head - Finance & Operation Acting C.E.O. Chairman Partner
Net Cash flows from Investing Activities (1,480,664,754) -
B.R.S. Neupane & Co.
Chartered Accountants Cash Flow from Financing Activities
Proceeds from the Issue of Share Capital 1,500,000,000 -
Vipin Vihari Pangeni Kabindra Dahal
Director Director Net Cash Flows from Financing Activities 1,500,000,000 -
Net Increase in Cash and Cash Equivalents 111,705,038 -
Cash and Cash Equivalents at the beginning of year - -
Cash and Cash Equivalents at the end of year 111,705,038 -
Date: August 28 , 2023
Place: Teendhara, Kathmandu
Significant Accounting Policies and Notes to Account form integral part of financial statements As per our report of even date

Madan Timilsina Suresh Devkota Bharat Adhikari CA Gyanendra B. Bhari

Head - Finance & Operation Acting C.E.O. Chairman Partner
B.R.S. Neupane & Co.
Chartered Accountants

Vipin Vihari Pangeni Kabindra Dahal

Director Director

Date: August 28 , 2023

Place: Teendhara, Kathmandu

436 NABIL BANK LIMITED ANNUAL REPORT 2022/23 437

 Notes to the Financial Statements

438
For the period ended 31 Ashadh 2080 (July 16 2023)
NPR
1. Property, Plant & Equipments

PARTICULARS RIGHT TO LAND CORPORATE FURNITURE VEHICLES COMPUTER OFFICE OTHER TOTAL
USE ASSETS BUILDING AND FIXTURE AND ACCESSORIES EQUIPMENT EQUIPMENTS

NABIL BANK LIMITED

Cost
Balance at 1 Shrawan 2078 - - - - - - - - -
Additions - - - - - - - - -
Disposals - - - - - - - - -
Balance at 32 Ashad 2079 - - - - - - - - -
Additions - - - - 664,754 - - 664,754
Disposals - - - - - - - - -
WIP Capitalized - - - - - - - - -
Balance at 31 Ashadh 2080 - - - - - 664,754 - - 664,754
Accumulated Depreciation
Balance at 1 Shrawan 2078 - - - - - - - -
Depreciation charged for the period - - - - - - - -
Adjustment of disposal -
Balance at 32 Ashad 2079 - - - - - - - - -
Depreciation charged for the period - - - - - - - - -
Adjustment of disposal - - - - - -
Balance at 31 Ashadh 2080 - - - - - - - - -
Carrying Amount
At 1 Shrawan 2078 - - - - - - - -
At 32 Ashadh 2079 - - - - - - - - -
At 31 Ashadh 2080 - - - - - 664,754 - - 664,754

Total
Total
Total
Total
Total
Total

PARTICULARS
PARTICULARS
PARTICULARS
PARTICULARS
PARTICULARS
PARTICULARS

Fixed Deposit
Cash in Hand

Bishnu Sapkota

Current Tax Assets

Nabil Bank Limited

Income Tax Liability

4. Other Assets

5. Current Tax Assets

3. Financial Investments

7. Current Tax Liabilities

Changes Deferred Tax Liabilities
Changes for Deferred Tax Assets
2. Cash and Cash Equivalents

Opening Deferred Tax Asset / ( Liabilities )

6. Deferred Tax Assets/(Liability)

31 ASHADH 2080
31 ASHADH 2080
31 ASHADH 2080
31 ASHADH 2080
31 ASHADH 2080
31 ASHADH 2080

26,470,674
26,470,674
16,619
16,619
-
-
14,932,921
14,932,921
25,000
25,000
1,480,000,000
111,705,038
-

1,480,000,000
111,705,038

ANNUAL REPORT 2022/23

32 ASHADH 2079
32 ASHADH 2079
32 ASHADH 2079
32 ASHADH 2079
32 ASHADH 2079
32 ASHADH 2079

-
-
-
-
-
-
-
-
-
-
-
-
-
-
-

NPR
NPR
NPR
NPR
NPR
NPR

Note 5

439
Bank Balance

Advances
8. Other Liabilities NPR 13. Employee Benefit Expenses NPR

PARTICULARS 31 ASHADH 2080 32 ASHADH 2079 PARTICULARS 31 ASHADH 2080 32 ASHADH 2079

Nabil Bank Ltd - 40,000 Salary, Allowances & Remuneration 458,219 -

Rolling Plans 43,485 - Total 458,219 -
Shrijana International Media P Ltd 8,288 -
International Electronic Concern P Ltd 106,817 -
V Chitra 28,782 -
MegaTech Group P Ltd 505,697 - 14. Operating Expenses NPR
BRS neupane & Co. 66,900 22,300
Sagar Distributors P Ltd 43,416 - PARTICULARS 31 ASHADH 2080 32 ASHADH 2079
Other Liabilities 119,560 -
TDS Payable Registration & Renewals - 40,000
Social Security Tax 4,582 - NEPSE License Fee 500,000 -
Audit Fee 1,200 - RTGS - SEBON License Fee 10,000,000 -
Due Deligence Audit Fee 375 - NEPSE Annual Charge 175,000 -
Advertisement Exp 499 - OCR Expenses for Capital Increment 873,200 -
Administrative Exp 585 300 SEBON Application Fee 200,000 -
Meeting Fee 35,700 - Due Deligence Audit Expenses 28,250 -
Fixed Assets Purchase 8,824 - Statutary Audit Expenses 33,900 22,600
Total 974,710 62,600 Nabil Securities Expenses - -
Meeting Fees 238,000 -
Office Consumable & Office Exp. 78,623 -
Advertisement Expenses 37,569 -
9. Share Capital NPR
Administrative Expenses 44,070 -
Provision for Expenses - -
PARTICULARS 31 ASHADH 2080 32 ASHADH 2079
Total 12,208,611 62,600
Authorized Share Capital (30,000,000 at NPR 100 Each) 3,000,000,000
Issued Share Capital (15,200,000 at NPR 100 Each) 1,520,000,000
Paid Up Share Capital (15,200,000 at NPR 100 Each) 1,520,000,000

15. Current Tax Expenses NPR

10. Reserves NPR

PARTICULARS 31 ASHADH 2080 32 ASHADH 2079

Current year income tax expenses 26,437,075 -

PARTICULARS 31 ASHADH 2080 32 ASHADH 2079
Prior year income tax expenses - -
Opening Retained Earning (62,600) - Total 26,437,075 -
Profit for the year 59,866,579 (62,600)
Reserve Transfer of NBBL Securities 61,732 -
Total 59,865,711 (62,600)

11. Revenue from Operations NPR

PARTICULARS 31 ASHADH 2080 32 ASHADH 2079

Revenue from Operation - -

Total - -

12. Other Income NPR

PARTICULARS 31 ASHADH 2080 32 ASHADH 2079

Interest Income From Bank Deposit 98,987,104 -

Total 98,987,104 -

440 NABIL BANK LIMITED ANNUAL REPORT 2022/23 441

Schedule forming part of the financial statement (Financial Year 2079/80)
Depreciation Schedule in Accordance with Income Tax(As of 31st Ashad 2080)
NPR

ADDITIONS DEPRECIATION ON CURRENT YEAR PREVIOUS YEAR

PARTICULARS OPENING UP TO MAGH TO BAISAKH 2079 TOTAL ABSORBED DISPOSALS NET VALUE OF NET OPENING ADDITIONS DISPOSALS TOTAL NET VALUE UNABSORBED NET VALUE NET VALUE
BALANCE POUSH 2078 CHAITRA 2078 TO ASHADH 2079 ADDITION ADDITIONS DEPRECIABLE ASSETS BALANCE DEPRECIATION (B) OF ASSETS AFTER ADDITIONS OF ASSETS OF ASSETS
BEFORE DEPRECIATION (A) DEPRECIATION (A-B)

Pool "A" (5%) - - - - - - - - - - - - - -

Corporate Building - - - - -
Pool "B" (25%) - - - 664,754 664,754 221,585 221,585 - 55,396 - 55,396 166,189 443,169 609,358 -
Furniture and Fixtures - - - - - - - - - - - - - - - -
Computer & Equipemnt - - - 664,754 664,754 221,585 - 221,585 - 55,396 - 55,396 166,189 443,169 609,358 -
Office Equipment - - - - - - - - - - - - - - - -
Pool "C" (20%) - - - - - - - - - - - - - -
Motorcycle - - - - - - - - - - - - - - - -
Vechicle Car - - - - - - - - - - - - - - - -
Pool "D"(15%) - - - - - - - - - - - - - - - -
UPS , TV , Projector, - - - - - - - - - - - - - - - -
CC TC & Air Conditioner
Total fixed assets - - - 664,754 664,754 221,585 - 221,585 - 55,396 - 55,396 166,189 443,169 609,358 -
Software (20%) - - - - - - - - - - - - - - - -
Total - - - 664,754 664,754 221,585 - 221,585 - 55,396 - 55,396 166,189 443,169 609,358 -

442 NABIL BANK LIMITED ANNUAL REPORT 2022/23 443

 EXECUTIVE MANAGEMENT TEAM

444
Full Name Designation Full Name Designation

Gyanendra Prasad Dhungana Chief Executive Officer Bhupendra Pandey DCEO

Sujit Kumar Shakya Senior DCEO Adarsha Bazgain DGM
Binaya Kumar Regmi DCEO Ganesh Prasad Awasthi DGM

NABIL BANK LIMITED

Manoj Kumar Gyawali DCEO Gyanendra Pratap Shah DGM

MANAGEMENT TEAM
Full Name Role Full Name Role

Digital Banking
Parmeshwor Shrestha Chief Digital Banking Officer Central Trade Operations
Dinesh Chand Manager - Digital Banking Sulabh Kumar Shrestha Chief - Central Trade Operations
Rajiv Shrestha Manager - Digital Banking Manoj Aryal Manager - Central Trade Operations

Retail Transaction Banking Information Technology

Niraj Sharma Chief - Retail Transaction Banking Sushil Bhattarai Chief Information Technology Officer
Sandesh Raj Bhattarai Manager - Information Technology
Corporate Banking Samir Giri Manager - Information Technology
Rajendra Prasad Adhikari Chief Business Officer - Corporate, Infrastructure and Project Raju Maharjan Manager - Information Technology
Finance
Prabin Lal Shrestha Manager - Information Technology
Suresh Jung Karki Head - National Corporate
Pramod K.C. Senior Relationship Manager - National Corporate
NPA Management, Inspection and Credit Reporting
Bhawana Khadka Senior Relationship Manager - National Corporate
Niraj Kumar Basnet Danil Chief Recovery Officer
Parikshya Pokhrel Relationship Manager - National Corporate
Dambar Bahadur Shrestha Head - NPA Inspection
Surya Bahadur Roka Manager - Recovery Cell
Marketing
Anjan Koirala Head - NPA Management
Krishna Prasad Subedi Chief Marketing Offficer
Bisho Rup Khadka Manager - NPA Management
Amartya Ojaswi Upadhyay Head - Wholesale Liability
Saroj Babu Tiwari Manager - Recovery Cell
Laxmi Lamichhane Dhakal Head - Government Sector and Branch Monitoring
Santosh Kumar Sah Manager - Recovery Cell
Ujjwal Nepal Head - Retail Liability
Premuka Rai Head - CSR
Internal Audit
Subodh Lohani Chief - Internal Audit
Operations
Suresh Prasad Tripathee Chief of Central Operations
Ashesh Adhikari Head - Branch Operations Control
Digendra Chand Head - Alternate Channel & Back Office Hub

Full Name Role Full Name Role

Contactor Business Administration

Rishi Ram Gyawali Chief - Contractor Business Kailash Tripathi Head - Administration
Bharat Thapa Senior Relationship Manager - Contractor Business Unit Ashish Manandhar Manager - Administration
Kiran Kumar Pradhan Relationship Manager - Contractor Business Unit
Service Excellence
Credit Approval Center Prabhavati Singh Bista Head - Service Excellence
Sudin Dhungel Chief - Credit Approval Center
Krishna Kumar Thapa Manager - Credit Approval Center Credit Control
Santosh Bhattarai Manager - Credit Approval Center Ashish Singh Head - Credit Control
Manika Shrestha Manager - Credit Approval Center Rajesh Kumar Das Manager - Credit Control
Padam Singh Mahata Manager - Credit Approval Center Bijaya Prasad Poudel Manager - Credit Control
Saroj Shrestha Manager - Credit Approval Center Rajan Manandhar Manager - Credit Control
Padam Raj Upreti Manager - Credit Approval Center Chiran Saran Manandhar Manager - Credit Control
Sunav Shrestha Manager - Credit Control
nBank Naresh Kayastha Manager - Credit Control
Pradeep Nepal Head - nBank
Retail Lending Unit
SME and Micro Finance Chandani Shrestha Head - Retail Lending Unit
Amit Shrestha Chief - SME, MF & Sustainable Banking Sachin Amatya Manager - Retail Lending Unit
Arjun Shrestha Manager - SME
Manoj Kumar Yadav Manager - MF & Sustainable Banking Integrated Risk Management
Bhaskar Awasthi Head - Integrated Risk Management
Human Resource Department
Diwas Karki Chief Human Resources Officer Legal
Sushil Sapkota Manager - Human Resources Vishma Neupane Head - Legal
Sumina Prajapati Manager - HR Operations
Compliance
Finance and Planning Anjuli Shrestha Head - Compliance & Governance Enforcement
Sandip Babu Paudel Chief - Finance and Planning
Ravi Chand Manager - Finance Infrastructure & Project Finance
Jagriti Rana Manager - Finance Nishesh Hari Rajbhandari Head - Infrastructure and Project Finance
Sarina Shrestha Senior Relationship Manager - Infrastructure and Project
Finance
Treasury, International Banking and Strategic Expansion
Ravi Bhatta Relationship Manager - Infrastructure and Project Finance
Jyoti Man Shrestha Head - International Banking
ANNUAL REPORT 2022/23

Vinisha Shrestha Head - Treasury

445
 OUR NETWORKS
HEAD OFFICE: Nabil Center, Beena Marga, Teendhara,
Durbar Marg, Kathmandu, Nepal

Cluster Head and Province Head

Cluster Head and Province Head

Cluster Head and Province Head

Cluster Head and Province Head

Cluster Head and Province Head

Cluster Head and Province Head

TEL: 01-4221718, 01-4227181
P.O. BOX: 3729, Kathmandu
FAX: 01-4226905
Head - Remittance Business Center
TELEX: 2431 NABILH NP
SWIFT: NARBNPKA

Cluster Head
Cluster Head

Cluster Head
Cluster Head

Cluster Head
Cluster Head
Cluster Head
Cluster Head
Cluster Head
Cluster Head

Cluster Head

Cluster Head
Cluster Head
Cluster Head
Cluster Head
Information Security Officer

KOSHI PROVINCE

Branch Name Address Contact

Role sf]zL k|b]z
Head - Strategy

Biratnagar Branch Biratnagar, Morang 021-516213

Itahari Branch Itahari, Sunsari 025-580741
Dharan Branch Dharan, Sunsari 025-530130
Birtamod Branch Birtamod, Jhapa 023-533727
Role

Damak Branch Damak, Jhapa 023-575190

Central Cluster Office, Sudur Paschim Province

Remittance Business Center

Khandbari Branch Khandbari, Sankhuwasabha 029-560873

Chandragadhi Branch Chandragadhi, Jhapa 023-454021
Central Cluster Office, Madhesh Province

Central Cluster Office, Gandaki Province

Central Cluster Office, Bagmati Province

Central Cluster Office, Lumbini Province

Urlabari Branch Urlabari, Morang 021-540929
Central Cluster Office, Koshi Province
Information Security

Gaighat Branch Gaighat, Udayapur 035-421172

Biratchowk Branch Biratchowk, Morang 021-545639
Manisha Shrestha

Cluster Office, Manakamana

Prabesh Poudel

Inaruwa Branch Inaruwa, Sunsari 025-566098

Sushil Poudyal

Cluster Office, Swayambhu

Cluster Office, Siddhababa

Cluster Office, Palanchowk

Cluster Office, Bageshwori

CLUSTER HEAD

Duhabi Branch Duhabi, Sunsari 025-543302

Cluster Office, Pashupati
Cluster Office, Phulchoki

Cluster Office, Shivapuri

Cluster Office, Deukhuri

Full Name

Strategy

Cluster Office, Mithila

Cluster Office, Janaki

Hile Branch Hile, Dhankuta 026-540708

Cluster Office, Mechi
Cluster Office, Koshi

Cluster Office, Rara

Cluster Office, Vyas
Mahendra Chowk Branch Mahendra Chowk, Morang 021-590294
Tarahara Branch Tarahara, Sunsari 025-475301
Kanchanbari Branch Kanchanbari, Morang 021-460426
Location

Katari Branch Katari, Udayapur 035-450355

Biratnagar (Pushpalal Chowk) Branch Pushpalal Chowk, Biratnagar, Morang 021-450447
Illam Branch Illam 027-524639
Jhumka Branch Jhumka, Sunsari 025-562707
Kakarvitta Branch Kakarvitta, Jhapa 023-590886
Head - Credit Administration Department

Surunga Branch Surunga, Jhapa 023-556280

Biratnagar Rangeli Road Branch Biratnagar Rangeli Road, Morang 021-590304
Head - Operation Risk, AML & CFT

Dharan Mahendrapath Branch Dharan Mahendrapath, Sunsari 025-275345

Bhojpur Branch Bhojpur 029-420713
Sudurpaschim Province

Birtamod BNC Branch Birtamod BNC, Jhapa 023-545724

Madhesh Province
Madhesh Province
Madhesh Province

Gandaki Province
Gandaki Province
Bagmati Province
Bagmati Province
Bagmati Province
Bagmati Province
Bagmati Province
Bagmati Province
Bagmati Province

Lumbini Province
Lumbini Province
Lumbini Province
Lumbini Province

Sankranti Bazar Branch Sankranti Bazar, Terhathum 026-680052

Karnali Province
Koshi Province
Koshi Province
Koshi Province
Company Secretary

Karsia Branch Karsia, Morang 021-565038

Phidim Branch Phidim, Panchthar 024-523081
Province

Itahari Pashchim Line Branch Itahari Pashchim Line, Sunsari 025-582411

Sindhuwa Branch Sindhuwa, Dhankuta 026-404169
Sangurigadhi Branch Sangurigadhi, Dhankuta 025-400078
Role

Chhathar Branch Chhathar, Terhathum 026-420005

Pachhakhapan Branch Pachhakhapan, Sankhuwasabha 029-411084
Operation Risk, AML & CFT

Salpasilicho Branch Salpasilicho, Bhojpur 9841660142

Rajarani Branch Rajarani, Dhankuta 026-411062
Credit Administration
Company Secretariat
Bishwa Prakash Poudel

Fikkal Branch Fikkal, Illam 027-540595

Sandip Kumar Sigdel

Dipak Kumar Shrestha

Prajwal Kumar Subedi

Akash Deep Shrestha

Asmin Kumar Basnet

Fedap Branch Fedap, Terhathum 026-681031

Binod Kumar Mahat
Murari Prasad Aryal
Hari Prasad Koirala

Madhu Jung Karki

Top Prasad Agasti

Tapendra Kunwar

Diktel Branch Diktel, Khotang 9849382685

Nishant Pradhan
Lila Prasad Ojha
Nitin Nandwana

Dinesh Adhikari
Guru Raj Regmi

Yubaraj Sigdel
Rabin Bariya

Prabin Khanal
Tek Raj Bhatta

Namche Bazar Branch Namche Bazar, Solukhumbu 9843101599

Pratul Bhatta

Hari Dhakal
Full Name

Full Name

Purbanchal University Branch Gothgaun, Morang 9842248276

Amit K.C.

446 NABIL BANK LIMITED ANNUAL REPORT 2022/23 447

 MADHESH PROVINCE
Bhatbhateni Branch Bhatbhateni, Kathmandu 01-4446397
Bhedasingh Branch Bhedasingh, Kathmandu 9841575599
Branch Name Address Contact
sf]zL k|b]z Bhumlu Branch Bhumlu, Kavrepalanchok 9851138695
Birgunj Branch Birgunj, Parsa 051-521476 Bijuli Bazzar Branch Bijuli Bazzar, Kathmandu 01-4790770
Power House Chowk Branch Power House Chowk, Parsa 051-525449 Bouddha Ramhiti Branch Bouddha Ramhiti, Kathmandu 01-4918159
Janakpur Branch Janakpur, Dhanusa 041-590708 Budhanilkantha Branch Budhanilkantha, Kathmandu 9841533210
Simara Branch Simara, Bara 053-520624 Chabahil Branch Chabahil, Kathmandu 01-4464470
Hariwan Branch Hariwan, Sarlahi 046-530760 Chapagaun Branch Chapagaun, Lalitpur 01-5265381
Bardibas Branch Bardibas, Mahottari 044-550733 Charikot Branch Charikot, Dolakha 049-421882
Lahan Branch Lahan, Siraha 033-563010 Chyamasing Branch Chyamasing, Bhaktapur 01-6620425
Chandrapur Branch Chandrapur, Rautahat 055-540030 Chyasal Branch Chyasal, Lalitpur 9851155880
Mirchiya Branch Mirchiya, Siraha 033-550590 Dahachowk Branch Dahachowk, Kathmandu 9851150844
Siraha Branch Siraha 033 520591 Dallu Branch Bhagwan Pau, Dallu, Kathmandu 9808556699
Golbazar Branch Golbazar, Siraha 033-540401 Dhading Branch Dhading Besi, Dhading 9851084994
Jeetpur Branch Jeetpur, Bara 051-590504 Dhapashi Branch Dhapashi, Kathmandu 01-4384990
Nijgadh Branch Nijgadh, Bara 053-540278 Dhulikhel Branch Dhulikhel, Kavrepalanchok 011-490731
Dhalkebar Branch Dhalkebar, Dhanusa 9845256085 Dhumbarahi Branch Dhumbarahi, Kathmandu 01-4241648
Mahendranagar Dhanusa Branch Mahendranagar, Dhanusa 041-591193 Dhunche Branch Dhunche, Rasuwa 010-540015
Janakpur Bhanuchowk Branch Bhanuchowk, Dhanusa 041-590548 Duwakot Branch Duwakot, Bhaktapur 01-6635731
Birgunj Bypass Birgunj Bypass, Parsa 051-523689 Gajuri Branch Gajuri, Dhading 01-4402426
Brahmapuri Branch Brahmapuri, Sarlahi 9854089099 Galchi Branch Galchi, Dhading 010-403197
Kaudena Branch Kaudena, Sarlahi 9852043860 Ghantaghar Branch Ghantaghar, Kathmandu 01-4233780
Parwanipur Branch Parwanipur, Bara 051-410069 Gongabu Jalpa Branch Gongabu Jalpa, Kathmandu 01-4355948
Bishnu Branch Bishnu, Sarlahi 9842871602 Gusingal Branch Gusingal, Lalitpur 9851067927
Dhanauji Branch Dhanauji, Dhanusa 9813094594 Gwarko Branch Gwarko, Lalitpur 01-5541590
Arnama Branch Arnama, Siraha 9844260155 Hakimchowk Branch Hakimchowk, Chitawan 056-594724
Chandranagar Branch Chandranagar, Sarlahi 9854020034 Halchowk Branch Halchowk, Kathmandu 01-4033553
Dewahi Gonahi Branch Dewahi Gonahi, Rautahat 9845527613 Hattigauda Branch Hattigauda, Kathmandu 01-4379297
Malangwa Branch Malangwa, Sarlahi 046-521706 Hetauda (Chisapani) Branch Chisapani, Hetauda, Makwanpur 057-590556
Rajbiraj Branch Rajbiraj, Saptari 031-530045 Hetauda Branch Hetauda, Makwanpur 057-524667
Barahathawa Branch Barahathawa, Sarlahi 9854089099 Imadol Branch Imadol, Lalitpur 01-5204104
Lalbandi Branch Lalbandi, Sarlahi 046-590010 Jarankhu Branch Jarankhu, Kathmandu 01-4025557
Kalaiya Branch Kalaiya, Bara 053-590331 Jawalakhel Branch Jawalakhel, Lalitpur 9849403462
Gaushala Branch Gaushala, Mahottari 044-556170 Jorpati Branch Jorpati, Kathmandu 01-4470498
Garuda Branch Garuda, Rautahat 9851206050 Kadaghari Branch Kadaghari, Kathmandu 01-4993004
Kanchanpur Branch Kanchanpur, Saptari 9817227204 Kalanki Branch Kalanki, Kathmandu 01-5234706
Jaleshwor Branch Jaleshwor, Mahottari 044-590069 Kalimati 2 Branch Kalimati2, Kathmandu 01-4277298
Kamalbinayak Branch Kamalbinayak, Bhaktapur 01-6620297
Kantipath Branch Kantipath, Kathmandu 01-4239204
BAGMATI PROVINCE Kapan Branch Kapan, Kathmandu 01-4813113
Kaushaltar Branch Kaushaltar, Bhaktapur 01-6635184
Branch Name Address Contact
sf]zL k|b]z Khichapokhari Branch Khichapokhari, Kathmandu 01-4241368
Anamnagar Branch Anamnagar, Kathmandu 01-5706884 Khokana Branch Khokana, Lalitpur 01-5591644
Attarkhel Branch Attarkhel, Kathmandu 01-4912990 Kirtipur Branch Kirtipur, Kathmandu 01-5906226
Bafal Branch Bafal, Kathmandu 9841677802 Koteshwor Branch Koteshwor, Kathmandu 01-460021
Bagdol Branch Bagdol, Lalitpur 9848424980 Kuleshwar Branch Kuleshwar, Kathmandu 01-4287576
Balaju Branch Balaju, Kathmandu 01-4388915 Kumaripati 2 Branch Kumaripati 2, Lalitpur 01-5553011
Balkhu Branch Balkhu, Kathmandu 01-5195123 Lalitpur Branch Lalitpur, Lalitpur 01-5453960
Banasthali Branch Banasthali, Kathmandu 01-4890016 Lazimpat Branch Lazimpat, Kathmandu 01-4376565
Banepa Branch Banepa, Kavrepalanchok 011-660168 Machchhegaun Branch Machchhegaun, Kathmandu 9851211809
Barahbise Branch Barahbise, Sindhupalchok 011-480005 Maharajgunj Branch Maharajgunj, Kathmandu 01-4720870
Battar Branch Battar, Nuwakot 010-560256 Maitidevi Branch Maitidevi, Kathmandu 01-4543706
Bhaisepati Branch Bhaisepati, Lalitpur 01-5591469 Makwanpurgadhi Branch Makwanpurgadhi, Makwanpur 057-621130
Bhandara Branch Bhandara, Chitawan 9851155659 Mandikhatar Branch Mandikhatar, Kathmandu 9841269285
Bhangal Branch Bhangal, Kathmandu 9803000007 Mangal Bazar Branch Mangal Bazar, Lalitpur 9841633097

448 NABIL BANK LIMITED ANNUAL REPORT 2022/23 449

Mitrapark Branch Mitrapark, Kathmandu 01-4482692 Waling Branch Waling, Syangja 063-440001
Mulpani Branch Mulpani, Kathmandu 01-4160170 Birauta Branch Birauta, Kaski 061-457892
Naikap Branch Naikap, Kathmandu 01-4117264 Pokhara (Malepatan) Branch Malepatan, Pokhara, Kaski 061-587084
Narayangadh Branch Narayangadh, Chitawan 056-523033 Chipledhunga Branch Chipledhunga, Kaski 061-583134
Narayanghat (Kamal Nagar) Branch Kamal Nagar, Narayanghat, Chitawan 056-571520 Kushma Bazar Branch Kushma Bazar, Parbat 067-421327
Narephat Branch Narephat, Kathmandu 01-5149338 Lekhnath Branch Lekhnath, Kaski 061-411445
Naya Bazzar Branch Naya Bazzar, Kathmandu 01-4383768 Bulingtar Branch Bulingtar, Nawalparasi East 9851019461
New Baneshwar Branch New Baneshwar, Kathmandu 01-4485212 Aanbu Khaireni Branch Aanbu Khaireni, Tanahu 065-590215
New Road Branch New Road, Kathmandu 01-4224592 Galkot Branch Galkot, Baglung 068-412015
Panauti Branch Panauti, Kavrepalanchok 011-441063 Archalbot Branch Archalbot, Kaski 068-591801
Panchkhal Branch Panchkhal, Kavrepalanchok 011-499472
Parsa Branch Parsa, Chitawan 056-582801
Pharping Branch Pharping, Kathmandu 01-5590028
LUMBINI PROVINCE
Prayag Pokhari Branch Prayag Pokhari, Lalitpur 01-5913698
Branch Name Address Contact
Putalisadak Branch Putalisadak, Kathmandu 9856045805 sf]zL k|b]z
Sallaghari Branch Sallaghari, Bhaktapur 01-6613170 Butwal Branch Butwal, Rupandehi 071-541059
Samakhusi Branch Samakhusi, Kathmandu 9849056988 Bhalwadi Branch Bhalwadi, Rupandehi 071-560357
Sanepa Branch Sanepa, Lalitpur 01-5546010 Bhairahawa Branch Bhairahawa, Rupandehi 071- 524041
Sankhu Branch Sankhu, Kathmandu 9841239828 Nepalgunj Branch Nepalgunj, Banke 081-534221
Satdobato Branch Satdobato, Lalitpur 01-5152262 Tulshipur Branch Tulshipur, Dang 082-522673
Shankhamul Branch Shankhamul, Kathmandu 01-5910764 Ghorahi Branch Ghorahi, Dang 082-561686
Shantinagar Branch Shantinagar, Kathmandu 9851098227 Sunwal Branch Sunwal, Nawalparasi West 078-570506
Sinamangal Branch Sinamangal, Kathmandu 01-4110850 Kohalpur Branch Kohalpur, Banke 081-541726
Sirutar Branch Sirutar, Bhaktapur 9858422541 Lamahi Branch Lamahi, Dang 082-540848
Suryabinayak Branch Suryabinayak, Bhaktapur 01-5708020 Sammarimai Branch Sammarimai, Rupandehi 9857017516
Taandi Branch Taandi, Chitawan 056-560591 Bardaghat Branch Bardaghat, Nawalparasi West 078-590961
Tatopani Branch Tatopani, Sindhupalchok 011-480005 Chandrauta Branch Chandrauta, Kapilbastu 076-540661
Thaiba Branch Thaiba, Lalitpur 01-5914100 Manigram Branch Manigram, Rupandehi 071-561257
Thali Danchhi Branch Thali Danchhi, Kathmandu 01-4813113 Kalikanagar Branch Kalikanagar, Rupandehi 071-438031
Thamel Branch Thamel, Kathmandu 01-4212167 Bansgadi Branch Bansgadi, Bardiya 084-400194
Thimi Branch Thimi, Bhaktapur 01-6634260 Butwal (Chauraha) Branch Chauraha, Butwal, Rupandehi 071-532621
Tilganga Branch Tilganga, Kathmandu 985206291 Bhanubhakta Chowk Branch Bhanubhakta Chowk, Newroad, Banke 081-521081
Timure Branch Timure, Rasuwa 010-543022 Tansen Branch Tansen, Palpa 075-590101
Tindhara Branch Tindhara, Kathmandu 01-4227180 Murgiya Branch Murgiya, Rupandehi 9806922883
Tokha Branch Tokha, Kathmandu 01-4381150 Khaireni Branch Khaireni, Rupandehi 071-577241
Tripureshwar Branch Tripureshwar, Kathmandu 01-4117014/17 Sukkhanagar Branch Sukkhanagar, Rupandehi 071-544845
Nepalgunj 2 Branch Nepalgunj 2, Banke 081-415021
Narayanpur Branch Narayanpur, Dang 082-530295
Khajura Branch Khajura, Banke 081-560429
GANDAKI PROVINCE
Chattaragunj Branch Chattaragunj, Arghakhanchi 077-690436
Branch Name Address Contact
sf]zL k|b]z Hapure Branch Hapure, Dang 082-403056
Pokhara Branch Pokhara, Kaski 061-525715 Sandhikharka Branch Sandhikharka, Arghakhanchi 077-420965
Baglung Branch Baglung 068-522194 Gulariya Branch Gulariya, Bardiya 084-420402
Gorkha Branch Gorkha 064-401529 Tamghas Branch Tamghas, Gulmi 079-590101
Besisahar Branch Besisahar, Lamjung 066-520805 Pharsatikar Branch Pharsatikar, Rupandehi 071-400143
Lakeside Branch Lakeside, Kaski 061-454268 Banganga Branch Banganga, Kapilbastu 076-550003
Damauli Branch Damauli, Tanahu 065-565527 Lumbini Branch Lumbini, Rupandehi 9842977244
Taalchok Branch Taalchok, Kaski 061-561844 Ramgram Branch Ramgram, Nawalparasi West 078-590152
Bagar Branch Bagar, Kaski 061-553472 Toulihawa Branch Toulihawa, Kapilbastu 076-590044
Amarsingh Chowk Branch Amarsingh Chowk, Kaski 061-550108
Gaindakot Branch Gaindakot, Nawalparasi East 078-501920
Daldale Branch Daldale, Nawalparasi East 078-575570
Kawasoti Branch Kawasoti, Nawalparasi East 078-541186
Dulegauda Branch Dulegauda, Tanahu 065-414473

450 NABIL BANK LIMITED ANNUAL REPORT 2022/23 451

 KARNALI PROVINCE

Branch Name Address Contact

sf]zL k|b]z
Surkhet Branch Surkhet 083-521484
Barah Taal Branch BarahTaal, Surkhet 9858053707
Tila Branch Tila, Jumla 9848084394
Darma Branch Darma, Salyan 9857866646
Pachaljharna Branch Pachaljharna, Kalikot 9851177730
Palata Branch Palata, Kalikot 9858024833
Salyan Branch Salyan, Salyan 088-400182
Musikot Branch Musikot, Rukum West 088-530364
Sinja Branch Sinja, Jumla 9858058888
Kalimati (Rampur) Branch Rampur, Kalimati, Salyan 9847824862
Chandannath Branch Chandannath, Jumla 087-520750

SUDURPASCHIM PROVINCE

Branch Name Address Contact

sf]zL k|b]z
Boradandi Branch Boradandi, Kailali 091-415313
Mahendranagar Branch Mahendranagar, Kanchanpur 099-525431
Tikapur Branch Tikapur, Kailali 091-560701
Alitaal Branch Alitaal, Dadeldhura 9814686423
Bittadchir Branch Bittadchir, Bajhang 9858023267
Pancheshwor Branch Pancheshwor, Baitadi 9848735499
Ramaroshan Branch Ramaroshan, Achham 9558481718
Sayal Branch Sayal, Doti 9841698824
Turmakhand Branch Turmakhand, Achham 9741466642
Lamki Branch Lamki, Kailali 091-540732
Attariya Branch Attariya, Kailali 091-550788
Ratopul Dhangadhi Branch Ratopul, Kailali 091-525941
Dhangadhi 2 Branch Dhangadhi 2, Kailali 091-417651
Darchula Branch Darchula, Darchula 9865619690
Jhalari Branch Jhalari, Kanchanpur 099-540067
Chainpur Branch Chainpur, Bajhang 092-421431
Chandev Branch Chandev, Kanchanpur 9868499770
Calcatta Branch Calcatta, Kanchanpur 9848748339
Amargadhi Branch Amargadhi, Dadeldhura 9841893917

452 NABIL BANK LIMITED ANNUAL REPORT 2022/23 453

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