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Nabil 21-22

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627 views316 pages

Nabil 21-22

Uploaded by

Nimesh Risal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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ENERGY IN SYNERGY

The bank recognized the need of the hour and


opted to acquire two financial institutions back to
back. These acquisitions will surely aid to the vision
of becoming the 1st choice provider of complete
financial solutions. The bank envisions that it will
now be the 1st choice not only in customer service
but also in providing value to the customer. With the
benefits of operational and financial synergy coming
from the acquisitions, it believes that it will be able
to provide best in class returns to all its stakeholders.

Annual Report 2021/22 1


Contents Inside

01. Overview
1.1 Profile of Nabil Bank
1.2 Vision, Mission and Value Statement
5
5
03. Products
and Services
Chart of Deposit Products
Chart of Remittance Services
61
61
1.3 Major Highlights 6 Chart of Loan and Other Services 62
1.4 Awards and Recognition 6 3.1 SBU Wise Briefing of Products and Services 63
1.5 Bank’s Network and Non-Financial Highlights 7 A. National Corporate 63
1.6 Milestones 9 B. Infrastructure and Project Financing 63
1.7 Organization Structure 11 C. Retail Lending 63
1.8 Financial Highlights 14 D. Mid Corporate, SME and Microfinance
1.9 Message from Chairman 18 (Including Deprived Sector Lending) 64
1.10 Message from Chief Executive Officer 20 E. Retail and Wholesale Liability Management 65
1.11 Nabil Bank’s Strategic Direction 22 F. Remittance Business Centre 66
1.12 Sustainability Report 2021/22 23 G. Cards and eBanking 66
1.13 The Board of Directors 36 H. Treasury 69
1.14 Management Team 40 I. Digi Bank 69
1.15 Macroeconomic Outlook 42 J. Other Services 71

02. 04.
Operating and
Financial Review Governance
2.1 Five Year Trend Analysis of 4.1 The Board of Directors 73
Bank’s Financial Position 45 4.2 Board Committees 74
A. Shareholder’s Equity 45 A. Risk Management Committee 74
B. Deposit Mobilization 46 B. Audit Committee 75
C. Loans 46 C. Committee Relating to Staff Services
D. Investments 47 and Facilities 76
E. Net Assets 48 D. Committee Relating to
2.2 Company’s Market Share Information 49 Money Laundering Prevention 77
A. Business Volume 49 4.3 Business Ethics and Anti Corruption
B. Alternate Channels 49 Measures 78
C. Digital Banking 49 4.4 Policy For Maintenance and Back-up
2.3 Disclosure on Non-Performing Assets 49 of Records 78
A. Movemnent in Non-Performing Assets 4.5 Extent Of Compliance with
and Corresponding Provisions 49 National Standards [NAS/NFRS] 79
B. Details of Accounts Restructured as per 4.6 Employees 80
Regulatory Guidelines 50 4.7 Human Resource Policy and
2.4 Five Year Trend Analysis of Human Resource Dynamics 81
Bank’s Operating Performance 50 4.8 Contribution of Bank Towards
A. Total Revenue 51 Employees Health and Safety 85
B. Operating Profit 51 4.9 Corporate Social Responsibility and
C. Profit before Tax 51 Sustainable Development Goals 84
D. Profit after Tax 51
E. Earnings per Share 52
F. Non Interest Income from Operating Activities 52
G. Operating Expenses 52
H. Impairment Charge 53
I. Income Taxes 53
2.5 Value Generation and Distribution 54
2.6 Bank’s Contribution to National Economy 55
2.7 Vertical and Horizontal Analysis of
Bank’s Unaudited Quarterly Report 57
A. Interim Financial Position 57
B. Interim Financial Performance 58
2 Nabil Bank Limited
05.
Financial Statement
And Other Disclosures

5.1 Regulatory Disclosure 103


07.
7.1
Shareholder’s
Information

Structure of Share Capital 257


7.2 Representation in the Board of Directors 257
A. Statement of Director’s Responsibility 103
7.3 Shareholder’s Profile 257
B. Disclosure of Information under Section 109(4)
7.4 Stock Symbol 257
of Companies Act 2063 104
7.5 Notice of Annual General Meeting 257
C. Disclosure Related to Sub rule(2) of Rule 26 of
7.6 Shareholder’s Enquiries and Communication 258
Securities Registration and Issuance Regulation, 2073 106
7.7 Taxation on Dividend and Bonus Shares 258

08.
D. Disclosure under Sub rule (3) and (4) of Rule 20 of The
Directive Related to Corporate Governance for Listed
Companies, 2074 107
Nabil Investment
Banking Limited
5.2 Financial Statement And Related Disclosures 115
Independent Auditor’s Report 115 8.1 Overview 260
Consolidated Financial Statements 115 8.2 Commentry on Key Items of Statement
Notes to the Consolidate Financial Statements 132 of Financial Position of Past Five Years 260
1. Reporting Entity 132 8.3 Commentry on Key Items of Income
2. Basis of Preparation 132 Statements of Past Five Years 261
3. Significant Accounting Policies 136 8.4 Director’s Report 262
4. Schedules of Explanatory Information to 8.5 Information Under Section 109(4)
Financial Statements 153 of Company’s Act, 2063 267
5. Disclosure and Additional Information 194 8.6 Independent Auditor’s Report of
5.1. Risk Management 194 Nabil Investment Banking Ltd. 271
5.2. Capital Management 203 8.7 Financial Statement of
5.3. Classification of Financial Assets and Nabil Investment Banking Ltd. 274

09.
Financial Liabilities 219
5.4. Operating Segment information for the Bank 221
Nepal Bangladesh
5.5. Share Options and Share Based Payments
5.6. Contingent Liabilities and Commitment
224
224
Capital Limited
5.7. Related Party Disclosure 225
5.8. Notes to Business Combination 228 9.1 Overview 285
5.9. Additional Disclosure of 9.2 Independent Auditor’s Report of
Non Consolidated Entities 229 Nepal Bangladesh Capital Limited 286
5.10. Events After Reporting Date 229 9.3 Financial Statement of
5.11. Interim Financial Report-Unaudited for Q4 230 Nepal Bangladesh Capital Limited 288

10.
5.12. Comparision of Audited and
Unaudited Financial Statements
5.13. Movement in Regulatory Reserve
233
240
NBBL Securities
5.14. COVID-19 Related Disclosures 241 Limited
5.15. Restatement in the Financial Statement 242

06.
10.1 Overview 302
10.2 Independent Auditor’s Report of
Erstwhile Nepal Bangladesh NBBL Securities Limited 302
Bank Limited 10.3 Financial Statement of NBBL Securities Limited 305

Consolidated Statement of Financial Position 244

Annual Report 2021/22 3


CUSTOMER FOCUSED
The learnings and experience that each of the
merged institutions bring will definitely support in

CRISP
the value creation process. The reenergized Team
Nabil recognizes that providing tailor made services
to our customers to help meet their banking needs is
the only way forward. With the extensive experience
that each of us brings to this organization, we
believe that we will be able to delight our customers
in each of their experiences with us.

4 Nabil Bank Limited


01 OVERVIEW
1.1 NABIL BANK
PROFILE OF

Date of incorporation: 11th May 1984 under the then Companies Act 1964 AD
Commencement of banking services: 12th July 1984
License: ‘A’ class licensed institution under the then Bank and Financial Institution Act 2017 A.D
Subsidiary: Nabil Investment Banking Ltd., Nepal Bangladesh Capital Ltd. and NBBL Securities Ltd.
Stock Symbol: Listed in Nepal Stock Exchange under the stock symbol ‘NABIL’

1.2
VISION
As the nation’s first joint venture Bank, we will
consistently surge together ahead providing the entire
VALUE STATEMENT
gamut of financial services across all demographic Each and every Nabilian is committed to be Customer
strata and geographic regions of the nation, constantly focused, Result oriented, Innovative, Synergistic and
evolving to better ourselves, so as to always better serve Professional or
our stakeholders. C.R.I.S.P. every day in everything we do.

MISSION
To be the ‘Bank of 1st Choice’ of all our
stakeholders.

Annual Report 2021/22 5


1.3 MAJOR
HIGHLIGHTS
Major Highlights Both in NPR and USD Value: For the year under review that ended on 16th July 2022, Nabil Bank’s
(In Million) balance sheet size has grown to NPR 420 billion. The Bank’s net worth
BUSINES AVENUES VALUE IN NPR VALUE IN USD stands at NPR 52.98 billion, deposits at NPR 329.57 billion, customer
Balance sheet 419,818 3,281 lending at NPR 310.57 billion and profit after tax at NPR 4.26 billion.
Loan and advances 310,573 2,427 In USD terms, these figures translate to balance sheet size of USD 3.28
billion, net worth over USD 414 million, deposits at USD 2.58 billion,
Deposits 329,576 2,576
customer lending at USD 2.43 billion and profit after tax at USD 33
Net Worth 52,982 414
million.
Profit after tax 4,256 33

*USD: NPR Exchange rate taken is 1:128.

1.4 AWARDS AND


RECOGNITION
Continuous effort towards providing best financial solution to the customers has earned the Bank a trusted name in the Nepalese financial
ecosystem. As a result, the Bank has been able to garner following awards in the reporting period and thereafter:

“SME Financier of the Year – 2022” under Global SME Finance Award 2022
National HR Excellence Award – 2022
Highest Tax Payer – FY 2020/21
Excellence in Consumer Debit Card Business 2022
Excellence in e-Commerce Acquiring Business 2022
Leading Partner Bank in Nepal by ADB, Year 2022

6 Nabil Bank Limited


1.5
BANK’S NETWORK AND
NON FINANCIAL HIGHLIGHTS
As of 16th July, 2022

231 17
Extension 250
Branches Counters ATM

THOUSAND
1.78
MILLION

65.5

THOUSAND
Number of
Deposit Accounts
Number of
Loan Accounts
4
POS Terminals

THOUSAND
THOUSAND

0.9 29
MILLION

9
QR Terminals
Mobile Banking Credit Card
Users
Users

0.6
MILLION

[ICRANP-IR]
Debit Card
170
International
AA-
Credit Rating
Users Correspondents

340 28,471 38.51


MILLION

Training
Programs Training
Conducted Participants CSR Investment

Annual Report 2021/22 7


8 Nabil Bank Limited
1.6 MILESTONES
Best Presented Best Presented
Annual Report Award Annual Report Award
(By the Institute of Chartered (By the Institute of Chartered
Bank of the Year Accountants of Nepal) Accountants of Nepal)
2009 2011

2004 Best Presented


2010 Best Presented
2012
Annual Report Award Annual Report Award
(By the Institute of Chartered (By the Institute of Chartered
Accountants of Nepal) Accountants of Nepal)

Leading partner Bank in Nepal Acquisition of


Best Domestic Bank ( By The Asian Development erstwhile United
(By Euromoney) Bank ) Finance Limited
2016 2019 2020

2019 2020 2021


Best Managed Best Digital bank Nepal’s Best Bank
Commercial Bank (By Euro Money) (By Euromoney)

JOURNEY OF HIGHEST
TAX PAYER AWARD

FY:
2010/11
BY
2014/15 INLAND
2016/17
2018/19 REVENUE
2019/20
2020/21 DEPARTMENT
People Excellence Award –
Large Enterprise
(By Federation of Nepalese
Chamber of Commerce &
Leading partner Bank of Nepal
Industry FNCCI)
(By Asian Development Bank)
2013 2014 2016

Best Presented
2013 Best Presented
2015 Financial Institution of the
Annual Report Award Annual Report Award Year (By Frost and Sullivan)
(By the Institute of Chartered (By the Institute of Chartered
Accountants of Nepal) Accountants of Nepal)

SME Financier of the Year-


Asia (Honorable Mention)
(By World Bank Member
Leading Partner bank IFC – International Finance
in Nepal (By Asian Corporation and the SME
Development Bank) Finance Forum) National HR Excellence Award
2021 2022 2022

2021 2021 SME Financier of the Year-Asia


2022 Acquisition of erstwhile Nepal
Excellence in Employee
Experience Award Under Global SME Finance Bangladesh Bank Limited
(By Growth Seller) Award 2022

JOURNEY OF BEST PRESENTED


ANNUAL REPORT AWARD
FY:
2008/09
BY THE INSTITUTE
2009/10 OF CHARTERED
2010/11
2011/12 ACCOUNTANTS
2012/13
2013/14 OF NEPAL
1.7 ORGANIZATION
STRUCTURE
Annual Report 2021/22 13
1.8 ORGANIZATION
FINANCIAL HIGHLIGHTS

14 Nabil Bank Limited


RETURN ON ASSETS (In Percentage) RETURN ON EQUITY (In Percentage)

2.61 20.94

2.11 17.76
1.71 15.19
1.58 13.61
1.27
10.19

2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

ROA for FY 2021/22 includes net profit of NPR 0.96 Billion of erstwhile ROE for FY 2021/22 includes net profit of NPR 0.96 Billion of erstwhile
Nepal Bangladesh Bank Ltd. Nepal Bangladesh Bank Ltd.

CREDIT TO DEPOSIT RATIO (In Percentage) CAPITAL ADEQUACY RATIO (In Percentage)

92.49
89.84 13.07 13.09
13.00

12.77

82.66
81.96
12.50
79.72

2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

NON PERFROMING LOAN TO TOTAL LOAN (In Percentage) EARNING PER SHARE AND DIVIDEND SHARE (In Percentage)

1.62 51.84 50.57

36.16 38.00
35.26 30.00
0.98 34.00 34.00
0.84 33.57
0.74
0.55
22.86

2018 2019 2020 2021 2022


2018 2019 2020 2021 2022 EPS DPS

CLOSING PRICE IN NEPSE (NPR) MARKET CAPITALIZATION (NPR in Billion)

201.36
1,359.00 188.15

800.00 881.90
920.00
765.00

70.58 77.25
60.88

2018 2019 2020 2021 2022 2018 2019 2020 2021 2022

Annual Report 2021/22 15


CUSTOMER INTERACTION IN DIGITAL PLATFORM

16 Nabil Bank Limited


RESULT ORIENTED
Creation of increased value is at the very core of the
principle of synergy. The results we can now achieve
together is undeniably going to be greater than

CRISP
just the sum of our individual results. With better
competitive advantage, we believe we will now be
able to garner greater chunk of the market which
will ultimately add value to the Bank’s bottom line in
the short, medium or long term. Having an impactful
team, greater efficiencies and increased bottom line
is what we envision for the bank going forward.

Annual Report 2021/22 17


1.9 MESSAGE FROM
CHAIRMAN

The Financial Year 2021/22 has been a year foot forward. We will exert enhanced focus representation including in the remotest part
of unprecedented strategic shift in terms of on simplifying the whole banking experience of the country. Many new branches are in the
growth and transformation for the Bank. With and delighting our customers by equally pipeline and we are also working tirelessly to
the historic acquisition of erstwhile Nepal recognizing the need of the nation as well. increase our customer reach, be it physical or
Bangladesh Bank, it has been successful in Significant effort and focus have also shifted virtual.
gaining substantial volume growth as well as in towards consolidation in the aftermath of
expanding its geographical footprint. I believe the pandemic, and supply chain disruptions The Bank is in its mission to gradually
the bank will reap the synergistic benefits of due to the ongoing geo political tensions that transform our banking services to make it
the acquisition in terms of diversification of its impacted the businesses globally. more impactful, always seeking to promote
portfolio, strengthening of its revenue base, individual, social and environmental well
cost rationalization and Human Resource Nabil has also succeeded to establish itself in being.
realignment. That aside, many other changes the global platform and has been recognized
with many international awards like ‘SME The ability to see into the future comes from
like digitizing the banking experience,
Financier of the Year – Asia’ by Global SME strong roots of the past and Nabil is where it
continued focus on granularity of the portfolio
Finance Awards 2022. The Bank has also is purely due to the dedication and the vision
and on sustainable business practices has
bagged ‘National HR Excellence Award – of our predecessors, both members from the
helped strengthen the market position of the
2022’ in the year. The Government of Nepal board and staff. I convey my deep respect and
Bank.
has recognized the Bank as the Largest Tax appreciation for their contribution to the Bank’s
With the world economy taking a hit by the Payer in the banking sector of Nepal for success. I express my deep appreciation for the
ongoing regional conflict, challenge of recovery the Fiscal Year 2020/21, in continuation of valuable contribution of the Bank’s outgoing
post pandemic, our own economy has also the Bank regularly being one of the largest director, Mr. Udaya Krishna Upadhyaya. I also
had to bear the brunt. Nabil has sailed through contributors to the government treasury. welcome our newly elected Director, Mr. ARM
satisfactorily amidst such challenging situation Nazmus Shakib along with our reappointed
in the history of Nepalese banking. Despite Our performance during the year has been Directors Mr. Nirvana Chaudhary and Mr.
the challenges posed by fluctuating interest exemplary and I am certain of the growth Malay Mukherjee.
rates, shrinking interest margins and intense that awaits us in the coming year. Despite
of the constrained growth due to the current I would like to express my sincere gratitude to
competition, we have achieved organic growth
liquidity situation; the Bank is well positioned our regulators Nepal Rastra Bank, Securities
in our books. We’ve also added 100 branches
to provide a superior return to its shareholders. Exchange Board of Nepal and Office of
and 11 extension counters from the acquisition
Our focus on customer service, business Company Registrar for their continued
and expanded our balance sheet by 44%. The
expansion and profitability will continue in guidance and support. I would also like to
Bank’s overall performance has improved,
the coming years as well. We will always thank all our customers and business partners
and we remain among the forerunners of the
continue to conduct the business of the Bank for their trust and cooperation. I humbly
industry.
in a responsible manner with added focus on acknowledge the contribution of shareholders
The focus now is to provide seamless banking providing finance to support the real economy who have provided valuable guidance and
services to our customers with end to end for positive impacts in the society and support.during the period. I would like to
integration of all financial services. Bringing environment. Our focus on service delivery and extend my sincere gratitude to our shareholders
the bank to the hands of the customers is now excellence, IT systems and transaction security, and expect similar guidance and co-operation
going to be the priority of the bank with focus compliance and risk management, expansion in the days ahead. The brand Nabil is what
on digitization. Sustainable business practices of branch network and customer base, is made by Team Nabil and the team is what
and sound corporate governance is embed into business growth and profitability will continue. continues to drive the bank forward into a
the essence of business of the bank. With the glorious future. Many thanks to my fellow
launch of Digibank and nBank, we believe we We have simultaneously focused on enhancing Directors and staff for your continued support.
have redefined and consolidated our journey financing access through continued expansion
for digital transformation by putting our best of the number of customer touch points and

Upendra Prasad Poudyal


Chairman

18 Nabil Bank Limited


Our performance in this fiscal year has
been exemplary and I am certain of the
growth that awaits us in the coming year.

Annual Report 2021/22 19


1.10 MESSAGE FROM
CEO

The Bank’s focus in the year 2021-22 shares which will help maintain the requisite Many international challenges like the ongoing
has been to boost stakeholder value whilst level of capital in the business. With significant Russia – Ukraine war, economic slowdown and
providing the support and foundation to increase in our size and volumes, we are domestic challenges like import restrictions,
reenergize the economy of the country which committed to increasing stakeholder value to decline in forex reserves continue to pose a
is struggling to cope with the after effects of the best. Withdrawal of relaxations given out threat to achieving organic growth as well
the pandemic. With the various relaxations by the regulator for loan repayment and the as to regularization and recovery. The bank
provided in the regulations being withdrawn hit taken by the businesses has caused the is committed to taking all the challenges in
and businesses slowing return to the usual, the NPA to gross loan ratio to shoot up to 1.62%. its stride and striving to grow in the face of
real impact of the pandemic is being felt and Concerted efforts are being made for recovery adversities as well.
all our efforts have been to stabilize and grow and the health of the accounts are also
our books. monitored continuously to avoid any further The vision of building a sustainable bank
degradation. which continues to provide value to all its
In the backdrop of a stable politico-economic stakeholders comes right from the Board of
environment, economy is slowly starting to With a vision to strengthen the capital base, Directors of the Bank, who bring along with
come out of the slowdown caused by the enhance competitiveness, increase bottom them vast wealth of experience from diverse
pandemic. Hike in interest rates and intense lines with increase in volumes of funded and backgrounds to our organization. Their
competition made the liquidity situation a non-funded business, strengthen the human continuous guidance and support in building
bit difficult during the year. The economy resource pool and to increase the physical the brand of Nabil has been a crucial factor
witnessed increase in growth rate of GDP, presence of the bank, the bank acquired in the success that the bank has seen. We
import, export, deposit mobilization, credit another commercial bank (erstwhile Nepal continue to remain thankful to the Chairman
expansion and annual average inflation rate. Bangladesh Bank) during the year which is one and to the Board of Directors for always
The Balance of payment also turned negative of the important milestones in the journey of helping us maintain our focus and their
which was in a surplus in the previous year. the bank. We believe that this move will help continued support.
the bank in achieving its goal of transforming
We were able to post net profit of NPR 4.26 the banking experience and also help in I will not be wrong to say that my team is
billion which is amongst the best in the reenergizing the brand. Upon completion of the what makes me and makes the entire bank.
industry. This is excluding the profit earned acquisition, the bank’s geographical footprint We wouldn’t be what we are and where we
by erstwhile Nepal Bangladesh Bank which has increased to 231 branches, 17 extension are without the efforts put in by each and
was acquired during the year. A significant counters and 250 ATMs. every member of them and hence I would like
volume of loans, deposits and non-funded to take this opportunity to express my sincere
business was also acquired which helped post The bank is committed to providing the best in appreciation to each and every member of my
a growth of 50.31% in loans and 44.57% class service to its customers and to this end Nabil family. We have now grown ever bigger
in deposits. We believe that the bank will has worked continuously in the integration of and we have added many new members to
continue to experience synergistic benefits banking into digital platforms. Communication our family. I trust and believe that we will all
of the acquisition in many years to come. with the customers have also been taken function as one single organism and one single
Providing the best returns to it’s investors while digital via the bank’s website, social media family to lead this organization into a better
running a sustainable business has always handles, internet banking and mobile banking future. Let us all continue to surge together
been a priority of the bank. As such, the Bank applications. This process of digitsation has ahead.
has proposed a total dividend of 30% with also aided in the sustainability initiative of the
11.50% being paid out in cash whilst 18.50% bank and helped in building a future ready
has been capitalized in the form of bonus bank.
Gyanendra Prasad Dhungana
Chief Executive Officer

22 Nabil Bank Limited


Providing the best returns to it’s investors
while running a sustainable business has
always been a priority of the bank.
1.11 STRATEGIC DIRECTION
NABIL BANK’S

across five year period covering financial year In its long term strategic plan the Bank
2020-21 through 2024-25. It encompasses is also open to strategic mergers and
the Bank’s strategic direction for future and acquisitions in order to benefit from scale
action plans to drive the Bank forward in line and complement in key business areas. In
with its Vision and Mission. NABIL 2025 is 2021-22 the bank acquired erstwhile Nepal
inspired from the eastern philosophy of Panch Bangladesh Bank Ltd. as its first commercial
Tatva leading to a five pillar structural balance bank acquisition. Current strategic focus has
between the Agni Tatva as Sales Pillar, the been maintained on seamless post-merger
Vayu Tatva as Support Pillar, the Akash Tatva integration and synergy benefits. The bank is
as Strategy Pillar, the Jal Tatva as Control also continuously scanning the possibilities for
Pillar, and the Prithvi Tatva as Compliance further acquisitions based on potential synergy
Pillar. benefits.

NABIL 2025 has been structured in three The Bank has recognized vast opportunities
phases. The Phase I strategies covered short at the grass roots entrepreneurial level across
term plans in the year 2020-21 and it has semi-urban and rural Nepal. A sustainable
been successfully executed. Currently the Bank financing business model must be integrated
is executing Phase II strategies which covers into this level thereby enhancing the
the medium term plans in years 2021-22 entrepreneurial capabilities and channeling
and 2022-23. This will be followed by the the financial resources. Nabil Sustainable
execution of Phase III strategies which covers Banking and Nabil School of Social Enterprise
the long term plans in years 2023-24 and are two flagship initiatives of the Bank with
2024-25. an objective to proliferate entrepreneurship
and positively impact people’s lives. The
Over the years the Bank has built competitive Bank has initiated towards creating enterprise
advantages in the areas of brand recognition, ecosystem across Nepal by working closely
technology, network, human resource, and with local governments, nongovernment
customer base. Through NABIL 2025, the organizations, academic institutions, other
Bank intends to further build on its competitive social organizations, and individuals.
advantages and transform into a digital bank
and a granular Bank. Structurally, our economy is a developing
one and there will be continued demand
The Bank has prioritized for significant for resources from all sectors including
enhancements in its technology infrastructure. infrastructure, corporate, and consumer. There
In 2020-21 the Bank had upgraded its core are challenges emanating from a primarily
banking system to Finacle version 10.2.25 import led economy. Expectations are that
from Infosys. In 2021-22 the bank launched fiscal policy and monetary policy will be aimed
its virtual banking app “nBank App” replacing at tackling the structural challenges. Banking,
its earlier mobile banking app. In the coming in general, will continue to work towards
years the Bank has planned an array of expanding financial access and delivering
technology enhancement projects aimed at efficient financial intermediation.
Nabil Bank envisions to always better serve delivering exceptional and smooth customer
our stakeholders by delivering the entire gamut experience across all channels. Nabil Bank will be strengthening its
of financial services across all demographic competitive advantages and building new
strata and geographic regions of the nation. It The Bank intends to further granularize its capabilities in core areas such as structural
is reflected in the Bank’s mission statement to risk assets and liability portfolio by increasing realignments, management depth, human
be the ‘Bank of 1st Choice’ of all our exposure on the retail and SME segments. resource, technology adoption, virtual banking,
stakeholders. As an institution and as a team It aims to reach out to more people by business growth, risk management, network
the Bank lives by its C.R.I.S.P. core values expanding branch network into the sub urban expansion, and efficiency gains. Through the
which has enabled the Bank to evolve over and less penetrated markets. The recent year execution of NABIL 2025 Nabil Bank aims to
time and lead the domestic financial services acquisitions have significantly contributed on continue as the most trusted bank and lead
industry. this front. Future expansions are likely to be the domestic banking industry into the era of
more selective and revolve around specific digital banking.
Nabil Bank is executing its long term strategic market based strategy, including potential for
framework “NABIL 2025” which spans overseas expansion.

22 Nabil Bank Limited


1.12 SUSTAINABILITY
REPORT 2021/22

As the world charges forward into the while making every investment decision, partnership for carbon accounting financials
technological revolution, the earth’s depleting leading to long-term investments in sustainable (PCAF). The report has been prepared
limited resources have become the focal economic activities. internally and contains information and data
point of conversations on sustainability provided by business departments and support
across the globe. In this day and age, it is In order to ensure the ESG goals are functions.
crucial to look at the impact (both positive operationalized at the ground level, the Bank
has undertaken numerous Sustainable Banking SUSTAINABILITY JOURNEY OF THE
and negative) of present-day actions on
Initiatives. BANK
the future. Therefore, Nabil Bank has also
taken proactive steps to attain leadership in Nabil bank ltd is a leading commercial bank in Nepal
ABOUT THIS REPORT and pioneer in sustainable banking. The Bank has
the domain of sustainability in the banking
been diligently striving to improve the sustainability
industry of Nepal. The Bank has begun its This report outlines Nabil Bank progress
of its services and operations. To ensure its long term
journey towards sustainable finance, striving in incorporating Sustainable Development
performance and impact, the bank has prioritized
to gradually integrate environmental and Goals, Environmental and Social factors into environmental, social and economic sustainability.
social considerations in its activities to avoid, its operations, services and portfolio. The
report focuses on the bank’s sustainability, In terms of environmental, social and economic
minimize, or offset negative impacts.
sustainable financing and committed towards sustainability, Nabil Bank has undertaken number of
efforts including installation of sustainable techniques
The Sustainable Banking model is guided environmental and social factors.
such as rainwater harvesting within office building,
by principles of protecting environment, promotion circular economy and also investment in
minimizing social risk, protecting human rights
Scope: renewable energy. The Bank has also taken steps
and promoting good governance, through The report is limited to information pertaining to reduce the use of paper by promoting e-banking
to the services and operations of Nabil Bank and mobile banking and recently launch nBank
financial inclusion, economic empowerment
services. The Bank has been encouraging financial
of women and marginalized communities, ltd, unless specified otherwise. Services and
inclusion, by providing financial/entrepreneurship
capacity building and collaborative operations covered within the boundary of literacy training. The Nabil Bank has been providing
partnerships. Sustainable Banking involves this report includes the bank’s 255 Branches banking services to stimulate entrepreneurships
mitigating risks that arise from Environmental, and 283 ATMs, 18 Extension counters, 8 and supporting Small and Medium sized enterprise
Branchless Banking across 7 provinces. (SMEs) in the country. The bank has been offering a
Social, and Governance (ESG) aspects.
variety of financial products and services to support
Nabil Bank has also adopted the business
Standards: the local economy grow and thrive.
model integrated with the people and the
environment, aligning business activities Best effort has been made to assure data Overall, Nabil Bank’ sustainability path demonstrates
with the UN Sustainable Development accuracy and report quality. This report also its commitment to creating long term value for all
Includes Bank’s disclosure on greenhouse gas stakeholders while also contributing towards the
Goals (SDGs), giving due weightage to
(GHG) emission in project finance under the sustainable development of Nepal.
environmental, social, and governance (ESG)

Annual Report 2021/22 23


ACCESS TO FINANCE
29 June, 2021
Nabil Kishan Karja (NKK) and Nabil Udhyamshil
Karja (NUK)
Promoting entrepreneurship development and
commercialization of agriculture
LAUNCH OF
NABIL SUSTAINABLE BANKING 24 September, 2022
29 June, 2021 Nabil Branchless Banking
Nabil Sustainable Banking Promoting access to finance and digitization in
Launch of Nabil Sustainable Banking as a strategic banking in rural areas
vertical of the bank

Integrate environmental, social and governance


(ESG) standards in financial market for supporting
capital flows towards Nepal’s Commitment to UN
DIGITIZATION
Sustainable Development Goals (SDG)
Fone Loan
First launch 20 September, 2020
SOCIAL ENTREPRENEURSHIP Offering customized sustainable financial products
revamped on 18 September 2022
26 Febraury, 2021 and services to increase access to finance focusing
on unbanked, remote, backward and rural Increase granular lending portfolio
Nabil School for Social Entrepreneurship
population Instant lending facilities to individuals & QR merchants
(NSSE)
Zero paperwork
Fellowship program

Nabil SSE Fellows of First batch have created 30 17-Dec-2021
full-time and 69 part-time jobs. UNCDF Supported Project
• ‘QR Code- Nabil Bank Digital
Nabil SSE Fellows (first batch) received Enablers Promotion for Women and Youth’
of Social Entrepreneurship Award organized by Promotion of Women and Youth through Digital Financial Solutions
CNI in CNIYEF fest-2022
22 December 2022
Certificate course Launch of nBank

Neo banking experience to customers
137 Candidates completed the Certificate
Significant reduction in paperwork.
Course from all 7 Provinces of the country
Omni experience (mobile & web)

Less footfall in branches
7 Candidates from Karnali Province, students
Complete banking services online
of Kopila Valley School started their enterprise
ranging from coffee shop, goat farming etc.

MESSAGES (WITH RESPECT TO business, and implementing environmentally way we lend, the products and services we
SUSTAINABILITY AND IMPACT) practices across our operations. offer, and the way we manage our operations.

Chairman’s Desk: We believe that this approach is essential for We understand the crucial role that banks play
long-term financial stability and for building in shaping the economy and society, and we
As a chairman of the bank, I am pleased to
trust with all of our stakeholders. I am proud are committed to using to our influence for
present our sustainability report for the year.
of the progress we have made in integrating good. This means investing in and supporting
Sustainability is a core part of our business
sustainability into our business, and I am projects that promote environmental and social
strategy, and we are committed to using our
confident that our commitment to sustainable sustainability, as well as working to reduce our
financial resources in a way that promotes
banking will continues to drive positive change own carbon footprint.
environmental and social sustainability,
and benefit all of our stakeholders in the years
while also ensuring financial stability and We are also committed to transparency and
ahead.
profitability. open communication with our customers,
CEO’s Desk: stakeholders, and the public. We believe that
Over the past year, we have made significant
by working together, we can create a more
progress in integrating sustainability into our As a CEO, I am proud to say that we are
sustainable future for all.
operations and decision-making processes. committed to making a positive impact on the
This includes decision to disclose emission world through responsible and ethical banking Thank you for choosing to bank with us and
generated under loans and investment practices. Our focus on sustainability extends for your support in our efforts to make a
following PCAF standards, Rural Banking, to all aspects of our business, including the difference.
Sustainable loan products, supporting small

24 Nabil Bank Limited


PARTNERSHIPS
26-Aug-2021
Partnership with local govt, other govt bodies,
NGO/INGOs and other institutions
25 MOU signed with the objective of promoting
financial literacy and access to finance

FINANCIAL LITERACY
GYB/SYB TRAINING Aug-2021
December 2021 Financial Literacy, Entrepreneurship WASTE MANAGEMENT
GYB/SYB training provided to Tila and Development and Access to Finance Program 28 November, 2022
Pancheswor in coordination with local Doko Recyclers
Around 30 programs with 2500 plus
government and National Youth Council participants Shredding the waste paper
117 participants on Pancheswor and 196 that ultimately use for recycling
from Tila has attended 7 days GYB/SYB products
training provided by ILO certified trainer

Deputy General Manager Desk: Sustainability has come along as the core initiative, but rather an core values of all that
principle and an essential component of ethical we do. We have the privilege and responsibility,
As a vertical chief of sustainable banking
business operations in the new world. It as members of the sustainable development
development, I want to take a moment to
encapsulates our dedication to environmental team, of incorporating environmental, social,
address the importance of sustainability
sustainability, social responsibility, and long- and governance considerations into our
in our work, as well as the impact it has
term financial success. At our organization, we decision-making processes to create a shift
on our organization, society, economy and
believe that sustainability is not a standalone toward Impact Financing.
environment as a whole.

GLOBAL PRESENCE International Finance Corporation (IFC) and


SME Finance Forum and held at the Hyatt
Chairman’s visit to COP 27: Regency Hotel in Phnom Penh, Cambodia.
The Chairman, Mr. Upendra Prasad Poudyal “Global SME Finance Award 2022” celebrated
participated at the 27th United Nations and recognized financial institutions and
Climate Change Conference, also known as fin-tech companies for their outstanding
COP 27 held in Sharm el-Sheikh, Egypt, as achievements in delivering exceptional
an observer. Also, it was a milestone event for products and services to their SME clients.
Bank’s sustainable banking initiatives
Chief - SME MF and NSB Mr. Niraj Kumar
Global SME Finance Award 2022: Basnet (Danil) attended “Conference/Training
Nabil Bank has received two “Honorable of Global SME Finance Forum” and “GB-TAP
Mentions” at the Global SME Finance Awards Training: Green, Social and Sustainability
2022 in the categories of “SME Financer of Bonds Executive” from 17th Sept to 26th
the Year - Asia” and “Product Innovation of September 2022.
the Year.” The awards were organized by the

SUSTAINABILITY REPORTING-2023
Sustainable banking is the necessity of Nepalese Economy

We are glad to publish our first sustainability report, which represents an important step towards in fulfilling our commitment to sustainability. The
purpose of this report is to provide transparency and accountability for our efforts to reduce our environmental and societal impact.

Annual Report 2021/22 25


WORKPLACE DIVERSITY
The Bank has diversified and inclusive work place that provides equal opportunities to all its employees with zero-tolerance towards any form of
discriminations.

FY 2078/79 FY 2021-2022
APRIL 13 2022
OCT 12 2021 JAN 14 2022 JULY 15 2022
EMPLOYEES (CHAITRA END 2078)
(ASHWIN END 2078) (POUSH END 2078) (ASHADH END 2079)
Q3
Q1 Q2 Q4

Male 898 891 878 1369


Female 582 579 579 910
Permanent staffs 1319 1318 1308 2109
Contract basis (Direct Contract) 10 10 10 21
Consultants 3 3 4 4
Outsourced 148 139 135 145
Total employees 1480 1470 1457 2279
% of Male on total employees 60.7% 60.6% 60.3% 60.1%
% of Female on total employees 39.3% 39.4% 39.7% 39.9%

NABIL SUSTAINABLE BANKING decisions based on risk, return, and impact. It since January 2021, the Bank is part of this
would collaborate with various development global initiative to measure and disclose the
The Nabil Sustainable Banking (NSB
stakeholders to build a pipeline of business greenhouse gas emissions associated with its
was formed with the goal of integrating
in priority and underserved areas for capital portfolio of loans and investments. A steering
Environmental, Social, and Governance
investment. committee has been formed under Sustainable
(ESG) norms into the financial market
Banking & Development Vertical, for PCAF
in order to assist capital flows toward Nabil Sustainable Banking aims to bringing measure and disclose. On March 17th 2023
Nepal’s commitment to the UN Sustainable positive impact on following key outcome areas Bank has disclosed its GHG emission under
Development Goals.
 Financial Inclusion Infrastructure and Project Financing Portfolio
Nabil Bank, under Sustainable Banking (IPF).
 Green Banking and Green Products
initiatives, intends to achieve the following
 Commercial Agro Surging Towards Sustainability:
goals:
 Women Entrepreneurship Development During Earth Hour, Nabil Bank supported and
 Promote environmental, social, and  Youth Employment promoted the placement of biodegradable
governance factors in lending; prayer flags at Boudhanath Stupa, Kathmandu
 Startup and accelerators
 Develop tailored sustainable financial Considering the growing concerns over climate
 Value and Supply Chain Ecosystem
products and services to enhance access to change in the world, Nabil Bank has launched
 Integration of returnee Migrants
finance, with an emphasis on the unbanked, an eco-friendly awareness campaign on the
remote, backward, and rural populations. occasion of Earth Hour that is celebrated
NABIL BANK INITIATIVES TO
across the world on 26 March 2022 by
 Increase access to financing to foster ATTAIN SDG GOALS
business and raise people’s living standards. replacing the prayer flags at Boudhanath
 SDG 13 Climate Action
Stupa with Biodegradable Prayer Flags. As
 Exploring better commercial options for rural
the old prayer flags are made from nylon
branches in order to ensure their long-term
PCAF Membership: cloth and rope, they have been replaced with
viability and survival.
biodegradable ones which are made out of
 Showcase Nabil Bank and its sustainable The Partnership for Carbon Accounting eco-friendly materials. Nabil Bank not only
initiative to the local and international Financials (PCAF) is “a global partnership aims to promote the use of biodegradable
markets. of financial institutions that work together materials in Boudhanath Stupa, but also
to develop and implement a harmonized intends to encourage social entrepreneurs
The purpose of Sustainable Banking is to
approach to assess and disclose the who have actively been contributing towards
incorporate ESG standards into financial
greenhouse gas (GHG) emissions associated sustainability by producing eco-friendly
markets in order to promote capital flows that
with their loans and investments. Nabil products.
achieve sustainable development goals, with
Bank has obtained membership of PCAF

26 Nabil Bank Limited


Environmental and Social Risk Management: participants are expected to be able to have to lower the carbon footprint, pollution &
an investment ready enterprise or a business deforestation in general.
Bank has formulated and implemented ESRM
with a viable product/service to trade in the
guidelines with the objective of contributing Nabil Bank is promoting access to finance
market. The program is being implemented
to the environment and social areas while and reducing inequalities in society by
in partnership with Faculty of Management,
providing loans and advances. Through the providing different Small and Micro Enterprise
Tribhuvan University at School of Management,
ESRM guidelines, the bank institutionalized loan products. The Bank is also working on
Tribhuvan University (SOMTU).
environmental and social risks while offering promoting gender equality by empowering
loans to business units around the country. Certificate Course in Social Entrepreneurship: women by developing women-focused loan
As per the Environmental and Social Risk Certificate Course is conducted in Partnership and deposit products.
Guidelines of the Bank, all loan proposals with partnering colleges in all 7 provinces of
are screened through exclusion list and any Nepal for aspiring and existing entrepreneurs Energy Financing:
loan proposal falling under exclusion sector is and any individuals who want to learn and
 SDG 7 Affordable and Clean Energy
declined. Environment and Social Risk Due contribute in the social entrepreneurship
 SDG 13 Climate Action
Diligence (ESDD) is conducted in all loans development. The program duration is of 3
falling under critical Sector and any term loan/ months’ period, which aims at developing Extending credit is one of the Bank’s major
project loan above Rs. 10 Million. Based on entrepreneurial mindset, business model with operations, therefore it is critical that lending
ESDD, the E&S Risk are categorized into High, a feasible solution and capable of receiving a activities are linked with the Bank’s long-
Medium and Low Risk category. Any proposal bank loan. term aims and vision. The bank’s Sustainable
falling under Medium and High E&S Risk Financing Plan thus envisions that its lending
category requires corrective action plans which Sustainable Financing of Nabil Bank: activities are not skewed towards emission
are monitored regularly. intensive industries & businesses and
Nabil Kishan Karja (NKK), Nabil Udhyamshil
Karja (NUK), Nabil Eco-Friendly Business Loan recognizes the positive role it has to play in
Nabil School of Social Entrepreneurship:
and other Small and Micro Enterprise Loan curbing GHG emissions to achieve climate
 SDG 4 Quality Education Products goals. Hence, bank has given necessary
 SDG 5 Gender Equality thrust on clean and renewable energy projects
 SDG 8 Decent Work and Economic Growth  SDG 1- No Poverty lending, viz., hydropower, grid solar, micro-
 SDG 10 Reduced Inequalities
 SDG 2- Zero Hunger hydro etc. Around 5% of the Bank’s credit
 SDG 5- Gender Equality portfolio is comprised of lending to the energy
Nabil School of Social Entrepreneurship  SDG 8- Decent Work and Economic Growth sector, i.e., hydropower and solar PV projects
(Nabil SSE)- a CSR initiative of Nabil Bank  SDG 10 - Reduced Inequalities and bank continues to identify and finance
was launched in 26 November, 2021 to potential bankable projects in achieving the
NSB has developed two loan products, Nabil
promote and develop social entrepreneurship mandated energy lending targets stipulated by
Kishan Karja (NKK) and Nabil Udhyamshil
in the country. The program provides the regulator.
Karja (NUK) that primarily focuses on
platform for individuals who have practical
increasing access to finance in these rural Branchless Banking:
ideas for change and use innovative
areas to foster local entrepreneurship, promote
approaches to tackle complex social  SDG 1 No Poverty
commercialization of agriculture and promote
problems. The individuals who have  SDG 8 Decent work and Economic Growth
local business potential thereby contributing
identified the unmet social need and aims to
towards Sustainable Development.
find a sustainable business model that Bank has commenced the BLB services in its
creates lasting social impact are provided NKK and NUK both are quick, easy, rural branches with the vision of achieving
with the platform through its programs. convenient, and hassle-free loan product Sustainable Banking objective especially
targeted for the promotion of Small and in the area of “Reaching to Un-reach” and
Nabil SSE has two programs designed Medium size enterprises/startups. “Promoting Digitization”. Through BLB
underthe technical assistance of School for initiative Nabil Bank aims to create sustainable
Social Entrepreneurs India: The Bank has also to introduce a new SME impact by promoting financial inclusion,
Loan Scheme “Nabil Eco- Friendly Business digitization and financial literacy, sustainable
Fellowship Program in Social Entrepreneurship: Loan”, a very opportune scheme developed banking and profitability of remote and rural
A Flagship program of Nabil SSE conducts by SME & MF Division, which aims to fulfill bank’s branches.
two Cohorts in a year, that offers 20 fellows the financing requirement of eco-friendly
in a cohort with a 6-month learning course in & sustainable businesses such as waste Nabil Gen Alpha:
an action-based learning approach and a year management value chain that manages and
of one on one mentoring from experienced  SDG 5: Gender Equality
recycles the waste and businesses aiming
mentors. At the end of this program,  SDG 9: Industry, Innovation and Infrastructure

Annual Report 2021/22 27


Nabil Gen Alpha is an app enabled savings which allowed customers to avail loans Kathmandu Valley. This has been liaised and
deposit product first of its kind in Nepal against their Fixed Deposits within seconds. implemented under supervision of GIZ.
designed for minor segment. Today’s What used to take at least one working day  UNCDF-Nabil Bank – QR code for Digital
minor(children) are the major stakeholders is now available at the click of a button. No solution for Women and Youth” project.
of future society and country as a whole paperwork, no hassles: Instant digital loans Bank aims to onboard women and youth
and quality of children/youths determines have saved paper, time, and money for the especially unbanked in formal financial
the quality of a country’s prosperity and Bank. channel and supports their economic
sustainability. Increasing interest and time empowerment through digital financial
spending of today’s Alpha generation children Finally, remittance. nBank has simplified
solutions i.e. QR code under this project.
in mobile phone has become a daunting remittance into a Nabil Bank account with the
This partnership aims to support bank’s
issue to worry about and Gen Alpha hence product nRemit, which leverages the Bank’s
Sustainable Banking initiatives of financial
envisions to capitalize the time spending of Electronic Payment Gateway to allow Nepalese
inclusion and digitization. The project has
children in mobile phone in a more productive residing abroad to send funds using their
also created a milestone in Nepali financial
way. Besides this Gen Alpha also provides International Mastercard or Visa cards to a
sector by offering full fledge digital loan to
features which not only develops self-learning, Nabil Bank account in seconds. All of nBank’s
QR Merchant (Fone Loan – QR Merchant).
intuitiveness, discipline and hygienic lifestyle products and services can be availed from the
nBank app, available on the Google Play Store  Swiss Contact-Nepal Agriculture Market
in children but also develops household skills
and Apple App Store. Development Project (Sahaj) for promoting
for an independent lifestyle, financial literacy
Agri-SME in Province 1.
preparing them for a better future with better
Development Partners:  UKAID-Sakchyam: Access to Finance
understanding the values of hard work and
money. The inbuilt features of Gen Alpha also Partnership for strengthening the SME
 SDG Goal 17 Partnership for the goals
attempt to nurture a healthy attitude towards Financing at Nabil.
money, instill life-long habit of good financial  Loan Loss Guarantee agreement with the
 MoU with USAID trade and competiveness
behavior and build confidence through Central Renewable Energy Fund (CREF),
activity to accelerate firm and sector level
milestone achievement & goal settings. that covers 20% of loans provided by
competitiveness, generate employment
the Bank to eligible Sustainable Energy
opportunities, access to market based
In addition, there are other direct benefits to Challenge Fund (SECF) projects. This
financial and non-financial services.
parents and schools in which the children are partnership aims at promoting Distributable
studying. Benefits to parents include financial  MoU with Smart Paani to Install Rain
Reneuable Energy projects and creating
benefits and security of child (Savings, Water Harvesting with Bank’s Building.
more sustainable energy environment.
Cumulative FD), enhancement in parent-child This sustainable initiative is a significant
 Nabil Bank has signed agreement with
relations, helps in developing adequate life milestone for us as we strive towards
Heifer International Nepal with the
skills in children, implant seeds of positivity responsible and eco-friendly practices.
aim of Promoting financial literacy,
and hard work in children by incentivizing  MoU with World Vision International
entrepreneurship development and access to
positive life habits and guiding children to Nepal (WVI Nepal) to promote financial
finance to Women entrepreneurs and small
newer hobbies & interests. inclusion, entrepreneurship, and economic
farmers under Heifer Project Areas.
development in Nepal.
nBank:  Initiated partnerships with local
 MoU with Aloi for Digital Green Financing-
governments and signed agreements
 SDG 9: Industry, Innovation and Infrastructure to provide digital lending service to electric
with various Rural Municipalities in Rural
vehicle entrepreneurs through Aloi’s digital
branches to promote the rural economy.
nBank, a virtual branch within Nabil Bank, has loan and repayment tracking system.
 Kheti Online Platform to provide Digital Agro
revolutionized the account onboarding process  MoU between Nabil Bank and Doko-
Loans a first-of-its kind initiative in Nepal.
by creating a completely digital customer Recyclers was held at the bank for
journey - from opening an account in 30  Agro Loans to Agro Technicians, to develop
waste management (focusing on paper
seconds, to completing customer KYC through them as Agro Entrepreneurs in the local
sustainability). This agreement serves both
a digital form and video KYC - available 24/7. level as “Krishi Dhoot” (Agricultural
organizations’ shared interest in a circular
Besides account opening, nBank has revamped Ambassadors) for market linkage, another
economy and environmental sustainability.
digital lending by launching transaction-based first-of-its kind initiative in Nepal.
 Nabil Bank has been awarded tender of
digital loans to individuals and QR merchants,  Agreement with Handicraft Association of
Handling Bank for SET4NPL under NAMA
which has contributed to the Bank’s granular Nepal for the promotion and development of
Facility project which aims to replace
strategy in lending. On top of this, nBank the handicraft sector of Nepal.
fossil fuel vehicles by electric vehicles
launched digital Loan Against Fixed Deposits,  Federation of the Women Entrepreneurs
under public transportation around

28 Nabil Bank Limited


Association of Nepal and various promoting a cashless economy by maximizing Nabil Bank has created a separate vertical
related organizations to promote women the use of online banking services and digital dedicated to SME industry as SME Hub. In an
empowerment and access to finance. platforms; around 25% of total lending portfolio of Bank
 Community Home Stay Network (CHN) e. Wearing green to the office once a week or is financing in SME sectors. Around 7% of the
to promote sustainable local tourism, fortnight to create awareness; portfolio’s overall lending amount accounts for
rural entrepreneurship, and financial loan under Rs. 10 million. With an emphasis
f. Driving Electric Vehicles, cycling, walking,
empowerment. on the SME sector, access to finance has been
or carpooling with colleagues to reduce our
expanded to low income people, women run
 Council for Technical Education and carbon footprint in transportation;
enterprises, farmers, youths, and aspiring
Vocational Training (CTEVT) to promote g. Promoting paperless offices by using entrepreneurs.
entrepreneurship for skilled manpower minimal papers, limiting the use of sticky notes
 Daraz-Sarathi Program, an innovative supply and diaries, storing documents electronically, COMMITMENTS AND WAY
chain financing model aimed at facilitating taking notes digitally, and using desktop FORWARD
vendors of the online platform, especially in applications like MS-Office and One Drive;
 To provide lending to the grounded
the Micro SME space. h. Carefully previewing documents before communities, serving the real economy and
printing, if absolutely necessary, and printing enabling new business models to meet the
SUSTAINABLE PRACTICES FOR double-sided as far as possible; real needs of people and support financial
NABIL STAFF i. Reusing used papers for note-taking and inclusion drive through several programs
To further reinforce the Bank’s commitment to creating drafts;  Measure carbon footprint of our financial
sustainable banking activities, the Bank has j. Collecting waste paper for recycling purposes portfolio (Loans and Investments), set
adopted a few sustainable practices for all of instead of throwing them away in trash bins; climate action strategy, objectives and
its staff members that can be incorporated, in targets
k. Minimizing the use of electricity by focusing
both their personal and professional lives. By
on natural lights, switching off the lights/  Push towards Green Banking, Green
internalizing sustainable practices within the
ACs/fans, or any electronic devices (like PCs, Financing, Introduction of Green Products
organization, Nabil Bank continues making
scanners, photocopy machines) when not in  Promotion of Entrepreneurship Skill
strides forward to a sustainable future.
use or when the rooms are vacated; Development support startup and
A few such sustainable practices include: l. Implementing Waste Walks: A Waste Walk is accelerator ecosystem.
when we take a step back, walk the floor, and  Take financing based on supply chain/
a. Green/Eco-friendly workspace by placing
identify wasteful activities; value chain ecosystem to next level through
small plants within the office table and
working desks; creation through market linkage
FINANCING IN SMALL AND
b. Using reusable coffee mugs and water MEDIUM ENTERPRISES (SME)  Explore possibilities and implement
bottles instead of plastic; SECTORS mechanism for developing and utilization
climate risk fund.
c. Consuming homegrown/organic food, SMEs are the backbone of every nation’s
purchasing food from local vendors, or bringing  Tie up and partnership with development
economy and the importance of SMEs become
lunch from home; agencies, government bodies, technical
more prominent for developing nations like
experts and best practitioners including local
d. Focusing on cashless transactions and Nepal. Hence, prioritizing the SME sector,
partners.

Annual Report 2021/22 29


30 Nabil Bank Limited
1.12.1 NABIL’S INFRASTRUCTURE & PROJECT
DISCLOSURE OF GREENHOUSE GAS (GHG) EMISSIONS UNDER
PARTNERSHIP FOR CARBON ACCOUNTING FINANCIALS (PCAF) STANDARD

FINANCING PORTFOLIO (IPF)


OVERVIEW credit policy already had a “Negative List” of FY 2021/22 closing (comprises portfolio
where it will not invest in or finance and a from erstwhile Nepal Bangladesh Bank also)
The bank had formed Sustainable Banking
“Critical Sector list” where it shall ensure which construes as the Scope 3c category
vertical to incorporate ESG standards into
proper Environment and Social Due Diligence 15 emissions disclosure under the PCAF
its Products and services and also achieve
is carried out and those units do not carry Standard. The portfolio under IPF division
sustainable development goals, with decision
adverse environmental and social impact while represented 10.17% of bank’s total LDO as on
based on risk, return and impact. During the
appraising them for bank financing. FY 2021/22 closing, i.e., 15th July 2022 and
course, bank has launched various financial
comprises exposure to business sectors like
literacy programs in rural areas, has been Realizing that bank is also responsible for energy, cement, airlines & telecommunication
promoting entrepreneurship through Nabil the emissions directly from its own activities services that come under the asset class of
School of Social Entrepreneurship, promoting as well as indirectly through its loans and Project Finance as per the PCAF Standard.
women’s economic empowerment and investments, Nabil bank voluntarily took
undertaking various CSR activities aimed to the membership of Partnership for Carbon a) Scope 1 emission- emissions that occur
have an impact on sustainable livelihood. Accounting Financials (PCAF) in January from sources owned or controlled by the
Bank has further oriented its lending activities 2021. While bank itself is also responsible reporting company
towards agriculture, commercial farm, for its own Scope 1a and Scope 2b emissions b) Scope 2 emission- Indirect GHG emissions
entrepreneurship, women led enterprises and from its direct operations, such emissions will from the generation of purchased or
lending in other productive sectors (SME/ not be significant. However, bank indirectly acquired electricity, steam, heating,
MSME) to support the UN’s Sustainable may be contributing significantly for the overall or cooling consumed by the reporting
Development Goals (SDGs). emissions through its loans and investments to company
businesses. c) Scope 3 emission-All other indirect GHG
Nabil Bank has been implementing the
emissions (not included in Scope 2) that
Environmental and Social Risk Management The emission disclosure made herein is thus occur in value chain of the reporting
(ESRM) guidelines prescribed by the regulator. the financed emissions from bank’s loan and company.
However, even before this adoption, bank’s investment portfolio under IPF division as

DISCLOSURE METHOD AND ASSUMPTIONS


The Bank uses the Global GHG Accounting and Reporting Standard for the Financial Industry to estimate greenhouse gas (GHG) emissions under its
IPF portfolio. The references to the emission calculation are as below:

Emission Factor Type Emissions Generated and Avoided Emissions for renewable sectors

Emission Factor Option - Physical Activity Based, i.e., Option 2 (Energy produced annually in Mega Watt hour in FY 2020/21) &
- Economic Activity Based, i.e., Option 3 (Company Revenue in the financials of FY 2020/21)

Country - ROW (Rest of the World) Asia Pacific since Scope 1 and Scope 2 Emission Factors data specific to Nepal is not available &
- In case of Physical Activity Based emission factor for hydropower projects, the PCAF database provided factor specific to
Nepal based on Combined Margin Grid Emission Factor has been referred for calculation

Source The Global GHG Accounting & Reporting Standard for the Financial Industry by PCAF (First edition published on November 18,
2020) & PCAF Database last updated on December 22, 2021

The analysis is based on regional emission attribution is determined from the total equity excluded for disclosure in the report as these
factors at an industry group level (GICS code) and debt of borrowing entities from their last projects are run of river (ROR projects), have
as available from the PCAF Database and available audited financial statement of FY low construction/lifecycle emissions and the
bank’s attribution to the absolute emissions up 2020/21. emissions associated to these projects are
to the extent of its financing. generally their Scope 3 emissions coming from
The construction emissions for renewable the Contractors and the Supply Chain which is
Though disclosure is for FY 2021/22, the (energy) projects financed by bank are not available for the calculation.

Annual Report 2021/22 31


DISCLOSURE RESULTS
The absolute emission attributable to loans and investments of Nabil Bank under IPF division (excluding renewable energy) is tabulated below:

GLOBAL INDUSTRY ABSOLUTE EMISSION tCO2e TOTAL ABSOLUTE BANK’S


DATA QUALITY
S. N. CLASSIFICATION STANDARD EMISSION tCO2e EXPOSURE IN USD
SCOPE 1 SCOPE 2 SCORE
(GICS) (SCOPE 1 & 2) MILLION
tCO2e tCO2e
Score 4
1 Construction Materials 74,970.32 914.11 75,884.43 56.06
Option 3 (3a)
Score 4
2 Airlines 4,426.61 15.03 4,441.64 15.40
Option 3 (3a)
Integrated Telecommunication Score 2
3 321.13 24.17 345.30 32.57
Services Option 1 (1b)
Total 79,718.06 953.31 80,671.37 104.02

(Weighted data quality score for above calculation is 3.37 where score of 1 indicates high data quality and score of 5 indicates low data quality.)

The highest emission is observed to be from representing 26.79% of the IPF portfolio on expansion programs and bank’s loan exposure
Construction Materials (GICS sector/Materials/ the reporting date. to them is now diminishing due to scheduled
Construction Materials) which mainly comprise repayments while new exposure to this sector
of mine based clinker/cement plants financed However, the construction/cement units shall focus on more efficient cement plant
by bank and the exposure therein is almost which are financed by bank have already technologies and satisfactory ESDD outcome.
commissioned and/or completed their capacity

AVOIDED EMISSIONS FROM LOANS AND INVESTMENTS IN ENERGY &RENEWABLES (OPERATIONAL PROJECTS)
The avoided emission attributable to renewable energy projects (viz., ROR hydropower schemes and Grid Solar PV Plant) financed by Nabil bank
under IPF division that are under operation is also disclosed below:

GLOBAL INDUSTRY CLASSIFICATION EMISSION tCO2e BANK’S EXPOSURE IN USD DATA QUALITY
S.N.
STANDARD (GICS) (AVOIDED) MILLION SCORE
Score 3
1 Renewable Electricity (Hydropower) 2,086.54 26.82 Option 2 (2b)
Score 3
2 Renewable Electricity (Solar) 45.27 1.23 Option 2 (2b)

Total 2131.81 28.05

32 Nabil Bank Limited


Since attribution factor has been based on the portfolios and/or asset classes going ahead. strategy and help bank pursue, reorient as well
financed project’s last available financials of Where available and is possible, bank shall as align its business activities more towards
FY 2020/21, the projects which had already also try to use more qualitative data over achieving net zero.
commissioned in FY 2021/22 are thus time through engagement with borrowers and
excluded from the calculation. consultants on deemed required basis. Production: NABIL BANK LIMITED, NEPAL
Published: MARCH 2023
The lending to Energy sector is a directed The measurement and disclosure of emission Contact: For any queries on the report, please
lending requirement of NRB and bank will help bank to set targets, develop strategy contact [email protected]
continues to finance under this sector. and take actions in the future to decarbonize References: The Global GHG Accounting &
and align its business activities with Paris Reporting Standard for the Financial Industry
CONCLUSION: Accord. This insight on emission intensity by PCAF (First edition published on November
This disclosure process shall be further for different sectors under IPF portfolio shall 18, 2020) & PCAF Database last updated on
extended to include loan portfolio under other serve as a base for developing decarbonization December 22, 2021

Please contact mentioned staff for any queries regarding the sustainability report.
Amrit Singh Karki
Officer - Sustainable Banking & Development
Nabil Bank Limited
Head Office
Teendhara, Kathmandu
Cell: +977 9851031170
Email: [email protected]
Web: https://nabilbank.com

Annual Report 2021/22 33


34 Nabil Bank Limited
DIRECTED SECTOR LENDING
SME below 10 Million
Loan
Province
Province Count Outstanding
contribution (%)
(In Mio)
Koshi 3,079 3,647 16%

Madhesh 2,113 2,904 13%

Bagmati 3,935 8,159 37%

Gandaki 1,070 1,511 7%

Lumbini 2,066 4,073 18%

Karnali 571 580 3%

Sudur Paschim 1,283 1,363 6%


Total 14,117 22,237 100%

% w.r.t Loans outstanding 6 months prior 7.44%

Agriculture Sector
Loan
Outstanding Province
Province Count (In Mio) Contribution (%)
Koshi 634 5,021 15%
Madhesh 543 3,661 11%

Bagmati 1,181 17,978 53%

Gandaki 161 692 2%

Lumbini 724 5,507 16%

Karnali 36 55 0%

Sudur Paschim 213 843 2%

Total 3,492 33,756 100%

% w.r.t Loans outstanding 6 months prior 11.29%

Energy Sector

Particulars Count Loan Outstanding (In Mio)

Energy 104 17,217


% w.r.t Loans outstanding 6 months prior 5.76%

Deprived Sector Loan


Loan
Particulars Count Ratio
Outstanding (In Mio)
Direct 9,827 7,008 39%
Indirect 168 11,167 61%
Total 18,174 100%
% w.r.t Loans outstanding 6 months prior 6.08%

Annual Report 2021/22 35


1.13 THE BOARD OF
DIRECTORS
Mr. Upendra Prasad Poudyal
Mr. Poudyal, aged 64, is an MBA from Tribhuvan
University. He has served in Standard Chartered Bank
(Nepal) Ltd. From 1986 to 2000 and in NMB Bank
Ltd. From Apr 2000 to Mar 2017. He brings with
him the extensive knowledge in all aspects of Banking
and Project Finance and in International Banking.
He has also held presidency of Nepal Bankers’
Association during Jan 2014 to Nov 2016.

36 Nabil Bank Limited


Mr. Nirvana Chaudhary
Nirvana Chaudhary, an entrepreneur and philanthropist, founded
CG Finco at 19. Now the Managing Director of CG Corp Global,
he oversees a multinational corporation with 136 companies and
76 brands across 30 countries. As Vice Chair of the Chaudhary
Foundation, he supports education, healthcare, and disaster relief
efforts. Recognitions include YPO’s SEN Sustainability Award and
World Economic Forum’s Young Global Leader nomination

He has been recognized for his social contributions with accolades


such as the YPO’s SEN Sustainability Award for Philanthropy and
the President’s Award for Social Contribution from Lions Club
International. Nirvana has also distinguished himself as the Vice
President of the Confederation of Nepalese Industries. He was
nominated to the board of the UN Business Advisory Council, the
UN Global Compact High Level Steering Committee of the Action
Platform. Nirvana has been named as one of Tatler’s New Faces of
Asia and Asia’s most influential.

Mr. Malay Mukherjee


Mr. Mukherjee, aged 67, MSc. is a senior banking executive with
an extensive knowledge in credit analysis, risk management and
technology development. He was the CEO and MD of IFCI Limited
and Chairman of different companies under the IFCI Group. He
had also held the post of Executive Director of Central Bank of
India from Sept. 2012 to Dec. 2013.

He had also served as the General Manager in charge of the


Risk Management Department and the Technology Management
Department of Indian Bank at its corporate office in Chennai.
He was Chairman of MDI, Gurgaon premier B school in India.
Presently he is in the Board of various companies in India besides
on the Board of Nabil Bank.

Annual Report 2021/22 37


Mr. Ananta Poudyal
Mr. Poudyal, aged 33, holds a Master’s degree in International
Relations specializing in International Trade & Diplomacy from the
prestigious Monash University, Australia and a Bachelor’s degree
in Business Administration from Kathmandu University.

Young and energetic Mr. Poudyal brings with him a global and
innovative approach to business development and policy building.
Mr. Poudyal is currently on the Board of Nepalese Association of
Australian Education Representatives (NAAER) and also on the
Board of Association of Nepalese Alumni from Australia (ANAA).
Furthermore, he has been serving as the Managing Director of
Nepal Education Consultancy since 2015.

Mrs. Asha Rana Adhikari


Mrs. Asha Rana Adhikary, aged 63,
possesses 35 years of experience in
the Banking Sector. This includes the
experience of Bank in USA, Government
bank, Joint Venture Bank and ‘A’ class
commercial banks in Nepal, where she
served in various executive and leading
positions. Besides Nepal and India, she
possesses exposure in various aspects of
banking from the courses in Hongkong,
Japan, Sweden and the Philippines.

She is also a Board Member of


Management Association of Nepal (MAN)
and a Member of Women Leadership
Forum, Confederation of Nepalese
Industries (CNI), Nepal.

She holds Master’s Degree in Business


Administration and was awarded with Gold
Medals for being Topper in Nepal.

She is keenly interested in Women


Entrepreneurship development programs
with an Integrated Development Approach
for ‘Sustainable and Inclusive Growth’.

38 Nabil Bank Limited


Mr. Pravin Tibrewala
Mr. Pravin Tibrewala, aged 34, holds MBA Degree in Accounting
and Finance from Pokhara University and Bachelor’s Degree
in Accounting and Finance from University of Bradford, United
Kingdom. Mr. Tibrewala is an entrepreneur and holds vast
experience of working in different business environment.

Mr. A. R. M. Nazmus Sakib


Mr. A. R. M. Nazmus Sakib has been appointed as a representative of IFIC
Bank, a promoter shareholder of the bank. He has a long bureaucratic
experience as a Joint Secretary/Additional Secretary in Finance Division
of Ministry of Finance of the Government of the People’s Republic of
Bangladesh.

Mr. Sakib did his post-graduation in Botany from University of Dhaka,


Bangladesh and also obtained M.Sc. degree in Development Finance from
University of Birmingham, United Kingdom.

Mr. Sakib is a currently Director to the Board of IFIC Bank Limited


representing M/s. Tradenext International Limited. Besides the bank, he is
also the Chairman of IFIC Money Transfer (UK) Limited, United Kingdom. He
is the Director of IFIC Investment Limited and Oman Exchange LLC Sultanate
of Oman.

Annual Report 2021/22 39


CENTRE

1.14 THE MANAGEMENT


TEAM Mr. Gyanendra Prasad Dhungana - Chief Executive Officer

CENTRE TO LEFT

Mr. Sujit Kumar Shakya - Senior DCEO-Business


Mr. Bupendra Pandey - DCEO-Corporate & Liability Business
Mr. Gyanendra Pratap Shah - CBO-Corporate & Infrastructure
Mr. Krishna Dutta Bhattarai - Chief Strategy Officer
Mr. Ganesh Prasad Awasthi - Chief Operating Officer

40 Nabil Bank Limited


CENTRE TO RIGHT

Mr. Binay Kumar Regmi - DCEO, nBank & Operations


Mr. Manoj Kumar Gyawali - DCEO, Finance & HR
Mrs. Namita Dixit - Chief Risk Officer
Mr. Adarsha Bazgain - DGM International Banking & Contractor Business
Mr. Raghu Krishna Shrestha - DGM Contractor Business Banking

Annual Report 2021/22 41


1.15 MACROECONOMIC
OUTLOOK
GLOBAL ECONOMY or GDP per capita, growth projections based EMERGING MARKET AND
on fourth-quarter comparisons suggest a DEVELOPING ECONOMIES (EMDEs)
The prediction for world growth in 2022 was
significant slowdown in activity in the latter
reduced from 6.1% to 3.2%. Due to number
half of 2022.
of variables, it is anticipated that growth will The growth forecast for emerging market
be slower in the US, China, and Europe. A ADVANCED ECONOMIES and developing economies in 2022-23
revision to the global inflation rate has been has been revised downwards, primarily
The economic forecast is subject to substantial
made due to rising food and energy costs as due to China’s sharp slowdown and India’s
risks, most of which are negative. These
well as supply-demand mismatches. Due to moderated economic growth. The baseline
dangers include the potential for an abrupt halt
the disinflationary monetary policy, just 2.9% scenario predicts a significant reduction in
to Russian gas imports to Europe due to the
growth in global output is anticipated in 2023. China’s growth, with a 1.1 percentage point
conflict in Ukraine, challenges in containing
The projection for global economic growth decrease to 3.3%, caused mainly by COVID-19
inflation due to sluggish labor markets or
is expected to be lower in 2022 and 2023 outbreaks and lockdowns. India’s growth
unanchored inflation expectations, debt
than what was predicted in the April 2022 outlook has also been revised down by 0.8
distress in emerging market and developing
World Economic Outlook, with growth rates of percentage point, attributable to unfavorable
economies, further restraints on Chinese
3.2% and 2.9%, respectively. Although some external conditions and rapid policy tightening.
growth as a result of COVID-19 outbreaks and
countries experienced higher-than-anticipated However, emerging and developing Europe is
lockdowns, and geopolitical fragmentation
growth in Q1 2022, the overall growth forecast predicted to shrink by 1.5 percentage points
that could obstruct international trade and
has been reduced due to negative factors in less in 2022 than previously forecast, while
cooperation. If these dangers come to pass, it
China, the United States, and India, such as Latin America and the Caribbean have seen
is expected that inflation will increase further
prolonged lockdowns, rising inflation resulting an upward revision of 0.5 percentage point
and that global growth will slow down to as
in higher interest rates, and repercussions from in 2022 due to a more robust recovery in
little as 2.6% in 2022 and 2.0% in 2023.
the Ukrainian war. While the baseline scenario large economies. The Middle East and Central
According to this scenario, growth would rank
does not anticipate a decrease in global GDP Asia, as well as sub-Saharan Africa, remain
in the worst 10% of results since 1970.
unchanged or positive, reflecting the impact of
high commodity prices on some countries.
World Economic Outlook
PROJECTIONS DOMESTIC OUTLOOK
(REAL GDP, ANNUAL PERCENT CHANGE)
2021 2022 2023 According to the Central Bureau of Statistics,
World Output 6.1 3.2 2.9 the country’s economy is projected to grow
Advanced Economies 5.2 2.5 1.4 by 5.84% in 2021/22, with the industry
United Sates 5.7 2.3 1.0 sector expected to grow the most at 10.19%,
Euro Area 5.4 2.6 1.2 followed by the service sector at 5.93% and
Japan 1.7 1.7 1.7
agriculture at 2.30%. The gross domestic
saving to GDP ratio is 9.27%, while the gross
United Kingdom 7.4 3.2 0.5
fixed capital formation and gross national
Canada 4.5 3.4 1.8
saving to GDP ratios are 29.37% and 31.95%,
Other Advanced Economies 5.1 2.9 2.7
respectively. The installed electricity capacity
Emerging Market and Developing Economies 6.8 3.6 3.9 rose to 2189.6 Megawatt, including hydro,
Emerging and Developing Asia 7.3 4.6 5.0 solar, cogeneration, and thermal electricity, and
China 8.1 3.3 4.6 the total tourist arrivals increased significantly
India 8.7 7.4 6.1 to 3, 70,906 in 2021/22.
ASEAN-5 3.4 5.3 5.1
GOVERNMENT’S FISCAL POSITION
Emerging and Developing Europe 6.7 -1.4 0.9
Latin America and the Caribbean 6.9 3.0 2.0 Fiscal position of the Government, based on
banking transactions, remained at a deficit of
Middle East and Central Asia 5.8 4.8 3.5
Rs.260.16 billion in 2021/22 compared to
Sub-Saharan Africa 4.6 3.8 4.0
a deficit of Rs.262.69 billion a year ago. The
Emerging Market and Middle- Income Economies 7.0 3.5 3.8
entire expenditures of the federal government
Low-Income Developing Countries 4.5 5.0 5.2 in 2021/22 increased from Rs. 1196.68

42 Nabil Bank Limited


billion to Rs. 1296.24 billion. In 2021/22, remained at 6.32 percent, as opposed to net foreign direct investment (FDI) decreased
the costs for finance, capital, and recurring 3.60 percent a year ago. Under the Food by 4.9 percent to Rs. 18.56 billion in the
expenses totaled Rs. 961.47 billion, Rs. and Beverage category, prices for Ghee & review year. In the previous year, capital
216.37 billion, and Rs. 118.39 billion, Oil, Pulses & Legumes, Tobacco Products, transfer and net FDI were Rs. 15.26 billion
respectively. In contrast, tax collection in and Alcoholic Drinks subcategories increased and Rs. 19.51 billion, respectively. The
2021/22 increased from Rs.935.89 billion significantly on an annual basis, while prices Balance of Payments (BOP) was in deficit in
to Rs.1067.96 billion, including grants to for Transportation, Education, Furnishing the review year with a value of Rs. 255.26
provincial and local governments. In 2021/22, & Household Equipment, and Recreation billion, compared to a surplus of Rs. 1.23
the federal government’s overall resource & Culture subcategories also increased billion in the previous year. In US Dollar terms,
mobilization, comprising revenue and other significantly under the non-food and services the BOP deficit was $2.14 billion in the review
revenues, was Rs. 1116.42 billion. . Balance category. Kathmandu Valley witnessed 5.73 year, compared to a deficit of $3.1 million in
at various accounts of the GoN maintained percent CPI based inflation, Terai 6.41 the previous year.
with NRB remained Rs.227.69 billion percent, Hill 6.87 percent and Mountain 6.07
(including Provincial government and Local percent. Such inflation in these regions had FOREIGN EXCHANGE RESERVE
Authorities Account) in mid-July 2022. registered 3.33 percent, 3.68 percent, 3.87 In mid-July 2022, the gross foreign exchange
percent and 2.87 percent respectively in the reserves of the country declined by 13.1% to
INFLATION previous fiscal year. Rs. 1215.80 billion compared to Rs. 1399.03
In mid-July 2022, consumer price inflation billion in mid-July 2021, while in US dollar
EXTERNAL SECTOR
increased from 4.19 percent to 8.08 percent terms, it fell by 18.9% to $9.54 billion from
year over year. Due to disruptions in the In the fiscal year 2021/22, the country’s $11.75 billion in mid-July 2021. During this
supply chain, a rise in fuel and food costs current account deficit increased to Rs. period, the reserves held by NRB decreased
globally, and a depreciation of the Nepalese 623.33 billion from the previous year’s deficit by 15.1% to Rs. 1056.39 billion, and those
rupee versus the US dollar in the second of Rs. 333.67 billion. The current account held by banks and financial institutions (except
half of 2021–2022, inflation has increased. deficit in US Dollar terms was $5.17 billion in NRB) increased by 3.2% to Rs. 159.41
Due to the low level of inflation in the first the review year, up from $2.84 billion in the billion. The Indian currency represented 23.6%
few months, the annual average consumer previous year. The capital transfer decreased of the total reserves in mid-July 2022.
price inflation for the years 2021/22 by 34.5 percent to Rs. 9.99 billion, and the

Annual Report 2021/22 43


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

CRISP
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. With brighter
minds and newer ideas in our quiver, we believe we
can redesign our thought processes to come up with
newer way of doing things.
02 FINANCIAL REVIEW OPERATING AND

2.1 BANK’S FINANCIAL POSITION


FIVE YEAR TREND ANALYSIS OF

NPR in Million

AT MID JULY
PARTICULARS
2022 2021 2020 2019 2018

Assets:
Cash, cash equivalents and due from NRB 24,089 15,310 24,821 18,672 15,325
Investments and placements 71,704 49,912 44,022 36,540 28,666
Loans and advances 310,573 206,623 153,890 133,559 113,625
Property, equipments and intangibles 3,828 1,927 1,390 1,093 1,037
Other assets 9,625 17,467 13,557 11,276 10,423
Total 419,818 291,239 237,680 201,139 169,076
Liabilities:
Due to NRB 4,657 5,450 53 88 33
Customer deposits and due to BFIs 329,576 227,977 193,035 164,373 135,979
Borrowing, debt securities and subordinated liabilities 17,206 2,097 2,036 - 60
Deferred tax liabilities 1,779 1,367 1,439 852 804
Other liabilities 13,619 20,338 15,261 12,637 11,614
Total 366,836 257,229 211,824 177,950 148,490
Shareholders Equity
Share Capital 22,833 13,844 10,097 9,012 8,043
Other components of equity 30,149 20,166 15,758 14,177 12,543
Total 52,982 34,010 25,856 23,189 20,586
Total Liabiilties and Equities 419,818 291,239 237,680 201,139 169,076

A. SHAREHOLDER’S EQUITY issued by the Bank is the one of the prominent


factor behind substantial increase in share
The Bank has been able to consistently
holder’s equity. During the last five years the
increase its shareholder’s equity over last
Bank has consecutively distributed 30%, 12%,
five year with a CAGR of 25.98%. Bank’s
12%, 33.5% and 33.60% of bonus share and
shareholder’s equity as of FY 2021/22 stands
18%, 22%, 22%,1.76% & 4.40% of cash
at NPR 52,982 Million which represents a
dividend. Further, in the current year the Bank
growth of 55.78% over last year. Substantial
has proposed bonus share of 18.5% equivalent
year on year growth of the equity is basically
to NPR 4,224 Million and cash dividend of
due to increase in share capital (NPR 4.34
11.5% equivalent to NPR 2,626 Million.
Billion due to acquisition of erstwhile NBB)
During the fiscal year Bank has been able to
and retained earning (increase in retained
provide satisfactory return in terms of ROE and
earning is basically supported by increase in
highest dividend to its shareholder’s among
statutory general reserve, regulatory reserve
commercial banks.
and capital adjustment fund). Bonus shares

Annual Report 2021/22 45


B. DEPOSIT MOBILIZATION C. LOANS
The Bank’s deposit book is presented in the The Bank’s lending book is presented in the
Statement of Financial Position under two Statement of Financial Position under two line
line items viz. ‘Due to Banks and FIs’ and items viz. Loans and Advances to Banks and
‘Deposits from Customers’, depending on the FIs and Loans and Advances to Customers,
type of customers being a bank or not. In the depending on the type of customers being bank
fiscal year, the Bank maintained its continued or not. These figures are presented after netting
focus on increasing its resources side of the of impairment provisions, interest accruals as
balance sheet with sustainable growth in its well as the current fair value of advances to
uses side as well. Total deposit balances of staff.
the Bank amounted to NPR 329,576 Million
which represents an increment of 44.57% Loans and advances in at the end of the year,
over last year and a CAGR of 22.00% over last composite for both bank and nonbank
five years. Substantial increase in deposit in
the review period is due to acquisition of NPR NPR in Million
1.61 Billion of Due to BFIs and NPR 81.52 AT MID JULY 2022 AT MID JULY 2021
Billion of Deposit from Customers of erstwhile PARTICULARS AVERAGE AVERAGE
INTEREST COST INTEREST COST
Nepal Bangladesh Bank Ltd. As per the VOLUME VOLUME
monthly statistics published by Central Bank Deposits 235,564 13,876 5.89 203,300 8,839 4.35
total deposits of commercial banking industry Borrowing 14,431 546 3.78 6,411 273 4.27
witnessed a growth of 8.84% over last year.
Total 249,995 14,422 5.77 209,711 9,113 4.35
Nabil Bank holds a market share of 6.39% in
the deposit segment.
NPR in Million

AT MID JULY GROWTH


PARTICULARS
2022 2021 2020 VOLUME %

Local Currency 317,892 214,934 183,162 102,958 47.90

Foreign Currency 11,684 13,043 9,873 (1,359) (10.42)

Total 329,576 227,977 193,035 101,599 44.57

Deposit book of the Bank reveals a major Presented about is the average volume of
concentration on local currency resources deposit balances held in customer accounts,
(96.45%) against foreign currency resources composite for both bank and non-bank
(3.55%). The greater reliance on local currency customers and average volume of borrowing,
customers, amounted to NPR 310,573
deposits stem from the fact that these are the along with respective weighted average
Million. This signifies a CAGR of 27.42%
primary resource required for expanding credit cost of current and previous fiscal year. As
over past five years which is substantiated
and maintaining prudential liquidity ratios presented, total cost of deposit has increased
by a growth of 50.31% over last year. The
while foreign currency deposits are limited in to 5.89% from 4.35% a year prior. Higher
substantial increase in in the lending books is
number to few institutional clients. The Bank cost of servicing and maintaining client has
due to acquisition of NPR 3.03 Billion of Loan
has been able to increase its local currency resulted in increase of 154 basis point in cost
& Advances to BFIs and NPR 77.60 Billion of
deposits by 47.9% and while industry growth of deposit. The same trend in cost of deposit
Loan & Advances to Customers from the books
registered a growth of 8.84% for total deposit has been observed in case of commercial
of erstwhile Nepal Bangladesh Bank Ltd.
(all currencies) in the current year. Despite banks. Weighted Average cost of local currency
intense competition, ongoing pandemic and deposit as of Mid July 2019 was 4.40% which
increasing cost of deposit, the Bank was able surged up to 7.18% as of Mid July 2022 with
to increase its deposit higher than the industry increment of 278 basis point.
growth.

46 Nabil Bank Limited


NPR in Million As shown in the table, the yield on total loan
AT MID JULY GROWTH has increased to 9.46% from 8.17% a year
PARTICULARS prior. This embodies a increment of 129 basis
2022 2021 2020 VOLUME %
point which was in large underpinned by a
Local Currency 305,236 192,726 145,590 112,510 58.38
increasing base rate and the same is reflected
Foreign Currency 5,336 13,897 8,301 (8,561) (61.60)
across the industry. Weighted average yield on
Total 310,573 206,623 153,890 103,950 50.31 Loan across the commercial bank’s as of Mid
July 2022 was 11.40% which is 321 basis
In consonance to total deposits, Bank’s bottom is the average volume of Loan
point higher than as of Mid July 2021.
lending book is also concentrated more in local balances, composite for both bank and non-
currency which occupies 98.28% which was bank customers, recorded for current year
93.27% a year prior. Credit expansion across along with respective weighted average yield
the industry was recorded at 12.91% which vis.a.vis. those for the previous year.
reached NPR 4,714 billion as of current fiscal NPR in Million
year end. The Bank has fared satisfactorily in AT MID JULY 2022 AT MID JULY 2021
lending book in comparison with the industry. PARTICULARS AVERAGE AVERAGE
INTEREST YIELD INTEREST YIELD
The Bank continued its focus on sustainable VOLUME VOLUME
growth of retail and SME fronts in domestic Business Loan 155,118 14,200 9.15 132,970 10,297 7.74
market. The Bank increased its local currency Retail Loan 66,049 6,731 10.19 44,157 4,175 9.45
loan by 58.38%.Presented in the table at the
Total 221,167 20,931 9.46 177,127 14,472 8.17

D. INVESTMENTS at NPR 52,982 Million which represents a Financial Position across four different line
growth of 55.78% over last year. Further, in items viz. Placements with BFIs, Investment
the current year the Bank has proposed bonus
share of 18.5% equivalent to NPR 4,224 Securities, Investments in Subsidiaries and in
Million and cash dividend of 11.5% equivalent Associates. This review of investment book is
to NPR 2,626 Million. During the fiscal year composite of all the four items taken together.
Bank has been able to provide satisfactory The Bank’s investment book increased by
return in terms of ROE and highest dividend to 43.66% to NPR 71,704 million at end of
its shareholder’s among commercial banks. current year. Over the past five years, a CAGR
of 14.81% has been registered.
The investment book of the Bank is looked
after by the Treasury department on a profit In the current year, placement in BFIs
center model following up with functions decreased by 10.08% to NPR 8,871
of liquidity management, maintenance of million whereas the Bank invested heavily in
prudential liquidity ratios including investments government bonds and treasury bills which has
gone up by 56.57% in the current year.
NPR in Million
Investment securities comprise a mix of
AT MID JULY GROWTH
PARTICULARS government securities measured at amortized
2022 2021 2020 VOLUME % cost and equity instruments measured at
Placement with Banks and FIs 8,871 9,865 10,231 (994) (10.08) fair value, almost entirely denominated in
Investment Securities 62,455 39,889 33,633 22,566 56.57 local currency. This ultimately resulted in
Investment in Subsidiaries 298 78 78 220 282.05 an increase in the gross investment book of
Investment in Associates 80 80 80 - - the Bank. The Bank has remained vigilant in
exploring opportunities in developing markets
Total 71,704 49,912 44,022 21,792 43.66
in Asia whilst striving to maintain a balance of
in domestic government securities, money risk and return in its placement book.
The Bank has been able to consistently
increase its shareholder’s equity over last market dealings and placing surplus foreign
five year with a CAGR of 25.98%. Bank’s currency resources in overseas markets.
shareholder’s equity as of FY 2021/22 stands Investment is reported in the Statement of

Annual Report 2021/22 47


NPR in Million
AT MID JULY GROWTH
PARTICULARS
2022 2021 2020 VOLUME %
Investment Securities measured at Amortized Cost 55,839 32,770 28,125 23,069 70.40
Investment in Equity measured at FVTOCI 6,616 7,119 5,508 (503) (7.06)
Total 62,455 39,889 33,633 22,566 56.57

NPR in Million
AT MID JULY 2022 AT MID JULY 2021
PARTICULARS
VOLUME INTEREST YIELD VOLUME INTEREST YIELD
Government Securities 34,794 1,803 5.18 30,407 1,378 4.53
Placements denominated in Foreign Currency 12,228 181 1.48 12,404 262 2.11
Total 47,022 1,984 4.22 42,812 1,640 3.83

The Bank was able to raise the yield of Government securities to 5.18% from 4.53% on year on year basis which led to an increment of yield on
overall Investment Securities to 4.22% from 3.83%.

E. NET ASSETS its net assets value with a CAGR of 25.98%


over last 5 years. Net assets value of the Bank
The Bank has been able to consistently
has risen by 55.78% in the review period
increase its shareholder’s equity over last
itself. Bank has recorded a CAGR of 2.25%
five year with a CAGR of 25.98%. Bank’s
in net assets value per share in last 5 years.
shareholder’s equity as of FY 2021/22 stands
Reason behind notable increase in net asset
at NPR 52,982 Million which represents a
of the bank is discussed under the heading
growth of 55.78% over last year. Further, in
“Shareholder’s Fund” of the current chapter.
the current year the Bank has proposed bonus
However, despite an increase in the net assets
share of 18.5% equivalent to NPR 4,224
value of the Bank, an increase in the number
Million and cash dividend of 11.5% equivalent
of outstanding shares owing to the highest
to NPR 2,626 Million. During the fiscal year
dividend payout among commercial banks in
Bank has been able to provide satisfactory
the review period has resulted in a decline of
return in terms of ROE and highest dividend to
5.54% in per share net assets value of the
its shareholder’s among commercial banks.
Bank. Net assets value per share of the Bank
in the review period stands at NPR 232.04.

The net assets of the Bank represent the


value of Bank’s assets deducted from its
liabilities. Bank has consistently increased

48 Nabil Bank Limited


2.2 COMPANY’S MARKET SHARE
INFORMATION

A. BUSINESS VOLUME B. ALTERNATE CHANNEL C. DIGITAL BANKING

In the review period, Bank’s market share in


Bank has registered a healthy increase in total Bank’s market share in the number of mobile
the industry in terms of registered number of banking customers saw an increase of 70 bps
loan market share in the industry. Bank’s share
debit and credit card users has declined by from 4.12% a year prior to 4.82% in the review
of total loans stands at 6.59%, an increase of
82 bps and 74 bps respectively to register period. Bank’s directed efforts towards revamp-
164 bps from previous year’s 4.95% market ing its Mobile Banking app accompanied with
market share of 5.91% and 10.97%. The
share. On the other hand, Bank’s share in total additional features in the app led to a boost in
decline in market share is resultant of intense
deposits has increased by 158 bps to stand at the number of mobile banking users. On the other
competition in product offerings of banks. hand, Bank registered market share of 5.17% in
6.39% in the review period.
number of internet banking customers, increment
of 120 bps from prior year’s 3.97% market share.

2.3 DISCLOSURE ON
NON-PERFORMING ASSETS

A. MOVEMENT IN NON-PERFORMING ASSETS AND CORRESPONDING PROVISIONS


NPR in Million

FY 2021/22 FY 2020/21
LOAN CLASSIFICATION NON PERFORMING NON PERFORMING
PROVISION PROVISION
ASSET ASSET
Restructured and Rescheduled 210 110 139 22

Sub-Standard 1,652 408 596 148

Doubtful 1,253 622 281 139

Loss 1,889 1,881 704 702

Total 5,004 3,021 1,720 1,010

Annual Report 2021/22 49


B. DETAILS OF ACCOUNTS RESTRUCTURED AS PER REGULATORY GUIDELINES
NPR in Million

FY 2021/22 FY 2020/21
LOAN CLASSIFICATION NON PERFORMING NON PERFORMING
PROVISION PROVISION
ASSET ASSET
Restructure with 12.5% provision 114 14 134 17

Restructure with 100% provision 96 96 5 5

Restructure with 5% provision 5,923 296 3,940 197

Total 6,132 406 4,080 219

2.4 FIVE YEAR TREND ANALYSIS OF


BANK’S OPERATING PERFORMANCE
NPR in Million
PERIOD ENDING MID JULY
PARTICULARS
2022 2021 2020 2019 2018 2017
Net interest income 8,919 8,076 6,984 7,159 6,262 5,563
Net fees and commission income 1,579 1,489 1,242 1,227 1,031 935
Net trading income 565 644 468 448 391 322
Other operating income 410 1,451 430 495 559 486
Total operating income 11,473 11,660 9,124 9,329 8,243 7,305
Impairment charge/ (reversal) for loans 1,119 828 857 405 176 (12)
and other lossess
Net operating income 10,354 10,832 8,267 8,924 8,067 7,318
Operating expense
Personnel expenses 2,659 3,412 2,010 1,950 1,728 1,423
Other operating expenses, 1,414 1,194 1,165 947 686 637
depreciation and amortization
Operating profit 6,282 6,226 5,093 6,027 5,653 5,258
Net non operating income / (expense) 6 29 2 15 4 11
Profit before income tax 6,288 6,255 5,095 6,041 5,657 5,269
Income tax expense 2,032 1,728 1,632 1,802 1,675 1,566
Profit for the Year 4,256 4,528 3,463 4,239 3,982 3,702

50 Nabil Bank Limited


A. TOTAL REVENUE B. OPERATING PROFIT C. PROFIT BEFORE TAX

Revenue of the Bank includes avenues like The Bank has been able to register an Bank’s financial performance for the fiscal
Net Interest Income, Net fee and Commission operating profit of NPR 6,282 million which is year has been satisfactory despite the many
Income, Net Trading Income and other one of the highest across the industry for the challenges encircling the global economy
operating income. The Bank has registered fiscal year. With a CAGR of 3.62% over past as well as domestic one. Bank recorded a
total revenue of NPR 11,473 million in the five years, Nabil has been able to generate a profit before tax of NPR 6,288 million which
fiscal year which represents a CAGR of 9.45% satisfactory level of operating profit in relation signifies a CAGR of 3.60% over past five years.
over past five years.
Year on year increase in profit before tax is
NPR in Million
recorded at 0.51%.
AT MID JULY GROWTH
PARTICULARS D. PROFIT AFTER TAX
2022 2021 2020 VOLUME %
Net interest income 8,919 8,076 6,984 843 10.44
Net fees and
1,579 1,489 1,242 90 6.07
commission income
Net trading income 565 644 468 (79) (12.24)
Other operating income 410 1,451 430 (1,041) (71.72)
Total 11,473 11,660 9,124 (186) (1.60)

The Bank witnessed 1.60% decrease in total to its business volume. Year on year growth of
revenue. The major factor behind the decrease operating profit is recorded at 0.89%. Major
in revenue is due to higher volume of sale of contributing factors in increasing operating
investment securities during previous year due profit despite decrease in net trading and
to regulatory provision in comparison to the operating income are increase in net interest,
review year and lower income under NDF as fee & commission income and decrease
the income from NDF fell down due to increase in operating expense. The bank has been
in cost of fund in comparison to the yield on following strategies to minimize operating Bank has registered a healthy profit after tax
NDF. Positive growth of 10.44% and 6.07% expense via optimal expense management figure of NPR 4.25 Billion in the current year
were recorded under Net Interest Income and techniques. which is one of the highest among commercial
Net Fee & Commission Income respectively. banks. Despite the various challenges in the

economy during the period, the Bank managed to regulatory provision in comparison to the income and decreasing operating expense. The
to sustain its net profit by with only 6% decline review year and lower income under NDF as Bank has recorded five year CAGR of net profit
from that of year prior. The major factor the income from NDF fell down due to increase of 2.83%. The Bank has been able to provide
behind the decrease in net profit on year on in cost of fund in comparison to the yield on satisfactory returns to the shareholders and
year basis is due to higher volume of sale of NDF. However, the Bank fared well in terms remains committed to generate above industry
investment securities during previous year due of increasing net interest, fee &commission average returns.

Annual Report 2021/22 51


E. EARNINGS PER SHARE Registering one of the highest earnings per F. NON INTEREST INCOME FROM
share in the commercial banking sphere of OPERATING ACTIVITIES
Nepal, Nabil Bank’s earnings per share of
22.86 after inclusion of NPR 0.96 Billion
of net profit of erstwhile Nepal Bangladesh
Bank indicates the Bank’s ability to generate
significant profits and its continued capacity for
profit distribution to its shareholders. Earning
per share of the Bank shows decreasing trend
because the bank has been fortifying its capital
via consistent distribution of bonus shares
and because of addition in capital due to two
successful acquisitions of erstwhile United
Finance Ltd and Nepal Bangladesh Bank Ltd
consecutively.

Non-interest income from operating activities The Bank has recorded healthy growth among G. OPERATING EXPENSE
of the Bank encompasses net fees and segments like Card & Remittance Business, off
commission income, net Trading Income and balance sheet business and dividend on equity
Other Operating Income line items presented in investment. The Bank continues to identify and
the Statement of Profit or Loss, taken together. expand other avenues that are independent
Under these headings, the Bank generated net from the lending book and can contribute in
income of NPR 2,554 million in the current feebased income such as cards, e-commerce,
year which shows decrease of 28.73%. A remittance, ancillary banking services, etc.
major chunk of such decrease was due to sale Banks equity investments are not a part of the
of lower volume of investment securities in the trading book as most investments are made
review period. The bank also generated lower in the capacity of promoter shareholder in
income on trading investments by due to lower microfinance companies and unit investments
positioning on NDF because of increase in in mutual fund. Disposal of investments and
cost of fund. The historical growth trend over fixed assets are one-off transactions and are
the past five years period stands at 7.95% in not part of the trading book.
CAGR terms.
NPR in Million
This review encompasses personnel expense,
AT MID JULY GROWTH
PARTICULARS other operating expense and depreciation
2022 2020 2019 VOLUME %
and amortization line items presented in the
Loan Administration 493 578 409 (85) (14.66)
Statement of Profit or Loss, taken together.
Cards and Remittance business 373 269 275 104 38.69 Under these headings, the Bank incurred total
Off Balance Sheet business 506 455 366 51 11.31 expense of NPR 4,073 million in the current
Foreign Exchange gains 695 768 773 (73) (9.51) year which is a negative growth of 11.58%
Dividend on equity instruments 207 77 101 130 168.52 over that of previous year. The historical
growth trend over the past five years period
Gain on Disposal of Investment (2) 1,238 - (1,240) (100.17)
stands at 14.60% in CAGR terms.
Gain on Disposal of Fixed Assets (4) 1 2 (5) (658.08)
Other Income 287 199 215 88 44.47
Total 2,554 3,584 2,140 (1,029) (28.73)

52 Nabil Bank Limited


NPR in Million compared to NPR 828 million in the previous
AT MID JULY GROWTH year. The increase in charge is entirely on
PARTICULARS
2022 2020 2019 VOLUME % account of loan impairment. In measuring the
impairment, the Bank has elected to apply the
Staff Salary and allowance 1,379 1,237 1,161 142 11.51
carve out in NFRS and charged an amount
Gratuity and provident fund 208 372 11 (164) (44.15)
higher of that derived from incurred loss model
Staff Training and development 35 28 22 6 22.66
and that derived from prudential overdue
Other Staff benefits 339 1,080 249 (741) (68.62) based provisioning under prevailing banking
Statutory Staff bonus 699 695 566 4 0.51 regulations. The Bank has thus charged
Depreciation and amortization 390 142 116 248 175.49 impairment equivalent to a fixed 1.3% on all
Office Administration expense 783 661 658 122 18.42 incremental pass graded loans booked in the
Operating Lease expense 106 272 235 (166) (61.01)
current year. The Bank also recorded recovery
on some non-performing accounts. The Bank’s
Other Office expense 135 120 157 15 12.57
gross non-performing loan increased from
Total 4,073 4,606 3,174 (533) (11.58)
previous year’s NPR 1,720 million to NPR
5,004 million in the current year.
Staff expense, excluding statutory bonus, on an Other office operating expenses, inclusive of
aggregate has decreased by 27.84% to reach depreciation and amortization, has increased I. INCOME TAXES
NPR 1,960 million in the current year. Such by 18.38% to reach NPR 1,414 million in
substantial growth is due to remeasurement the current year. Historically, the Bank has An increase in Bank’s profits has led to an
of deferred employee expenditure accounted managed its operating expenses efficiently and increase in the net tax expense on Bank’s
under NFRS. There is no significant growth in maintained a CAGR of 17.29% over the last book by 17.57% which stands at NPR 2,032
the actual facilities provided to the employees five year. million. The Bank has calculated tax expense
as such. Staff expense of the Bank has grown at the rate of 30% that has been applicable for
at a CAGR of 16.61% over the last five years. H. IMPAIRMENT CHARGE both the current and the previous year.
The statutory staff bonus is derivative of the
The bank incurred net impairment charge
profit figures and expensed in compliance with
of NPR 1,119 million in the current year
the Bonus Act.

Annual Report 2021/22 53


2.5 VALUE GENERATION
AND DISTRIBUTION
NPR in Million
CHANGES
PERIOD ENDING MID JULY 2022 2021
AMOUNT %
Interest Income 23,341 17,189 6,152 35.79%
Interest Expense (14,055) (8,912) (5,143) 57.70%
Operating Cost (1,491) (1,278) (213) 16.66%
Other Income from financial intermediation 215 80 135 167.99%
Value addition from financial intermediation 8,010 7,079 932 13.16%
Income from financial services 2,812 3,758 (946) -25.17%
Total Value Addition 10,822 10,837 (14) -0.13%

The Bank has been successful in generating has contributed 74.02% in the total value financial intermediation. Value generation from
value of NPR 10,822 million during the generation. Remaining 25.98% of value financial intermediation have increased by
review period which is a decrement of 0.13% generation engenders from financial services, 13.16% and from financial services decreased
from corresponding period last year. Financial encompassing conveyance of various auxiliary by 25.17% respectively in the review year
intermediation, a core business of the bank, services, which are not directly relating to despite of many economic challenges.

NPR in Million
2022 2021 CHANGES
PERIOD ENDING MID JULY
AMOUNT SHARE % AMOUNT SHARE % AMOUNT %
To Employee 2,659 24.57% 3,412 31.48% (753) -22.07%
To Governments 1,940 17.93% 2,259 20.84% (318) -14.09%
To Long term Financier 367 3.39% 201 1.85% 167 83.03%
To Investor 2,626 24.26% 609 5.62% 2,017 331.05%
To Provide for maintenance and expansion 3,230 29.85% 4,357 40.20% (1,126) -25.85%
- Depreciation and Amortisation 390 3.60% 142 1.31% 248 175.49%
- Provision for Loan and Investment Loss 1,119 10.34% 828 7.64% 291 35.20%
- Deferred Tax 91 0.84% (531) -4.90% 622 -117.21%
- Capital / Retained Earning / Reserves 1,630 15.06% 3,918 36.16% (2,288) -58.40%
Total Value Addition 10,822 100.00% 10,837 100.00% (14) -0.13%

Application of value created during the review stock dividend of 18.50% amounting to NPR to its shareholders, which solidifies Bank’s
period has been applied in the interest of all 4.22 billion which is reported under Capital/ determination towards meeting shareholder’s
stakeholders along with prioritizing a long Retained Earnings in the table presented expectations. Moreover, Bank feels an
term interest of its business. Value generation below. immense pride assisting the government
towards investors stands at NPR 2,626 in serving the nation building initiative by
million resultant of 11.50% cash dividend. In Higher return apportioned to shareholders applying 17.93% of its total value generation
addition, investors have also benefitted with consistently over the period portrays Bank’s as corporate tax payment.
competency in delivering exceptional return

54 Nabil Bank Limited


2.6 BANK’S CONTRIBUTION TO
NATIONAL ECONOMY

CONTRIBUTION TOWARDS 17.08 billion in cash dividend alone before DIGITIZATION OF FINANCIAL
GOVERNMENT deduction of applicable taxes over the period of ECOSYSTEM
operation of the Bank.
Nabil Bank has been awarded as the highest The Bank has envisioned to undergo
tax payer entity among Bank and Financial ALIGNMENT WITH ECONOMIC metamorphosis into complete digitized
Institutions for the fiscal year 2020/21. The POLICIES banking system and has been striving to do
Bank has been able to earn the title for the so in its actions. Banking services of the Bank
It is very important that financial institutions
seventh time over the last eleven years. Nabil includes digitized services like Mobile Banking,
march in line with the economic policies
Bank feels immensely proud for making Internet Banking, Online Account Opening,
envisioned by the country. Nepal Rastra Bank
substantial contribution to the national coffer Video KYC, QR Code, auto approving loan
has been entrusted with the authority to
which will help in nation building mechanism system, Nabil Cash Machine among others. In
regulate BFIs and thus direct BFIs towards
of the government. Tax paid by Nabil bank for addition to the digitized services, the Bank has
policies envisioned for the country. Nepal
last eleven years have been mentioned in the been striving to automate internal operating
Rastra Bank regulates and guides BFIs through
table below: procedures under Digi Workspace which will
various Acts, directives and circulars to
In Million ultimately affect the banking services targeted
ensure that BFIs remain vigilant in economic
to customers.
FISCAL YEAR TAX EXPENSE wellbeing of the country. Nabil Bank has
2011/12 728 been very prudent in abiding by the directions CORPORATE SOCIAL
2012/13 947 laid out by Nepal Rastra Bank. The Bank RESPONSIBILITY
2013/14 981 is very cautious in protecting the funds of
As a catalyst in the overarching value system,
2014/15 897
depositors and utilizing those funds to uplift
Nabil assumes the moral duty of giving a
sectors like Agriculture, Micro Industries,
2015/16 1,199 fair share of the value created back to the
Small Industries, Medium Industries, Cottage
2016/17 1,538 community. The Bank has been allocating 1
Industries, Deprived Sector, Energy among
2017/18 1,682 percent of net profit to CSR fund. As a part
others. In doing so, the Bank has been prudent
2018/19 1,810 of our CSR initiatives, we have organized
in maintaining adequacy of capital vis-à-vis
several programs throughout the nation. These
2019/20 1,551 risk inherent to loans. The Bank is determined
activities included charities to local institutions,
2020/21 2,259 in serving people by increasing its scope of
tree plantation, donation of electronic
2021/22 1,940 financial intermediation and financial access.
devices, allocation of health supplies, poverty
Total 15,532 FINANCIAL ACCESS alleviation, blood donation among others. The
Bank contributed NPR 38.52 Million under
CONTRIBUTION TOWARDS Integration of the majority of the population
CSR activities during the review period.
INVESTORS into the scope of banking system is an

The Bank is considered as one of the premium


important requisite of a developed economy. CONTRIBUTION THROUGH
institutions for the investors to place their
As of mid-July 2022, the Bank catered to the EMPLOYMENT GENERATION
banking needs of its customers through 231
funds and has continually lived upto the Nabil Bank Ltd has been awarded with
branches, 17 Extension Counters and 250
expectations of the investors. Thirty eighth “National HR Excellence Award - 2022”.
ATMs. Bank has been catering to the banking
Annual General Meeting of the Bank has The Bank has been providing one of the best
needs of population of rural areas via 37
announced Cash Dividend of 11.50% (NPR employee experiences in terms of:
branches in rural municipalities.
2,625,784,499.68) and Stock Dividend of
18.50% (NPR 4,224,088,096.92) for the 1) Employee Training and Skill Development
BRANCH CLASSIFICATION
investors of the Bank. The Bank has been NUMBER 2) Salary, Allowances and Other Benefits
serving exceptionally well in maximizing 3) Retirement, Gratuity and Job Safety
Rural : 37
shareholders’ wealth since its inception. 100
Semi Urban : 109 4) Job Design and Appraisal
shares of the Bank during the inception of
the Bank has compounded to 59,614 shares Urban : 85 5) Inclusion and equality
by the end of thirty eighth year of Bank’s Total : 231 6) Health and safety of employees
operation. Investors have benefitted from NPR 7) Employee motivation, among others

Annual Report 2021/22 55


As of mid-July 2022, a total of 3,259 employees are working at the bank, out of which 65% of the employees were of permanent in nature and
remaining 35% are outsourced staff. Out of the total permanent employees of the Bank, 37% are females while 63% are males. The bank expensed
an amount of 2.66 billion towards personnel expense during FY 2021/22. It is one of the highest in the industry which signifies the bank’s
commitment to employee satisfaction.

The Bank’s CEO, Mr. Gyanendra Prasad Dhungana accepting the highest tax payer award for FY 2020/21.

56 Nabil Bank Limited


2.7 VERTICAL AND HORIZONTAL ANALYSIS OF
BANK’S UN-AUDITED QUARTERLY REPORT
A. INTERIM FINANCIAL POSITION
NPR in Million
ASSETS Q1 Q2 Q3 Q4
Assets
Cash and Cash Equivalent 7,373 9,806 7,436 9,320
Due from Nepal Rastra Bank 7,208 8,587 7,662 13,008
Placement with Banks and FIs 11,730 9,016 8,449 10,603
Derivative Financial Instruments 10,193 8,391 2,509 1,374
Other Trading Assets - - - -
Loans and Advances to Banks and Fis 8,148 8,096 7,957 10,367
Loans and Advances to Customers 207,437 215,206 221,989 301,073
Investment Securities 41,161 40,726 39,156 61,681
Current Tax Assets - 42 185 423
Investment in Subsidiaries 78 78 78 298
Investment in Associates 80 80 80 80
Investment Property 23 23 23 931
Property and Equipment 1,683 1,657 1,676 3,138
Goodwill and Intangible Assets 61 85 79 125
Deferred Tax Assets - - - -
Other Assets 5,448 2,519 3,243 3,751
Total Assets 300,622 304,311 300,522 416,170
Liabilities
Due to Banks and FIs 5,286 2,727 3,179 3,354
Due to Nepal Rastra Bank 4,367 5,502 3,688 4,657
Derivative Financial Instruments 10,234 8,252 2,488 1,391
Deposits from Customers 225,885 232,555 234,230 326,222
Borrowings 4,508 7,897 8,828 10,721
Current Tax Liabilities 259 - - -
Provisions - - - -
Deferred Tax Liabilities 1,937 1,695 1,451 1,490
Other Liabilities 9,619 7,219 7,163 9,253
Debt Securities Issued 4,290 4,381 4,299 6,499
Subordinated Liabilities - - - -
Total Liabilities 266,384 270,226 265,327 363,587
Equity
Share Capital 13,844 18,496 18,496 22,833
Share Premium 159 0 0 0
Retained Earnings 4,609 962 2,168 3,371
Reserves 15,626 14,626 14,532 26,379
Total Equity Attributable to Equity Holders 34,238 34,085 35,196 52,584
Non Controlling Interest
Total Equity 34,238 34,085 35,196 52,584
Total Liabilities and Equity 300,622 304,311 300,522 416,170

Annual Report 2021/22 57


Bank showed consistent increase in its assets During the reporting period, the Bank has 1.78% (NPR 4.11 billion) in second quarter,
throughout four quarters of the year whilst been able to optimize the cash position 0.90% (NPR 2.12 billion) in third quarter and
also maintaining continued focus on asset significantly. Cash and cash equivalent stood at 38.82% (NPR 92.17 billion) in fourth quarter
quality. Total assets of the Bank as on fourth NPR 9.32 billion at the end of fourth quarter was achieved by the Bank.
quarter of reporting period stood at NPR of the reporting period which is an increase
416.17 billion, year-on-year increment of of 74.30% from that of previous year. Better Amidst stiff competition among banks offering
43%. The asset of the Bank grew throughout optimization of funds has been one of the attractive interest rates, Bank has been able to
the year at an average growth rate of 10.50%. core strengths of the Bank in recent times. better utilize its manpower and offer products
Loans and advances of the Bank, which Investment securities of the Bank witnessed with attractive features to the customers
account for a majority of Bank’s assets books increase of NPR 20.68 Bio within the review which gave major push to this rise in deposit
( i.e 74.83% of total assets), increased by period due to acquisition of Erstwhile Nepal base of the Bank. Borrowing of the Bank at
50.67% throughout the period in comparison Bangladesh Bank and due to capital gain of last quarter was NPR 10.70 Billion in order
to previous year end. Quarterly growth of underlying securities. to manage liquidity of the Bank amidst low
4.29% (NPR 8.876 billion) in first quarter, liquidity in the economy. Portion of debenture
3.58% (NPR 7.72 billion) in second quarter, On the liabilities side, Deposit from Customers increased by NPR 4.4 Billion till last quarter
2.98% (NPR 6.65 billion) in third quarter and Due to BFIs, which account for a due to issuance of Debenture by the Bank
and 35.44% (NPR 81.49 billion) in fourth majority of Bank’s Liability (i.e 79.19% of (NPR 2.2 Bio at 8%) and due to acquisition of
quarter was achieved by the Bank. There was total capital and liabilities), increased by erstwhile Nepal Bangladesh Bank Ltd (NPR 2
a significant growth in fourth quarter which 44.56% throughout the period in comparison Bio at 10.25%).
was due to acquisition of Erstwhile Nepal to previous year end. Quarterly growth of
Bangladesh Bank. 1.40% (NPR 3.19 billion) in first quarter,

B. INTERIM FINANCIAL PERFORMANCE


NPR in Million
ASSETS Q1 Q2 Q3 Q4
Interest Income 4,930 5,192 6,199 7,462
Interest Expense 2,689 3,214 3,828 4,620
Net Interest Income 2,242 1,978 2,371 2,842
Fees and Commission Income 471 395 391 437
Fees and Commission Expense 22 26 28 36
Net Fees and Commission Income 448 369 363 401
Net Interest, Fees and Commission Income 2,690 2,347 2,734 3,242
Net Trading Income 164 170 120 111
Other Operating Income 86 186 54 31
Total Operating Income 2,940 2,704 2,908 3,384
Impairment Charge/ (Reversal) for Loans and Other Losses 176 226 209 93
Net Operating Income 2,764 2,478 2,699 3,291
Personnel Expenses 882 631.44 678 535
Other Operating Expenses 248 281.33 309 395
Depreciation & Amortization 46 38.61 45 48
Operating Profit 1,589 1,527 1,667 2,314
Non-Operating Income 1 1.40 5 2
Non-Operating Expense 1 0.14 (0) (0)
Profit Before Income Tax 1,589 1,528 1,672 2,316
Income Tax Expense 477 459 501 695
Current Tax 477 459 501 695
Deferred Tax - - - -
Profit /(Loss) For the Period 1,112 1,069 1,171 1,621

58 Nabil Bank Limited


The Net Interest Income (NII) of the Bank 79.03% is attributed to earnings in the form of expense which stands at 65.91% of total
stood at NPR 9.43 billion having recorded a net interest income, 13.25% by net fees and operating expenses as of year end.
yearly growth of 22.06% during the reporting commission income, 2.99% by other operating
period. Although second quarter witnessed a income and 4.73% by net trading income. The Bank has been able to increase its net
negative growth in NII third and fourth quarter profit by 10.40% as compared to previous
witnessed outstanding quarter-on-quarter Impairment provisioning on loans increased year. Despite the various challenges persisting
growth of 19.84% and 19.87% respectively. by NPR 44 million (6.61%) on year-on-year in the domestic and global economy, the Bank
Similarly, total operating income of the Bank basis. The Bank recorded operating expense has been able to generate satisfactory level of
witnessed a yearly growth of 5.22% and stood of NPR 4.14 billion which is a decline of profits.
at NPR 11,935 million at the fourth quarter of 27.86% from previous year. A major portion
reporting period. Out of total operating income, of operating expense is attributed to personnel

Annual Report 2021/22 59


SYNERGISTIC
Synergy is figuring out an ‘our’ way of doing
things from ‘your’ way or ‘my’ way and that is at
the heart of the brand new Team Nabil. Yes, we
understand that each individual brings different
ideas to the plate but we also understand that the

CRISP
right combination of each of these ideas might
just be what the bank needs to achieve its fullest
potential. With the right attitude and aptitude, we
will surge together ahead 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.

60 Nabil Bank Limited


03 AND SERVICES
PRODUCTS

DEPOSIT
LOCAL CURRENCY FOREIGN CURRENCY

Savings Current Nabil NRN Savings Account

Nabil Bachat Yojana Call Nabil USD Special Savings Account (Individual)
Nabil Bal Bachat Khata
Fixed Nabil USD Elite Savings Account (Individual)
Nabil Corporate Staff Savings Account
Nabil Gen Alpha Account Cumulative Fixed Deposit NRN Fixed Deposit
Nabil General Savings Account Karnali Kramik Fixed Deposit
USD
Nabil Gen-N Account Nabil Remittance Fixed Deposit
GBP
Nabil Gold Savings Account Nabil Choice Fixed Deposit
AUD
Nabil Jestha Bachat Khata Nabil Smart Fixed Deposit
Nabil Premium Nari Bachat Khata Nabil Akshaya Kosh Muddati Khata
Nabil Premium Payroll Savings Account
Nabil Premium Remittance Savings Account
Nabil Remittance Savings Account
Nabil Shareholders Savings Account
Nabil Social Security Savings Account
Nabil Corporate General Savings
Nabil Corporate Premium Savings
Nabil Gold Payroll Savings
Nabil Gaurav Bachat Khata
Nabil Chhori Beti Bachat Khata
Nabil Insta Kit Account
nsavings Account
Nabil Quick Savings Account
Nabil NRN Savings Account
Nabil Sahuliyat Khata

REMITTANCE
Nabil Remit Western Union Other Remittance Alliance

Domestic Remittance Western Union ID Payment KEB Hana Bank Global (South Korea)
Inward International Payments Western Union- Account Payment Network Kookmin Bank (South Korea)
Al Sadd Exchange (Qatar) (WU APN) Axis Bank (India)
Third-Party Payment Doha Bank (Qatar)
CG Remit

City Express

Outward Remittance

Convera Student payment

Annual Report 2021/22 61


62
LOAN
Business Loan Direct Deprived Sector Loan Nabil Sustainable Banking Direct Deprived Sector Loan Loan Against

Customized SME Loans General Loan Products Nabil Kisan Karja Housing Fixed Deposit (Nabil Bank)
Nabil Nari Karja Low Cost Housing Nabil Udhyamshil Karja NCell Housing (Corporate Employees Fixed Deposit (Other Banks)

Nabil Bank Limited


Loan
Nabil Sajilo Karja Commercial Agriculture Loan (without Interest Subsidy) 1st Class Bank Guarantee
Corporate Loan Facility (National Life
Nabil Sajilo Express Karja Small & Micro Enterprises Loans Other Bank's Guarantee
Insurance Agent)
Commercial Agro & Livestock Loan Handicraft & Skill Based Enterprise Development Loan Government Securities
Mortgage
(Interest Subsidized)
Self- Employment Auto Loan LCY Loan against FCY Deposit
Textile (Clothes Production) Industry Auto
Women Entrepreneur Loan Loan against Share
Production Loan (Interest Subsidized) Private
Agri Business Loan Gold Loan
Channel Financing Commercial
Education Loan
Nabil Sakchhyam Karja Interest Subsidized Loan Products Tractor Loan
Electric Vehicle Corporate Loan Facility (National Life
Commercial Agro and Livestock Loan
Insurance Agent)
Educated Youth Self Employment Loan Electric Taxi

Project Loan for Youths Returning from Foreign Electric Commercial


Employment up to Rs. 1 million
Education Loan
Women Run Microenterprise Loan
Personal Overdraft (Collateral Based)
Loan for Under Privileged Caste/Community/ Nabil Personal Loan (Professional
Marginalized (Dalit) Communities for Business Loan, non collateral based)
Enhancement up to Rs. 1 million
Nabil Sahayatri Karja
Higher and Techno-Vocational Education Loan up to
Nabil Fone Loan (nbank)- not booked
Rs. 0.5 million in Retail Portfolio
Personal Home Construction(Residential Building) Loan Credit Cards
for the Erthquake Affected People up to Rs. 0.3 million
Youth Self Employment Loan
Textile (Clothes Production) Industry Operation Loan
Technical Education and Vocational Training Loan

Other Services
 Nabil SmartBank (Mobile Banking)  Visa & Master Credit Card  Manager’s Cheque (MC) Issuance  Nabil Corporate Pay
 NabilNet (Internet Banking)  Master Card Intl. Credit Card  Advance Payment Certificate  Demand Draft
 QR Code Payment  Visa Intl. Prepaid Card  Bills Inward/Outward  POS Service
 Safe Deposit Locker  Visa Intl. Debit Card  Documentary Credits (Import/Export LC)
 Visa Electron Prepaid Card  Nabil iCard  Documents Against Payment/Collection
 Visa Electron Debit Card  SWIFT- outward/Inward  Guarantees
3.1 PRODUCTS AND SERVICES
SBU WISE BRIEFING OF

Nabil has structured its delivery platform by B. INFRASTRUCTURE AND other flexi features available in the domestic
constituting specific Strategic Business Units PROJECT FINANCING market, financing is available for purchase
(SBUs) to ensure single window customer of land, construction of buildings, furnishing,
Infrastructure and Project Financing (IPF)
dealing in specific product segments. For refurbishment and purchase of individual
is a one window banking designed for
effective and efficient delivery, most of the homes and apartments.
catering to large capital intensive projects
Bank’s product and service offerings are
such as hydropower, telecommunication, Nabil Mortgage Loan
channeled through these SBUs. All SBUs are
cement manufacturing, aviation and other
equipped with the resources and expertise This product offers clients with a simple
infrastructure projects. IPF primarily caters to
required for driving business in their respective option to obtain credit against mortgage of
large funding requirements of megaprojects
markets. their residential or commercial property. The
through loan syndication.
customers can mortgage both residential and
Within respective markets, the SBUs undertake
In addition to providing other corporate commercial properties and enjoy comfortable
market research, product enhancement,
banking services to our valued clients, the Unit EMIs over long tenures going up to 35
delivery channel optimization, relationship
also facilitates Foreign Direct Investment (FDI) years. Clients have access to credit towards
marketing and stakeholder relationship
in the infrastructure sector in the capacity of funding their social obligations like marriages,
management. The Bank’s product and services
‘Agent/Escrow Bank’ on behalf of the foreign travel plans, education, and equity infusion
are being offered through following SBUs:
lenders. Nabil has been a forerunner in in businesses and any of their personal
Nabil Bank’s continuous effort in breaking new financing large infrastructure projects and has requirements.
ground with innovative products/services in wide experience in dealing with some of the
Nabil Auto Loan
the banking industry has always enhanced the leading hydropower projects and mine based
value of stakeholders. cement plants in the country. This product is designed for financing of motor
vehicles for private as well as commercial use.
A. NATIONAL CORPORATE C. RETAIL LENDING Clients can easy avail financing for purchase of
National Corporate (NC) is a one window Nabil Bank offers an array of loan products cars, vans, jeeps, taxis, trucks, bus etc. either
banking designed for catering the entire gamut which can be taken in an individual’s name for personal use or use by offices such as
of financial services to large corporates. for moving into your new home, buying your schools, hotels, hospitals, transport operators,
NC offers entire banking services required dream car, invest in business or simply manage small businesses among others. Nabil has
for corporate establishments such as short term cash for personal and social tie-ups with the leading automobile dealers
manufacturing and processing industries, obligations. to ensure that clients get the best deals.
export and import trading, real estate Customers can choose Nabil Auto Loan to
Nabil has been providing loans at competitive enjoy flexible schemes, a simple application
development, hotels, agro production, service
interest rates with faster loan processing process and quick loan processing for getting
industries and others. NC offers capital
schedules to its retail segment. Retail lending their dream car.
investment in the form of multiyear term
products are offered through all our touch
loan, working capital in the form of Cash
points across Nepal. Within this segment, the Nabil Education Loan
Credit and structured time loans (Permanent
Bank offers a range of products and has been
Working Capital), trade transactions in the Nabil has introduced Education Loan for
introducing various attractive schemes and tie-
form of letter of credit, bank guarantees, financing higher education to aspiring Nepali
ups within those products on a regular basis.
import loans, pre/post shipment loans, bills students choosing Nepali or foreign universities
and documentary negotiation/collection/ and colleges as their next study destinations.
Nabil Housing Loan
advising and open account arrangements. As a Specially packaged study loans cover funding
Banker to most of the nation’s large corporate Nabil Home Loans are affordable and flexible for tuition, accommodation, travel and
houses for over three and half decades, Nabil and designed to take clients closer to their insurance required for the duration of their
has the necessary expertise and experience dream home. We have an accommodating full course. Nabil has promoted its education
to foresee the requirements of businesses eligibility criteria and we offer lower EMIs with loan as a social initiative within a financially
and has tailored its products to meet those highest loan tenure in the industry at attractive feasible framework. Nabil is the largest caterer
requirements. interest rates. With the most competitive of education loan in Nepal and is amongst
interest rates, extended loan tenures and the most preferred banks by the Australian/

Annual Report 2021/22 63


New Zealand High Commission for loan facility against one’s gold is one of the most lucrative the Bank has partnered with selected
since Nabil has been highly accredited by options, whether it is for emergencies, to Micro-Finance Institutions (MFIs) licensed
the Australian and New Zealand academic support your child’s education, or for other by the Central Bank to operate as financial
institutions. personal reasons. intermediary. The Bank provides wholesale
credit to these MFIs in the form of loan
Personal Overdraft Under this retail loan product, customers refinancing. The Bank has also participated
in need of cash can also avail loans by in equity in some of the major MFIs from
This product offers overdraft limit to clients
collateralizing their gold bars or ornaments. their inception and has been representing in
against mortgage of land and building up to
NPR 5 million. This is a quick solution to their Board of Directors to support capacity
D. MID COPORATE, SME AND
our customer’s immediate and contingent development and corporate governance.
MICROFINANCE (INCLUDING
funding requirements. Loan processes are Besides, the Bank also directly finances
DEPRIVED SECTOR LENDING)
simplified and expedited coupled with features micro-businesses, small scale agriculture
of convenient payback facilities tied with Nabil Bank has been moving forward with businesses, small and medium enterprises,
revolving credit line. a vision, mission and target to expand low cost housing, handicraft and skilled based
its portfolio with thrust on SME and business, self-employment loan for COVID-19
Nabil Share Loan Microfinance portfolio for sustainable banking affected tourism sector, self-employment auto
approach through these segments. SME and loan and further promotes women run micro
Nabil Share Loan is an easy loan provided
Microfinance Division of the Bank oversees enterprises etc. through direct lending within
against the pledge of dematerialized shares in
the banking needs of SME and Microfinance the definition of microfinance in line with
the form of either Overdraft or Demand Loan
customer segments and provides all kinds of regulatory provisions.
facility. The product is offered to meet client’s
financial services from a specialized dedicated
business or personal obligations remaining
Hub at Ghantaghar in Kathmandu valley and With a view to generate employment in the
within the norms prescribed by Nepal Rastra
through all of its 231 branches spread across country, Bank has also been supporting
Bank.
various geographic strata of the nation. youth for self-employment for sustainable
income generation to uplift their livelihood
Nabil Personal Loan
To have focused approach and quality control in line with NRB guidelines through various
An exclusive product targeted to those who in the country level, SMEs are segregated into interest subsidized loan schemes. Further, the
have maintained staff payroll account with us following segments: Bank has been promoting entrepreneurs by
and for professionals and salaried individuals. assisting them with financial support through
This is a non-collateral EMI and Overdraft Small Enterprises: Any borrowing unit having
various interest subsidized loan programs.
based loan which is in consonance with NRB total limit up to NPR 10 million
Currently, the Bank offers various loan
Directives. This loan facility can also be availed Medium Enterprises: Any borrowing unit schemes under subsidized interest schemes
by existing mortgage-based loan customers. having total limit above NPR 10 million and like Educated Youth Self Employment, Women
Personal Loans are usually a medium-term up to NPR 50 million Entrepreneurship, Commercial Agriculture and
solution for managing your finances and can be Livestock, Project loan for youths returning
used to help with expenses related to medical Mid-Market: Any borrowing unit having total
from foreign employment, Loan for under
emergency, home renovation, children’s study, limit above NPR 50 million and up to NPR
privileged/marginalized communities, Higher
social events like wedding, amongst others. 100 million
Techno-vocational education loan along
The SME & MF Hub is equipped with with Youth self-employment, textile industry
Nabil Sahayatri Karja
the resources and expertise required for operation loan, Technical education and
Nabil Sahayatri Karja, by its name, is a loyalty driving business in their respective markets. vocational training loan and Personal home
financing program to reward Bank’s existing Within respective markets, the SME & MF construction loan for earthquake affected
loan clients through providing easy overdraft Hub undertake market research, product people.
facility at affordable rates. Eligible customers enhancement, delivery channel optimization,
can enjoy overdraft facility through this scheme As a result of Nabil’s strategy to shift its
relationship marketing and stakeholder
to meet their short-term contingent financial focus towards the SME sector and proactively
relationship management.
and social liabilities. incorporating various innovations in SME
Microfinance product line is specially designed segment, the Bank has received an Honorable
Nabil Gold Loan to extend financing to income generating Mention in the category ‘SME Financier of the
initiatives of the socially underprivileged Year - Asia’ at Global SME Finance Awards
Investment in Gold has always been in choice
population, most of those residing in rural 2022 organized by International Finance
for Nepalese, to ensure that their future is
areas where commercial banks’ outreach is Corporation (IFC).
financially secure. Gold can always be counted
on in times of financial volatility. Taking loan less. To extend Bank’s reach to this segment,

64 Nabil Bank Limited


Nabil Bank has also successfully completed end Turnaround time (TAT) for all the SME loan “Retail Liability Unit (RLU)” has been
collaboration with the UKAID funded products and has been regularly monitoring structured to deliver wide range of deposit,
“Sakchyam Access to Finance Programme”. to ensure smooth service delivery. SME & MF card, alternate channels & digital products.
Sakchyam provided technical and other Division plans to move ahead with innovative The role of RLU is to continuously engage in
supports for designing and implementing A digital products and value added services product development and innovation. The bank
SME focused strategy to enhance banking to the customers to increase the customer offers a wide range of deposit products and
services for SME segments in Nepal. The experience in the Bank and has been launching regularly introduces various schemes to cater
project incorporated best global practices and various campaigns and offers to the customers to a large spectrum of customers. Apart from
also streamlined existing processes to make as well as staffs/branches. generic deposit products like Current Account,
banking much easier and convenient to SME General Savings and Fixed Deposit Accounts,
clients. The project has benefitted more than E. RETAIL AND WHOLESALE Nabil Bank offers an extensive suite of retail
1,250 SME beneficiaries with a loan exposure LIABILITY MANAGEMENT deposit products. “Nabil Gen Alpha Account”
of NPR 9.7 billion. Deposit Management is a saving product specially designed for
children in an effort to engrave the value of
Further collaboration with Swiss Agency for Based on the characteristics, deposit is
savings from a tender age. The bank offers
Development and Cooperation (SDC) project, grossly segmented into institutional deposit
“Nabil Gen-N Account” targeted towards young
Sahaj- Nepal Agricultural Market Development and individual deposit. Deposit management
and technologically adept customers. While
Programme (NAMDP) Phase-II aims to studies expectation of depositors, competition
discounts on cards & e-channels facilities are
strengthen Bank’s capacity to finance Agri- status in deposit market and requirement
the crux of Nabil Gen-N Account, there are
SMEs in Province 1. of the bank. Based upon need, it amends
other attractive freebies as well, like discounts
the existing deposit schemes as well as
on DEMAT account opening, etc. Another
The main objective of this project is to bring develops new schemes so as to cater different
deposit product “Nabil Jestha Bachat Khata”
substantive changes to the way we do business / new requirements of different segments
provides a hosts of facilities and special
with Agri-SMEs by improving our credit of depositors. It also prices various types
privileges to senior citizens of the country
process and aligning our risk assessment with of deposits based upon above mentioned
enabling them to enjoy more in their Golden
realities of the Agri-SME segment. With an aim elements. Deposit management ensures proper
Age. Further, Nabil offers “Nabil Premium Nari
to provide easy and hassle free credit facility relationship with deposit customers.
Bachat Khata”, a specially designed deposit
Nabil Bank had introduced some unique SME
In addition to general schemes, this product for women with a host of facilities and
products as below:
department also prepares different customized special discounts in locker & card services.
“Nabil Sakchyam Karja” aims to facilitate offers to its customers. Nabil Bank offers an
The Bank has introduced “Nabil Gold Savings”
small size business to create the assets for extensive range of deposit products suitable for
with one of the highest interest rates and top-
which usually entrepreneurs of the small size both individual and institutional customers.
notch features. The bank has also introduced
business are use co-operatives or private
“Wholesale Liabilities” unit has been “Nabil Premium Remittance Savings” to cater
money lenders to fulfill the gap in financial
structured to look after institutional deposits to the banking needs of Nepalese Citizens
requirement.
through three sectors namely Diplomatic who are engaged in foreign employment. This
In continuation to Bank’s ongoing efforts & Development organizations, Government product bears the highest interest rate and
for uplifting the SME segments, Bank has organizations and Service organizations with special discounts on locker facility, remittance
launched innovative solution i.e Channel dedicated officers for looking after customers service, mobile banking, internet banking &
Financing product which helps SMEs to under the assigned sectors. Institutional card services.
sustain a seamless business flow within value depositors are served with deposit products
“Nabil Shareholders Savings” is designed for
chain with minimal difficulties. like Current account, Call account and Fixed
the shareholders of Nabil Bank with features
Deposit Accounts. Nabil also offers salary
“Nabil Sajilo Express Karja” that is based on crafted to provide them the best of the best in
account “Nabil Gold Payroll Savings Account”,
credit scoring model for making credit approval a Bank Account.
to tailor needs of employees of corporate
and pricing decision was launched a year prior houses. Bank has provided competitive interest Along with other general fixed deposit
with turnaround time of the product is only 35 rate along with various banking facilities to products, Nabil also offers Cumulative Fixed
hours. staffs under this scheme. Deposit (CFD) allowing customers with regular
“Nabil Nari Karja” is another unique product income to deposit multiple times into their
Nabil Bank has also recently launched three
aimed at supporting women run SME CFD account for a pre-determined tenure.
new Local Currency institutional savings
businesses by providing easy and hassle-free Furthermore, the Bank provides insurance
deposit schemes to cater needs of non-
credit facility to meet their total financial coverage of Rs. 300,000/- based on diagnosis
profitable organizations such as INGOs/NGOs.
requirements. Nabil bank has fixed the end to of any one of 13 Critical illnesses (including

Annual Report 2021/22 65


first heart attack, major cancers, stroke, etc.) submitting MTCN number, sender’s name, security in our remittance payment system
along with Term Life Insurance of Rs. 75,000/- expected amount and other relevant details. and to cater our service more efficiently to our
which is offered free of cost to all Savings Beneficiaries can transfer funds from their valuable customers.
Account holders of the Bank maintaining a wallet balance to different bank accounts or
minimum balance of Rs. 35,000/-. can use it for payments of utilities. Drafts and SWIFT Transfers
The Bank issues demand drafts and executes
With the introduction of Online Account In order to differentiate the remittance products
fund transfer instructions for transfer of funds
Opening Portal and Online Fixed Deposit, the from the other remittance service providers and
across the globe using the platform provided
Bank focused its efforts in allowing prospects widen the existing remittance service provided
by SWIFT. The Bank has a wide correspondent
to open their savings and fixed deposit to its customers around the world, WU has
banking arrangement with international banks
accounts online. This has not only simplified also partnered with Nabil Bank to provide
in order to execute fund transfer requests
account opening process but also has given Direct to Bank account (APN-Account Payment
from clients so as to facilitate individual fund
new dimension to the conventional account Network) product in Nepal. APN product
transfer requirements, international trade
opening approach. With the flexibility and is designed to facilitate those remittance
transactions and treasury operation of bilateral
convenience to complete KYC requirements customers who intend to send the amount
and multilateral agencies.
upon online account opening, Nabil Bank has directly to the account of desired beneficiary.
launched Video-KYC. Nabil Video-KYC enables Through WU APN, Nepalese diasporas living/ G. CARDS AND E-BANKING
our customers to complete KYC through a working in 188 countries can send money
We are the principal member of Visa
simple video call at the comfort of their homes. directly into the accounts maintained with
International Service Association, MasterCard
Nabil Bank or any other banks & FIs in Nepal
F. REMITTANCE BUSINESS instantly. The product is convenient and
International Inc. (since early 1990s),
CENTER customers friendly as the beneficiary doesn’t
UnionPay International Co. Ltd. and Smart
Choice Technologies (P) Ltd. Nabil has the
Remittance Business Center has been need to go through any paper work or visit any
widest range of services in cards which
structured into a centrally developed and remittance counter to receive the payment.
includes issuance of Visa and MasterCard
locally delivered range of remittance products.
Nabil Remit brands of cards whereas on the acquiring end,
The core of the SBU lies at continuously
we process Visa, MasterCard and UnionPay
engaging in product development, network This is a proprietary brand developed by the
International (UPI) brands of payment cards
enhancement and innovation in delivery Bank in order to provide domestic remittance
as a mode of payment. The Bank has ‘State of
channels. Remittance business is catered services for money transfers within Nepal.
the Art technology’ to provide online banking
from the branch offices and also through the NABILREMIT is a web-based online money
services, mobile banking services, credit, debit
extensive network of payout agents deployed transfer system introduced by Nabil Bank Ltd.
and pre-paid cards under Visa and MasterCard
throughout the nation. to ease the fund transfer from one place of
brands to the accountholders and non-
the country to the other. NABILREMIT has the
Western Union (WU) accountholders alike.
network of over 15,000 agents located across
Nabil Bank is the only Principal Agent Bank the nation. We issue EMV chip based NFC contactless
of Western Union Money Transfer for Nepal (TAP & PAY) cards which adds convenience to
Foreign Inward Remittances
since the last 2 decades. WU provides fast, our cardholders along with enhanced security
reliable and convenient ways to transfer Nabil Bank has been rendering different of the card and card transactions by manifolds.
money. Through WU, customers can receive remittance services to its customers. The bank With this enhancement, our cardholders can
the fund through more than 500,000 WU has been providing inward remittance service use their Nabil cards more conveniently by just
Agent locations in more than 200 countries received from India, Qatar, UAE, Saudi Arabia, tapping their card at NFC supportive Point of
and territories. One does not need to have an Kuwait, Australia, Japan and S. Korea through Sales (POS) and ATM terminals with Chip and
account with Nabil Bank to receive the funds. different arrangements. The transactions are PIN verification method. Similarly, we deploy
The bank has built up extensive agent network received through Swift, Nabil Secure FTP, API EMV compliant POS terminals supporting NFC
throughout the country for effective payout of Integrations and different web based softwares. contactless features at our merchant locations
Western Union remittance. The transactions are either paid over-the- for safety, security and convenience of both the
counter after verifying the beneficiary’s ID merchants and cardholders.
Western Union (WU) and Nabil Bank Ltd. or credited in the beneficiary’s account
has also been providing WU Mobile Money maintained with Nabil Bank or any other bank We have also deployed Quick Response (QR)
Transfer (MMT) service. WU customers can of FIs in Nepal. codes for merchants who facilitate contactless
send money directly to the beneficiary’s and card-less transactions using a machine
eSewa mobile wallet in Nepal or beneficiary With rapid shifts observed in technology, readable optical label bar-code. QR payments
can load money in his/her mobile wallet by we have made several changes to enhance are globally more popular because of the

66 Nabil Bank Limited


portability of mobile phones. Nabil has a are becoming exceptionally convenient to the mobiles/smart phones/tablets, solar systems,
network of over 280 EMV upgraded ATMs customers who travel abroad other than India bicycles, branded watches, home furniture,
inside and outside Kathmandu valley. These where transactions through cards are the most readymade jewelry, hair transplant treatment
EMV ATMs are most secure and are capable preferred mode of payment unlike drafts or service and various travel packages.
of processing EMV ATM card transactions in traveler’s cheques. Nabil Visa International
most secure encrypted platform and serve Pre-paid Card can also be availed instantly at Nabil eSecure
customers 365 days a year. Nabil ATMs accept any of our branches without the need to open Nabil offers secured internet payment solution
debit, credit and pre-paid cards of Visa, Visa an account in the Bank. for Visa and MasterCard cardholders (debit,
Electron, MasterCard, Maestro, Cirrus, Union credit and pre-paid) to enjoy the new world
Pay International and SCT. Further extension of Nabil VISA International Debit Card
of online shopping experience in a safe and
ATMs in various locations inside and outside Nabil offers Visa International Debit Card to convenient way called “Nabil eSecure”. Nabil
valley is still under Nabil’s immediate business its foreign account holders. The International eSecure is secured by Visa and MasterCard
plan. VISA Debit Card is designed to meet the Secure Code, a 3D Secure Service which
requirements of FCY accountholders. The makes online transactions more safe and
Domestic Cards card is accepted worldwide except in India. It secure. 3D Secure Service provides the
Nabil Visa Domestic Debit Cards and Nabil can be used in ATMs, POS as well as across cardholders with “One Time Password (OTP)”
Visa/MasterCard Domestic Credit Cards e-commerce platforms. to protect online transactions. It enables the
are accepted at over 4.4 million merchant cardholders to authenticate at the time of
Nabil Installment
outlets and over 244,000 ATMs in Nepal and online purchase by using 3D Secure OTP
India. Nabil Visa Domestic Debit Cards can Nabil offers a unique supplementary service and thus protects the cards against misuse.
be availed and used without any hassle of called “Nabil Installment” for Nabil Domestic Cardholders are requested to visit only
limits, interests, late payment fees and other Visa and MasterCard credit cardholders. Nabil trusted merchant websites for online payment
penalties. Installment offers easy Equated Monthly of goods and services. Cardholders can
Installments (EMIs) at 0% interest from purchase railway tickets, airlines tickets, hotel
International Cards our selected merchants with minimum 6 to reservations, tour packages and many more
Nabil offers International Dollar Cards like maximum 18 months tenure for purchase of with the help of hassle free Nabil eSecure. Our
Nabil MasterCard International Credit Card goods and services with minimum purchase Domestic cards can be used to purchase online
and Nabil Visa International Pre-Paid Card amount of NPR 20,000/- to a maximum goods and services from Nepal and India and
under MasterCard and Visa brands, which purchase of NPR 200,000/-. Under Nabil International Cards (USD card) can be used to
are accepted at over millions of merchant Installment facility, currently Nabil Bank purchase goods from across the globe except
outlets and ATMs worldwide. These cards cardholders can purchase various consumer India.
electronics products, home appliances,

Annual Report 2021/22 67


nBank Mobile Banking Application has enhanced its security feature on NabilNet with the Bank, this terminal assembles,
transaction with the implementation of two encrypts and transmits the data to complete
The utility of mobile commerce is growing
factor authentication (2FA) process called the transactions. It executes a series of tasks
exponentially. With the intention of providing
“Mobitoken”. In Mobitoken, the first factor is to process a transaction upon receiving a
all modern banking services to its customers,
the conventional User ID and Password and customer’s request to purchase a product
Nabil has upgraded user friendly Mobile
the second factor is One Time Password (OTP) from a payment gateway enabled merchant.
Banking application with dual channel
generated by the system for each internet With the aid of Nabil EPG service, Nepali
access (Internet/SMS) with personalization
transaction. OTP are sent to customer’s businesses can sell their products/services
features called “nBank”. With this mobile
registered mobile number via SMS or through online in a secure environment by accepting
banking application, customers can navigate
registered e-mail address. Customers need to payments through Visa, MasterCard and
Nabil Bank’s branches/ ATMs/ Merchant
enter both the factors for NabilNet transaction. UnionPay International Cards issued in Nepal
locations easily. This application allows our
or abroad.
valued customers to use their mobile set in a e@Nabil
simpler form in order to perform non-financial Nabil Viber Banking
e@Nabil bank is designed to cater to the
transactions like balance enquiry, mini
need of corporate houses. Under this facility, Viber is a free, internet based cross-platform
statement request, full statement request, view
corporate houses can view the account details instant messaging and voice over IP (VoIP)
foreign exchange rates/ stock market/ account
in a click. At the same time, following services application that offers cheap and efficient
statement, PIN change and engage in financial
are offered: 1) bulk transactions - setup way to communicate for millions of users
transactions such as third party fund transfers
of bulk transactions as per the respective worldwide. Nabil Bank’s Viber Banking
within Nabil Bank and e-Sewa member banks,
organization’s requirement and, 2) employee facility is available to all users through the
payment of Nabil credit card bills, purchase
management, and 3) payroll – payroll Viber application which is available at Google
of NTC prepaid mobile (Namaste) recharge
management. Play Store and App Store. Multiple banking
cards, payment of NTC postpaid mobile
functions are delivered through the Bank’s
bills, payment of Ncell postpaid mobile bills,
Point of Sale (POS) public account. This enterprise service allows
payment of NTC PSTN bills, payment of ADSL
customers to interact with the Bank via
bills, mobile Top-up (NTC Prepaid/ Postpaid/ Point of Sale (POS) is a terminal at a
Public Chats in a direct, personalized and
PSTN/ ADSL/ Ncell prepaid/ postpaid), merchant’s location to execute the payments of
spontaneous manner. Customers can easily
electricity bill payments, load e-sewa wallets, goods and services sold. Nabil Bank is serving
search for and subscribe to the Bank’s Public
payment of Broadlink (Internet service its valued merchant members with the POS
Account within Viber app to enjoy various
provider) charges, payment of Dish Home facility since 1990s. There are 4000 plus
features like account information, balance
charges, merchant payments, etc. In addition, merchant members of Nabil who are equipped
enquiry, mini statements, forex rates, interest
customers receive notifications and alerts viz. with POS terminals for collection of payments
rates, ATM and branch locations, banking
transactions alerts, push notifications, loan through cards.
hours, FAQ’s and products and services etc.
repayments alerts etc. The entire range of the Accountholders need to register their bank
Electronic Payment Gateway (EPG)
aforementioned services are available for both accounts through the registration menu in
NTC and NCell mobile service users. Nabil Electronic Payment Gateway (EPG) is a order to access their account information.
has always been keen to expand the scope of software system that enables online card Any ad-hoc comments/ suggestions of the
mobile commerce services in order to facilitate processing via an electronic payment system. customers shall be processed through chat-bot.
our esteemed customers. Customers can browse an online catalog and
purchase items online through automated Nabil Fone Loan
NabilNet online transactions. EPG complements
Nabil Fone Loan is another innovative product
Through Nabil’s internet banking facility businesses in improving the way of doing
of the Bank which provides short-term
called “NabilNet”, customers can bring business, increasing level of sales, expanding
preapproved loans to individual customers up
the Bank right to their homes and offices. business and improving relationships with
to a limit of NPR 2 lakh. This lending service
Customers ranging from individuals, NGO/ existing customers. This service offered
can be availed through the mobile banking
INGOs, development agencies and corporate through our system enables the online
platform and by use of Virtual Credit Card.
houses can enjoy services like transferring business establishment to offer customers
Herein, customers are provided with a contact-
funds, viewing account balances, downloading an online payment facility that is convenient,
less digital lending experience with a collateral-
and printing account statements, paying of robust and secure. It is a functionally rich
free pre-approved loan.
credit card bills, paying of NTC/Ncell Postpaid solution that is 3D secure standard compliant
bills, payment of NTC ADSL bills, payment of and is suitable for businesses of all sizes, from ATM
NTC PSTN bills and loading e-sewa wallets. small to corporate. As EPG is an e-commerce
Nabil has a large domestic network of 284
NabilNet is a highly secured platform. Nabil application service that connects a website
ATMs spread across the country. These ATMs

68 Nabil Bank Limited


serve customers 365 days a year. Nabil’s transaction needs of all Nepalese citizens. undertakes all foreign exchange transactions
ATMs accept debit, credit and prepaid cards of Nabil iCard can be issued to individual and as permitted by the regulation and offers
Visa, Visa Electron, Plus, MasterCard, Maestro, organizations having PAN certificate which is competitive spot rates and hedging solutions
Cirrus, UnionPay International and SCT. used for making various international online by undertaking derivative transactions like
payments for goods and services from various providing forward exchange rates in order
Nabil Cash Machine International E-commerce platforms. to cover customers’ foreign exchange risks.
Cash Recycler machine is a self-service Treasury also offers customized investment
Chat bot (Nabina) solutions to customers as per their specific
terminal that allows the customer to make
deposit and withdrawal transactions. This Nabina is a web based chat bot solution on needs.
product has been termed as Nabil Cash Amazon web services. It is a new Artificial
Bullion Operation
Recycler Machine (NCM). NCM is capable Intelligence powered Chat-bot and web-plugin
for NPR cash deposit & withdrawal. Using designed to enable seamless self-service Nabil is a wholesale importer of gold on
this machine the customers can deposit cash customer journeys. This solution enhances consignment basis and has developed a
of specific denominations in NPR currency consumer-tobusiness interactions by overlaying credible name in the domestic bullion supply
in CASA account and Domestic credit cards an end to end digital channel over existing chain. The Bank offers bullion import services
within Nabil Network. For cash withdrawal voice infrastructure of Avaya. This chat bot to merchants as well as licensed financial
& deposit in credit cards, presence of card is channel integrates into customer-facing institutions and is
mandatory whereas for cash deposit into bank interfaces such as a web portal, mobile app,
I. DIGI BANK
account presence of card is optional. Accepted mobile browser, and messaging clients and
cash for deposit by NRCM will be store in the enables rich, interactive customer journeys
The digital revolution has had a tremendous
cassettes in the modules for dispensing in that can start from the digital interface and
impact on every aspect of our lives, including
future cash withdrawal transactions. transition seamlessly. It is integrated with
banking. Nabil Bank, one of the leading banks
Avaya solution which allows the customer to
Nabil Customer Care Center in Nepal, began its digital transformation
connect with the bank using Avaya platform.
journey in 2022 with the implementation of
Customer Care, a proven foundation for a new Digital Platform that included a new
Nabil Voice Banking:
growth, lies at the heart of an organization. Core Banking System (CBS), Omni Channel
Customer satisfaction is the key indicator Interactive Voice Response (IVR) service Manager, Business Intelligence (BI), and
in gauging success and is on increasingly Nabil Voice Banking is an automated telephony Business Process Management (BPM).
becoming important part of today’s business system which interacts with customer and
world serving as a primary customer-facing provides the requested services. It is an The new Digital Platform allowed the bank
channel. Due to the changing landscape in Interactive Voice Response (IVR) based service to digitize many of its processes, increasing
customer service backed by the breakthrough which comes with the capability of self-service its efficiency and providing new opportunities
in physical science and technology, customer’s and ensures to provide requested service at to deliver a new banking experience to
preference has shifted from physical faster speed. its customers. The bank’s investment in
distribution to electronic distribution. And, to technology has resulted in a significant
meet the rising customer expectations- Bank H. TREASURY improvement in customer service, as well as
has launched a dedicated unit, Nabil Customer an increase in operational efficiency.
Bank’s Treasury offers complete solution for
Care Centre, to look after the customer query/
foreign currency transaction requirements of The CBS has enabled Nabil Bank to automate
complaints envisioning that it would provide
its customers. The Bank is well equipped with its operations, allowing it to streamline
deeper and more accurate understanding of
real time transaction window for transacting its operations, reduce costs, and improve
each customer’s context, behavior, needs
in global financial markets in order to support customer service. The Omni Channel Manager
and preferences to design excellent customer
customer requirements. Extensive network has allowed the bank to deliver a seamless
journeys in a focused way.
of correspondent banking arrangements experience across all channels, including
Such customer centric approach not only worldwide with renowned and well established online banking, mobile banking, and in-person
reduces cost but also increases operational counterparties support clients’ requirement of banking. This has made it easier for customers
efficiencies and provide a better customer transactions with foreign counterparties, be it to conduct transactions, access their accounts,
experience to an increasingly digital friendly for individual requirements like remittances to and get support whenever they need it.
customer base. and from third countries, trade transactions
like advising and confirmation of Letter of The implementation of Business Intelligence
Nabil iCard Credits and Guarantees through foreign (BI) has enabled the bank to collect and
banks or for treasury operations of bi-lateral analyze customer data to gain insights
Nabil iCard is an international prepaid
and multi-lateral foreign agencies. The Bank into their behavior and preferences. This
card which simplifies International online

Annual Report 2021/22 69


information has helped the bank to develop Now Pay Later (BNPL) model available to all 5. International Number Registration: To
new products and services that better meet eligible savings accountholders and even QR include Nepalis residing abroad, registration on
the needs of its customers. The bank has also merchants. The upper ceiling of loan limit was nBank is available using international mobile
used BI to identify areas where it can improve also increased from Rs. 100K to Rs. 200K. numbers. Customers residing abroad can not
its processes and reduce costs. only operate their accounts remotely, but also
On 22nd December 2022, Nabil’s mobile receive OTP & relevant SMS alerts from the
The Business Process Management (BPM) banking app (Nabil SmartBank) was revamped bank, making the customer experience much
system has allowed the bank to automate to the nBank app to provide customers with a smoother.
many of its processes, reducing the need neo banking experience, along with a host of
for manual intervention and streamlining digital banking services that were never seen 6. 24/7 Support & vKYC: Customers can reach
operations. This has led to a significant before in the Nepalese Banking Industry. Some out to the Nabil Customer Care Centre at any
reduction in processing times, allowing the of them included: time of day. Furthermore, customers seeking to
bank to deliver faster service to its customers. activate their accounts through the video KYC
1. Instant Account Opening: Nepali citizens solution can also join the call anytime.
As part of its digital transformation journey, can open a Bank account in under 30 seconds,
7. Online Payments Marketplace: With nBank,
Nabil Bank has also introduced a new banking minimizing the turnaround time to onboard a
customers can make online payments without
domain with a new banking app to provide customer.
logging in to the app, and may choose to make
a neo-banking experience to its customers.
2. Pre-approved Digital Loans: While Nabil payments using their digital wallets as well,
The new banking app nBank offers a range
Bank had been offering transaction-based right from the nBank app.
of features and services, including instant
digital loans to payroll accountholders on a
account opening, real-time fund transfer, bill Besides these, the nBank app also integrates
one-month model before, the scope of the
payment, and access to a range of financial Nabil Bank Cards, enables cardless cash
product was expanded to include one-month,
products and services. The app has been withdrawals from Nabil ATMs, offers virtual
EMI, and Buy Now Pay Later models to all
designed to be user-friendly, with a simple e-commerce USD Cards, allows QR payments,
savings accountholders. Furthermore, the
and intuitive interface that makes it easy for online Fixed Deposits, and informational
customer segment was also expanded to
customers to navigate and use. This initiative services such as Interest Rates, Exchange
include QR merchants – the first ever in Nepal.
is taken in order to be a leader in neo banking Rates, EMI Calculator, etc.
space to make the banking services futuristic. 3. Digital Loan Against Fixed Deposits:
Through nBank, customers can apply and The nBank, Digi, and IT teams collaborated
Overall, Nabil Bank’s digital transformation get loans against their fixed deposit accounts with various departments of the Bank to
journey has been a significant success. The maintained with Nabil Bank in an instant. re-engineer many of the Bank’s manual, paper-
bank’s investment in technology has allowed based processes in order to cut turnaround
it to improve its efficiency, reduce costs, and 4. Card-Based Remittance (nRemit): Nabil
time, manpower requirement, and paperwork.
deliver a better banking experience to its Bank leveraged its Electronic Payment
By creating straight-thru processes, nBank
customers. With the introduction of its new Gateway to facilitate card-based remittance
eliminated duplication of manual tasks and
banking app, the bank is well-positioned to into Nabil Bank Accounts. Customers residing
minimized the need for manual intervention.
meet the changing needs of its customers and abroad use their International Mastercard or
remain competitive in an increasingly digital Visa cards to send money into a Nabil Bank The nBank app was launched with great
world. account instantly. success, and the team is already working on
releasing the next phase of the project: nBank
nBank web to create an omnichannel experience to
nBank was launched internally as a virtual the customer.
branch within Nabil Bank on 1st Baisakh
Furthermore, the teams are collaborating to
2079 (14th April 2022), where all accounts
add more products and services onto the
opened through online channels were booked
nBank app to provide digital-first solutions
under a separate nBank Sol.
to customers and reduce the workload in
To facilitate online account opening from the Nabil Bank branches. Not only are the
abroad, International SMS was enabled, existing products expanding (for example,
and video KYC was made available 24x7. nRemit is expanding to accommodate card-
Furthermore, the Bank’s digital loan product based, remittance aggregator-based, and
was revamped from a one-month model internet-banking based remittance to any
available to employee accountholders to an bank in Nepal), but new digital and hybrid
Equated Monthly Installment (EMI) and Buy loan products are being developed to achieve

70 Nabil Bank Limited


greater success in the digital banking arena of 6. nRemit (Card-Based Remittance): 76 across a wide network of its branch offices,
Nepal. nRemit transactions amounting Rs. 5.60 ATM network and POS machine network. The
million took place thru the card-based objective is to ensure that Nabil’s products and
As of 12th February 2023, the following remittance channel (nRemit) within the nBank services are easily accessible to its customer
quantitative impact has been observed: app. irrespective of their location. Clients can
7. Online Payments Marketplace: Payments benefit from hassle free transaction banking
1. Online Account Opening: Online account
totaling Rs. 10.11 million took place through services from each and every branch offices
opening accounted for 11% of the entire
the online payments marketplace from 22nd irrespective of the branch where they opened
Bank’s Saving Accounts (count) during the
December 2022 to 12th February 2023. an account.
period 15th Jan to 12th Feb 2023.
2. Instant Account Opening: 3,204 accounts Along with this, the following qualitative Extended Banking (EB) Services
(out of a total of 13,285 online accounts) have impact in the form of reduced turnaround time Nabil has offered “365 Days Banking Service”
been opened as on 12th February 2023. has been observed: and “Extended Banking Service” from
3. Turnaround Time for Account Onboarding selected branches to cater to the banking
was reduced from 30 minutes to 30 seconds. 1. Account Onboarding: From 30 minutes to needs of customers who do not have time to
30 seconds visit a branch during regular banking hours.
4. Transaction-Based Digital Loans: The size
of the digital loan portfolio was Rs. 154.32 2. Loan Against Fixed Deposit: From one Teendhara and Lalitpur (Kupondole) branches
million as on 12th Feb 2023. Volume-wise, working day to 30 seconds in Kathmandu valley provides “365 Days
97% of loans were in EMI-model while 3% 3. Remittance: From 2-3 working days to 1 Banking Service” and “Extended Banking
were booked in one-month model. A total of minute Service” while many more branches across the
6,388 digital loans were active as on the date. country provides “Extended Banking Service”.
J. OTHER SERVICES
5. Loan Against Fixed Deposits: Across the
Bank, a total of Rs. 536.09 million Loan Any Branch Banking Services (ABBS) The
Against Fixed Deposit was booked directly from Bank has capitalized on its technology
the nBank app. resources to offer uninterrupted transactions

Annual Report 2021/22 71


PROFESSIONAL
We understand that each of us come from different
backgrounds, experiences and perspectives.
When we respect these differences and work in a

CRISP
professional manner, we will be able to work towards
the common goal. Professionalism in our manners
and proficiency in our dealings within the team and
with the customers is what will drive our organization
forward and help reap the true benefits of the
synergy. Being a thorough Nabilian is not only about
what we do but also about how we do it.

74 Nabil Bank Limited


04 GOVERNANCE
4.1 DIRECTORSTHE BOARD OF

STRUCTURE OF THE BOARD empowered to further delegate authority and Management Committee, Committee relating to
assign responsibility through the organizational the Staff Services and Facilities and Committee
There are seven members in the Board
structure. The Board, may form committees relating to Money Laundering Prevention
including the Chairman. All the board
for specific purpose considering the job (AML Committee) which were formed as
members are non-executive directors and
requirement ascribing specific responsibilities per Section 7 of NRB Unified Directive
thus, they do not take part in day-to-day
and delegating its authorities and powers to Number 6. Each Committee can include a
management decisions. The board of directors
such committees. minimum three members and a maximum of
are from diverse backgrounds and possess
five members. All Board Committees have a
specialization and expertise in various fields However, the Board keeps certain important Member Secretary who is engaged and has
and thus bring about an external perspective authorities and rights to itself including, but expertise in the concerned area of business
on company affairs and provide constructive not limited to, the approval of strategic plans, within the Bank. For effective discussions of
suggestions to the CEO. Individual directors performance targets, policy documents, annual the items in agenda, other members from the
exercise their authority at the board meetings budgets, annual financial statements and Bank’s Management, whose responsibilities
and the Board acts in the collective interest of the authority or the delegation of authority to relate to the matter in agenda, are also
the shareholders. The prime objective of the approve credit and market risk limits. invited as required. Agendas of the meeting
Board is to form policies and provide guidance
are communicated to the BOD members
and suggestions to the management for long A total of 35 board meetings were held during
in advance of the Board meeting for their
term sustainability of the Bank with reasonable the year. NPR 6.53 million was paid out as
meetings. Board members have timely access
returns to the shareholders and maximize meeting allowances and NPR 3.33 million
to adequate information so as to enable them
shareholders’ wealth. was expensed out against other expenses of
to conduct appropriate review of the agenda
the board which includes the communication
The Board decides on corporate and business and actively participate in discussions during
allowance paid to the board members,
strategies, approves capital and operational the meetings. They may seek independent
travelling and accommodation expenses of the
plan and consistently monitors and reviews professional advice wherever they feel so is
members among other things.
management’s performance so as to ensure needed. Directors can also make offsite visits
that the actual performances are in tandem INFORMATION TO THE BOARD to branches to obtain a better understanding
with the annual and long-term targets. of local business conditions, participate in
Nabil has open communication culture which
Similarly, the Board sets strategic path for the business promotion and corporate social
has fostered healthy working relationship
organization, identifies business objectives, responsibility related activities and interact
across all levels. Open communication
reviews management’s performance and with customers and employees.
policy at the Board level has smoothened
provides guidance to the management towards the communication and information sharing DIRECTOR’S APPOINTMENT AND
achieving targeted goals and objectives. between the Board and the Bank’s executive INDUCTION
team. The Board receives reports and
The Board is collectively responsible for long Director’s appointment, retirement and re-
presentation from the conveners of Board
term sustainability of the Bank. To this election are done as per the provisions laid
Committees and the CEO which covers the
end, the Board exercises its authority within out in the prevailing Companies Act, Bank and
key issues related to credit exposures, risk
the framework of regulatory provisions, Financial Institution Act, Articles of Association
portfolio, liquidity, financial performance,
Companies Act, Bank and Financial of the Bank and other relevant Laws and
business expansion, audit and compliance.
Institutions Act, Memorandum and Articles Regulations. Directors take oath of secrecy and
The Board regularly reviews management
of Association and other relevant laws and fidelity in presence of the Chairman and the
performance against approved budget target
regulations. The Board delegates executive Chairman in presence of the Governor of Nepal
and goals.
responsibility for running the Bank’s business Rastra Bank at the latter’s office immediately
to the Chief Executive Officer. The CEO heads There are four permanent Board level after the appointment. They are also given
the executive management team and is Committees viz. Audit Committee, Risk induction training within a month of their

Annual Report 2021/22 73


appointment that covers important aspects of 2. Director Mr. Malay Mukherjee, Member the strategic implementation process. Risk
banking in Nepal, transparency, disclosure, 3. Director Mr. Ananta Poudyal, Member appetite of the Bank is determined based on
conflict of interest, international best practices, the following:
4. Mr. Ganesh Prasad Awasthi,
compliance and relationships with the
Chief Operating Officer, Member  Strength of capital base
regulatory institutions.
5. Mrs. Namita Dixit, Chief Risk Officer,  Quality and growth of earning assets base
RELATION WITH SHAREHOLDERS Member Secretary  Brand reputation
The Board has always encouraged active Director Mrs. Asha Rana Adhikary was the  Balanced approach to business risks and
participation of shareholders in every Annual coordinator of the Committee and directors returns
General Meeting. The meeting has always  Risks diversification
been a very important platform for the Board Mr. Malay Mukherjee and Director Mr. Ananta
to interact with many shareholders, both Poudyal were the members of the Committee RMC reviews that managerial and operational
individual and institutional, communicating throughout the FY 2021/22. level officials of the Bank, responsible in risk
the objectives and strategic plans, clarifying management and decision making processes,
Mr. Ganesh Prasad Awasthi (Chief Operating possess adequate knowledge of their specific
on shareholders’ concerns and sharing the
Officer) joined the RMC from 72nd RMC job area and of the corporate risk culture. The
collective vision.
Meeting held on January 17, 2022. activities of ALCO, like portfolio assessment,
Directors, most of whom represent institutional returns from the business, asset quality, growth
Mr. Niraj Sharma was an RMC member in overall business vis-à-vis market growth
shareholders, engage in regular dialogues
until 71st RMC Meeting in capacity of Chief (competitor’s position) are also reviewed by
with institutional shareholders, continuously
Operating Officer. the Committee and necessary instructions
conveying on business strategies and apprising
them of the Bank’s performance based on are issued to the management and necessary
Ms. Namita Dixit (Chief Risk Officer) worked recommendations are made to the board as
mutual understanding of organizational
as Member - Secretary of the Committee deemed appropriate. Quarterly stress report
objectives.
throughout the year. and reports comprising overall position of the
Director Mr. Uday Krishna Updadhyaya Bank, changes in the market condition are
RMC ATTENDANCE RECORD
resigned from the board of the bank during reviewed and necessary instructions are issued
Total 14 RMC meetings were conducted during to the management. If the need is felt for any
the year. Mr. ARM Nazmus Shakib has been
the year 2021/22. Meetings attended by the recommendation to the board, the same is
appointed as a director representing promoter
directors were as follows: also appropriately done. The Committee also
shareholder IFIC Bank Limited. Directors Mr.
Attendance reviews trends in portfolio quality and the
Nirvana Kumar Chaudhary and Mr. Malay
adequacy of provisioning for possible credit
Mukherjee were re-appointed during the year Mrs. Asha Rana Adhikary 14/14
losses.
following the termination of their tenure. Mr. Malay Mukherjee 14/14
Mr. Ananta Poudyal 13/14 Risk Governance

4.2 COMMITTEES BOARD


Total

RMC Roles and Responsibilities


Bank practices risk governance applying
the principles of good governance to the
identification, assessment, management and
A. RISK MANAGEMENT
The Committee oversees overall risk communication of risk. The Bank equally
COMMITTEE (RMC)
governance framework of the Bank. It takes account of participation, transparency
Directors’ Risk Management Committee is ensures that proper risk management policy and accountability within the procedures and
constituted in line with the spirit of Risk and procedures are in place and effectively structures by which risk related decisions are
Management Guidelines (RMG) of Nepal practiced at all levels within the Bank. In made and implemented.
Rastra Bank and the NRB Unified Directives. doing so it assesses whether or not the Bank’s
Within the Bank, RMC is responsible for
The RMC highlights on risk governance policies and procedures are adequate and
overseeing the risk governance structure
and identifies the need of a strong risk implemented. It reviews the effectiveness of
and monitoring the effectiveness of risk
management framework, well defined risk Management Information System and Internal
management and internal control systems. As
management processes and effective risk Control Systems of the Bank. The Committee,
advised by RMC, the management ensures
assessment and measurement mechanism. on an ongoing basis, defines and reviews
presence of strong risk governance culture
risk appetite of the Bank in relation to overall
in the Bank which guides its risk strategies.
RMC members as on 16 July 2022: business risk with specific focus on credit
Chief Risk Officer, member secretary of RMC,
risk, market risk, operation risk and liquidity
1. Director Mrs. Asha Rana Adhikary, ensures that emerging risks and changing
risk. RMC advises the Board on the overall
Coordinator behavior of key risks are brought forward
risk tolerance levels of the Bank throughout

74 Nabil Bank Limited


for discussions in the committee meetings. 6. While reviewing /enhancing bank risk same. Furthermore, the entire process has
Invitees who head major functional and limits of counterparty foreign banks, the been outsourced to an independent Chartered
business areas participate in RMC meetings Committee not only recommended to Accountant firm from this fiscal year.
and highlight the key risks faced in their diversify bank’s portfolio among banks
specific areas. This helps the Board, together and countries but also advised to explore The unit, under the broad vision to become
with RMC, to ensure that a strong risk investment opportunities in sovereign bonds, a better bank under the changed context
management framework is maintained. commercial papers., etc. with increasing complexities in the business;
and the business risks posing an increased
7. The Committee reviewed risk appetite
Agenda Discussed in RMC Meetings challenge, Bank intends to promote the risk
and risk tolerance metrics of the bank,
culture through Internal Audit Department
To fulfill its objectives, the RMC deliberates on and included Information Technology and
for which it first shares the concept of Risk
various agendas in the meeting. After detail Information Security Risk as a separate
Based Internal Audit as to what is it and
discuss and deliberations, the RMC decisions risk in the risk universe of the bank, earlier
why the Bank adopted new methodology.
are communicated to the Board in the form which was incorporated under Operational
Overall objective as being risk taking with
of memos and minutes. In FY 2021/22, Risk.
due knowledge and its acknowledgement
total 105 agendas were deliberated on the 8. The Committee reviewed policies and with addressal/ mitigating mechanisms in
meetings. The agendas discussed broadly product papers and ensured that such place, Internal Audit Department does share
covered the issues related to Credit, Operation, policies and product papers properly the knowledge of the risk and closure of
Market, Information Security, Strategy, address not only the present requirement reported issues addressing the risk. Under the
Performance, Stress test, ICAAP, Policies and but future requirements also in the context defense perspective, the first and foremost
Product Paper Guidelines etc. of acquisition of NB Bank. The Committee responsibility of taking or averting a risk lies
reviewed Contractor Business PPG to align with the business units (first line of defense
Recommendation Issued to Management Contractor Business practices with that of units). Similarly check and control units and
NB Bank. their resultative/ effective review makes it
On the basis of deliberations and discussion
in RMC meeting, the committee provides 9. The Committee continuously took updates more sensible to all and some businesses may
recommendations and suggestions. Highlights on various issues, such as market updates have to be dropped if standards prescribed
of those suggestions provided in FY 2021/22 on Srilanka, China and Bangladesh, are not met by the same. These actions make
are as follows: Lending Territory of Branches, Call Deposit every one aware of what is that one has to
Concentration of the Bank, Liquidity go for the business what one should avoid. If
1. The Committee focused on strategic Scenario of the Bank, Compensation one has to go for the business, what benefits
direction of being a more granular bank and Modality of the Gold Testers, etc. and and safeguards it is imperative for the Bank
diversification of assets through increased recommended appropriate action plans to to put into play. The awareness of same is
focus in SME and retail portfolio. The deal with such issues. necessary for all the staff in which Internal
Committee aligned lending authorities of the After the conclusion of each meeting, the Audit Department has an active role. Similarly,
credit to support diversification efforts of the Committee communicates its view on periodic review of the business also gives a
bank. discussed agendas and recommends necessary pulse feeling to the units. Timely action against
2. Looking at the increasing size of the bank, actions to the Board. early warning signal in any business help the
the Committee recommended the system of institution to correct the course and march on
delegating credit approval authorities based B. AUDIT COMMITTEE (AC) long term sustainable path. This is not one
on individual capabilities of the officers to day or one activity function. This has to be
The Committee is formed and functions in
corporate title of the officers. embedded in the culture and every staff in the
compliance to the regulatory provisions of
Bank and that in the control units (second line
3. The Committee continuously took updates NRB Unified Directives and the provisions of
defense units) on regular basis to be watchful
on changing national and international Sections 164 and 165 of Company Act 2063.
on the business, environment and changes
economic environments and taking timely The coordinator and other members of AC are
happening.
measures to safeguard bank’s portfolio in non-executive directors. The role of Committee
regards of changing environment. Secretary is performed by the Head of Internal The slippage that has come from the 1st line
4. While reviewing the internal sectoral credit Audit department. Internal Auditors and of defense can be fully checked and controlled
limits of the bank, the Committee focused Statutory Auditors have direct access to the by 2nd line of defense, where Internal Audit
on creating diversified loan portfolio. Audit Committee. Nabil Bank has adopted Risk Department assesses the same and suggests
Based Internal Auditing. Bank has separate for a change if required.
5. Realizing that risk in hotel sector has been
and independent unit set up, intending
increased due to COVID-19, the Committee
to promote a risk culture, the department Where air tight control regime even in place
continued the existing practice of lending
through its observations shares the risks in can make some slippages likely. If such
authority for Hotel Sector with enhanced
the business, suggests for remedial measures aspects are not addressed in time these can
due diligence.
and finally asks for addressal/ closure of the lead to an accident or disaster. For the purpose

Annual Report 2021/22 75


of checking such slippages on sample basis security position of the Bank in respect of Instruction Status and Statutory Audit
the role of Internal Audit Department (third exposure to credit risk, operations risk and Recommendation Status.
line of defense) comes into play. The Bank has market risk 5. Internal Audit Function Outsourcing
shifted into a new methodology of Risk Based Selection and RFP of the Bank for the
6. Advising and recommending the Board on
Internal Audit, following the globally accredited year 2079-80 and 2080-81.
management actions required for achieving
practices, with an aim to help make the Bank,
the desired level of effectiveness and 6. Policy and Guiding Documents- Review
one of the best risk aware, managed and
compliance in response to above reviews and Update.
controlled banks forever.
7. Recommending the Board on 7. Quarterly and Yearly report to Board on
As on 16 July 2022, the composition of the appointingstatutory auditor, auditor’s Audit Committee activities in line with
Committee is as follows: remuneration and reviewing that the Standard Operating Guidelines of Audit
auditor’s actions incourse of Bank’s audit, Committee.
1. Director Mr. Malay Mukherjee - Coordinator
do not contravene with applicable laws and 8. Review of Risk Acceptance report- total
2. Director Mr. Pravin Tibrewala provisions 7 reports.
3. Mr. Krishna Dutta Bhattarai 9. Parking Account (office account) report
(Chief Internal Audit) - Member Secretary Major Activities review.
a. Review and checking of 10. AMS (Audit Management Software
AC ATTENDANCE RECORD FinancialStatements, both quarterly and arrangement report review.
annual.
Total 27 AC meetings were conducted during 11. Quarterly review of NPA status of the
the year 2021/22. Details of meetings are b. Review of internal control mechanism and Bank and major NPA accounts.
tabulated below: risk management system through audit of
different control function units and business c. Special Reports:
Attendance
units by Audit Department, 1. Special reports - 8 Reports of Branches
Mr. Malay Mukherjee 27/27
c. Supervision and review of the functions of and Accounts.
Mr. Pravin Tibrewala 27/27
Internal Audit Department, Suggestions to Management from Audit
Total Committee
d. Selection of Statutory Auditors and
AC Roles and Responsibilities proposing final 3 names and remuneration  Quarterly review of NPAs and
for final approval from AGM, appropriatemeasures to deal with past due
The Committee’s role is extensive and strongly
e. Review of compliance activities of different and keep a watch on overdue loan accounts
supports the Board in dealing with aspects of
units of the Bank and their reporting  Monthly review on status on old and
good corporate governance, internal control,
through audit done by Audit Department, unreconciled items in the nostro accounts
risk management, financial reporting, legal and
f. Others as appropriate - Special AuditReport and appropriate directions for timely
regulatory compliance and ethical conduct of
Review, Monitorable Action Plan Report reconciliation to keep the unreconciled
business.
Review, and ACM-ATR Review etc. items under control.
Major responsibility of the Committee  Review and discussions made on the
Agenda Discussed in AC Meetings
includes: NRBinspection report of the Bank and
advised appropriate measures to be taken
a. Main Audit Reports:
1. Reviewing the Banks’ overall system of by the Management for compliance.
internal controls 1. Audit report of 98 branches and 25
 Investment made in different Investment
units, total reports -123 were reviewed
2. Reviewing observations and portfolios while presenting the half
by Audit Committee in the year 2078-
recommendations made in audit reports yearly Investment Portfolio Report to the
79 as planned.
issued by internal auditors, statutory committee to be presented with % under
auditors and regulators 2. Information System (IS) Audit report each category.
review.
3. Reviewing the Bank’s financial statements,
C. COMMITTEE RELATING TO
ensuring its accuracy and the required b. Other Reports - STAFF SERVICES AND FACILITIES
level of compliance in relation to financial
1. NRB Inspection on K YC/AML aspects- (CRSSF)
reporting standards
Review and Suggestions. The Board has constituted Committee relating
4. Reviewing compliance in relation to the
2. Status update of MAP listed units. to Staff Services and Facilities in line with
Bank’s internal policy and prevailing
3. Status update of Audit Reports Directives issued by Nepal Rastra Bank. The
regulatory and legal provisions
(Compliance based and Risk based) Committee consisted of following members as
5. Reviewing risk management systems and on 16th July 2022:
4. Quarterly review of NRB Inspection

76 Nabil Bank Limited


1. Director Mr. Nirvana Kumar Chaudhary 1. Director Mr. Ananta Poudyal - Coordinator 3. Update on National and International
Coordinator 1. Director Mr. Udaya Krishna Upadhyay events related to AML/CFT.
2. Director Mrs. Asha Rana Adhikary - - Member 4. Annual Review of Money Laundering
Member 2. Mrs. Namita Dixit (CRO) - Member and Financing of Terrorism Related Risk
3. Mr. Gyanendra Prasad Dhungana Assessment of Nabil Bank Limited.
3. Mr. Prakash Babu Panta
(Chief Executive Officer) - Member (Head- Compliance) - Member 5. AML/CFT Quarterly Reports.
4. Mr. Manoj Kumar Gyawali 4. Mrs. Sabitri Dahal (Head-AML/CFT) Recommendations of the Committee to the
(DCEO Finance and HR) - Member - Member Secretary Board
5. Mr. Diwas Karki (Head Human Resources) - AMLC Attendance Record
 The Committee reviewed KYC and AML/CFT
Member Secretary CRSSF
Total of 6 meetings were conducted during the Policy of Nabil Bank Limited recommended
Attendance Record year. Meetings attended by the directors were to put the revision of KYC and AML/CFT
as follows: Policy to the Board for approval.
A total 15 meetings were conducted during the
year. Meetings attended by the Directors are  The Committee reviewed over the issues
DIRECTOR ATTENDANCE
identified in NRB AML/CFT Targeted
as follows:
Mr. Udaya Krishna Upadhyaya 6/6 Inspection Report, advised for arrangement
DIRECTOR ATTENDANCE
Mr. Ananta Poudyal 6/6 of relevant measures and controls.

Mr. Nirvana Kumar Chaudhary 15/15 The committee also reviewed the response
Roles and Responsibilities
Ms. Asha Rana Adhikary 12/12
to be provided to NRB regarding findings
Following are the major functions and of inspection report and recommended for
Mr. Udaya Krishna Upadhyaya 3/3 responsibilities of the Committee in line with presentation to the Board for approval to
Note: *The Committee was re constituted after the resignation of related Act, Rules and NRB Directives. submit to NRB.
Director Mr. Udaya Krishna Upadhyaya.

1. Review AML/CFT related Policies and  The Committee discussed the media news
Roles and Responsibilities
Programs put up by the CEO and further related to use of bank accounts to invest
1. To assist Board of the Bank to formulate in Virtual currencies like Crypto Currency
recommend to the Board for its review/
“Remuneration Policy” and Bitcoin, which is illegal in Nepal
approval as required.
2. To study and analyze market salary and instructed for monitoring of such
2. Review the quarterly reports on
structure and submit report to the Board transactions on a periodic basis. Similarly,
implementation status of the AML/CFT
with regards to possible consequences in US Department of Treasury – OFAC
framework in the Bank.
the Bank due to change in remuneration sanctions to Russia was also discussed, the
3. Update and track issues and events
structure of the market committee noted that frequent publication
related to AML/CFT globally and make an
3. To recommend revision of remuneration of of OFAC’s recent actions, sanction list
assessment of risk in national perspective
CEO and that of entire employees to the update and executive order regarding
and the Bank.
Board in line with Remuneration Policy as prohibiting certain “imports, exports and
4. Provide recommendations/ feedback to
well as prevailing rules and guidelines, if new investment” has created sanction
the Board and the Management on issues
such revision is deemed essential compliance more challenging to conduct
pertaining to AML/CFT.
transactions for Russia origin
D. COMMITTEE RELATING 5. Accomplish any other additional goods, and shipment from Russia.
TO MONEY LAUNDERING responsibilities that may be entrusted upon
 The committee reviewed the annual AML/
PREVENTION (AML COMMITTEE) the Committee from time to time as per the
CFT risk assessment report of the bank and
stipulations of prevailing laws, instructions/
AML Committee of the Board has been instructed to submit the risk assessment
directions of the regulatory authority or
formed in line with the provision of Directives report to NRB and adhered the feedback
Board of Directors of the Bank.
of Nepal Rastra Bank. The Committee from NRB, if received any. The committee
oversees implementation of Assets (Money) decided to present the report to the Board
Agendas Discussed in AML Committee
Laundering Prevention Act, 2064, Assets for information.
Meetings:
(Money) Laundering Prevention Rules, 2073,
NRB Unified Directives and other legal and The Committee discussed on the following The Committee perused the implementation
regulatory requirements related to Money agendas in its meetings. status of KYC and AML/CFT Framework
Laundering Prevention. updates and decided to present the quarterly
1. Annual Review and Revision of KYC and reports to the Board for Board’s information
Members of the AML Committee of the Board AML/CFT Policy of Nabil Bank Limited.
and deliberation.
as of 16 July 2022 are: 2. Findings and Response of NRB AML/ CFT
Targeted Inspection Report.

Annual Report 2021/22 77


4.3 BUSINESS ETHICS AND
ANTI CORRUPTION MEASURES
The Bank adopts a “Zero-Tolerance” approach own “Anti-bribery and Anti-Corruption Policy” working on behalf of the Bank. The board of
to bribery and corruption and demands the to guide Board members of Nabil Bank, directors, employees and business partners
highest standard of integrity and ethical its employees and business partners about has been barred from accepting or offering
conduct in its business dealings. Nabil our intention to closely monitor bribery and bribe, facilitation payment, kickback or other
Bank will not tolerate any bribery or corrupt corruption risk and to take immediate action if improper payment under any circumstances.
practices related to its business activities evidence in case bribery and corrupt activity is This includes transactions with government
from its employees or business partners. It suspected. Ultimately, this Policy aims to: officials (whether to and from the Government
is committed to transparent reporting and of Nepal or any other government) as well as
to taking all other reasonable measures a. Outline principles for conducting business with any private company or person. It also
which avoid Nabil’s involvement in bribery or with integrity and in accordance with the applies where payment is received directly
corruption. Bribery and corruption undermine highest ethical standards or where it is received through a third party
the rule of law and the principle of fair b. Ensure that the financial and other resources (agent, contractor, representative, distributor or
competition. Such activities entrench bad of the Bank are used solely for their proper business partner).
governance, hindering efforts to alleviate purposes and
poverty and often contributing to economic Hence, in adherence to this Policy, prevention,
c. Promote a culture of honesty and openness
instability and human rights abuses. Board detection and reporting of any act of bribery or
among the Bank’s staff.
of Directors of Nabil Bank and employees corruption is the responsibility of all employees
have taken practical steps to mitigate the This Policy applies to all employees, board of the Bank and the board of directors.
risk of corrupt behaviors. Nabil Bank has its of directors, and any business partners

4.4 POLICY FOR MAINTENANCE AND


BACKUP OF RECORDS
Each department, unit and branch of the DRS is outsourced to a professionally managed were being provided through a few selected
Bank function as per the predefined and pre- company having expertise in the sector. branches and minimum possible staff. With
approved operating procedure laid down in the Periodical drills are carried out to assess the maximum support from the IT unit, each staff
Standing Instruction Manual (SIM). Detailed smooth functioning of DRS. was enabled to work from home and all the
guideline on what is to be done, how it is to functions were running smoothly.
be done and what are the information and Keeping in mind the possibility of business
documentation to be maintained is mentioned disruption due to natural and technical The Bank has entered into the Record
in the manual itself. Each unit perform disasters or man-made events, the Bank has management Agreement with Black Box
their responsibilities and maintain adequate put a Continuity of Business Plan (COBP) in Record Management Pvt Ltd regarding Storage
records as per the guideline. Each unit has place. The purpose of the COBP guidelines and Non Storage Services. Storage Services
their own system of maintaining the backup is to prepare concerned staff in the event of imply storage of documents and records
of their records and it is also periodically service outages caused by factors beyond while Non Storage Service imply services
replicated in the IT server. Hard copies of anyone’s control; internal or external such as, such as on premises pick up & drop services,
important documents such as legal documents natural disaster, fire breakouts, man-made retrieving on demand & image on demand
and security documents are stored fireproof events, and to restore services to the widest service or safe destruction or other services.
cabinets. Backup of important documents in extent possible in a minimum time frame. Bank’s documents are stored in a storage
softcopies are maintained in computers of Bank’s COBP guidelines are developed to facility built as per international standard
Disaster Recovery Site or Cloud Storage as manage the adverse impact of significant so that documents are protected against
appropriate. disruptions and to enable the Bank to resume the risk and any sort of physical damage by
business and operations to an acceptable natural disaster, environmental factors, pests,
The Bank also has an online replication level within a reasonable time in the event of etc. Documets are stored in a PEB structure
Disaster Recovery Site (DRS) which captures a disaster. From the onset of the COVID-19 warehouse with a 250,000 sq.ft. of dedicated
the record of each transaction that takes pandemic, Bank has activated the COBP storage space built in Paanchkhal, Kavre
place at the Production Server. Both the sites guidelines with clear instructions on the way which is strategically located to ensure that
(Production Server and Disaster Recovery – further intending to extend maximum possible any sort of risk is mitigated or eliminated for
Back up site) are housed in well-conditioned services to the public whilst also safeguarding the safety of documentary records.
and high shock resistant buildings and are at staffs’ health and ensuring their well-being.
different seismic zones, far from each other. During the nationwide lockdown, services

78 Nabil Bank Limited


4.5 EXTENT OF COMPLIANCE WITH
NATIONAL STANDARDS [NAS/NFRS]
The accompanying financial statements comply with the regulations of Nepal Rastra certain carve-outs in the implementation
have been prepared in accordance with Bank, requirements of the Companies Act of NFRS at licensed banks and financial
Nepal Financial Reporting Standards (NFRS) and also provide appropriate disclosures institutions and has also prescribed alternative
developed by the Accounting Standards Board, required under regulations of the Securities treatments on NFRS 9 – “Financial Instruments
Nepal (ASBN) and pronounced for application Board of Nepal (SEBON). The Institute of and the alternative treatment has been adopted
by the Institute of Chartered Accountants of Chartered Accountants of Nepal (ICAN), on wherever applicable and reasonable.
Nepal (ICAN). These financial statements recommendation from ASBN, has issued

Annual Report 2021/22 79


4.6 EMPLOYEES
As we progress and adopt modern been shaped by the drive of the employees to SELECTION AND CAREER
management practices including adoption “Surge Together Ahead”. Bank’s core corporate DEVELOPMENT
of technology in all the fronts, the role of values i.e. C.R.I.S.P- Customer Focused,
The Bank believes in meritocracy and institutes
human capital becomes highly pivotal for Result Oriented, Innovative, Synergistic and
a fair selection policy. All new appointments
the success of any organization. Accordingly, Professional are embedded in our daily work
and promotions are planned and approved as
effective human capital management in any culture.
part of the annual HR budget. Usually, fresh
organization is gaining paramount importance
Being a service provider, we believe every appointments are made at Trainee Assistant
for effective implementation of strategies to
action of ours’ should create immense value and Management Trainee levels and depending
achieve the stated goals.
to all our stakeholders. For us to align our on the business requirement appointments
The above stated objective would not be actions with our belief, communication is at other levels are also made to bring in
possible without effective team work and also the key. Communication strengthens sharing appropriate set of skills in existing or new
without sharing and owning the goals of the of knowledge, ideas and viewpoints. Issues areas of businesses.
organization. Hence, in our organizational set affecting individual job areas and the overall
As corporate governance is of utmost
up, all senior staff members enjoin to act as financial performance of the Bank are regularly
importance to the Bank, all appointed staff,
HR Managers in their areas of operations by communicated to our staff in order to align
whether permanent or under contractual term,
implementing policies and guidelines of the individual goal with organizational goal.
must adhere to the employment standards
Bank. They ensure that strong ethical practices
The Bank has implemented Employee Code as stipulated by Employee By-Laws of the
are put in place by nurturing talent and sharing
of Conduct which follows this very essential Bank. Staff placements are done as best
knowledge thus by taking the ownership in all
theme and is abided by all staff in spirit. suited for one’s abilities and growth potential.
activities that we carry out.
The strength of our human capital lies in Performance appraisal system is fair and
Likewise, HR Department is responsible for its diversity and fair treatment. Our culture career progression is based on objective
monitoring and ensuring that the Bank’s HR respects individual differences and learning assessment of one’s performance and team
policies are updated regularly as well as are aptitudes of every staff. We do not allow work along with potentiality to grow in the
interpreted consistently across the Bank. discrimination on any grounds be it social, role. Amongst many others, Learning and
Employee By-Laws acts as a framework religious, hierarchical or gender. Any kind of Development, Transfer, Job Rotation, Job
that guides human resource management discrimination or any form of harassment is Enrichment, Job Enlargement, Succession
practices within the Bank. This document is dealt with as per disciplinary provisions in the Planning and working in Cross Functional
approved by regulatory authority i.e. central Employee By-Laws. teams are some of the tools that we employ for
bank of Nepal upon recommendation of the employee development. 3% of HR expenses of
Board of the Bank. Principle of ethical work At Nabil, employees perceive that their views the preceding year is provisioned toward Staff
culture, open communication, objective career are heard, their concerns are attended and Training and Development program in line with
development, transparency in remuneration, their career progression is based on objective NRB directive 6/078 in every year.
pay – performance correlation supports HR performance assessment. Towards this end,
practices implemented within the Bank. It the Bank has implemented performance LEARNING AND DEVELOPMENT
is to be noted that with the increasing HR management system that endeavors objective
As much as human capital is important for
strength, Bank has given equal emphasis assessment of employees’ performance under
the Bank, the Bank has a strong focus on
to automate and move into digital arena as 4 dimensions based on stated KRA and KPI set
continuous learning and growth of the staff in a
much as possible in order to achieve high right at the beginning of performance period.
sustainable manner. Bank lays much emphasis
level of efficiency and provide high return to We have a recognized “Employee Association”
on the development of the staff as the coveted
all the stakeholders. Hence, Bank has been in the Bank known as “Association of Nabil
growth by the Bank is possible only if Bank is
very judicious while hiring new staff and Bank Staff (ANBS)”. The Management and
able to provide continuous learning opportunity
has been actively involved in selecting and ANBS jointly execute collective bargaining
to all of its staff. Bank has been primarily
attracting the best manpower in the industry. exercise once every two years. Collective
focusing
At the same time, the Bank has smoothly Bargaining exercises have been harmonious
incorporated latest practices that is reflected in throughout and has never resulted in any kind on providing learning opportunity to the staff
the organizational structure. High performance of disruption in banking operations and/or through 4 arenas which are i. Class Room/
culture that has evolved within Team Nabil has customer service. Physical Learning ii. Self-Learning iii. On-the-

80 Nabil Bank Limited


Job and iv. Experience Gaining through various is affected by multiple factors among which  Salary structure is reviewed every two
exposure activities and shadowing etc. financial benefits is a very important one. years with reference to national economic
Market forces constantly pose a challenge to scenario, Bank’s business performance
Training details of the Bank during FY our HR strategy and retaining the best talents and market practice. Any one or both of
2078/79 are as below: is often not easy. Remuneration is one of the the basic and variable components may be
major factors that affects one’s decision about revised as appropriate.
ACTIVITIES (DURING FY 2078/79) NUMBER
joining and or even continuing with the current  The bonus element of annual pay is tied up
Total trainings conducted : 340 organization and this fact has been fully to the overall performance of the Bank at
acknowledged by the organization. the end of each financial year. This instills
Total Staff participants : 28,471
winning spirit in our employees, drives
Total Man Hours : 9677 Accordingly, we attract the best people business performance and aligns their
who wish to work in an organization having personal interests with the interest of our
Some of these trainings were conducted online
strong corporate values, ethical work culture, stakeholders.
as well.
reputed brand performance and the one
 Bank’s contribution to Employees’ Gratuity
REMUNERATION AND BENEFITS offering excellent work experience and career
Fund and Provident Fund is proportionately
development opportunities. Our remuneration
linked to the number of years in employment
The quality of our human capital defines the policy covers the following:
and the last drawn salary at the time of
scale of our business success. Our business
making such contribution.
stands on trust, relationships and ethical  Salary structure comprises of fixed monthly
conduct. Our strategy is to be proactive to pay and variable incremental pay which is  Besides, our employees receive the benefit
attract, select, develop and retain the best provided based on documented position of housing loan, vehicle loan and personal
talents from the market. We need to constantly grades of individual employee as per his/ loan facilities at concessional rates as per
ensure that we have required set of skills, her annual performance appraisal ratings. their individual eligibility in line with the
knowledge and expertise in our talent pool. The grade earned in annual performance Integrated Staff Loan Policy approved by the
We believe staff commitment and motivation appraisal ratings has an incremental impact Board.
towards the job is achieved over time, which in the basic pay.

4.7 HUMAN RESOURCE POLICY AND


HUMAN RESOURCE DYNAMICS

The Human Resource Policy of Nabil Bank  Employee Training and Skill Development CORPORATE NO. OF
also known as Employee Bylaws is guided by Programs COMPOSITION
TITLE STAFFS
Bank and Financial Institution Act 2073 and  Performance Appraisal Management 153 7%
Labour Act 2074. The Policy approved by
 Retirement, Gratuity, Job Safety, Service Officer 465 22%
NRB emphasizes on enhancing the employees’
Period Calculation Assistant 1357 64%
skills, promoting inclusion and equality,
 Conduct and Discipline of Employees Total 2130 100%
ensuring safety and health of the employees
and motivating for best delivery of services.  Disciplinary Action
The Bank believes that the employees are the  Others – Fidelity Insurance, Internship, and
most valuable assets for the Bank’s growth and Bank account, Tax deduction, Settlement
success and hence focuses on attracting and after retirement etc.
managing best in class talent to deliver on its
goal of growth, profitability and sustainability. HUMAN RESOURCE DYNAMICS
Staff demography based on nature of job
The HR policy of Nabil Bank includes
provisions related to: NATURE OF NO. OF
COMPOSITION
JOB STAFFS
 Organizational Structure and Employee
Permanent 2130 65%
Management
Contract 1129 35%
 Salary, Allowances and Other Benefits
Total 3259 100%
 Attendance and Leave

Annual Report 2021/22 81


Gender-wise Corporate Title of Permanent
Staffs

LEVEL
GENDER MANAGEMENT LEVEL OFFICER LEVEL OTHERS
ASSISTANT
Female 22 152 602 22
Male 131 313 755 133
Total 153 465 1357 155

Gender Composition of Permanent Staffs Provincial Composition of Permanent Staffs

GENDER NO. OF STAFFS COMPOSITION NO. OF


PROVINCE COMPOSITION
Female 798 37% STAFFS

Male 1332 63% Koshi Pradesh 259 12%

Total 2130 100% Madhesh Pradesh 177 8%


Bagmati Pradesh 1261 59%
Age Composition of Permanent Staffs
Gandaki Pradesh 116 5%
AGE RANGE NO. OF STAFFS
Lumbini Pradesh 177 8%
Below 20 2
Karnali Pradesh 44 2%
20 to 30 822
Sudurpashchim
30 to 40 817 96 5%
Pradesh
40 to 50 343
Total 2130 100%
50 to 60 140
60 and above 6
Total 2130

4.8 CONTRIBUTION OF BANK TOWARDS


EMPLOYEE HEALTH AND SAFETY
The Bank has always ensured employees’ Our main goal is to prevent all occupational  Ensure that there is effective involvement
health and safety in the workplace. Bank injuries, transmission of infectious disease, and and open communication on all Safety and
has “Occupational Safety and Health Policy”. illness. We aim to provide a safe and healthy Health matters at all levels in the Bank.
This policy has been formulated in view of environment for all and to operate without any  Involve individuals in Safety and Health
reinstating Bank’s commitment towards hazard or health incidents. To achieve this, matters and develop with them ways to
Occupational Safety & Health as well as to bank has envisioned to: recognize, evaluate and control workplace
adhere with the provision laid out by Labour hazards and risks
Act 2074 of the country.  Identify, analyze and eliminate or reduce as
 Encourage all people to carry commitmentto
far reasonably possible all hazards and risks
Safety and Health from the workplace to
The health, safety and security of the Bank’s to Safety and Health
their home
staff is of the highest priority and an essential  Conduct our operations in compliance
part of the Bank’s duty of care. Accordingly,  Nabil Bank shall implement and maintain
with all relevant legislation, regulations,
Bank has low risk appetite from any health, ongoing occupational Safety and Health
standards, licenses and codes Occupational
safety, and security risk which could harm any system, which includes:
Safety and Health Policy (OSHP)
staff and customer likewise. The goal of the  Provide instruction, training and supervision • Conduct regular monitoring/inspections
Bank in terms of safety of the employees is to to ensure all have necessary knowledge and audits of the workplace and
eliminate or minimize any accidental hazards. and skills to undertake work in a safe and associated activities
Health and safety measures are applied to healthy manner
• Clear documentation and records relating
all directors, employees (permanent, contract
 Require all staff to comply with relevant to Safety and Health
and outsourced), contractors, consultants,
legislation, regulations, standards, Bank
customers and all visitors to the premises of • Continuous development and
policies, procedures and safe work practices
the Bank. improvement of the Bank’s workplace
practices and procedures aimed at best

82 Nabil Bank Limited


workplace practice and a zero-harm practices and will take disciplinary action if 3. Medical cost, PCR test cost, hospitalization
approach necessary. cost and hotel isolation cost of Covid-19
• Adequate systems and resources to infected employee was covered up by the
The Bank has in place Medical Insurance Bank.
effectively manage rehabilitation and
Policy for all permanent, contract and
return to work processes in case of 4. Bank has been proactive in arranging
probation staff that covers medical expenses
occurrence of any event/incident o medical consultation to infected staff. Further,
of staff, spouse, dependent parents and two
Instruction and training to improve staff infected with Covid-19 were provided
children up to 18 years. Further, Bank also
understanding of all personnel about medical kit to be used during quarantine.
workplace hazards, safe work practices has in place Accidental Insurance policy for all
permanent, contract and probation staff. 5. Employee Happiness and Wellness
and emergency procedures
programs have been emphasized by taking into
• In-house safety rules to provide In year 2021-22, Covid-19 was still a major account mental issues that can arise during the
instructions for achieving safety health concern for all, Bank has been issuing period of pandemic.
management objectives. and implementing COVID-19 advisory to all its 6. Travel guidelines has been issued and
• Promoting, developing and maintaining employees based on the transmission rate of implemented for the safety of employees.
safety and health awareness in the the virus. Further, spread of Dengue was in rise
7. Braches and units have been equipped with
workplace. across the country. Some noteworthy measures
Oxygen Concentrator so that employees and
adopted by the Bank during FY 2021-22 are
In particular, where the safety and health their family members can avail the same at
enlisted below:
committee is responsible for reducing times of need.
workplace hazards, managers and supervisors 1. Staff were equipped with sanitizers and 8. Bank has signed agreement with different
are accountable for the safety and health of gloves while office premises were disinfected hospitals and pathological labs to provide
their employees and must provide training and periodically. discounted service to Nabil Staff.
take corrective action. Everyone is responsible 2. Customers were encouraged to follow
for their own safety and that of others. The COVID-19 and Dengue safety protocols in all
bank is committed to promote safe work branches and units of the Bank.

Annual Report 2021/22 83


4.9 CORPORATE SOCIAL
RESPONSIBILITY AND SDGS
Nabil CSR activities associate with the entire nation including customers, shareholders, investors, business partners, employee, society and nation.
As a catalyst in the overarching value system, we assume the moral duty of giving a fair share of the value created back to the community. We foster
community activities in these main fields.

09
CITIES AND 01
EDUCATION
COMMUNITIES

02
08 HEALTH
MANAGEMENT

CSR
AREAS 03
07 ECONOMIC
SCIENCE AND DEVELOPMENT
TECHNOLOGY

06 04
LITERATURE POVERTY
CULTURE/ART ALLEVIATIONS
05
ENVIRONMENT

RESPONSIBILITY TO CUSTOMERS RESPONSIBILITY TO BUSINESS opportunities.


PARTNERS
We fulfill our social responsibility by creating RESPONSIBILITY TO SOCIETY AND
and offering high value products and services We work with individuals and companies NATION
with full support and adequate response that share our work standards and ethics
mechanisms. ensuring cooperative relationship and ensuring
We undertake and promote philanthropic
commitment to continuous improvement.
RESPONSIBILITY TO INVESTORS activities as a means to giving back to society.
AND SHAREHOLDERS RESPONSIBILITY TO EMPLOYEES Our CSR activities are aligned with the SDGs
where we provide services that contribute to
We work to create a sound management base We consistently work towards creating a work reducing inequalities in the society.
that is driven to achieve sustainable growth environment that offers equality of opportunity
resulting in increased corporate value and and ensures growth of the employees with the
wealth maximization. best possible systems and career development

84 Nabil Bank Limited


2 4 6 8
ZERO QUALITY CLEAN WATER DECENT
HUNGER EDUCATION AND WORK
SANITATION AND
1 3 5 7 9
ECONOMIC
NO GOOD HEALTH GENDER AFFORDABLE GROWTH INDUSTRY,
POVERTY AND WELL-BEING EQUALITY AND INNOVATION AND
CLEAN ENERGY INFRASTRUCTURE

11 13 15 17
SUSTAINABLE CLIMATE LIFE ON LAND PARTNERSHIPS
CITIES ACTION FOR THE GOALS
AND
10 12 14 16
COMMUNITIES
REDUCED RESPONSIBLE LIFE BELOW PEACE, JUSTICE
INEQUALITIES CONSUMPTION WATER AND STRONG
AND INSTITUTIONS
PRODUCTION

Annual Report 2021/22 85


4.9.1 EDUCATION
FINANCIAL LITERACY
Financial Literacy in simple term refers to the set of skill and understanding so that individuals/corporate houses can effectually use the various
financial skills. The importance of financial literacy has increased day by day as a result of financial market developments, economic, technological
and policy changes. Bank has conducted various programs under Financial Literacy through different branches/units or through the collaboration
with different organizations or institutes.

Some of the activities conducted under Financial Literacy are as of below.

NABIL SCHOOL OF SOCIAL ENTREPRENEURSHIP

Nabil School of Social Entrepreneurship who seek to engage in innovation and problems. Through a unique action driven
(Nabil SSE) was initiated to promote enterprise for the benefit of society. This program, it actively seeks to support,
social entrepreneurship in Nepal. NABIL program helps individuals start, sustain, reassure, value, legitimize and guide
SSE’s vision is to empower people from and scale social enterprises, charities and individuals in their efforts to realize their
all backgrounds to create positive social community projects. goals and potential. It works with the
change. help of an ever-growing network made up
Nabil SSE believes that individual social of a wide range of skilled people.
Nabil SSE dreams of a society which entrepreneurs are key to providing
values and actively supports those effective solutions for community

86 Nabil Bank Limited


NABIL SSE FELLOWSHIP PROGRAM 2022
The Nabil SSE Fellowship Program Management, Tribhuvan University to enterprises. The course is a rigorous
is focused on promoting social implement fellowship program to invite action-based learning process where the
entrepreneurship across different themes ideas that can bring positive impact entrepreneur will be able to establish an
and sectors such as livelihood, skill in the lives of the people, society enterprise at the end of the course.
development, agriculture, education, and environment contributing to the
20 Fellows were selected through rigorous
healthcare, arts & communities’ well- Sustainable Development Goals.
selection process and were finalized for the
being, energy, etc. spread across the
The Fellowship course is designed to six months program as first cohort.
country. Nabil SSE has partnered with
aspiring social entrepreneurs who are
Faculty of Management, School of
looking for support to kick start their

Annual Report 2021/22 87


NABIL SSE CERTIFICATE PROGRAM 2022
Nabil SSE Certificate Program provides Nepal, facilitate access to finance and has partnered with colleges from each
platform for individuals to present their raise the profile of social entrepreneurs. province to offer Certificate Course in
creative ideas and solution through social Social Entrepreneurship. It aims to train
enterprises, promote and develop social The program supports learning that 700 students per year, 25 per cohort, 28
entrepreneurs in all the provinces of builds leadership capacity and those cohorts per annum across all 7 provinces.
creating change in the society. Nabil SSE

1. 2.

3. 5.

6.

4. 7.

1. Mahendra Morang Adarsh Multiple Campus, Province 1 5. Kshitiz Internaional College, Lumbini Province
2. Birgunj Public College, Madhesh Province 6. Surkhet Model College, Karnali Prvoince
3. Campion College, Bagmati Province 7. Sudur Paschimanchal Academy, Sudur Paschim Province
4. LA GRANDEE International College, Gandaki Province

88 Nabil Bank Limited


BANKING SIKSHYA
The absence of financial literacy leaves Hence, the importance of financial literacy The program was conducted with
citizens or public unprepared to meet the program is felt more important in the the participation of Local government
emergency expenses. The proper literacy current context. Seeing such impact of authorities, ex or incumbent NRB
program will result to maximize the income financial literacy, the bank has conducted executives, business personalities,
that the family earns, prevents citizen to Banking Sikshya program in different places entrepreneurs, district police and public
retire with enough money to meet their across the seven province. with the minimum attendees of 100 -150
retirement expenses. people in each program.

Annual Report 2021/22 89


FINANCIAL LITERACY VIDEO

With the collaboration with the Sustainable Banking team of establishes awareness in local people and entrepreneurs regarding
the bank itself, different videos were produced to showcase the the Nabil Sustainable Banking, the initiatives of the bank. Such kind
successful cases of agro loan and entrepreneurship development of video production is believed to develop and promote agriculture
videos that has significant contribution in promoting the and livestock business, entrepreneurship development of women and
entrepreneurship at the local level. Through this kind of video, it is youth. The video is focused in different areas such as agro farming,
believed to have awareness among the customer regarding the loan goat farming, and micro hydro. With coverage in different areas, it
facility that they can reach to the bank. is believed that these video will have some impact in fostering the
entrepreneurship in the country.
This video enables people to know the basic of financials and the
loan that are available in the market to scale up the business and

90 Nabil Bank Limited


LITERACY PROGRAM AT TILA RURAL MUNICIPALITY
JUMLA, KARNALI

With the overarching goal to provide access to finance and Council and Nabil Bank. The objective of this program is to make
empowerment of women through banking channel, eight days’ youth independent through amplification of Youth entrepreneurship
entrepreneurship and financial literacy program was conducted in and self-employment. The training also aimed to make participants
Tila, Jumla from December 6 to 13, 2021. The entrepreneurship aware on financial literacy and to provide financial access to
training was conducted by Tila Rural Municipality along with entrepreneurship project. The closing ceremony of the event was
trainers from National Youth Council to youth and women under a witnessed by Chairman of Nabil Bank, Mr. Upendra Poudyal and
tripartite agreement among Tila Rural Municipality, National Youth DCEO Sujit Kumar Shakya.

Annual Report 2021/22 91


BITTHADCHIR RURAL MUNICIPALITY, BAJHANG AND ALITAAL
RURAL MUNICIPALITY, DADELDHURA, SUDURPASCHIM

The branches of the Sudurpaschim Provinces were visited by entrepreneurship was provided in Bitthadchir, Bajhang. The total
Nabil Sustainable Banking team from December 24 to January number of participants was around 100. Also, similar program
2, 2022 with the objective to provide financial literacy and was conducted in Alitaal, Dadeldhura in the presence of more
entrepreneurship training to the local people and motivate them than 100 local participants.
for entrepreneurship and access to finance. A day of training on

92 Nabil Bank Limited


PHOTOS FROM FINANCIAL LITERACY AND
ENTREPRENEURSHIP DEVELOPMENT PROGRAMS:

SAYAL RURAL MUNICIPALITY MAHILA SHAKTI BIKAS KENDRA NEPAL, DHULIKHEL

TURMAKHAND RURAL MUNICIPALITY CHANDRAGIRI MUNICIPALITY

PANCHKHAL MUNICIPALITY

Annual Report 2021/22 93


FINANCIAL LITERACY PROGRAM AT POKHARA

94 Nabil Bank Limited


DIGITAL LITERACY citizens to read and write, keep accounts, use Also, different studies show that people who
mobile phones, electronic devices and get are engaged in mobile phones are less prone to
In collaboration with Bharat Mohan Smriti
information on road signs. With a life time of depression and any other mental health issues.
Foundation, the bank has conducted digital
hard work, senior citizens deserve a dignified Hence, this digital literacy program will help to
literacy program in Biratnagar. Bharat Mohan
life, not as a charity from younger generation. advance the knowledge and required technical
Adhikari Foundation is running different
As elders are the living history of a society, it is skills for the use of mobile phones among
educational programs for senior citizens. Such
important to utilize their knowledge, skills and the older generation as well as different other
educational program enables illiterate senior
experience for socio-economic development. educational skills needed for daily life.

Annual Report 2021/22 95


SHREE MANAKAMANA absenteeism in the school. The upgradation about changes in academic, social and
of the drinking water and washrooms has also economic dimension of Jhapa district. Thus,
Shree Manakamana Basic School was
helped in maintaining the health and sanitation the bank has supported the Campus for the
established in 2062 B.S. (2005 A.D.) with
of the students. upgradation of library.
the mission to provide quality education to the
locals of Ward no 9 of Devchuli Municipality. Ganeshman Singh Memorial Library
Before the establishment of the school, there
was a single school in the locality with not Ganeshman Singh Memorial Library is the
much to offer to the students. At such times, public library which was established in
the school was established with the motive of Sainamaina Municipality-4, Rupandehi in
providing English-medium education starting 2014 AD. In the era of digitization, different
from the preschool period at a near distance. sectors and infrastructures are continuously
Under the Social Enterprise Project (SEP), the upgrading, which has also impacted in the
BBA students of Kathmandu University School SUPPORT TO BAA FOUNDATION educational system and the library as well.
of Management aimed in providing support to Hence, the Ganeshman Singh Memorial
Baa Foundation is a Non-profit organization
the Shree Manakamana Basic School regarding Library is transforming its traditional library
and is involved in different social activities.
the necessary technological resources to into the digital library as per the need of
Baa Foundation was established on 2021 at
computerize all the administrative work that current hour. For the same, the bank has
Kirtipur with around 26 orphan/children living/
the school was doing manually. To complete extended its support to the library seeing a
studying there. Baa Foundation has organized
the project of the students of Kathmandu huge impact in the upcoming generation.
a donation event on its first anniversary i.e.,
University, the bank has extended its support on 25th Poush 2078. One of the themes of
for the upgradation of the school’s system. this event was to help orphan children to fulfill
Such adaptation of the technology is believed their basic needs and help to raise the fund
to be helpful in carrying out the administrative to fulfill their needs. Thus, foundation has
work more efficiently and effectively which provided warm clothes, food, and stationary
will ultimately help in reducing the time of the items for orphan children through the support
management of the school which could be of Nabil Bank under CSR.
invested in the strategic part of the school.
The foundation is being established with the
SUPPORT FOR ROUND TABLE motive of providing basic needs and facilities
Round Table Nepal is an organization of young for the orphan children. The child who has lost Shree Ratna Pustakalaya
achievers in the age group of 18-40 driven their both parents will have to face different
scenarios such as lack of education, health, With the motive of serving the society,
by their aims and objectives of community
food, and shelter. Hence, the foundation Ratna Rajya Pathshala was established
service, self-development, fellowship, and
is working for uplifting the condition of the in 1960 A.D in front of the Baneshwar
fostering international relations. Over the
children who are in dire need of support. Mahadev temple. The library has an
last 22 years, Round Table Nepal has built
impactful drive to the society hence, the
and upgraded numerous schools benefitting
LIBRARY UPGRADATION SUPPORT Bank has provided the financial assistance
thousands of students. On the process of
to Shree Ratna Pustakalaya on the occasion
upgrading school, the Round Table Nepal Libraries do offer countless learning
of 59th anniversary of the library. With
(RTN) has decided to upgrade the Chamardhap opportunities that can fuel economic, social,
the continuation of such library which has
Primary School. Chamardhap Primary School and cultural development. As gateways
witnessed many Nepali scholar, it is believed
is located in Birtamod-10, Chamardhap. The to knowledge and culture, libraries play a
to have impact in preservation of the world’s
overall objective of the project is upgradation fundamental role in society.
cumulative knowledge and heritage for future
of classroom wall fencing, filtered drinking
Birendra Namuna Campus generations.
water, washroom upgradation, E learning and
Computer Lab, and upgradation of kitchen Birendra Namuna Campus is one of the oldest
and dining area. For the same, the bank has community campus situated at Chandragadhi,
provided the financial support to the Round Jhapa. Since its inception it has been running
Table Nepal. as a community campus considering the
economic condition of student’s receiving
This project has helped in the creation of the
education are from sub-standard low income
favorable learning space in the school which
generating families. This campus is playing a
results in lowering the number of days of
vital role and serving as a milestone in bringing

96 Nabil Bank Limited


SETO GURANS BAL BIKASH SEWA INFORMATION SECURITY VIDEO OTP and other personal information and its
SGBBS effects, and Facebook Messenger fraud case.
There has been an alarming rise in cybercrime
Seto Gurans Bal Bikash Sewa is the NGO cases registered and prosecuted in Nepal The release of these videos are thus believed
registered with Social Welfare Council Nepal. lately. Around 10 complaints have been to build the level of user awareness among
SGBBS works for education and wellbeing of recorded in Cyber Bureau in a day. With the the customer as well as general public. Since,
under privileged and marginalized children era of digitization, the type of fraudulent online fraud has become a national issue, this
in Rupandehi Region. SGBBS has planned to activities has also taken a quantum leap along video will help to educate people regarding
distribute educational materials to 400 (202 with the change in the medium of crime. cybercrime.
Fraudsters are using different techniques such
Boys and 198 Girls) highly underprivileged
as phishing and vishing to lure customers
children admitted in various schools of 19
to transfer/deposit a certain amount to their
wards of Butwal Sub Metropolitan City area.
accounts. With the increase in such fraudulent
In this endeavor, the bank has provided the
activities, it has become one of the major
financial support to SGBBS. This kind of
necessities to make the customer aware of the
support is expected to ensure inclusive and
fraud that is happening.
equitable quality education and promote
lifelong learning opportunities for the deprived For the same purpose, Bank has created
people. three videos and released in different phases
regarding the Lottery fraud case, Sharing of

Annual Report 2021/22 97


4.9.2 HEALTH AND SANITATION
ARTIFICIAL LIMB CENTER challenging tasks may seem simple to them
after having prosthetics. Pursuing their goals
We belong to a society where people
can become easier with artificial limbs. Nabil
with disabilities have to undergo various
Bank has funded the cost for the production of
discriminations. To alleviate this situation
100 prosthetics.
to some extent, the Artificial Limb Center
provides artificial limbs and also the required The entire perspective towards the life of
post-service facilities including rehabilitation. differently-abled people can be changed after
Proper care is provided to differently-abled they are provided with artificial limbs. They
people until they can lead an independent can afterward compete with the world easily
life. The center gives shape to their dreams and don’t have to go through mental trauma
by providing them comfortable limb(s) along and traumatic experiences of losing a limb(s).
with the proper counseling and guidance It is believed that prosthetics give them
which can help them regain their confidence massive power.
and experience a normal life. Complex and

RAM KUMAR MAHABIR PRASAD facilitate eye care service to reduce cataract Blood is needed in all health care facilities
KEDIA EYE HOSPITAL blindness in Bara & Parsa District and is and is also required for a host of life saving
serving around 130,000 patients & performs procedures. Blood donation is a regular social
Ram Kumar Mahabir Prasad Kedia Eye
Surgery of Around 15,000 Patients Annually. work conducted by Nabil Bank. By partnering
Hospital (RM Kedia Eye Hospital) is a non-
The Hospital is providing its services on both with various social organizations, different
profit organization serving for eye care service
shifts (Day Shift & Evening Shift), during branch of Nabil Bank conduct blood donation
in Bara & Parsa district since 45 Years. The
evening hours there is arising lightning problem program every year.
Hospital was established by M.B Kedia Sewa
because of unavailability of sufficient light
Trust running under umbrella of Nepal Netra Blood which is donated are used for the
poles. So, the bank has extended its support to
Jyoti Sangh. The Hospital is Pure charitable service of sick people, suffering from accident,
RM Kedia Eye Hospital for the upgradation of
service & main objective of hospital is to cancer patient and pre-mature baby, which is
the infrastructures in the hospital premises.

98 Nabil Bank Limited


BLOOD DONATION of socially reputed personality of Narayanghat, On the occasion of World Blood Donor Day,
Chitwan District. In this event, the staff of the Blood Donors Association Nepal (BLODAN)
Why blood donation is synonymous with saving
bank and the local resident of Chitwan area has organized a week-long program in order
someone’s life. Nabil Bank has conducted such
has contributed for blood donation program. to thank the regular blood donor and create
program to ensure the availability of blood for
public awareness regarding the need of regular
the patients which can potentially save their The Nabil Bank, Pokhara branch organized and unpaid blood donation for which the bank
lives and to grow a sentiment of charitable the blood donation program by partnering with has stretched its support through CSR. On this
emotion amongst the local as well as the staff Annapurna FM. Pvt. Ltd. Annapurna FM Pvt. event, BLODAN has honored Highest Blood
of the bank. Ltd has conducted the blood event program for Donors those who have donated blood more
the 20th time in row. In this event, the staff of than 100 times, 50 times and 25 times.
The Nabil Bank, Chitwan branch has organized
the bank and the local resident of Pokhara area
the blood donation program by partnering with
has contributed for blood donation program
Rotary Club on 15th Bhadra. Rotary Club of
and the total 300+ packets of blood were
Chitwan was founded on 2047 B.S by a group
collected.

KANCHANPUR NETRAHIN SANGH for the players and to conduct the program event will help to increase the importance of
effectively. the disable people and show that they can also
“Kanchanpur Netrahin Sangha” located at
stand somewhere and compete like a normal
Bheemdatt-18 Kanchanpur is an organization People with physical and mobility impairments people also above all this kind of event also
where more than 200 visually impaired need decent canes, walkers, wheelchairs, helps in maintaining good relation with the
persons are associated. The organization has and above all, barrier free homes and people.
organized weekly wheelchair marathon and neighborhoods. Some also need every day
Visual Impairment race program on 3rd Dec personal help to do every day self-care tasks. NIJGADH HEALTH CAMP
2021, in the occasion of International Day Regardless of the type and degree of disability,
Lions Club of Nijgadh City is a reputed local
of person with disabilities. For the same the disrespect, insults, and physical and emotional
Club working in different social activities. It has
bank has provided the financial assistance to abuse are equally unacceptable regardless of
been carrying out Health Camps, School Bags
purchase various required items and uniform type and degree of disability. So, this kind of
Distribution Programs/activities in Nijgadh

Annual Report 2021/22 99


area to facilitate the local & under privileged MENSTRUAL HYGIENE
population. In continuation to the support WORKSHOP AT NAWALUR
provided by the Lions Club, the club has
Menstruation is a health issue for many
organized health camp at Nijgadh on 24th and
young girls. Due to taboo associated with
25th Mangsir. Hence, the bank has provided
menstruation many girls in different part
the financial support to conduct the health
of Nepal are forced to stay at home during
camp.
school hours and this causes them to lag
The participants of the camp had accessed behind in the education. In most of the
different checkups such as general, thyroid and places, lack of openness in conversation about
MATERNAL HEALTH CAMP AT
sugar checkup, child specialist, skin disease, the menstruation with teachers at school
HUPSIKOT AND KAWASOTI
and ENT checkup. This camp has helped the and as well as parents at home has caused
people of the Nijgadh area regarding the early According to Government of Nepal, the child menstruation to be a problem for the girls.
detection of the disease and prevent the people mortality rate under 5 years of age is 28 out Menstruation is a natural process and is prone
to suffer from the severe risk. of 1000. Reproductive and maternal health to ascend health related issue. Therefore, Nabil
is considered extremely important when it bank has organized this camp by partnering
comes to reducing mortality rate amongst the with Nepal Health Corps.
children. However, in Nepal the awareness
related to reproductive and maternal health
remains low. According to Government of
Nepal, the women who gets their pregnancy
checked at least four times during their
pregnancy period is 77.8%.
On 31st Jestha
After taking a hard look at the state of
multipronged maternal health, Nabil Bank
KANTIPUR INSTITUTE OF HEALTH conducted a free maternal health camp in 216 girls were benefitted by this program.
Hupsikot and Kawasoti at Nawalpur. This They were oriented about precaution to be
Kantipur Institute of Health and Science
camp was organized in partnership with Nepal applied during menstruation, menstruation
(KIHS) is the first dental Hygiene school in
Health Corps. Nepal Health Corps is the hygiene and usage of sanitary pad. They were
the western Nepal. The organization provides
organization which is committed to support also encouraged to converse freely about
extensive clinical facilities to the students of
the implementation of the Universal Health menstruation with their colleagues, teachers,
learning at both rural and urban centers. Every
Coverage at different district, communities, parents and health officers. Overall, this
year, the Public Health Department of KIHS
or area. The camp thus was organized at camp has resulted in overcome the fear and
carries oral Hygiene practice, which includes
Hupsikot Rural Municipality and Kawasoti embarrassment that the young girl used to face
awareness programs and school training on
Municipality which provided free health service in the days of their period.
Oral Health, Free Dental Camps, Trainings
for 300 women of reproductive age. This camp
targeted to lower-level health workers and EYECAMP IN THANTIKANDH
provided health service related with uterus
so forth. Hence, the bank has provided the DAILEKH
prolapsed, etc. Nabil Bank believes that such
financial assistance to KIHS for conducting
health camp will benefit the women and the Thantikandh is one of a very remote rural
dental health camp.
children by helping to reduce the maternal municipality located in Dailekh district
The project has benefitted around 38,000 mortality rate and child mortality rate. of Karnali Province of Nepal. Due to the
people (children along with their parents). unavailability of ophthalmologist service in
People often miss out on their regular check- such rural setting, the people of that area
ups of dental and oral care. Thus, this project or locals are unaware about the eye health
has ensured people of the area to access the and the risk associated with it. Thus, in
quality dental and oral healthcare services collaboration with Nepal Redcross Society
which will definitely help in the improvement Surkhet Eye Hospital, the bank has organized
of overall health and well-being, identify the a health camp in the Dailekh district. The
early signs of diseases, and refer them for camp has outreached the screening of 1000
preventive and curative services. locals and carry out the surgery of around

100 Nabil Bank Limited


200 cataract cases. The camp has also Hindus. The river has thus been polluted Nepal. Nepal has different historic moments
provided the eye checkup and eye vision, glass due to different human and developmental where martyrs have sacrificed their lives. Even
distribution for free, medicine distribution to activities. In order to make the river pollution though the Martyrs aren’t physically present,
the needy, and recommend eye surgery to the free and less pollution, the High-Powered the memory and the activities made them
needy patients. Committee for Integrated Development of to get remembered in every citizen. In order
Bagmati Civilization (HPCIDBC) was formed to support such a Nobel activity of Martyrs
in 2051 in the joint initiation of citizen and Memorial Park, the bank has supported for the
government. The one of the major objective maintenance of park situated at Pulchowk. All
of HPCIDBC is to maintain roads and green of these activities will hence restore life quality
belt along the river banks. One of the area in the community and also sets up an example
of Bagmati Corridor has been maintained among other BFIs to take the step forward for
by Nabil Bank since 2071 in collaboration the environment conservation activity.
with HPCIDBC. With the continuation of the
support, the bank has maintained the Bagmati
corridor area of about 2,750 sq. m.

Under this activity, areas nearby the corridor


are also cleaned, built and repaired. Bagmati
itself being a symbol of civilization, religion
and culture, this CSR initiative in the corridor
aims to maintain the garden and keep the road
smooth of that area.
BAGMATI CORRIDOR
MAINTENANCE MAINTENANCE OF MARTYRS
MEMORIAL PARK
Due to increase in commerce, transport, and
other developmental activities, a healthy and Martyrs Memorial Committee, established in
clean environment is need of the hour. Bagmati 2027 B.S. has been looking after the park and
is considered as one of the holy rivers of the the statue of the martyrs in different places of

4.9.3 CULTURE

JANAKPUR LITERATURE FESTIVAL presented as the part of the festival. With the but also helps in creating new values for later
TO PROMOTE THE LOCAL same mission, NawaMithila has organized JLF generation.
CULTURE 2022 with the support of Nabil Bank.

NawaMithila has inaugurated Janakpur Culture and Heritage are known as the
Literature Festival (JLF) in the year 2019 invaluable resources which creates a unique
which has now become the landmark event tourist attraction for the country. Nepal
for the Janakpur City. With a mission of is a country which is rich in culture and
celebrating extraordinary stories, amplifying heritage. Whereas, preserving and promoting
brave voices and tackling national issues, the heritage for future generation is quite
JLF for the first time in 2019 brought an difficult. The culture and festivals are slowly
opportunity for the citizens of Janakpur to dissolving because of the lack of attention. If
explore the interconnections between literature this continues, then different culture, festivals,
and art, theater, films, music, television, and heritage will surely be history. Thus,
journalism, and political activism. People this kind of the program will not only help
from all over Nepal participated in the festival in supporting the literature program not only
and learned about the local tradition that was contributes in the socio-economic development

Annual Report 2021/22 101


4.9.4 CITIES AND COMMUNITIES

KARNALI KRAMIK MUDDHATI The accounts opened under this scheme are with the installation of CCTV as this will allow
KHATA eligible to get NPR 1,000 as cash incentive the police to keep an eye on criminal activities.
along with the contribution of the province To support the activity of DPO Illam, the bank
According to the data of the Ministry of Social government. The amount thus accumulated has provided support for the installation of
Development, 41,000 teenage girls of Karnali will be enabled to be withdraw when the CCTV.
Province got married in the last three years. girl reaches the age of 20, completion of
Karnali Province is one of the provinces where secondary education, and remains unmarried
PUBLIC AWARENESS AT
early marriage is widely practiced despite until the age of 20. The impact of this project KHADBARI
the laws and regulations of the government. is believed to raise the standard of the girl In today’s context, people are equipped with
Among those teenage girls, 19% went through child, bind them not to get married at a young cell phone but do not have the contact number
teen pregnancy. The risk of both mother and age (to the extent possible), and also to raise of concerned authority to report the cases/
child is high during teen pregnancy. So, to awareness regarding saving and banking incidents immediately after it occurs. So, to
uplift the socio-economic condition of girls habits. connect such issues, DPO has issued contact
in Karnali Province, Nabil Bank launched
number of their office/official so that each
a deposit scheme named, “Karnali Kramik CCTV AT ILLAM incident is reported which is the first step to
Muddhati Khata” on 23rd Falgun 2077. In
District Police Office, Illam approached bank bring the cases to be tested in the court of law.
this fiscal year 929 girls opened an account
with expectation of contribution for installation To make this event happen, the District Police
under this scheme. This deposit scheme is
of CCTV at the locality. The installation of Office (DPO) Khadbari has reached Nabil Bank
believed to support the vision of the provincial
CCTV cameras in the municipality serves as for the support. This event will allow general
government i.e., “Bank Khata Chhoriko,
a serious deterrent to criminals and those public for reporting the incident/criminal
Surakchya Jeevan Variko”. carrying out illegal activities. Therefore, Nabil activity.
Bank has assisted the District Police of Illam

102 Nabil Bank Limited


05 AND OTHER DISCLOSURES
FINANCIAL STATEMENTS

5.1 DISCLOSURE
REGULATORY

A. STATEMENT OF DIRECTOR’S under regulations of SEBON. The financial The directors are also entrusted with the
RESPONSIBILITY statements of FY 2021/22 of the Bank and fundamental responsibility of keeping adequate
the Group have been prepared on the basis of accounting records that are sufficient to
The statement of director’s responsibility
NFRS. show and explain the Bank’s transactions
addressed to the shareholders of the Bank
and disclose with reasonable accuracy at
should be read in conjunction with the The financials of FY 2021/22 of the Bank and any time, the financial position of the Bank
Auditor’s Report, that is introduced in order the Group have been prepared on the basis which also enables them to ensure that
to distinguish the respective responsibilities of of format prescribed in the Unified Directives its financial statement comply with NRB
the Board from that of auditors in relation to whilst complying with the provisions of the directives. Section 1(6) of Directive 6 of
the preparation and presentation of financial Companies Act and Banks and Financial NRB Unified Directives 2078 also specifies
statements of the Bank. The Board of Directors Institutions Act (BAFIA). Apart from the the requirement of maintaining records of
is responsible for preparing the Annual Report, specific provisions of Unified Directives of transactions up-to date and intact at all times.
the separate financial statements of the Bank NRB, BAFIA and the Companies Act, the Moreover, it also restricts the directors to add/
and the consolidated financial statements of financial statements have been prepared on modify official accounting records in their
the Bank and its subsidiary (ies) in accordance the basis of NFRS. As such, consistency has personal capacity. Further, the directors have
to the prevailing laws and regulations of Nepal. been maintained. In preparing the consolidated general responsibility for taking such steps as
and separate financial statements, it is are reasonably open to them to safeguard the
Section 108 read together with Section 109
required to: assets of the Group and to prevent and detect
of the Companies Act of Nepal stipulates
the ultimate responsibilities of the Board of fraud and other irregularities.
 Select suitable accounting policies and then
Directors to prepare the financial statements apply them consistently; As such, the Bank and its subsidiary have
of the Company to its shareholders for
 Make judgments and estimates that are implemented policies, procedures and
presentation in AGM. Further, Section 4 (2)
reasonable and prudent; and mechanisms that are intended to mitigate the
of Directive No. 8 of NRB Unified Directive
 State whether they have been prepared in risks that may arise due to control lapses. The
2078 prescribes preparation and presentation
accordance with NFRS/ Nepal Accounting Bank has constituted Audit Committee that
of consolidated financial statements of the
Standards (NAS). comprises of four non-executive directors and
Bank and its subsidiary (ies) in addition to the
the Head- Internal Audit, who is the secretary
preparation of separate financial statements Financial statements should be prepared
of the Committee. The Audit Committee
in line with Directive No. 4. The consolidated on going concern basis unless it is not
functions independently and reports directly to
financial statement of the group has been appropriate. Since the directors are satisfied
the Board of Directors.
prepared in accordance with Nepal Financial that the Group and the Bank have the
Reporting Standards 2013 (NFRS) developed resources to continue the business for the Chairman
by Accounting Standards Board, Nepal foreseeable future and there are no indicators
On behalf of the Board
(ASBN). The financial statements comply that casts significant doubt on the Bank’s and
with the requirements of the Companies Act its subsidiary’s going concern assumption, the
2006 and amendments thereto and also financial statements are continually prepared
provides appropriate disclosures required on going concern basis.

Annual Report 2021/22 103


B. DISCLOSURE OF INFORMATION Under “Governance” section of the Director’s Disclosed under chapter Nabil Investment
UNDER SECTION 109(4) OF Report banking, NB Capital Limited and NBBL
COMPANIES ACT 2063 f. Main factors that affect business activities: Securities Limited.

1. Increased competition k. Main activities carried out by the Company


a. Business review of last year:
and its subsidiary(s) in last fiscal year and
2. Disbursement of fund in assets of good
This has been disclosed under section any significant changes in the business
quality
“Operating and Financial Review” of the report. activities of the Company and its subsidiary
3. Increase in cost of deposits
b. Any impact caused to the business of the during the same period:
4. Liquidity crisis
company due to national and international a) Nabil Bank – Commercial banking
g. Any remarks and observation stated in the
conditions: activities like credit disbursement, deposit
Independent Auditors’ Report and response of
Although the economy has been recovering mobilization, remittance, operation of
Board of Director towards the same:
from the impact of impending COVID 19, foreign trade,
No such remarks were observed
emergence of liquidity crisis in the economy electronic transactions and other financial
h. Amount recommended for distribution of services.
has been creating challenges in extending
dividend: b) Subsidiary Company – Investment
credit.
NPR 11.50 per share cash dividend and banking activities like portfolio
c. Current year’s (2022/23) achievement
bonus share of 18.50% (1.85 shares for every management service, corporate advisory
until the date of preparation of Report and
10 shares) service and mutual fund scheme
Board of Director’s view on 2021/22:
i. Details of shares forfeited (number of management along with merchant
In accordance to operating and financial banking activities like issue management,
shares, face value, amount received by the
Review of fiscal year 2021/22: underwriting and registrar to shares and
Company prior to forfeiture, amount received
d. Industrial and professional relation: by the Company after putting such forfeited depository participant’s service of CDS
The Bank has achieved success due to shares into subscription and amount refunded and Clearing Ltd.
the harmonious relationship among its on account of forfeited shares) : l. Any information given to the Company by
stakeholders. Employees work in unision its principal shareholder (who holds 1% or
The Bank has not forfeited any shares
to achieve common organizational goals. more shares of the Company) during the
j. Review of the progress made by the
Staff union and management have built a financial year :
Company and its subsidiary(s) in the
harmonious relationship over the years. No such information provided by the
reporting fiscal year 2021/22 and the
e. Changes in the Board of Directors and the position of the same at the end of fiscal principal shareholders
reason thereof: year:

104 Nabil Bank Limited


m. Shares held by the directors and officials of the Company and information received by the
Company on their involvement in trading of shares:
Shares held by the directors and officials of the company and their involvement in trading:

DESIGNATION SHAREHOLDER NO. DIRECTORS AND OFFICIALS SHARE UNIT


Vice chairman 1301040000123783 Mr. Nirvana Kumar Chaudhary 1,601,232

Director 1301040000008238 Mr. Ananta Poudyal 22,099

Director 1301060000221143 Mr. Pravin Tibrewala 891

C.E.O 1301120000057983 Mr. Gyanendra Prasad Dhungana 8,488

Manager 1301510000000648 Mr. Amrit Laal Shrestha 2,652

Manager 1301040000028208 Mr.Arjun Shrestha 68

Manager 1301020000110987 Mr.Ashesh Adhikari 1,211

Manager 1301040000043070 Mr. Ashish Singh 324

Manager 1301330000027038 Mrs. Binita Shrestha 2,859

Manager 1301510000000044 Mr.Binod Kumar Mahat 747

Manager 1301120000449034 Mr.Bishwa Prakash Poudel 330

Manager 1301040000040217 Mr. Jaya Krishna Shrestha 15,297

Manager 1301510000345310 Mr.Kailash Tripathi 10,058

Manager 1301040000021641 Mr.Kapil K.C 18

Manager 1301120000797267 Mr.Khagendra Bastakoti 759

Manager 1301510000000365 Mr.Kiran Kumar Pradhan 1,518

Manager 1301040000102995 Mr.Krishna Kumar Thapa 86

Manager 1301040000012559 Mr.Manoj Kumar Yadav 895

Manager 1301310000003301 Mr.Murari Prasad A ryal 238

Manager 1301040000034813 Mr.Nishat Pradhan 129

Manager 1301100000127391 Mr.Nitin Nandawan 1,078

Manager 1301090000044411 Mr.Padam Raj Upreti 2,602

Manager 1301240000273953 Mrs.Prabhawati Singh Bista 334

Manager 1301040000085094 Mr. Pratul Bhatta 3

Manager 1301370000308311 Mr.Rajan Manandhar 456

Manager 1301040000025737 Mr.Rajeshwor Laal Shrestha 1,423

Manager 1301310000036821 Mr.Raju Maharjan 2,430

Manager 1301220000018570 Mrs.Ratna Kala Shrestha 340

Manager 1301380000006800 Mr.Sagar Timilsena 434

Manager 1301040000003584 Mr.Santosh Prasad Pandey 10

Manager 1301040000029425 Mrs.Sareena Shrestha 281

Manager 1301510000037180 Mrs.Saroja Koirala Shrestha 3,292

Manager 1301120000015522 Mr.Sujit Pokharel 76

Manager 1301040000090687 Mrs.Sunita Malla Pradhan 3,698

Manager 1301040000012962 Mr.Yagya Prasad Sharma 1,822

Manager 1301040000004501 Mr.Yugesh Laal Bijukchhe 4,540

Annual Report 2021/22 105


n. Information provided on personal interest s. Dues payable to the Company by any w. Information on assets bought or sold as per
of Board of Directors and their relatives director, MD, CEO, principal shareholders Section 141:
(nearest kin) regarding contract or agreement (holding shares more than 1%) or their No assets bought or sold
done with the Company during the year relatives or firms or institutions in which they
x. Details of related party transaction as per
There is no record of such event/ transaction. have their involvement (interest)
Section 175 (transactions between associated
o. Buyback of share by the Company, reason No dues payable to the Company companies)
thereof for buyback, number of shares bought t. Name list of internal audit committee, Disclosed in point 5.7 of Note to the
back, face value of share and amount paid their allowance and benefits, details of Consolidated Financial Statement
during the buyback disciplinary action taken by committee and
y. Any other details to be disclosed in the
The Bank has not bought back any shares. any suggestions given:
Report from the Directors in accordance Act
p. Information on existence of Internal control Any information related to bank is disclosed or other prevailing laws:
system and if there is, its detail under” Audit Committee” point no 1
Disclosed in appropriate part of this Report
Other information of bank is further disclosed u. Remuneration, allowances and benefits and financial statements.
in Internal Control System. paid to Director, MD, CEO and officials
z. Any other pertinent details
r. Details related to the operating expense Disclosed under point 5.7 entitled “Related
Disclosed in appropriate part of this Report
during 2021/22: Party Disclosure” of the heading “Disclosure
and financial statements.
and Additional information”.
Employee expense is disclosed in schedule
number 4.36 of “Personnel Expenses” and v. Uncollected dividend by the Shareholders:
4.37 under “Other Operating Expense”. NPR 790,282,369 /-

C. DISCLOSURE RELATED TO 4. Legal Proceedings: The Bank does not have knowledge of any
SUBRULE (2) OF RULE 26 OF a) A lawsuit filed by or against the body such claims
SECURITIES REGISTRATION AND corporate during the quarterly period: No 5. Analysis of stock performance of the body
ISSUANCE REGULATION, 2073 mentionable suits have been filed by the Bank corporate:
except for regular lawsuits concerning loan a) Management’s view on the Stock Exchange
1. Report of the Board of Directors -
recovery and tax liabilities arising in normal - The Bank’s share price is guided by market
Disclosed in the “Director’s Report” portion of
course of banking business. operations of the capital market. The Bank
this report.
b) A lawsuit filed by or against the promoter does not comment on its share transactions.
2. Auditor’s report - Disclosed before this
or director of the body corporate involving b) High, Low and Closing price of the stocks
financial statements within this report.
statutory regulations or criminal offence: The of the company during each quarter of the
3. Audited financial reports - Disclosed in Bank does not have any knowledge of any preceding year of the preceding year along
appropriate part of this report and financial such claims with total volume of trading of shares and
statement. number of days traded.
c) A lawsuit, if any, filed against the promoter
and director for committing economic crimes:

MAXIMUM PRICE MINIMUM PRICE CLOSING PRICE TOTAL SHARES TOTAL DAYS
QUARTER (MONTH)
PER SHARE(NPR) PER SHARE (NPR) PER SHARE (NPR) TRADED TRADED
First Quarter (Mid-October 2021) 1,560 1,345 1,482 6,367,223 57
Second Quarter (Mid-January 2022) 1,740 1,086 1,110 7,159,890 59
Third Quarter (Mid-April 2022) 1,213 953 971 3,361,004 58
Fourth Quarter (Mid-July 2022) 990 726 824 28,878,002 64

106 Nabil Bank Limited


6. Problem and challenges 7. Corporate governance effectiveness of internal control processes.
Unhealthy competition fueled by increase in Description of management’s initiative towards Regular meetings of the Board Audit
the cost of deposit, instability in interest rate, good governance: Committee are conducted to ensure the
low government expenditure in development execution and review of suggestions presented
a. The Bank has Board of Directors along with
activities, trade deficit, fluctuating exchange in the audit report.
the different Board Committees namely Audit
rates and increasing inflation rates have been Committee, Risk Management Committee, c. Various internal policies, regulations and
recognized as the challenges apart from those Committee Relating to Staff Services and directives have been put in place to minimize
outside of Bank’s control. The Bank has Facilities and AML Committee. Management operational risk as well as to regulate the
adopted business diversification, customer Level Executive and Asset and Liability transactions.
focused quality service along with effective Management Committee (ALCO) are also
risk management strategy to cope up with d. Employees Code of Conduct has been
operational.
challenges. issued to ensure maintenance of corporate
b. Internal Audit is conducted by the internal governance. The compliance of the same is
auditors of the Bank to review on the also periodically reviewed.

D. DISCLOSURE UNDER SUBRULE (3) AND (4) OF RULE 20 OF THE DIRECTIVE RELATED TO CORPORATE
GOVERNANCE FOR LISTED COMPANIES, 2074
Name of the listed Company Nabil Bank Limited
Address, Email, and Website Nabil Centre, Beena Marg, Durbarmarg - Post Box No: 3729, Kathmandu, Email:
[email protected], https://www.nabilbank.com
Phone No. 4227181, 4221718
Report for the fiscal year 2078/79

1. Information related to Board of Director


a) Name of Chairman and Appointment Date: Mr. Upendra Prasad Poudyal (14th Jan, 2022)
b) Structure of share ownership:

NAME OF SHAREHOLDER NO.OF SHARES PERCENTAGE


1. NB (International) Ltd, Ireland 90,047,462 39.44%
2. IFIC Bank Ltd. Bangladesh 17,736,088 7.77%
3. Rastriya Beema Company Ltd. 17,415,179 7.63%
4. Nepal Stock Exchange Ltd. 601,131 0.26%
5. Muthoot Finance Limited, India 1,011,418 0.44%
6. Other shareholder 6,624,333 2.90%
Total 133,435,612 58.44%

TYPE OF SHAREHOLDER NO.OF SHARES PERCENTAGE


Promoter 133,435,612 58.44%
Ordinary Share 94,893,464 41.56%
Total 228,329,086 100%

Annual Report 2021/22 107


c) Information related to Board of Director (As of Mid-July 2022)

NO. OF APPOINTMENT DATE OF


NAME GROUP METHOD OF APPOINTMENT
SHARES DATE OATH
1. Mr. Upendra Prasad Poudyal Promoter Shareholder - 2022/01/14 2022/01/14 Elected from 37th AGM dated 2022/01/14
Nomination from BOD meeting no. 502
2. Mr. Nirvana Kumar Chaudhary Promoter Shareholder 1,601,232 2018/12/03 2018/12/03
(Re-appointed
3. Mr. Malay Mukherjee Promoter Shareholder - 2018/08/17 2018/08/17 Nomination from BOD meeting no. 493
4. Mrs. Asha Rana Adhikary Independent Director - 2020/06/17 2020/06/17 Nomination from BOD meeting no. 539
5. Mr. Ananta Poudyal Public Shareholder 22,099 2021/01/13 2021/01/13 Elected from 36th AGM dated 2021/01/13
6. Mr. Pravin Tibrewala Public Shareholder 891 2021/01/13 2021/01/13 Elected from 36th AGM dated 2021/01/13
7. Mr. Udaya Krishna Upadhyay Promoter Shareholder 48 2021/02/22 2021/02/22 Elected from 37th AGM dated 2022/01/14

d) Meeting of Board of Director

DATE OF BOD MEETING NO.OF NO. OF DIRECTORS HAVING


DATE OF BOARD MEETING DURING FY 2020/21
DURING FY 2021/22 ATTENDEES CONTRASTING OPINIONS
1. 2021/07/26 7 - 2020/08/02
2. 2021/07/28 7 - 2020/08/10
3. 2021/08/02 7 - 2020/08/30
4. 2021/08/15 7 - 2020/09/23
5. 2021/08/25 7 - 2020/10/06
6. 2021/10/01 7 - 2020/10/13
7. 2021/10/03 7 - 2020/11/19
8. 2021/10/08 7 - 2020/11/24
9. 2021/10/10 7 - 2020/12/10
10. 2021/11/02 7 - 2020/12/13
11. 2021/11/18 7 - 2020/12/21
12. 2021/11/26 7 - 2020/12/22
13. 2021/12/20 7 - 2021/01/10
14. 2021/12/23 7 - 2021/01/12
15. 2021/12/29 7 - 2021/01/22
16. 2022/01/12 7 - 2021/02/04
17. 2022/01/13 7 - 2021/02/12
18. 2022/01/13 7 - 2021/03/24
19. 2022/01/14 7 - 2021/04/12
20. 2022/01/25 7 - 2021/04/15
21. 2022/02/07 7 - 2021/04/25
22. 2022/03/11 7 - 2021/04/30
23. 2022/03/21 7 - 2021/05/21
24. 2022/04/12 7 - 2021/05/03
25. 2022/04/24 7 - 2021/06/24
26. 2022/05/05 7 - 2021/06/18
27. 2022/05/20 7 - 2021/07/04
28. 2022/06/08 7 - 2021/07/13
29. 2022/06/20 7 -
30. 2022/06/23 7 -
31. 2022/06/28 7 -
32. 2022/06/30 7 -
33. 2022/07/03 7 -
34. 2022/07/08 7 -
35. 2022/07/16 7 -

108 Nabil Bank Limited


 The details, if the meeting of the Board was adjourned without reaching the required quorum: No meetings were adjourned

 Additional information related to Board of Director:

a) Presence/absence of Chairman or person nominated by Chairman in Board Meetings (Reason Present as mentioned in Table 1(d)
of absence in the Board Meeting if any)
b) Maintenance of record of details related to Meetings of Board of Director like attendance of Maintenance of separate record
Directors, agenda of the meeting, and decision there of
c) Maximum gap in days between two consecutive Board Meetings 37 days
d) Date of Annual General Meeting that accounted for the approval of Meeting Fees of Board of 7th Jan 2020 (35th AGM)
Director
e) Sitting fee per meeting of Board of Director Chairman (NPR 20,000), Director (NPR 15,000)
f) Meeting fees paid to Directors during the FY NPR 3,820,000

2. Information related to conduct of Board of Director among other information:


a) Code of conduct in organization pertaining to Board of Director: Available
b) Detail of Board of Directors (if any) in case they belong to the same family: None
c) Detail of training attended by Board of Director:

AREA OF TRAINING DATE PARTICIPANTS LOCATION


1. KYC/AML for BODs and Senior Management 2021/09/05 7 Kathmandu
2. Credit Management and Credit Risk Management for BODs and 2021/09/21-2021/09/23 2 In-house
Senior Management
3. Director’s Refresher Course 2021/11/19-2021/11/20 2 Kathmandu
4. Virtual Event of AFI Forum 2022 2022/03/14-2022/03/16 2 Virtual
5. Director’s Refresher Course 2022/07/01-2022/07/02 2 Kathmandu

d) Following information were submitted/not submitted in written by Directors within 15 days of their appointment or nomination:

 Detail of any contract established or likely to be established with the organization by the Director or Submitted
his family member
 Detail of shares and debenture of the organization or its subsidiary owned by the Director or his Submitted
family member
 If the Director is shareholder of any other organization or holds the position of director in any other Submitted
organization, details thereof
 Detail of family member of Director who works as an employee or holds a position in the Submitted
management team in the organization

 Detail of listed organization of similar nature where the director has served as a salaried employee or Submitted as no such remuneration taken
held the position of Director, management team or CEO
 Details of legal action taken against board members by regulatory No legal actions were taken

Annual Report 2021/22 109


3. Detail of Risk Management and required implementing directions laid out  Mr. Pravin Tibrewala (Director)
Internal Control System of the by NRB.  Mr. Udaya Krishna Upadhyay (Director)
organization  Advising the Board of Director in
formulation of necessary policies based Risk Management Committee:
a) Presence/absence of Committee for
Risk Management, if committee for risk on the outcome of Stress Test Report on  Mrs. Asha Rana Adhikary (Coordinator)
management does not exist mention the periodic basis.
 Mr. Ananta Poudyal (Member)
reason:  Assessing the rationale and limit of
 Mr. Malay Mukherjee (Member)
Risk Management Committee exists authority assigned by Board of Director
and present a report based on the same  Mr. Ganesh Prasad Awasthi (Member)
b) Information related to Risk Management to the Board.  Mrs. Namita Dixit (Member Secretary)
Committee:
 Submitting a report to Board of Director
Audit Committee:
i) Structure of the Committee (Name and on asset structure, mobilization of
designation of member) : asset, income that can be derived from  Mr. Malay Mukherjee (Coordinator)

 Mrs. Asha Rana Adhikary : Coordinator these assets, possibility of appreciation  Mr. Pravin Tibrewala (Member)
or depreciation in the quality of these
 Mr. Ananta Poudyal : Member  Mr. Krishna Dutta Bhattarai (Member
assets. In addition, quarterly submission
Secretary)
 Mr. Malay Mukherjee : Member of report to Board of Director containing
 Mr. Ganesh Prasad Awasthi : Member assessment of activities of Asset Liability Committee relating to Staff Services and
(Chief Operating Officer) Committee (ALCO). Facilities:
 Mrs. Namita Dixit : Member  Studying the effect that can spill over
 Mr. Nirvana Kumar Chaudhary
Secretary(Chief Risk Officer) to financial status of the Bank due to
(Coordinator)
problem in any sector of the economy and
ii) Number of meetings held during  Mrs. Asha Rana Adhikary (Member)
advising policies to be adopted to mitigate
F.Y.2021/22: 14 such effects to Board of Director.  Mr. Gyanendra Prasad Dhungana
(Member)
iii) Roles and responsibilities of Risk  Proposing appropriate risk management
Management Committee: system and process to Board of  Mr. Manoj Kumar Gyanwali (Member)
Director and seeking approval for the  Mr. Niraj Sharma (Member Secretary)
 Advising the Board of Director about
implementation of the same.
the adequacy, appropriateness Committee related to Money Laundering
and development of ongoing Risk c) Presence/absence of Internal Control Prevention:
Identification and Management System of System: Present
the organization.  Mr. Udaya Krishna Upadhyay
d) Name of committee formed to implement (Coordinator)
 Advising the Board of Director about the
Internal Control System (Specify reason if  Mr. Ananta Poudyal (Member)
level of business risk, risk appetite of
no such committee is formed): The internal
the Bank, strategy for development of  Mrs. Namita Dixit (Member)
control structure of the Bank constitutes of
Risk Management System, policies and  Mrs. Prakash Babu Panta (Member)
Board of Director directly supervising the risk
procedures.
and control measures in every function in  Mrs. Sabitri Dahal (Member Secretary)
 Estimating, evaluating, managing the Bank through its committees like Audit
and supervising risk based on Risk Committee, Risk Management Committee, Committee related to Merger and
Management Reports obtained from Committee relating to staff services and Acquisition:
Management Team on ongoing basis and facilities and Committee relating to Money  Mr. Udaya Krishna Upadhyay
advising the Board of Director regarding Laundering Prevention. (Coordinator)
the same.
e) Details related to Internal Risk  Mr. Malay Mukherjee (Member)
 Advising the Board of Director upon the
matters like Capital Adequacy, Internal Management Committee  Mrs. Asha Rana Adhikary (Member)
Capital Adequacy Assessment Procedure i) Structure of Committee Board of Director :  Mr. Ananta Poudyal (Member)
(ICAAP), coherence between policies and  Mr. Anil Keshary Shah (Member)
business strategy and risk appetite of the  Mr. Upendra Prasad Poudyal (Chairman)
 Mr. Sujeet Kumar Shakya (Member)
organization.  Mr. Nirvana Kumar Chaudhary (Director)
 Mr. Manoj Kumar Gyanwali (Member
 Advising the Board of Director in  Mr. Malay Mukherjee (Director)
Secretary)
development of necessary policies and  Mrs. Asha Rana Adhikary (Director),
infrastructure for Risk Management Mr. Ananta Poudyal (Director)

110 Nabil Bank Limited


ii) Number of Meetings: Audit and thus provides independent
suggestions to Board of Director on
COMMITTEE NO. OF MEETING effectiveness of the Internal Control System.
Board of Director 35 Risk Management Committee is responsible
Risk Management Committee 14 for continuous monitoring of the Credit Risk,
Audit Committee 27 Operation Risk, AML Risk, Market Risk
Committee relating to Staff Services and Facilities 15 etc. and suggests and develops appropriate
controlling measures through assessment of
Committee relating to Money Laundering Prevention 6
risk appetite of the Bank.
Committee related to Merger and Acquisition 9
iv) Use of Financial Administration Guideline:
iii) Role of Committees: Bank and effectiveness of the system. Audit
Yes
Committee summarizes audit reports of
Board of Directors is responsible in evaluating
Internal Audit, External Audit and Supervisory
Internal Control System of the

4. Details about notice and information disseminated by the organization:


a. Information disseminated by the organization to the general public:

PARTICULARS MEDIUM DATE OF PUBLICATION


Notice of Annual General Meeting Public Notice in National Daily Newspaper 25-Nov-2021
08-Dec-2021
Notice of Special General Meeting Public Notice in National Daily Newspaper 06-May-2022
12-May-2022
Annual Report Public Notice in National Daily Newspaper and Website of Bank 10-Feb-2022
Quarterly Report Public Notice in National Daily Newspaper
First Quarter: 01-Nov-2021
Second Quarter: 21-Jan-2022
Third Quarter: 19-April-2022
Fourth Quarter: 05-Aug-2022
And Website of Bank
Effects on Debenture: Price sensitive information Public Notice in National Daily Newspaper
Others

b. Public information not disclosed by organization or the organization had to incur punitive measures charged by SEBON or any other
organization: None

c. Date of last AGM and Special General Meeting:

 SGM date: 21st June, 2022


 37th AGM date: 14th January, 2022

5. Organization Structure and details related to employees:


a. Employee By-Laws containing employee structure, recruitment, employee development, allowances, other facilities, attendance, leave and
code of conduct: Present
b. Organization Structure: Present in the report

Annual Report 2021/22 111


c. Name, Education Qualification and Experience of Management Team:

S.N. EMPLOYEE’S NAME DESIGNATION QUALIFICATION EXPERIENCE


1. Mr. Gyanendra Prasad Dhungana Chief Executive Office CA (The Institute of Chartered Accountants of India) 27 years and more
Master of Financial Analysis, (UNSW)Australia
BBA, Tribhuwan University
2. Mr. Sujit Kumar Shakya Senior Deputy Chief Executive Officer PGDBM, Institute of Productivity & Management, 25 years and more
Lucknow, India
3. Mr. Binaya Kumar Regmi Deputy Chief Executive Officer MBA, Tribhuwan University 35 years and more
4. Mr. Manoj Kumar Gyawali Deputy Chief Executive Officer CA (The Institute of Chartered Accountants of India) 23 years and more
5. Mr. Bhupendra Pandey Deputy Chief Executive Officer CA (The Institute of Chartered Accountants of India) 17 years and more
MBS, Tribhuwan University
6. Mr. Adarsha Bazgain Deputy General Manager MBA, Kathmandu University 18 years and more
7. Mr. Krishna Dutta Bhattarai Deputy General Manager MBA, Tribhuwan University 30 years and more
8. Mr. Ganesh Prasad Awasthi General Manager MBS., Tribhuwan University 17 years and more
9. Mrs. Namita Dixit General Manager MBA, Tribhuwan University 30 years and more
10. Mr. Gyanendra Pratap Shah General Manager MPA, Tribhuwan University 31 years and more

d. Other details related to employees:

Recruitment of employees in accordance with organization structure: Yes


Process used in recruiting new employee: According to Employee Service Bylaw approved by Nepal Rastra Bank.
Number of employees in management level: 153
Number of employees: 2130
Use of succession plan for employees: Yes
Total number of training and the number of employees trained during the year 340 training
Involving 28,471 employees
Employee training expense during the year: 34,835,254
Percentage of employee expense out of gross expense: 50.68%
Percentage of employee training out of gross employee expense: 1.28%

6. Details regarding Accounting and Audit of the organization


a. Details related to accounting:

Preparation of financial statement of previous fiscal year of the organization on the Yes (Financial Statements of FY 2078/79 prepared as per NFRS)
basis of NFRS:
Date of approval of financial statement of previous fiscal year by board of director: 2nd Nov, 2021
Published date of quarterly financial reports: Presented in point 4 (a)
Latest audit date: 2nd Nov, 2021
Date of approval of Financial Statement by AGM: 14th Jan 2022
Details related to internal audit of bank:
i) Audit performed by Internal Audit or by recruitment of external expertise: Audit
performed by Internal Audit department
ii) Details of external expertise employed for audit (if any): External Expertise was
assigned for IT Audit
iii) Periodicity of Internal Audit: Yearly

112 Nabil Bank Limited


b. Details related to Audit Committee

S.N. NAME DESIGNATION QUALIFICATION


1. Mr. Malay Mukherjee Coordinator Member(Member of BOD) M.Sc.
2. Mr. Pravin Tibrewala Member (Member of BOD) M.B.A.
3. Mr. Krishna Dutta Bhattarai Member Secretary (Head- Internal Audit Department) M.B.A.

Date of meeting and attendance details:

NO. OF MEMBERS PRESENT


MEETING NO. DATE MR. MALAY MUKHERJEE MR. PRAVIN TIBREWALA MR. KRISHNA DUTTA BHATTARAI
(COORDINATOR) (MEMBER) (MEMBER SECRETARY)
186 2021/08/05 Present Present Present
187 2021/08/15 Present Present Present
188 2021/08/26 Present Present Present
189 2021/09/27 Present Present Present
190 2021/09/29 Present Present Present
191 2021/10/22 Present Present Present
192 2021/10/31 Present Present Present
193 2021/11/02 Present Present Present
194 2021/11/09 Present Present Present
195 2021/12/01 Present Present Present
196 2021/12/10 Present Present Present
197 2022/01/13 Present Present Present
198 2022/01/20 Present Present Present
199 2022/02/06 Present Present Present
200 2022/03/02 Present Present Present
201 2022/03/10 Present Present Present
202 2022/03/23 Present Present Present
203 2022/04/05 Present Present Present
204 2022/04/18 Present Present Present
205 2022/04/19 Present Present Present
206 2022/05/09 Present Present Present
207 2022/05/18 Present Present Present
208 2022/05/20 Present Present Present
209 2022/05/23 Present Present Present
210 2022/06/30 Present Present Present
211 2022/07/05 Present Present Present
212 2022/07/15 Present Present Present
Total Attendance 27 27 27

Meeting fee per meeting: NPR 15,000 per Meeting (After deduction of 15% tax – NPR12,750 per Meeting)
Date of submission of Report by Audit Committee to BOD: 16th Aug 2022
Date of submission of minutes of meeting for fiscal year 2021/22 by Audit Committee to BOD:

Annual Report 2021/22 113


BOARD MEET- DATE OF PRESENTATION 7. Other Information
MINUTE
ING NO. OF MINUTE
Whether the bank has obtained any loan,
186 573 2021/08/15
advance or any other amount in any other
187 573 2021/08/15 form from any person, bank or financial None
188 575 2021/10/01 institution in which the directors or their
family members have financial interest:
189 580 2021/11/18
Whether the bank has obtained any loan,
190 580 2021/11/18
advance or any other amount in any other
191 580 2021/11/18
form from any person, bank or financial None
192 580 2021/11/18 institution in which the directors or their
193 579 2021/11/02 family members have financial interest:

194 582 2021/12/20 Whether the company has complied with the
stipulations set while granting the license by Yes
195 582 2021/12/20
the regulatory body:
196 589 2022/01/25
Whether the company has compiled with the
197 589 2022/01/25
directions given by the regulatory body during Yes
198 589 2022/01/25 any regulation, inspection or supervision:
199 590 2022/02/08 None except for the ones
Details of any ongoing litigations in the court
200 593 2022/04/12 that occur in the normal
of law against the company or it’s directors:
course of business
201 593 2022/04/12
202 593 2022/04/12
Name of Compliance Officer: Anjuli Shrestha
203 599 2022/06/23
Designation: Head of Compliance
204 600 2022/06/28
Date: 19th December, 2022
205 599 2022/06/23
Stamp of organization:
206 600 2022/06/28
Date of approval of the report by Board of Director:
207 600 2022/06/28
208 599 2022/06/23
209 599 2022/06/23
210 599 2022/06/23
211 605 2022/06/29
212 605 2022/06/29

114 Nabil Bank Limited


Annual Report 2021/22 115
116 Nabil Bank Limited
Annual Report 2021/22 117
118 Nabil Bank Limited
Annual Report 2021/22 119
120 Nabil Bank Limited
Consolidated Statement of Financial Position
At 32 Ashadh 2079 (Jul 16, 2022)
NPR
GROUP BANK
PARTICULARS NOTE
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Assets
Cash and Cash Equivalents 4.1 11,213,405,777 7,910,457,344 11,051,539,126 7,285,636,456
Due from Nepal Rastra Bank 4.2 13,037,239,444 8,024,171,855 13,037,239,444 8,024,171,855
Placement with Banks and FIs 4.3 8,870,895,241 9,865,211,974 8,870,895,241 9,865,211,974
Derivative Financial Instruments 4.4 1,373,614,068 13,615,332,578 1,373,614,068 13,615,332,578
Other Trading Assets 4.5 192,282,454 175,501,559 29,728,860 -
Loans and Advances to Banks and FIs 4.6 10,366,938,262 8,601,568,926 10,366,938,262 8,601,568,926
Loans and Advances to Customers 4.7 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466
Investment Securities 4.8 63,196,882,381 40,507,157,978 62,455,044,394 39,889,092,978
Current Tax Assets 4.9 615,986,765 305,188,718 606,480,035 307,012,815
Investment in Subsidiaries 4.10 - - 298,000,000 78,000,000
Investment in Associates 4.11 178,177,470 145,282,792 80,000,000 80,000,000
Investment Property 4.12 1,318,597,583 10,075,063 1,318,597,583 10,075,063
Property and Equipment 4.13 3,546,355,137 1,770,207,851 3,536,100,347 1,759,752,021
Goodwill and Intangible Assets 4.14 294,529,350 167,522,791 291,720,723 166,930,570
Deferred Tax Assets 4.15 - - - -
Other Assets 4.16 6,338,504,669 3,619,674,582 6,296,549,940 3,534,742,720
Total Assets 420,749,061,528 292,738,772,477 419,818,100,950 291,238,946,422
Liabilities
Due to Banks and FIs 4.17 3,353,609,544 4,502,705,221 3,353,609,544 4,502,705,221
Due to Nepal Rastra Bank 4.18 4,657,437,355 5,450,392,779 4,657,437,355 5,450,392,779
Derivative Financial Instruments 4.19 1,390,736,904 13,634,226,278 1,390,736,904 13,634,226,278
Deposits from Customers 4.20 326,186,071,792 223,408,097,336 326,222,310,372 223,474,470,361
Borrowings 4.21 10,720,730,171 - 10,720,730,171 -
Current Tax Liabilities 4.9 - - - -
Provisions 4.22 - - - -
Deferred Tax Liabilities 4.15 1,749,305,176 1,375,085,940 1,778,504,118 1,366,871,738
Other Liabilities 4.23 12,759,230,876 7,864,066,295 12,228,181,442 6,703,351,256
Debt Securities Issued 4.24 6,484,843,749 2,096,633,378 6,484,843,749 2,096,633,379
Subordinated Liabilities 4.25 - - - -

Annual Report 2021/22


Total Liabilities 367,301,965,567 258,331,207,227 366,836,353,655 257,228,651,012

121
122 Nabil Bank Limited
GROUP BANK
PARTICULARS NOTE
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Equity
Share Capital 4.26 22,832,908,632 13,844,451,156 22,832,908,632 13,844,451,156
Share Premium 175,555 158,758,428 175,555 158,758,428
Retained Earnings 3,139,621,635 4,352,686,499 2,899,544,565 4,162,928,789
Reserves 4.27 27,253,541,510 15,854,875,384 27,249,118,543 15,844,157,037
Total Equity Attributable to Equity Holders 53,226,247,332 34,210,771,467 52,981,747,295 34,010,295,410
Non Controlling Interest 220,848,629 196,793,783 - -
Total Equity 53,447,095,961 34,407,565,250 52,981,747,295 34,010,295,410
Total Liabilities and Equity 420,749,061,528 292,738,772,477 419,818,100,950 291,238,946,422
Contingent Liabilities and Commitments 4.28 251,172,394,535 128,655,349,875 251,172,394,535 128,655,349,875
Net Assets Value per share 233.11 188.17 232.04 245.66

As per our report of even date

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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: December 11, 2022
Place: Kathmandu, Nepal
Consolidated Statement of Profit or Loss
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR
GROUP BANK
PARTICULARS NOTE
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Interest Income 4.29 23,420,890,773 17,253,789,633 23,340,747,062 17,188,718,781
Interest Expense 4.30 14,414,019,258 9,112,175,169 14,421,875,671 9,112,834,007

Net Interest Income 9,006,871,515 8,141,614,464 8,918,871,391 8,075,884,774


Fee and Commission Income 4.31 2,211,751,216 1,885,894,309 2,043,273,963 1,739,881,898
Fee and Commission Expense 4.32 483,186,163 261,631,559 464,375,729 251,313,018
Net Fee and Commission Income 1,728,565,052 1,624,262,749 1,578,898,234 1,488,568,880
Net Interest, Fee and Commisson Income 10,735,436,567 9,765,877,214 10,497,769,625 9,564,453,654
Net Trading Income 4.33 498,573,957 737,179,551 564,990,054 643,760,640
Other Operating Income 4.34 407,832,480 1,440,656,604 410,410,129 1,451,435,679
Total Operating Income 11,641,843,004 11,943,713,369 11,473,169,808 11,659,649,973
Impairment Charge/ (Reversal) for Loans and Other Losses 4.35 1,118,823,076 828,000,382 1,118,823,076 827,521,912
Net Operating Income 10,523,019,928 11,115,712,987 10,354,346,732 10,832,128,061
Operating Expense
Personnel Expenses 4.36 2,719,330,394 3,455,624,513 2,658,925,044 3,411,785,246
Other Operating Expenses 4.37 1,072,650,784 1,105,436,920 1,023,800,285 1,052,745,013
Depreciation & Amortisation 4.38 400,319,089 145,060,957 390,030,033 141,574,759
Operating Profit 6,330,719,661 6,409,590,597 6,281,591,369 6,226,023,043
Non Operating Income 4.39 41,596,191 54,311,045 8,701,513 35,304,371
Non Operating Expense 4.40 2,730,446 5,865,674 2,730,446 5,865,674
Profit Before Income Tax 6,369,585,406 6,458,035,968 6,287,562,436 6,255,461,740
Income Tax Expense 4.41
Current Tax 2,001,747,298 2,310,479,792 1,940,231,711 2,258,553,428
Deferred Tax 55,744,138 (520,919,931) 91,306,537 (530,644,526)
Profit for the Year 4,312,093,970 4,668,476,107 4,256,024,188 4,527,552,838
Profit Attributable to:
Equity-holders of the Bank 4,287,129,502 4,599,972,141 4,256,024,188 4,527,552,838
Non-Controlling Interest 24,964,468 68,503,966 - -
Profit for the Year 4,312,093,970 4,668,476,107 4,256,024,188 4,527,552,838
Earnings per Share
Basic Earnings per Share 18.89 34.62 18.64 33.57
Diluted Earnings per Share 18.89 34.62 18.64 33.57

As per our report of even date

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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: December 11, 2022
Place: Kathmandu, Nepal

Annual Report 2021/22 123


Consolidated Statement of Comprehensive Income
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR
GROUP BANK
PARTICULARS NOTE
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Profit / (loss) for the year 4,312,093,970 4,668,476,107 4,256,024,188 4,527,552,838
Other Comprehensive Income (net of income tax)
a) Items that will not be reclassified to profit or loss:
Gains/(losses) from investment in equity instruments
measured at fair value (852,843,613) 3,006,543,181 (852,843,613) 3,006,543,181
Gains/(losses) on revaluation - - - -
Actuarial gains/(losses) on defined benefit plans 32,021,047 9,619,716 32,021,047 9,619,716
Less: Income tax expense relating to above items 246,246,770 (904,848,869) 246,246,770 (904,848,869)
Net other comprehensive income that will not be
reclassified to profit or loss (574,575,796) 2,111,314,028 (574,575,796) 2,111,314,028
b) Items that are or may be reclassified to profit or loss:
Gains/(losses) on cash flow hedge (31,744,821) - - -
Exchange gains/(losses) (arising from translating
financial assets of foreign operation) - - - -
Income tax relating to above items 9,523,446 - - -
Reclassify to profit or loss - - - -
Net other comprehensive income that are or may be
reclassified to profit or loss (22,221,375) - - -
c) Share of other comprehensive income of associate
accounted as per equity method - - - -
Other Comprehensive Income for the year
(net of income tax) (596,797,171) 2,111,314,028 (574,575,796) 2,111,314,028
Total Comprehensive Income for the year 3,715,296,800 6,779,790,135 3,681,448,392 6,638,866,865
Total Comprehensive Income attributable to:
Equity-Holders of the Bank 3,690,332,332 6,711,286,169 3,681,448,392 6,638,866,865
Non-Controlling Interest 24,964,468 68,503,966 - -
Total Comprehensive Income for the year 3,715,296,800 6,779,790,135 3,681,448,392 6,638,866,865

As per our report of even date

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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: December 11, 2022
Place: Kathmandu, Nepal

124 Nabil Bank Limited


Consolidated Statement of Changes in Equity
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR
GROUP

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK NON-


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

Balance at Shrawan 01, 2077 (16-Jul-2020) 10,461,789,526 158,758,428 7,353,126,407 615,900,000 781,141,314 3,413,558,431 - 3,781,216,604 1,039,472,777 27,604,963,486 147,489,817 27,752,453,303

Comprehensive Income for the FY 2077-78 (2020-21) :

Profit for the year 4,599,972,141 4,599,972,141 68,503,966 4,668,476,107

Other Comprehensive Income (net of tax) - - - - - 2,104,580,228 - - 6,733,801 2,111,314,029 - 2,111,314,029

Gains/(losses) from investment in equity


instruments measured at fair value - - - - - 2,104,580,228 - - - 2,104,580,228 2,104,580,228

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

Actuarial gains/(losses) on defined benefit plans - - - - - - - - 6,733,801 6,733,801 6,733,801

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

Exchange gains/(losses)(arising from translating

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

Total Comprehensive Income for the year - - - - - 2,104,580,228 - 4,599,972,141 6,733,801 6,711,286,170 68,503,966 6,779,790,136

Transfer to Reserves during the year - - 906,000,000 32,400,000 - - 47,911,831 (1,328,860,281) 387,905,323 45,356,874 45,356,874

Transfer from Reserves during the year - - - - 222,226,978 (1,083,165,278) - 861,054,488 (77,194,462) (77,078,274) (77,078,274)

Transactions with Owners, directly recognized in

Equity : - - - - - - - - - - - -

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

Share Based Payments - - - - 104,278,034 - - - - 104,278,034 104,278,034

Dividend to Equity-Holders - -

Bonus Shares Issued 3,382,661,630 - - - - - - (3,382,661,630) - - -

Cash Dividend Paid - - - - - - - (178,034,823) - (178,034,823) (19,200,000) (197,234,823)

Other - - - - - - - - - - -

Total Contributions by and Distributions 3,382,661,630 - 906,000,000 32,400,000 326,505,012 (1,083,165,278) 47,911,831 (4,028,502,245) 310,710,861 (105,478,189) (19,200,000) (124,678,189)

Balance at Ashadh 31, 2078 (15-Jul-2021) 13,844,451,156 158,758,428 8,259,126,407 648,300,000 1,107,646,326 4,434,973,381 47,911,831 4,352,686,499 1,356,917,439 34,210,771,467 196,793,783 34,407,565,250

Reserves added through acquisition 4,336,721,887 101,555 3,517,668,389 71,212,612 1,770,446,111 216,296,259 - (620,100,162) 6,566,604,150 15,858,950,802 - 15,858,950,802

Balance at Shrawan 01, 2078 (16-Jul-2021) 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

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

Annual Report 2021/22


125
Consolidated Statement of Changes in Equity
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR

GROUP

ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK NON-


TOTAL GROUP
PARTICULARS SHARE GENERAL EXCHANGE REGULATORY FAIR VALUE REVALUATION RETAINED OTHER CONTROLLING
EQUITY

126 Nabil Bank Limited


SHARE CAPITAL TOTAL INTEREST SHARE
PREMIUM RESERVE EQUALISATION RESERVE RESERVE RESERVE EARNING RESERVE

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

instruments measured at fair value - - - - - (596,990,529) - - - (596,990,529) (596,990,529)

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

As per our report of even date

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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Date: December 11, 2022 Accountants
Place: Kathmandu, Nepal
Consolidated Statement of Changes in Equity
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
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
Balance at Shrawan 01, 2077 (16-Jul-2020) 10,461,789,526 158,758,428 7,353,126,407 615,900,000 781,141,314 3,413,558,431 - 3,653,276,037 1,036,917,819 27,474,467,962

Comprehensive Income for the FY 2077-78 (2020-21) : -

Profit for the year 4,527,552,838 4,527,552,838

Other Comprehensive Income (net of tax) - - - - - 2,104,580,228 - - 6,733,801 2,111,314,029

Gains/(losses) from investment in equity instruments

measured at fair value 2,104,580,228 2,104,580,228

Gains/(losses) on revaluation -

Actuarial gains/(losses) on defined benefit plans 6,733,801 6,733,801

Gains/(losses) on cash flow hedge -

Exchange gains/(losses)(arising from translating

financial assets of foreign operation) -

Total Comprehensive Income for the year - - - - - 2,104,580,228 - 4,527,552,838 6,733,801 6,638,866,867

Transfer to Reserves during the year 906,000,000 32,400,000 - 47,911,831 (1,318,141,934) 379,741,934 47,911,831

Transfer from Reserves during the year 222,226,978 (1,083,165,278) 860,938,301 (77,194,462) (77,194,461)

Transactions with Owners, directly recognized in Equity : -

Right Share Issued -

Share Based Payments 104,278,034 104,278,034

Dividend to Equity-Holders -

Bonus Shares Issued 3,382,661,630 (3,382,661,630) -

Cash Dividend Paid (178,034,823) (178,034,823)

Other -

Total Contributions by and Distributions 3,382,661,630 - 906,000,000 32,400,000 326,505,012 (1,083,165,278) 47,911,831 (4,017,900,086) 302,547,472 (103,039,419)

Balance at Asar 31, 2078 (15-Jul-2021) 13,844,451,156 158,758,428 8,259,126,407 648,300,000 1,107,646,326 4,434,973,381 47,911,831 4,162,928,789 1,346,199,092 34,010,295,410

Reserves added through acquisition 4,336,721,887 101,555 3,513,195,948 71,212,612 1,770,446,111 229,884,010 - (639,314,207) 6,566,271,705 15,848,519,621

Restated 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

Annual Report 2021/22


127
Consolidated Statement of Changes in Equity
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR

BANK
ATTRIBUTABLE TO EQUITY-HOLDERS OF THE BANK
PARTICULARS

128 Nabil Bank Limited


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

measured at fair value (596,990,529) (596,990,529)

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) (523,976,862)

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) (536,101,396)

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

As per our report of even date


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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: December 11, 2022
Place: Kathmandu, Nepal
Consolidated Statement of Cash Flows
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
CASH FLOWS FROM OPERATING ACTIVITIES:
Interest Received 21,210,936,597 16,906,103,246 21,131,394,949 16,841,032,395
Fees and other income received 2,270,955,551 1,629,635,199 2,067,170,171 1,514,966,900
Dividend received - - - -
Receipts from other operating activities 848,888,208 2,124,042,953 769,293,682 2,021,644,940
Interest paid (14,080,375,571) (8,738,495,370) (14,083,905,172) (8,739,154,208)
Commission and fees paid (463,875,729) (76,726,480) (464,375,729) (77,226,480)
Cash payment to employees (2,285,462,107) (3,314,678,712) (2,231,583,004) (3,270,687,044)
Other expense paid (1,095,572,797) (1,121,968,734) (1,026,530,731) (1,058,610,687)
Operating cash flows before changes in operating
assets and liabilities 6,405,494,152 7,407,912,102 6,161,464,166 7,231,965,816
(Increase)/Decrease in operating assets
Due from Nepal Rastra Bank (5,013,067,589) 11,996,859,426 (5,013,067,589) 11,996,859,426
Placement with bank and financial institutions 994,316,733 365,367,489 994,316,733 365,367,489
Other trading assets (53,363,336) 52,539,773 (29,728,860) -
Loan and advances to bank and financial institutions (1,788,621,414) (2,819,540,926) (1,788,621,414) (2,819,540,926)
Loan and advances to customers (103,820,408,271) (50,620,217,385) (103,820,408,271) (50,620,217,385)
Other assets 9,529,576,377 (3,869,035,268) 9,484,356,056 (3,828,370,007)
Increase/ (Decrease) in operating liabilites
Due to bank and financial institutions (1,149,095,677) 2,273,844,039 (1,149,095,677) 2,273,844,039
Due to Nepal Rastra Bank (792,955,424) 5,397,107,151 (792,955,424) 5,397,107,151
Deposit from customers 102,797,934,456 32,612,151,912 102,747,840,011 32,668,000,389
Borrowings 10,720,730,171 - 10,720,730,171 -
Other Liabilities 10,734,333,164 8,109,827,075 11,444,059,384 7,178,321,370
Net cash flow from operating activities before tax paid 28,564,873,342 10,906,815,388 28,958,889,286 9,843,337,362
Income taxes paid (2,307,364,498) (2,358,538,706) (2,239,698,931) (2,304,770,245)
Net cash flow from operating activities (A) 26,257,508,844 8,548,276,682 26,719,190,355 7,538,567,117

Annual Report 2021/22 129


GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities (23,885,713,838) (5,112,985,231) (23,890,655,838) (4,732,147,231)
Receipts from sale of investment securities - -
Purchase of property and equipment (2,219,077,213) (149,478,652) (2,214,757,533) (147,670,926)
Receipt from the sale of property and equipment - 21,395,006 - 21,395,006
Purchase of intangible assets (252,257,809) (10,196,736) (252,257,809) (10,196,735)
Receipt from the sale of intangible assets - - - -
Purchase of investment properties (1,309,850,581) - (1,309,850,581) -
Receipt from the sale of investment properties - - - -
Interest received - - - -
Dividend received 187,424,267 57,190,060 206,624,267 76,950,060
Net cash used in investing activities (B) (27,479,475,174) (5,194,075,553) (27,460,897,494) (4,791,669,826)
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt from issue of debt securities 4,196,903,354 - 4,196,903,354 -
Repayment of debt securities - - - -
Receipt from issue of subordinated liabilities - - - -
Repayment of subordinated liabilities - - - -
Receipt from issue of shares - - - -
Dividends paid 526,763,602 (240,582,797) 511,247,813 (220,342,797)
Interest paid (200,541,358) (40,547,943) (200,541,358) (40,547,945)
Other receipt/payment 1,789,165 - - -
Net cash from financing activities (C) 4,524,914,763 (281,130,740) 4,507,609,809 (260,890,742)
Net increase (decrease) in cash and cash equivalents 3,302,948,433 3,073,070,389 3,765,902,670 2,486,006,549
Cash and cash equivalents at Shrawan 01 (beginning of the year) 7,910,457,344 4,837,386,955 7,285,636,456 4,799,629,907
Effect of exchange rate fluctuations on cash and - - -
cash equivalents held
Cash and cash equivalents at Ashadh end (end of the year) 11,213,405,777 7,910,457,344 11,051,539,126 7,285,636,456

As per our report of even date

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

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib CA Prakash Jung Thapa
Board Member Board Member Board Member Board Member Board Member Partner
P.J.P.N. & Co., Chartered
Accountants
Date: December 11, 2022
Place: Kathmandu, Nepal

130 Nabil Bank Limited


Statement of distributable profit or loss
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
(As per NRB Regulations)
NPR
BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Net profit / (loss) as per statement of profit or loss 4,256,024,188 4,527,552,838
Less: appropriations (-) / contributions (+):
a. General Reserve (852,000,000) (906,000,000)
b. Foreign Exchange Fluctuation Fund (32,600,000) (32,400,000)
c. Capital Redemption Reserve (Debenture Redemption Reserve) (333,333,333) (333,333,333)
d. Corporate Social Responsibility Fund (42,560,242) (45,275,528)
e. Employees’ Training Fund (5,085,171) -
f. Investment Adjustment Reserves - (133,073)
g. Others: (1,000,000) (1,000,000)
- Contingent Reserve (1,000,000) (1,000,000)
- Cash Dividend - -
- Bonus Share - -
- CSR Expenses Routed Through SoPL - -
Transfer from Fair Value Reserve - 1,083,165,278
Profit or (loss) before regulatory adjustment 2,989,445,442 4,292,576,182
Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) 492,389,707 (86,966,480)
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) - -
d. Short loan loss provision on Non - Banking Assets (-)/reversal (+) (8,778,420) 3,044,268
e. Deferred tax assets recognised (-)/ reversal (+) - 2,482,581
f. Goodwill recognised (-)/ impairment of Goodwill (+) - -
g. Bargain purchase gain recognised (-)/reversal (+) - -
h. Actuarial loss recognised (-)/reversal (+) 32,021,047 (141,183,073)
i. Other (+/-) - 395,726
Total Adjustment in Regulatory Reserve 515,632,334 (222,226,978)
Total Distributable profit 3,505,077,776 4,070,349,204
Opening balance in retained earnings 37,264,297
Add: Distributable profit of NBB (639,314,207)
Less: Direct transfer from RE (3,483,300)
Total Distributable profit 2,899,544,565
Add: Free Reserves of NBB 5,748,677,851
Total Distributable profit and free reserves 8,648,222,416

Annual Report 2021/22 131


NOTES TO THE
CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 32 Ashadh 2079 (at July 16, 2022)

1. REPORTING ENTITY 1.3. Ownerships held by the Bank in NBBL Securities is a public limited company
subsidiary and associate companies domiciled in Nepal. It was incorporated on 9th
1.1. Corporate information August, 2019 with paid up capital of NPR 20
Nabil Bank Limited (hereinafter referred to 1.4. Subsidiary company Million. The subsidiary is not listed. The group
Nabil Investment Banking Limited (hereinafter represents the Bank and its Subsidiaries.
as “the Bank”) is a public limited company
domiciled in Nepal. It was incorporated on referred to as “the Subsidiary”) is a public 1.5. Principal activities of the Bank
May 11, 1984 under then Companies Act limited company domiciled in Nepal. It was
Principal activities of the Bank comprise full-
1964 A.D. of Nepal. It is a class “A” licensed incorporated on February 07, 2010 under
fledged commercial banking services including
commercial bank regulated under the Banks the then Companies Act 2006 A.D. of Nepal.
financial intermediation, trade finance services,
and Financial Institutions Act 2017 A.D. It is a Merchant Banker licensed under the
remittance, treasury, cards and e-banking,
It commenced banking operations on 12th Securities Businessperson (Merchant Banker)
Regulations, 2008 A.D. It commenced its agency services and other ancillary banking
July 1984 and has its registered head office services to a diverse clientele encompassing
commercial operations on May 26, 2010 and
in ‘Nabil Center’, Tindhara, Durbarmarg, individuals, corporates, multinationals, state
operates from its registered office at Central
Kathmandu, Nepal. It is listed on the Nepal owned enterprises, public sector companies,
Plaza, Narayanchaur, Naxal, Kathmandu,
Stock Exchange. developmental aid agencies, embassies, NGOs
Nepal. The Subsidiary is not listed.
and INGOs.
1.2. Consolidated financial statements
Nepal Bangladesh Capital Ltd is a public
The accompanying consolidated financial limited company domiciled in Nepal. It was 1.6. Principal activities of the Subsidiary
statements comprise the Bank (Parent incorporated on 25th October 2017 under Principal activities of the subsidiaries are issue
Company) and its Subsidiaries (together the then Companies Act 2006 AD of Nepal management, portfolio management services,
referred to as the ‘Group’ and individually as It is a Merchant Banker licensed under the underwriting of securities, securities trustee,
‘Group entities’) and the Group’s interest in its Securities Businessperson (Merchant Banker) registrar to shares, fund management and
associate company. The Bank is the ultimate Regulations, 2008 A.D. It commenced depository services, depository participant
parent of the Group. its commercial operation on January 10, services in a central depository services, corporate
2019 and operates its registered office advisory services, allied support services, etc.
at Bijulibazaar, Kathmandu, Nepal. The
subsidiary is not listed.

OWNERSHIP AT
NAME OF COMPANY STATUS PRINCIPAL ACTIVITIES
16-JUL-2022
Nabil Investment Banking Ltd. Subsidiary 52.00% Merchant Banker under license from Securities Board of Nepal
Nepal Bangladesh Capital Ltd. Subsidiary 100% Merchant Banker under license from Securities Board of Nepal
NBBL Securities Ltd. Subsidiary 100% Established with the aim of carrying out the security brokerage activities
NADEP Laghubitta Bittiya Sanstha Ltd. Associate 25.00% Microfinance Institution under class “D” license from Central Bank

2. BASIS OF PREPARATION Nepal (ICAN). These financial statements statements for the reporting period are given
comply with the regulations of Nepal Rastra in Note 3.
2.1. Statement of compliance
Bank, requirements of the Companies Act and
The consolidated financial statements of the also provide appropriate disclosures required 2.1.1. Reporting pronouncements
Group have been prepared in accordance with under regulations of the Securities Board of Nepal The Accounting Standards Board of Nepal
Nepal Financial Reporting Standards (NFRS) (SEBON). has developed NFRS (updated 2018) by
developed by the Accounting Standards Board, converging with International Financial
Nepal (ASBN) and pronounced for application Significant accounting policies followed by Reporting Standards (IFRS) as issued by the
by the Institute of Chartered Accountants of the Group in the preparation of financial

132 Nabil Bank Limited


International Accounting Standards Board The Group has adopted this alternative providing the information on the financial
(IASB). The Institute of Chartered Accountants treatment in the case of loans and advances. position of the Group and the Bank as at the
of Nepal has pronounced implementation of As a result of this alternative treatment, the end of the reporting period;
NFRS. Accordingly, the accompanying financial Group has excluded the full amount of upfront  Statement of Profit or Loss [SoPL] and
statements for the year ended July 16, 2022 loan management fees or commission received Statement of Other Comprehensive Income
are prepared in accordance with NFRS. on loans and advances in the calculation of [SoCI] providing the information on the
effective interest rate for the loan. The upfront financial performance of the Group and the
2.1.2 Carve-outs in NFRS fees and commission are recognized as income Bank for the reporting period;
The ICAN, on recommendation from ASBN, in the same period the loan is approved.
 Statement of Changes in Equity [SoCE]
has issued following carve-outs in the The Group has assessed that this election is
reporting all changes in the shareholders’
implementation of NFRS at licensed banks and justifiable in line with the principal of cost and
funds during the reporting period of the
financial institutions and has also prescribed benefit of adopting certain provisions in NFRS.
Group and the Bank;
alternative treatments explained below:
2.2 Reporting period and approval of  Statement of Cash Flows [SoCF] providing
a) Para 5.4 of NFRS 9 – “Financial financial statements the information to the users, on the ability
Instruments” of the Group and the Bank to generate cash
The accompanying financial statements cover
Carve out from the requirement to recognize and cash equivalents and utilization of those
annual reporting period between July 16,
impairment loss for expected credit losses cash flows; and
2021 and July 16, 2022 (the reporting period)
on financial assets – loans and advances
and the status is reported as at the year-end  Notes to the financial statements
as specified in para 5.4 of NFRS 9 unless
date of July 16, 2022 (the report date). These comprising significant accounting policies,
the reporting entity is a bank or a financial
financial statements, inclusive of comparative other disclosures and other explanatory
institution registered as per Bank and
figures for the year ended July 16, 2022 have information relevant to the study of financial
Financial Institutions Act 2073. Such entities
been approved and authorized for issue by the statements.
shall measure impairment loss on loans and
board of directors as per its decision dated
advances at the higher of: 2.3 Functional and presentation
December 11, 2022 and have recommended
- amount derived as per norms prescribed by for its approval at the shareholders annual currency
Nepal Rastra Bank for loan loss provisioning; general meeting. Consolidated financial statements are presented
and in Nepalese Rupees (NPR), the functional
- amount determined as per para 5 of NFRS 9 2.2.1 Responsibility for financial currency of Group entities. Consolidated financial
statements statements are prepared in the formats prescribed
The Group has adopted this mandatory
treatment. As a result of this treatment, the The board of directors of the Bank is by Nepal Rastra Bank. Assets and liabilities
Group has recognized impairment loss on loans responsible for the preparation of financial are generally presented in the order of liquidity
and advances at the higher of the amount statements of the Group and the Bank which in the statement of financial position. Income
derived as per prudential norms specified reflects a true and fair view of the financial and expenses are classified ‘by nature’ in the
in NRB directive no. 2/78 and the amount position and performance of the Group and presentation of statement of profit or loss. Cash
derived from incurred loss model as specified that of the Bank. The board is of the view that flows from operations are derived using the direct
in para 5 of NFRS 9. the financial statements in its entirety have method in the presentation of statement of cash
been prepared in conformity with the prevailing flows.
The Group has recognized impairment loss on
financial reporting standards, regulations of the
other financial assets measured at amortized 2.4 Use of estimates, assumptions and
Nepal Rastra Bank and the requirements of the
cost in accordance with para 5 of NFRS 9. judgments
Companies Act.
b) Para 5.5 of NFRS 9 – “Financial Preparation of financial statements in
Instruments” The board of directors acknowledges their
conformity with NFRS required the Group’s
responsibility for financial statements as
Carve out from the requirement to incorporate management to make critical judgments,
set out in the ‘Statement of Director’s
all fees and points paid or received under estimates and assumptions such that could
Responsibility’ and in the certification on the
contractual terms of a financial instrument potentially have a material impact on the
statement of financial position.
in the calculation of ‘Effective Interest Rate’ reported financial figures. These affect the
for the financial instrument as specified in These financial statements include the application of accounting policies and the
para 5.4 of NFRS 9 unless it is immaterial following components: reported amounts of assets, liabilities, income
or impracticable to determine such fees and and expenses.
 Statement of Financial Position [SoFP]
points reliably.

Annual Report 2021/22 133


On an ongoing basis the management reviews can be presented under any of the following  defining individually significant assets;
these estimates and underlying assumptions accounting classifications based on specific  designing impairment assessment
to ensure that they continue to be relevant circumstances. questionnaire;
and reasonable. Any revisions to accounting
estimates are recognized prospectively in the  Financial assets or financial liabilities  estimating future recoverable cash flows on
financial statements. subsequently measured at Amortized Cost; financial asset; and
or  adjusting results of historical data analysis
The most significant areas of assumptions
 Financial assets or financial liabilities to incorporate the economic conditions and
and estimation applied in the application
designated as at Fair Value Through Profit or portfolio factors that existed at the reporting
of accounting policies that have the most
Loss (FVTPL); or date.
significant effect on the amounts recognized in
the financial statements are listed hereinafter  Financial assets or financial liabilities
Exercise of judgment is an integral part of the
and their description follows: subsequently measured at Fair Value
impairment assessment process and the Group
Through Profit or Loss (FVTPL); or
exercises its experienced judgment to adjust
 Fair value of financial instruments  Financial assets subsequently measured at observable data for a group of financial assets
 Classification of financial assets and Fair Value through Other Comprehensive to reflect current circumstances. The use of
financial liabilities Income (FVTOCI). reasonable estimates is an essential part of the
 Impairment losses on financial assets preparation of financial statements and does
Presentation and / or measurement of the
 Impairment losses on non-financial assets not undermine their reliability.
amounts recognized in financial statements
 Useful economic life of property and could be different for a particular financial The Group’s policy in accounting for
equipment asset or financial liability under any two impairment of financial assets is explained in
 Taxation and deferred tax different accounting classifications. The Note 3.4.8.
Group’s management exercise judgment in the
 Defined benefit obligations
application of appropriate accounting policy 2.4.4 Impairment losses on non-
 Provisions for liabilities, commitments and financial assets
to achieve correct accounting classifications
contingencies
for its financial assets and financial liabilities. At each reporting date, or more frequently
 Impairment of goodwill/intangibles Accounting policy relating to classification if events or changes in circumstances
of financial assets and financial liabilities necessitates, the Group assesses whether there
Information about significant areas of estimation
is presented in Note 3.4.3 and the related are indicators of impairment for a non-financial
and critical judgments in applying accounting
explanatory information is presented in Note asset. Where any indication of impairment
policies, other than those stated above, and which
5.3. exists, the Group makes an estimation of the
have significant effects on the amounts recognized
in the financial statements are described in asset’s recoverable amount.
2.4.3 Impairment losses on financial
respective notes.
assets The ‘recoverable amount’ of an asset is the
2.4.1 Fair value of financial instruments Impairment loss on financial assets – loans greater of its ‘Value in Use’ and it’s ‘Fair Value’
Fair value of financial assets and financial and advances are determined at the higher of: less costs to sell. In determining the ‘Value in
liabilities, for which there is no observable market use’, future cash flow estimates are discounted
 Loan loss provision amount derived as
prices, are determined using a variety of valuation to their present value using a pre-tax discount
prescribed in directive no. 02/78 of Nepal
techniques that include the use of statistical rate that reflects current market assessments
models. The Group measures fair value using a Rastra Bank; and
of the time value of money and the risks
fair value hierarchy that reflects the significance of  Impairment loss amount determined as per specific to the asset. In determining ‘Fair Value’
input used in making measurements. The use of Incurred Loss Model specified in para 5 of less cost to sell, an appropriate valuation
fair value hierarchy is described in Note 5.1.10. NFRS 9. model is used.
There arises a need for the Group’s management
2.4.2 Classification of financial assets
to apply judgment and estimation in assessing The whole impairment assessment exercise
and liabilities
and determining the amount of impairment loss requires the management to make estimates
Significant accounting policies of the Group on financial assets measured at amortized cost. of expected future cash flows, appropriate
provide scope for financial assets and financial Some of the areas that require management discount rates and also select appropriate
liabilities to be recognized under different judgment and estimation are listed herein below: valuation model.
accounting classifications. These are either
 selection of appropriate impairment
measured at fair value or at amortized cost and
assessment tool;

134 Nabil Bank Limited


2.4.5 Impairment of Goodwill tax assets that can be recognized, based upon where the transfer of economic benefit is not
Goodwill and intangible assets with infinite the likely timing and level of future taxable probable or cannot be reliably measured.
useful life such as license are not amortized, profits, together with future tax planning Contingent liabilities are not recognized in
but are assessed for impairment in each strategies. Additional disclosure on income tax the statement of financial position but are
reporting period or as and when there is is stated in Note 3.10. disclosed unless they are remote. Additional
indication of impairment. The assessment of disclosure on this is stated in Note 5.6.
2.4.8 Defined benefit obligations
infinite life is reviewed each reporting period to
The Group recognizes following two types 2.5 Changes in accounting policies
determine whether the infinite life continues to
of employee liabilities as defined benefit The Group has consistently applied the
be supportable.
obligations: accounting policies for all periods reported
The Goodwill recognized upon acquisition in the financial statements. There were no
a) Gratuity Liability changes in accounting policy in the reporting
of erstwhile United Finance Ltd. and Nepal
Bangladesh Bank Ltd. has been assessed for b) Accumulated Leave Liability period.
impairment and indication of impairment of
The cost of the defined benefit obligations is 2.6 New standards issued but not yet
such goodwill has not been observed at the
determined using actuarial valuation from an effective
end of the reporting period. These acquisitions
independent actuary. The actuarial valuation
have resulted in synergistic growth in the The Institute of Chartered Accountants of
involves making assumptions about discount
business of the Group with significant boost Nepal, (ICAN) has issued a new version of
rates, expected rates of return on assets,
observed in many key areas. As the assets NFRS on 2077 Ashadh,11 (NFRS 2018)
attrition rate, future salary increases, mortality
acquired from these acquisitions along with which covers NFRS 9 Financial instruments,
rates, future pension increases, etc.
the goodwill will continue to provide support NFRS 14 Regulatory deferral Accounts, and
in generation of future cash flows as well, NFRS 17 Insurance Contracts.
In determining the appropriate discount rate,
the probability of the goodwill being impaired management considers the interest rates of
2.7 New standards and interpretations
is assessed to be very low. The impairment Nepal government bonds with maturities
not adopted
indicators are being monitored regularly. corresponding to the expected duration of
All Accounting standards along with carve
the defined benefit obligation as may be
2.4.6 Useful economic life of property outs, issued by the Institute of Chartered
available. The mortality rate is based on
and equipment Accountants of Nepal (ICAN) has been
publicly available mortality tables. Future
Management judgment is exercised in the incorporated.
salary increases and pension increases are
estimation of residual values, useful lives based on expected future salary increase rates. 2.8 Discounting
and methods of depreciation of property and The Group reviews actuarial assumptions at
equipment. Management uses its experienced The Group determines amortized cost of a
each reporting date. Additional disclosure on
judgment in determining the useful lives of financial asset or a financial liability using the
employee benefits is stated in Note 3.15.
property and equipment. effective interest rate. The effective interest
rate is the rate that exactly discounts estimated
2.4.9 Provisions for liabilities,
2.4.7 Taxation and deferred tax commitments and contingencies
future cash payments or receipts throughout
The Group Entities are subject to income the expected life of a financial asset or a
The Group receives legal claims in the normal financial liability to the net carrying amount
tax under Income Tax Act 2002 A.D. and
course of business. Management has made of the financial asset or liability. If expected
amendments thereto, and due to the potential
judgments as to the likelihood of any claim life cannot be determined reliably, then the
differences that may exist between the Group
succeeding in making provisions. The time contractual life is used.
Entities and the Income Tax Authorities with
of concluding legal claims is uncertain, as is
regard to the interpretation of complex tax In case where the Group assesses that the
the amount of possible outflow of economic
provisions, management judgment is required transaction amount of a financial asset or
benefits. Timing and cost ultimately depends
to determine the total provision for current tax a financial liability does not represent its
on the due processes in respective legal
and deferred tax amounts. fair value, the related future cash flows are
jurisdictions.
discounted at prevailing interest rate to
Deferred tax assets are recognized in respect of determine the initial fair value.
All discernible risks are accounted for in
tax losses to the extent that it is probable that
determining the amount of all known liabilities.
future taxable profit will be available against
Contingent liabilities are possible obligations
2.9. Going concern
which such losses can be utilized. Judgment is The management has made an assessment
whose existence will be confirmed only by
required to determine the amount of deferred of its ability to continue as a going concern
uncertain future events or present obligations

Annual Report 2021/22 135


and is satisfied that it has the resources to aggregation is dealt with in compliance 2.14 Events after the reporting date
continue in business for the foreseeable future. with Nepal Accounting Standard – NAS 1
Events after the reporting date are those
Furthermore, the management is not aware “Presentation of Financial Statements” and
events, favorable and unfavorable, that occur
of any material uncertainties that may cast within the scope of formats implemented by
between the reporting date and the date when
significant doubt upon the Group’s ability Nepal Rastra Bank. Accordingly, each material
the financial statements are authorized for
to continue as a going concern. Therefore, class of similar items is presented separately
issue.
financial statements of the Group continue to and items that are not similar in nature or
be prepared on a going concern basis. function are also presented separately unless
All material and important events that occurred
these are immaterial.
after the reporting date have been considered
2.10 Offsetting
2.12 Rounding and appropriate disclosures have been made in
In the Statement of Financial Position, financial line with NAS 10 – “Events After the Reporting
The amounts in the financial statements are
assets and financial liabilities are netted off Period”. Explanatory information on events
rounded off to the nearest Rupees, except
only when there is a legally enforceable right after the reporting date is presented in Note
where otherwise indicated as permitted
to offset the recognized amounts and there 5.10.
by NAS 1 – “Presentation of Financial
is an intention to settle on a net basis, or
Statements”.
to realize the assets and settle the liability 3. SIGNIFICANT
simultaneously. Income and expenses are not 2.13 Comparative information ACCOUNTING POLICIES
netted off in the Statement of Profit or Loss
Accounting policies are consistently applied The Group has applied the accounting policies
unless required or permitted by an accounting
across all periods reported. The presentation set out below consistently to all periods
standard or interpretation and as specifically
and classification of financial figures relating presented in the accompanying financial
disclosed in the Group’s accounting policy.
to previous period are regrouped or reclassified statements unless specifically stated otherwise.

2.11 Materiality and aggregation where relevant to facilitate consistent


Index of significant accounting policies is
presentation and better comparability.
In the financial statements materiality and produced below for easy reference.

PRINCIPAL NOTE ACCOUNTING POLICY TOPIC ADDITIONAL NOTE


3 Significant Accounting Policies
3.1 Basis of measurement
3.2 Basis of consolidation
3.3 Cash and cash equivalent 4.1
3.4 Financial assets and financial liabilities 5.3
3.5 Trading assets 4.5
3.6 Derivative assets and derivative liabilities 4.4, 4.19
3.7 Property and equipment 4.13
3.8 Goodwill and intangible assets 4.14
3.9 Investment property 4.12
3.10 Income Tax 4.41
3.11 Deposits, debt securities issued and subordinated liabilities 4.17, 4.20, 4.24, 4.25
3.12 Provisions 4.22
3.13 Revenue recognition 4.29, 4.31, 4.33, 4.34, 4.39
3.14 Interest expense 4.30
3.15 Employee benefits 4.23.1 to 4.23.7
3.16 Leases 4.28.4
3.17 Foreign currency transactions, translation and balances
3.18 Financial guarantee and loan commitment 4.28.1, 4.28.2
3.19 Share capital and reserves 4.26, 4.27
3.20 Earnings per share
3.21 Segment reporting 5.4
3.22 Impairment of Non-Financial Assets
3.22 Statement of cash flows

136 Nabil Bank Limited


3.1 Basis of measurement equity holders of the Group. Non-controlling  the contractual arrangement with the other
Financial Statements of the Group have been interest in the profit or loss of the Group vote holders of the investee;
prepared on historical cost convention, except is disclosed separately in the consolidated  rights arising from other contractual
for the following: statement of profit or loss. arrangements; and

A change in the ownership interest of  the Group’s voting rights and potential
 Investments in equity instruments presented
a subsidiary without a loss of control is voting rights.
in SoFP line items Other Trading Assets and
Investment Securities measured at fair value accounted for as equity transactions. This in
The Group reassesses whether or not it
under NFRS 9 ‘Financial Instruments’. effect is the adjustment made in the carrying
controls an investee if facts and circumstances
amounts of the controlling and non-controlling
 Land and buildings held as non-banking indicate that there are changes to one or more
interests to reflect the changes in their relative
assets presented in SoFP line item Investment of the above.
interests in the Subsidiary.
Property measured at fair value under NAS 40
The financial statements of subsidiaries
‘Investment Property’. 3.2.3 Investment in subsidiary
are included in the consolidated financial
 Liabilities for employee defined benefit The Group has recognized Nabil Investment statements from the date that control
obligations and liabilities for long service leave Banking Ltd. as a Subsidiary company in commences until the date that control ceases.
presented in SoFP line item Other Liabilities which the Bank held 52% controlling interest Where Subsidiaries have been sold or acquired
measured at fair value under NAS 19 at the report date. Furthermore, the group during the year, assets, liabilities, income and
‘Employee Benefits’. has recognized Nepal Bangladesh Capital Ltd expenses of the said subsidiary are included in
and NBBL Securities Ltd., as a Subsidiary the consolidated financial statements from the
3.2 Basis of consolidation
company in which the Bank has held 100% date the Group gains control until the date the
The Group’s financial statements comprise controlling interest at the report date. There Group ceases to control the subsidiary.
consolidation of the financial statements of the has been no change in the Bank’s holding in
Bank and those of the following entities: the Subsidiary for the reporting period and the When necessary, adjustments are made to
previous comparative period. the financial statements of subsidiaries to
a. The Subsidiary, in accordance with NFRS
bring their accounting policies in line with the
10 – “Consolidated Financial Statements”; and Subsidiaries are investees that are controlled Group’s accounting policies. All intra-group
b. The proportionate share of the profit or loss by the Group. Control is achieved when the assets and liabilities, equity, income, expenses
and net assets of the Associate Company in Group is exposed, or has rights, to variable and cash flows relating to transactions
accordance with NAS – 28 “Investments in returns from its involvement with the investee between members of Group are eliminated in
Associates and Joint Ventures”. and has the ability to affect the returns of full on consolidation.
those investees through its power over the
3.2.1 Business combinations investee. Specifically, the Group controls an There are no significant restrictions on the
During the fiscal year 2078-79, the Bank has investee if, and only if, the Group has all of the ability of the subsidiaries to transfer funds
acquired erstwhile Nepal Bangladesh Bank following: to the Bank in the form of cash dividends or
Limited which was “A” class licensed financial repayment of loans and advances.
institution. Accounting for acquisition of Nepal  power over the investee;
Bangladesh Bank Limited has been done as  exposure or rights to variable returns from 3.2.4 Cost of acquisition
per NFRS 3 – Business Combination and its involvement with the investee; and The cost of acquisition of a Subsidiary is
Guidance Note on the same issued by ICAN measured as the fair value of the consideration,
 the ability to use its power over the investee
dated July 31, 2022. including contingent consideration, given
to affect its returns.
on the date of transfer of title. The acquired
Generally, there is a presumption that a identifiable assets, liabilities and contingent
3.2.2 Non- controlling interests (NCI) majority of voting rights results in control. To liabilities are measured at their fair values
Non-controlling interest represent the support this presumption, and when the Bank at the date of acquisition. Subsequent to the
proportionate share of profit or loss and net has less than a majority of the voting or similar initial measurement, the Bank continues to
assets of the subsidiaries not owned directly rights of an investee, the Bank considers all recognize the investments in Subsidiary at
or indirectly by the Group. The non-controlling relevant facts and circumstances in assessing cost.
interest is presented in the consolidated whether it has power over an investee,
statement of financial position within equity, 3.2.5 Loss of control
including:
separately from the equity attributable to the On loss of control over a Subsidiary, the Group
derecognizes its assets and liabilities and any

Annual Report 2021/22 137


related NCI and other components of equity.  material transactions between the entity and 3.4 Financial assets and financial
The resulting gain or loss is recognized in profit its investee; liabilities
or loss.  interchange of managerial personnel; or Financial assets refer to assets that arise from
 provision of essential technical information. contractual agreements that result in future
Any interest retained in the former subsidiary
cash inflows or from owning equity instruments
is measured at fair value when control is Investments in associate entities are accounted
of another entity. Since financial assets derive
lost. Subsequently, it is accounted for as an for using the equity method (equity-accounted
their value from a contractual claim. These are
Associate or in accordance with the Group’s investees) and are recognized initially at
non-physical in form and are usually regarded
Accounting Policy for financial instruments cost as required under the Nepal Accounting
as being more liquid than other tangible
depending on the level of influence retained. Standards – NAS 28 on “Investments in
assets. Common examples of financial assets
Associates and Joint venture”. Accordingly, the
3.2.6 Special purpose entity group carries its associate investments at cost
are cash, cash equivalents, bank balances,
There are no special purpose entities within placements, investments in debt and equity
plus post-acquisition changes in its share of
the Group’s holding structure. instruments, derivative assets and loans and
the associate’s net assets, after adjustments to
advances.
align the accounting policies with those of the
3.2.7 Transactions eliminated on Group, wherever required.
consolidation Financial liabilities are obligations that arise
from contractual agreements and that require
The effect of all intra-group transactions and The Group discontinues the use of the equity
settlement by way of delivering cash or another
outstanding balances, including realized and method from the date that it ceases to have
financial asset. Settlement could also require
unrealized income and expenses are eliminated significant influence over an associate and
exchanging other financial assets or financial
in the preparation of the Consolidated accounts for any residual investments in
liabilities under potentially unfavorable
Financial Statements. accordance with the Group’s accounting policy
conditions. Settlement may also be made by
for financial instruments. Any disposal gains or
3.2.8 Investment in associate issuing own equity instruments. Common
loss is recognized in profit or loss.
examples of financial liabilities are due to
The Group has recognized NADEP Laghubitta
At each reporting date, the Group determines banks, derivative liabilities, deposit accounts,
Bittiya Sanstha Ltd. as an Associate company
whether there is objective evidence that the money market borrowings and debt capital
in which the Bank held 25% equity interest
investment in the associate is impaired. If instruments.
at the report date. There has been no change
there is such evidence, the Group calculates
in the Bank’s holding in the Associate for the The contractual agreements, generally referred
the amount of impairment as the difference
reporting period and the previous comparative to as financial instruments, are characterized
between the recoverable amount of the
period. by the existence of counterparties and the
associate and its carrying value, which is
contract terms give rise to a financial asset to
Associates are those entities in which the charged to profit or loss asnet impairment
one counterparty and a corresponding financial
Group has significant influence, but not charge / (reversal) for loans and other assets.
liability or equity instrument to the other
control, over the variable returns through
3.3 Cash and cash equivalent counterparty.
the exercise of its power over the financial
and operating policies of the investee. If an Cash and cash equivalent comprise of the
The Group has applied NFRS 9 – “Financial
entity holds, directly or indirectly i.e. through total amount of cash-in-hand, balances with
Instruments” in the classification and
subsidiary, 20% or more of the voting power of other bank and financial institutions, money
measurement of its financial instruments. Para
the investee, it is presumed that the entity has at call and short notice, and highly liquid
5.2.2 of NFRS 9 prescribes the application
significant influence, unless it can be clearly financial assets with original maturities of
of impairment requirements in paragraphs
demonstrated that this is not the case. three months or less from the acquisition
58-65.
date that are subject to an insignificant risk
Significant influence is usually evidenced in of changes in their fair value, and are used 3.4.1 Date of recognition of financial
one or more of the following ways: by the group in the management of its short instruments
term commitments. Restricted deposits are not
 representation on the board of directors or All financial assets and financial liabilities
included in cash and cash equivalents. These
equivalent governing body of the investee; are initially recognized in the Statement of
are measured at amortized cost and presented
Financial Position when the entity becomes
 participation in policy-making processes, as a line item on the face of consolidated
a party to the contractual provisions of the
including participation in decisions about Statement of Financial Position (SoFP).
instrument. A regular way of purchase or sale
dividends or other distributions;
of financial assets is recognized on the trade

138 Nabil Bank Limited


date, which is the date on which the Group is to hold the financial asset to collect the case of a financial asset held as part of a
becomes a party to the contractual provisions contractual cash flows (rather than to sell the hedging relationship. FVTPL classification is
of the financial asset. Regular way trade instrument prior to its contractual maturity to determined based on the investment motive
means purchases or sales of financial assets realize its fair value changes). where the related asset is acquired principally
that required delivery of assets within the time for the purpose of selling or repurchasing in the
frame generally established by regulation or ii. Cash flow characteristics test near term or is held as part of a portfolio that
convention in the market place. The contractual terms of the financial asset is managed together for short-term profit or
give rise on specified dates to cash flows that position taking.
3.4.2 Initial recognition and are solely payments of principal and interest on
measurement of financial instruments the principal amount outstanding. 3.4.3.3 Investment in equity
All financial assets and financial liabilities are instruments measured at FVTOCI
initially measured at fair value plus or minus, Interest, for the purpose of contractual The Group has irrevocably elected at initial
in the case of a financial asset or financial cash flow test, is the consideration for the recognition to measure certain investments in
liability not at fair value through profit or loss, time value of money and for the credit equity instruments at FVTOCI. The election
transaction costs that are directly attributable risk associated with the principal amount is made in respect of equity investments that
to the acquisition or issue of the financial asset outstanding during a particular period of time. are not held for trading. Only dividend income
or financial liability. arising on such investment is recognized in
All debt instruments that meet the above
profit or loss.
3.4.3 Classification and subsequent two conditions are subsequently measured at
measurement of financial assets amortized cost applying the effective interest Subsequent fair value changes (unrealized
rate (net of any write down for impairment), gains or losses) on equity investments
Financial assets are classified based on how
except when the Group designates an irrevocably elected for FVTOCI presentation is
the asset is measured subsequent to its
instrument at fair value through profit or loss recognized in other comprehensive income.
initial recognition as per NFRS 9 – “Financial
(FVTPL). At the reporting date the Group does In the event such fair value changes is
Instrument”. Accordingly, at the time of initial
not have any financial assets designated as realized upon sale of the investment it is
recognition, financial assets are classified as:
FVTPL. not reclassified to profit or loss, rather it is
 financial assets subsequently measured at recognized directly within equity. The related
All gains or losses on financial assets that are
amortized cost, and taxes payable and the statutory employee
measured at amortized cost and are not part of
 financial assets subsequently measured at bonus payable in respect of the realized fair
a hedging relationship are recognized in profit
fair value. value changes upon sale of the investment is
or loss (through amortization process) when
recognized through expense charge to profit
the financial asset is derecognized or impaired
Classification and subsequent measurement of or loss.
or reclassified to fair value. The amortization
financial assets are arrived at on the basis of
is presented as interest income and any Details on financial investments measured at
both the following criteria:
impairment loss is presented as impairment FVTOCI are presented in Note 5.1.10.2.
 the entity’s business model for managing the charge / (reversal) in profit or loss.
financial assets, and 3.4.4 Classification and subsequent
3.4.3.2 Financial assets subsequently measurement of financial liabilities
 the contractual cash flow characteristics of measured at fair value
the financial asset. Financial liabilities are classified based on
Financial assets are measured at fair value how the liability is measured subsequent to its
Details on different classes of financial assets unless it is measured at amortized cost. Within initial recognition as per NFRS 9 – “Financial
and financial liabilities recognized on the the fair value classification there are two sub- Instrument”. Accordingly, at the time of initial
financial statements are presented in Note 5.3. classifications as under: recognition, financial liabilities are classified
3.4.3.1 Financial assets subsequently as:
i. Fair value through profit or loss (FVTPL)
measured at amortized cost
ii. Fair value through other comprehensive  subsequently measured at FVTPL, or
Financial assets are measured at amortized
income (FVTOCI)  subsequently measured at amortized cost.
cost when both of the following conditions are
met: For financial assets that are measured Details on different classes of financial assets
at FVTPL all related fair value changes and financial liabilities recognized on the
i. Business model test (realized and unrealized gains or losses) are financial statements are presented in Note 5.3.
The objective of the Group’s business model recognized in the profit or loss except in the

Annual Report 2021/22 139


3.4.4.1 Financial liabilities subsequently 3.4.5 Reclassification of financial assets  the contractual rights to the cash flows from
measured at FVTPL and liabilities the financial asset expire; or
A financial liability is classified as FVTPL Reclassification of financial assets and  the Group transfers the rights to receive
if either it is held for trading or upon initial liabilities are at the election of management the contractual cash flows in a transaction
recognition it is designated as FVTPL. A and determined on an instrument by in which substantially all risks and rewards
financial liability is held for trading if it is instrument basis. Reclassification of financial of ownership of the financial asset are
acquired principally for the purpose of selling assets is done if and only if the business model transferred; or
or repurchasing in the near term or held as a objective for the financial asset changes so its  the Group has assumed an obligation to pay
part of a portfolio that is managed together for previous model assessment would no longer the received cash flows in full without material
short-term profit or position taking. apply. delay to a third party under a ‘pass-through’
arrangement and:
All resulting fair value changes are recognized NFRS 9 does not permit reclassification in the
in profit or loss, except when a financial following cases: • either the Group has transferred
liability is designated as FVTPL and the substantially all the risks and rewards of
Group is required to present the effects of  for equity investments measured at FVTOCI; the asset; or
changes in the liability’s credit risk on other and • the Group has neither transferred nor
comprehensive income. At the reporting date  where the fair value option has been retained substantially all the risks and
the Group does not have any financial liability exercised in any circumstance for a financial rewards of the asset, but has transferred
designated as FVTPL. asset or a financial liability. control of the asset.

3.4.4.2 Financial liabilities subsequently Where the Group’s management assesses On de-recognition of a financial asset, the
measured at amortized cost a reclassification as appropriate, it is done difference between the carrying amount of
prospectively from the reclassification date the asset (or the carrying amount allocated to
All other financial liabilities that are not
which is defined as the first day of the first the portion of the asset derecognized) and the
classified as FVTPL are classified as
reporting period following the change in sum of the consideration received (including
subsequently measured at amortized cost.
business model. The Group does not restate any new asset obtained less any new liability
The general substance of the contractual
any previously recognized gains, losses or assumed) and any cumulative gain or loss that
arrangement results in the Group having an
interest. had been recognized in other comprehensive
obligation:
income is recognized in profit or loss. Any
 either to deliver cash or another financial Where financial asset is reclassified so that residual interest in transferred financial assets
asset to the holder; or it is ‘measured at fair value’, its fair value is that qualify for de-recognition that is created
determined at the reclassification date. Any or retained by the Group is recognized as a
 to exchange financial assets or financial
gain or loss arising from the difference between separate asset or liability.
liabilities with the holder under conditions that
the previous carrying amount and fair value is
are potentially unfavorable to the Group; or Where there is the Group’s continuing
recognized in profit or loss.
 to settle the obligation by delivering variable involvement that takes the form of
number of own equity instruments. Where financial asset is reclassified so that it guaranteeing the transferred asset, the extent
is ‘measured at amortized cost’, its fair value of the continuing involvement is measured
After initial recognition, such financial liabilities at the reclassification date becomes its new at the lower of the original carrying amount
are subsequently measured at amortized carrying amount. of the asset and the maximum amount of
cost using the effective interest rate method. consideration received by the Group and which
Amortized cost is calculated by taking into 3.4.6 De-recognition of financial assets it could be required to repay.
account any discount or premium on issuance and financial liabilities
and issuance costs that are an integral part of 3.4.6.2. De-recognition of financial
3.4.6.1 De-recognition of financial
the effective interest rate. liabilities
assets
The Group derecognizes a financial liability
The amortization is presented as interest The Group derecognizes a financial asset,
when its contractual obligations are discharged
expense in profit or loss. Gains or losses are or where applicable a part of financial asset
or cancelled or expired. Where an existing
also recognized in profit or loss when the or part of a group of similar financial assets,
financial liability is replaced by another from
liabilities are derecognized. when:
the same lender on substantially different

140 Nabil Bank Limited


terms or the terms of an existing liability are 3.4.8. Impairment of financial assets cash flows (excluding future credit losses
substantially modified, such an exchange or The Group, at the end of each reporting that have not been incurred) discounted at
modification is treated as de-recognition of the the financial asset’s original effective interest
period, assesses whether there is any objective
original liability and the recognition of a new rate (i.e. the effective interest rate computed
evidence that a financial asset or group of
liability. at initial recognition). The amount of the loss
financial assets is impaired. A financial asset
or a group of financial assets is impaired and is recognized in profit or loss. The carrying
The difference between the carrying value
impairment losses are incurred if, and only if, amount of the asset is reduced through the use
of the original financial liability and the
there is objective evidence of impairment as of an impairment allowance account.
consideration paid is recognized in profit or
loss as a disposal gain or loss. a result of one or more events that occurred Subsequent reversal of impairment loss, due to
after the initial recognition of the asset (a ‘loss factors such as an improvement in the debtor’s
3.4.7. Fair value of financial assets and event’) and that loss event (or events) has an credit rating, is recognized in profit or loss. The
financial liabilities impact on the estimated future cash flows of reversal shall not result in a carrying amount
the financial asset or group of financial assets of the financial asset that exceeds what the
‘Fair Value’ is the price that would be received
amortized cost would have been had the
on sell of an asset or paid for transfer of a that can be reliably estimated.
impairment not been recognized at the date
liability in an orderly transaction between
It may not be possible to identify a single, the impairment is reversed.
market participants at the measurement
discrete event that caused the impairment. Financial assets (and the related impairment
date. Fair value measurement is based on the
Rather the combined effect of several events allowance accounts) are written off either
presumption that the transaction to sell the
may have caused the impairment. Objective partially or in full, when there is no realistic
asset or transfer the liability takes place either:
evidence of impairment includes observable prospect of recovery. Where financial assets
 in the principal market for the asset or data such as following: are secured, this is after receipt of any
liability; or proceeds from the realization of security.
 significant financial difficulty of the issuer or
 in the absence of principal market, in the obligor; 3.4.8.2. Impairment of individually
most advantageous market for the asset or significant loans
 a breach of contract, such as a default or
liability.
delinquency in interest or principal payments; The Group provides due consideration to the
The principal or the most advantageous market  the lender, for economic or legal reasons following factors while determining impairment
must be accessible to the Group. relating to the borrower’s financial difficulty, loss on individually significant loans:
granting to the borrower a concession that the
The fair value of an asset or a liability is  aggregate exposure on the obligor;
lender would not otherwise consider;
measured using the assumptions that market  viability of the customer’s business model
 it becoming probable that the borrower
participants would use when pricing the asset and their capacity to service debt obligations;
will enter bankruptcy or other financial
or liability, assuming that market participants  amount and timing of expected repayments
reorganization;
act in their economic best interests. and recoveries;
 the disappearance of active market for the
A fair value measurement takes into account financial asset because of financial difficulties;  realizable value of collateral security and
a market participant’s ability to generate other credit mitigants;
 where observable data indicate that there is
economic benefits by using the asset in its  likely residual interest on liquidation or
a measurable decrease in the estimated future
highest and best use or by selling it to another bankruptcy;
cash flows from a group of financial assets
market participant that would use the asset in
since the initial recognition of those assets,
its highest and best use. 3.4.8.3. Collective impairment
although the decrease cannot yet be identified
assessment
Fair Value of non-financial assets such as land with the individual financial assets in the
Statistical methods are used to determine
and building are derived based on reports of group, including adverse changes in repayment
impairment losses on a collective basis for
independent professional property valuators. patterns or economic conditions that correlate
homogenous portfolio of loan assets. The
with defaults.
Explanatory information on fair value Group applies “net flow rate” methodology
measurement of assets and liabilities, along 3.4.8.1. Impairment charge / (reversal) to calculate historical loss experience on a
with the fair value hierarchy adopted by the and write off collective portfolio basis. Under this, loans are
Group in determining the fair value of financial The amount of the loss is measured as the grouped into ranges according to the number
assets, is provided in Note 5.1.10.1. difference between the asset’s carrying amount of days in arrears and statistical analysis is
and the present value of estimated future used to estimate the likelihood that loans in
each range will progress through the various

Annual Report 2021/22 141


stages of delinquency and ultimately turn into NPR
an uncollectible. The loss rates are regularly
2079 ASAR 32 2078 ASAR 31
reviewed against actual loss experience.
Gross Loans and Advances to Customer and BFIs
3.4.8.4. Impairment of rescheduled (principal amount, excluding staff loans, accrued 309,070,913,925 205,517,620,140
loans and advances interest and impairment)
Where possible, the Bank seeks to restructure Loss provision per NRB Directive – alternative 1 7,806,964,807 4,051,064,183
loans rather than to take possession of
Impairment Loss per NFRS – alternative 2 3,188,388,236 1,082,266,214
collateral. This may involve extending the
repayment arrangements and the agreement of Loss provision recognized in financial statements
new loan covenants. Once the terms have been (higher of the two alternative) 7,806,964,807 4,051,064,183
re-negotiated, any impairment is measured
3.4.9. Loan to employees at below- recognized in the Statement of Financial
using the original EIR as calculated before the
market interest rate Position. The consideration paid, including
modification of terms and the loan is no longer
accrued interest, is recorded in the Statement
considered past due. The Group has a policy of providing loans to
of Financial Position as an asset, reflecting
its employees at below-market interest rate.
Management continually reviews renegotiated the transaction’s economic substance to the
This asset is bifurcated and recognized as two
loans to ensure that all criteria are met and Group. The difference between the purchase
different elements viz. a prepaid employee
that future payments are likely to occur. The and resale prices is recorded as ‘Interest
benefits and a loan asset. Initially the fair value
loans continue to be subject to an individual or Income’ and is accrued over the life of the
of employee loan is determined by discounting
collective impairment assessment, calculated agreement using the effective interest rate.
the future loan repayments using a market
using the loan’s original effective interest rate. rate of interest. This fair value is recognized as
3.4.11. Offsetting of financial
loan asset and any excess of the principal loan
3.4.8.5. Loan loss provision determined instruments
amount over the fair value is recognized as
as prescribed in directive no. 02/78 of Financial assets and financial liabilities are
deferred employee expenditure.
Nepal Rastra Bank offset and the net amount presented in the
There is a Carve out from the requirement to Deferred employee expenditure is amortized Consolidated Statement of Financial Position
determine impairment loss on financial assets over the loan tenure with the amortization when the Group holds a legally enforceable
– loans and advances as specified in para 5 amount recognized as interest income and right to offset the recognized amounts and
of NFRS 39 unless the reporting entity is a a corresponding finance expense within the there is an intention to either settle on a net
bank or a financial institution registered as personnel expense. basis, or realize the assets and settle the
per Bank and Financial Institutions Act 2073. liabilities simultaneously.
Such entities shall measure impairment loss on 3.4.10. Repurchase and reverse
repurchase agreements Income and expenses are presented on a net
loans and advances at the higher of:
basis only when permitted under NFRSs, or for
Securities sold under agreement to repurchase
 amount derived as per directive no. 2/78 of gains and losses arising from a group of similar
at a specified future date are not derecognized
Nepal Rastra Bank for loan loss provisioning transaction such as in the Group’s trading
from the Statement of Financial Position as
generally applying a fixed percentage of activity.
the Group retains substantially all of the risks
impairment allowance based on overdue and rewards of ownership. There being an
3.4.12. Amortized cost measurement
period; and obligation to return the sales proceeds along
An ‘amortized cost’ of a financial asset or
 amount determined as per para 5 of NFRS 9 with the interest component on a subsequent
financial liability is the amount:
buy-back event, it is recognized as a liability.
The Group has adopted this mandatory This treatment reflects the transaction’s  at which the financial asset or liability is
treatment. As a result of this treatment, economic substance to the Group. The measured at initial recognition
the Group has recognized the amount of difference between the sale and repurchase
impairment loss on loans and advances that  (minus) principal repayments
prices is recorded as interest expense and is
has been derived as per prudential norms amortized over the life of the agreement using  plus / (minus) the cumulative amortization
specified in NRB directive no. 2/78 because the effective interest rate. using the EIR method of any difference
this amount is higher than the amount between the initial amount and the maturity
determined from incurred loss model as Conversely, securities purchased under amount
specified in para 5 of NFRS 9 as stated in the agreements to resell at future date are not  (minus)any reduction for impairment.
table presented hereunder.

142 Nabil Bank Limited


The Group calculates amortized cost of a interest rate, security price, commodity price, at cost of purchase together with any
financial asset or a financial liability using the exchange rate, price index, etc. incidental expenses thereon, less accumulated
effective interest rate. The effective interest depreciation and any accumulated impairment
rate is the rate that exactly discounts estimated Derivative financial instruments meet the losses. Cost also include the cost of replacing
future cash payments or receipts throughout definition of a financial instrument and are part of the equipment when the recognition
the expected life of a financial asset or a accounted for as derivative financial asset or criteria are met.
financial liability to the net carrying amount of derivative financial liability measured at FVTPL
the financial asset or liability. and corresponding fair value changes are 3.7.4. Revaluation model
recognized in profit or loss. The Group has not The Group does not apply revaluation model
The effective interest method is a method of designated derivative as a hedging instrument for any class of property and equipment,
calculating the amortized cost of a financial in an eligible hedging relationship under NFRS except for those acquired on business
instrument and of allocating the interest 9 – “Financial Instrument” and has not applied combination.
income or interest expense over the relevant hedge accounting.
period. The amortized cost is calculated by 3.7.5. De-recognition
taking into account any discount or premium 3.7. Property and equipment
The carrying amount of an item of property
on acquisition that is an integral part of the Property and equipment are tangible items and equipment is derecognized upon disposal
effective interest rate. that are held for and used in the provision or when no future economic benefits are
of services, for rental to others, or for expected from its use. Any gain or loss arising
3.5. Trading assets administrative purposes, and are expected to on de-recognition of an asset (calculated as the
Trading assets are those assets that are be used for more than one-year period. The difference between the net disposal proceeds
acquired principally for the purpose of selling Group applies NAS 16 – “Property, Plant and and the carrying amount of the asset) is
in the near term, or held as part of a portfolio Equipment” in the accounting of property and recognized in profit or loss in the year the asset
that is managed together for short-term profit. equipment. is derecognized.
It includes non-derivative financial assets such
as bonds, treasury bills, equities, etc. held Additional information on property and When replacement costs are recognized in the
primarily for trading purpose. If a trading asset equipment with a reconciliation of carrying carrying amount of an item of property and
is a debt instrument, it is subject to the same amounts, accumulated depreciation at the equipment, the remaining carrying amount of
accounting policy applied to financial assets beginning and at the end of the periods is the replaced part is derecognized.
measured at amortized cost. If a trading asset presented in Note 4.13.
is an equity instrument, it is subject to the
3.7.6. Capital work-in-progress
3.7.1. Basis of recognition
same accounting policy applied to financial These are expenses of a capital nature directly
Property and equipment are recognized if incurred in the construction of buildings and
assets measured at FVTPL.
it is probable that future economic benefits system development, awaiting capitalization.
3.6. Derivative assets and derivative associated with the asset will flow to the These are stated in the Statement of Financial
liabilities Group and the cost of the asset can be reliably Position at cost less any accumulated
Derivative assets and derivative liabilities measured. impairment losses. Capital work-in-progress
(derivatives) create rights and obligations that is transferred to the relevant asset when it is
3.7.2. Basis of measurement
have the effect of transferring one or more of available for use, i.e. when it is in the location
An item of property and equipment that and condition necessary for it to be capable
the financial risks inherent in an underlying
qualifies for recognition as an asset is initially of operating in the manner intended by
primary financial instrument between the
measured at cost. Cost includes expenditure management.
parties to the instrument. However, they
that is directly attributable to the acquisition of
generally do not result in a transfer of the
underlying primary financial instrument on
the asset and eligible subsequent expenditure. 3.7.7. Depreciation
Subsequent expenditure is capitalized only The Group provides depreciation from the
inception of the contract, nor does such a
when it is probable that the future economic date the assets are available for use up to the
transfer necessarily take place on maturity of
benefits of the expenditure will flow to the date of disposal. Assets are depreciated on
the contract.
Group. Ongoing repairs and maintenance are a straight line basis over its estimated useful
The value of a derivative changes with the expensed off as incurred. lives.
change in value of the underlying. Examples of
derivative are forward, futures, options or swap
3.7.3. Cost model
contracts. The underlying could be specified The Group applies the cost model to all
property and equipment and records these

Annual Report 2021/22 143


that has been arisen from the acquisition of not, the change in the useful life assessment
ESTIMATED
CLASS OF FIXED ASSETS erstwhile Nepal Bangladesh Bank Limited from indefinite to finite is made on a
USEFUL LIFE
(NBBL) and erstwhile United Finance Co. Ltd. prospective basis. At the reporting date the
Freehold Building Up to 50 years (UFL). Group does not have intangible assets with
Motor Vehicles Up to 10 years indefinite useful lives.
3.8.2. Intangible assets
Metal Furniture Up to 10 years Intangible assets are identifiable non-monetary 3.8.4. De-recognition of intangible
asset without physical substance, which are assets
Wooden Furniture & Fixture Up to 10 years
held for and used in the provision of services, Intangible assets are de-recognized on disposal
Information Technology Hardware Up to 15 years
for rental to others or for administrative or when future economic benefits are no more
Office Equipment Up to 10 years purposes. An intangible asset appearing in expected from their use. Gains or losses arising
the Group’s books is computer software. The from de-recognition of an intangible asset are
Leasehold Assets Up to 10 years
Group applies NAS 38 – “Intangible Assets” in measured as the difference between the net
accounting for its intangible assets. disposal proceed and the carrying amount of
Depreciation of an asset ceases at the earlier of
the asset. Such a gain or loss is recognized in
the date that the asset is classified as held for The Group recognizes an intangible asset profit or loss.
sale or the date that the asset is de-recognized. when:
Depreciation does not cease when the assets 3.8.5. Amortization and impairment of
become idle or is retired from active use unless  the cost of the asset can be measured intangible assets
the asset is fully depreciated. Depreciation reliably;
The useful lives of intangible assets are
methods, useful lives and residual values are
 there is control over the asset as a result assessed as either finite or infinite. Except for
reassessed at each reporting date and adjusted
of past events (for example, purchase or self- goodwill other intangible assets with finite
if appropriate.
creation); and lives are amortized on a straight line basis in
3.7.8. Changes in estimates profit or loss from the date when the asset is
 future economic benefits (inflows of cash or available for use, over the estimated useful
The asset’s residual values, useful life and
other assets) are expected from the asset. economic life.
methods of depreciation are reviewed, and
adjusted if appropriate, at each financial year Intangibles can be acquired by separate ESTIMATED
end. purchase; as part of a business combination; CLASS OF INTANGIBLE ASSETS
USEFUL LIFE
by a government grant; by exchange of assets;
3.7.9. Pledge or title restriction Software Up to 5 years
or by self-creation (internal generation).
At the reporting date none of the Property and These are measured at cost less accumulated
Intangible assets are assessed for impairment
Equipment items were pledge as securities amortization and any accumulated impairment
whenever there is an indication that the
for liabilities, and there were no any kind of losses.
intangible asset may be impaired. Expenditure
restrictions on the Group’s title over any of the
on an intangible item that was initially
assets. Additional information on intangible assets
recognized as an expense by the Group in
with a reconciliation of carrying amounts,
3.8. Goodwill and intangible assets previous annual financial statements or interim
accumulated amortization at the beginning and
financial statements are not recognized as part
3.8.1. Goodwill at the end of the periods is presented in Note
of the cost of an intangible asset at a later
Goodwill arising out of acquisition is initially 4.14.
date. Amortization methods, useful lives and
measured at cost. Goodwill is measured at the
3.8.3. Intangible assets with indefinite residual values are reviewed at each reporting
excess of the aggregate of the consideration
useful lives date and adjusted if appropriate.
transferred taken together with the amount
recognized for any non-controlling interests Intangible assets with indefinite useful lives are
3.8.6. Pledge or title restriction
and any previous interest held, over the net not amortized but are tested for impairment
At the reporting date none of the Intangible
identifiable assets acquired and liabilities annually either individually or at the Cash
Asset items were pledge as securities for
assumed. Generating Unit level as appropriate, when
liabilities, and there were no restrictions on the
circumstances indicate that the carrying value
Group’s title over any of the assets.
Subsequent to initial recognition, goodwill is is impaired. The useful life of an intangible
measured at cost less accumulated impairment asset with an indefinite life is reviewed
3.9. Investment property
losses. At the reporting date, the Group has annually to determine whether the ‘indefinite
Investment properties are land or building or
recognized the goodwill as intangible asset life assessment’ continues to remain valid. If

144 Nabil Bank Limited


both other than those classified as property The Group recognizes a current tax liability These are classified as financial liabilities
and equipment under NAS 16 – “Property, to the extent that the current tax expense measured at amortized cost.
Plant and Equipment”; and assets classified for current and prior periods remain unpaid.
as non-current assets held for sale under Conversely, a current tax asset is recognized 3.11.2. Debt securities issued
NFRS 5 – “Non - Current Assets Held for Sale if the tax paid in respect of current and prior The Group presents debenture issued by the
& Discontinued Operations”. The Group has periods exceed the amount payable for those Bank under this line item. These are classified
recognized as investment property such land periods. Explanatory information on current tax as financial liabilities measured at amortized
or land and building acquired by the Bank as calculation is stated in Note 4.41. cost.
non-banking assets in course of recovery of
loans and advances to borrowers that have 3.10.2. Deferred Tax 3.11.3. Subordinated liabilities
turned into chronic defaulters. Deferred tax is recognized at the reporting
These comprise of liabilities subordinated to
date in respect of temporary differences
the claims of depositors, debt securities issued
Non-banking assets (only land and building) between the carrying amounts of assets or
and other creditors at the event of winding up.
are initially recognized at cost. Subsequent liabilities for financial reporting purposes and
Items eligible for presentation under this line
to initial recognition the Group has chosen the corresponding amounts used for taxation
item include redeemable preference share,
to apply the cost model allowed by NAS purposes (i.e. tax base).
subordinated notes issued, borrowings etc.
40 – “Investment Property” and since it
Deferred tax assets are recognized for all These are subject to the same accounting
is not intended for owner-occupied use, a
deductible temporary differences, carried policies applied to financial liabilities measured
depreciation charge is not raised.
forward unused tax credits and carried forward at amortized cost. The Group does not have
3.10. Income Tax unused tax losses (if any), to the extent that it any subordinated liabilities at the reporting
Tax expense is the aggregate amount included is probable that future taxable profits will be date.
in the determination of profit or loss for the available against which they can be claimed.
3.12. Provisions
period in respect of current and deferred Deferred tax liabilities are the amounts of
The Group applies NAS 37 – “Provisions,
taxes. The Group applies NAS 12 – “Income income taxes payable in future periods in
Contingent Liabilities & Contingent Assets” in
Taxes” for the accounting of Income Tax. respect of taxable temporary differences.
the accounting of provisions.
Income tax expense is recognized in profit or
loss, except to the extent it relates to items The carrying amount of deferred tax assets is
reviewed at each reporting date and reduced to
3.12.1. Provision for restructuring
recognized directly in equity or directly in
the extent that it is no longer probable that the Provision for restructuring is recognized when
other comprehensive income. Tax expense
related tax benefit will be realized. the Group has approved a detailed and formal
relating to items recognized directly in other
restructuring plan, and the restructuring either
comprehensive income is recognized in the
Deferred tax assets and liabilities are measured has commenced or has been announced
Statement of Other Comprehensive Income.
at the tax rates that are expected to be publicly. The Group does not have any
3.10.1. Current Tax applied to temporary differences when they provision for restructuring at the reporting date.
will be reversed, using tax rates enacted, or
Current tax comprises the amount of income
substantively enacted, at the reporting date. 3.12.2. Provisions for onerous contracts
taxes payable (or recoverable) in respect of
Deferred tax income or expense relating A provision for onerous contracts is recognized
the taxable profit (or tax loss) for the reporting
to items recognized directly in equity is when the expected benefits to be derived by
period, and any amount adjusted to the tax
recognized in Other Comprehensive Income. the Group from a contract are lower than the
payable (or receivable) in respect of previous
Explanatory information on deferred tax unavoidable cost of meeting its obligations
years. It is measured using tax rates enacted,
calculation is stated in Note 4.15. under the contract. The provision is measured
or substantively enacted, at the reporting date.
as the present value of the lower of the
3.11. Deposits, debt securities issued
The Group has determined tax provision for expected cost of terminating the contract and
and subordinated liabilities
the reported period based on its accounting the expected net cost of continuing with the
profit for that period, and incorporating the 3.11.1. Deposits from customers and contract. The Group does not have any onerous
effects of adjustments for taxation purpose as BFIs contracts at the reporting date.
required under the Income Tax Act 2002 A.D. The Group presents deposit accounts held by
3.12.3. Other provisions
(2058 B.S.) and amendments thereto, using a customers and those held by BFIs in the Bank
corporate tax rate of 30%. A provision is recognized if, as a result of a
under respective line items in the face of the
past event, the Group has a present legal or
consolidated statement of financial position.

Annual Report 2021/22 145


constructive obligation that can be estimated management fees or commission received 3.13.3. Dividend income
reliably, and it is probable that an outflow of on loans and advances in the calculation of
Dividend income is recognized when the right
economic benefits will be required to settle the effective interest rate.
to receive income is established, which is the
obligation.
Nepal Rastra Bank has issued “Guideline on ex-dividend date for quoted equity instruments
The amount of provisions is determined by Recognition of Interest Income 2019” vide and unit investments. In line with the
discounting the expected future cash outflows circular no. Bai. Bi. Ni.Bi./Niti/Paripatra/ requirements of the Income d 2002, dividends
at a pre-tax rate that reflects current market KaKhaGa/01/76/77 for implementation in received from domestic companies are
assessments of the time value of money and the financial statements of current reporting recognized as final withholding income, while
the risks specific to the liability. The unwinding period. This document has provided guidance those received in respect of unit investments
of the discount is recognized as interest on application of judgments in assessing the in mutual funds and equity interest in
expense in profit or loss. collectability of interest on loans and advances foreign companies are recognized in gross
and determining whether there is a need to amounts and respective withholding taxes are
Before a provision is established, the Group recognize interest suspense or to cease interest recognized as tax receivables.
recognizes any impairment loss on the assets accrual. The bank has implemented this
associated with that contract. The expense 3.13.4. Net trading income
guideline and recognized interest suspense
relating to any provision is presented in profit and stopped interest accrual in qualifying Trading income comprises of gains or losses
or loss net of any reimbursement. accounts while determining the interest income relating to financial assets and liabilities held
for the current reporting period. Explanatory in the Group’s trading books. The Group
3.13. Revenue recognition
information on interest income is stated in presents all accrued interest, dividend,
Revenue is recognized to the extent that it Notes 4.29. unrealized fair value changes and disposal
is probable that the economic benefits will gains or losses in respect of trading assets
flow to the Group and the revenue can be 3.13.2. Fees and commission income and liabilities under this head. The Group also
measured reliably. The Group applies NFRS Fees and Commissions are recognized at presents foreign exchange trading gains or
15 – “Revenue from contract with customers” an amount that reflects the consideration losses arising on foreign exchange buy and sell
in the accounting of revenue, unless otherwise to which the bank expects to be entitled in transactions under trading income. Explanatory
stated. exchange for providing the services. The information on net trading income is stated in
performance obligations, as well as the Note 4.33.
3.13.1. Interest income
timing of their satisfaction are identified, and
Interest income is recognized in profit or determined, at the inception of the contract.
3.13.5. Other Operating Income
loss using the effective interest rate (EIR) Fees and Commissions from services are The Group presents income other than those
method for all financial assets measured at recognized evenly over the period, based on presented under interest income, fees and
amortized cost. Interest income is earned on time-elapsed where performance obligations commission income and trading income under
bank balances, investments in money market are satisfied over time. Where performance this heading. Income recognized here includes
and capital market instruments, loans and obligations are satisfied at a point in time, fees items such as foreign exchange revaluation
advances, etc. and commission are recognized typically on gain or loss; dividend on equity investments
completion of underlying service. that are measured at FVTOCI; dividend from
EIR is the rate that exactly discounts estimated subsidiary and associates; gain or loss on
future cash receipts or cash payments through The Group earns fee and commission income disposal of property and equipment; gain
the expected life of the financial asset to the on providing a diverse range of services and loss on disposal of investment property;
net carrying amount of the financial asset. to its customers. Such income earned on and gain or loss on disposal of investment
EIR method is a method of calculating the services including account maintenance,
securities except for equity investments
amortized cost of a financial asset and of remittance transactions, agency commissions,
measured at FVTOCI. Explanatory information
allocating the interest income over the relevant e-commerce transactions, letter of credits,
on other operating income is stated in Note
period. bank guarantees, loan management, etc.
4.34.
are recognized as the related services are
The Group has adopted the alternative performed. Fee and commission earned for 3.13.5.1. Foreign exchange revaluation
treatment as provided by the Carve Out in the provision of services over a period of time gain / (loss)
NFRS implementation as explained in Note are accrued over that period. Explanatory
Gains and losses arising from day-to-day
2.1.2 (b). Resultant of this the Group has information on net fees and commission
revaluations of foreign currency denominated
excluded the full amount of upfront loan income is stated in Note 4.31.

146 Nabil Bank Limited


assets and liabilities, exclusively due to the 3.15.1. Short term employee benefits employees and meets the funding requirement
effect of changes in foreign currency exchange These are employee benefits which fall due to the related DBP which is managed by Nabil
rates, are recognized in profit or loss in the wholly within twelve months after the end Bank Limited Retirement Fund (NRF).
period in which they arise. of the period in which the employees render In case of the Bank, an actuarial valuation is
the related service. This includes salary, carried out every year using the Projected Unit
3.13.5.2. Gain / (loss) on disposal of
allowances, medical insurance, statutory Credit Method to ascertain the full liability
property and equipment
bonus to employees, etc. These are measured under gratuity. The Projected Unit Credit
Gain or loss on the disposal of property and
on an undiscounted basis and are charged Method involves estimating the amount of
equipment is determined on the difference
to profit or loss in the period the services are future benefit that employees have earned in
between the asset’s carrying amount on
received. Prepaid benefits on loans advanced return for their service in the current and prior
disposal date and the disposal proceeds, net
to employees at below-market interest rate are periods and discounting the benefit amount to
of any disposal costs. This is recognized as an
amortized over the full period of the loan. determine its present value.
item of Other Operating Income in the year in
which significant risks and rewards incidental 3.15.2. Defined contribution plan (DCP) The increase in gratuity liabilities attributable
to the asset’s ownership is transferred to the DCPs are post-employment benefit plans to the services provided by employees during
buyer. under which an entity pays fixed contributions the reporting period i.e. current service cost
into a separate entity (a fund) and will have (gratuity expense), together with the related
3.14. Interest expense finance charge are recognized as personnel
no legal or constructive obligation to pay
Interest expense is recognized in profit or expense in profit or loss. Actuarial gains or
further contributions if the fund does not hold
loss using the effective interest rate (EIR) losses are recognized in other comprehensive
sufficient assets to pay all employee benefits
method for all financial liabilities measured at income.
relating to employee service in the current and
amortized cost. Interest expense is incurred on
prior periods. The Group has one DCP in the
inter-bank borrowings, deposit from customers, In case of the Subsidiary, an actuarial
form of ‘Provident Fund’.
debenture issued, refinance borrowing, etc. valuation is not carried out considering the
Explanatory information on interest expense is Contributions by the Group to a DCP in small organization structure and hence
stated in Note 4.30. proportion to the services rendered by its actuarial gains or losses are not recognized.
employees are recognized as incurred in profit Instead the gratuity liability is fully funded to
3.15. Employee benefits or loss in the same period. If there stands any the corresponding DBP to the extent of gratuity
Employee benefits are all forms of payable to the DCP at the reporting date, a entitlement earned by the employees in the
consideration given by an entity in exchange corresponding liability is also recognized in the same period. Employer’s contribution to DBP
for service rendered by employees. The Group’s consolidated SoFP. is recognized as gratuity expense in profit or
remuneration package includes both short loss.
term and long term benefits and comprise of 3.15.2.1. Description of DCP –
Provident Fund 3.15.3.2. Recognition of Defined benefit
items such as salary, allowances, paid leave,
The Group entities contribute a fixed amount
obligation (DBO)
accumulated leave, gratuity, provident fund
and annual statutory bonus. linked to the salary of individual employees on The net DBO comprises the present value of
a monthly basis to an approved provident fund the defined benefit obligation, less past service
The Group applies NAS 19 – “Employee managed by Nabil Bank Limited Retirement cost not yet recognized and less the fair value
Benefits” in accounting of all employee Fund (NRF). Related party information on the of plan assets out of which the obligations
benefits and recognizes the followings in its Group’s dealings with NRF is stated in Note are to be settled directly. The net DBO is
financial statements: 5.7.5. recognized as a liability and presented as other
liabilities in the consolidated SoFP.
 a liability when an employee has provided 3.15.3. Defined benefit plans (DBP)
service in exchange for employee benefits to be In case where there is a net defined benefit
A defined benefit plan is a post-employment
paid in the future; and asset, the value of any asset is restricted to the
benefit plan other than a defined contribution
 an expense when the Group consumes the sum of any past service cost not yet recognized
plan. The Group has one DBP in the form of
economic benefit arising from service provided and the present value of any economic benefits
‘Gratuity’.
by an employee in exchange for employee available in the form of refunds from the plan
benefits. 3.15.3.1. Description of DBP – Gratuity or reductions in the future contributions to the
The Group has recognized gratuity obligations plan.
Explanatory information on personnel expense
towards gratuity entitlement of individual
is stated in Note 4.36.

Annual Report 2021/22 147


In order to calculate the present value of 3.16. Leases and any lease payments made in advance of
economic benefits, consideration is given to the lease commencement date (net of any
NFRS 16 – Leases has introduced a single
any minimum funding requirement that apply incentives received).
lessee accounting model and requires a lessee
to the plan. An economic benefit is available to
to recognize assets and liabilities for all leases The Group depreciates the right-of-use
the Bank if it is realizable during the life of the
with a term of more than 12 months, unless assets on a straight-line basis from the lease
plan, or on settlement of the plan liabilities.
the underlying asset is of low value. A lessee commencement date to the earlier of the end
Explanatory information on DBOs, the related is required to recognize a right-of-use asset of the useful life of the right-of-use asset or the
expenses, liabilities and details on actuarial representing its right to use the underlying end of the lease term. The Group also assesses
valuations are stated in Note 4.23. leased asset and a lease liability representing the right-of-use asset for impairment when
its obligation to make lease payments. The such indicators exist.
3.15.4. Other long term employee Group has applied NFRS 16 effective from FY
benefits 2078-79. At the commencement date, the Group
measures the lease liability at the present
The Group’s net obligation in respect of long
For any new contracts entered into, the Group value of the lease payments unpaid at that
term employee benefits, other than gratuity, is
considers whether a contract is, or contains date, discounted using the interest rate implicit
the amount of future benefits that employees
a lease. A lease is defined as ‘a contract, or in the lease if that rate is readily available or
have earned in return for their service in the
part of a contract, that convey the right to use the Group’s incremental borrowing rate.
current and prior periods. That benefit is
an asset (the underlying asset) for a period of
discounted to determine its present value, and Subsequent to initial measurement, the
time in exchange for consideration’. To apply
the fair value of any related assets is deducted. liability will be reduced for payments made
this definition, the Group assesses whether the
The Group has recognized accumulated leave and increased for interest. It is re measured
contract meets three key evaluations which are
liability as other long term employee benefits. to reflect any reassessment or modification,
whether:
or if there are changes in in-substance fixed
The discount rate is the yield at the reporting
 The contract contains an identified asset, payments.
date on current government bonds that have
which is either explicitly identified in the
maturity dates approximating to the terms of When the lease liability is re measured, the
contract or implicitly specified by being
the employee benefit obligations, or if required corresponding adjustment is reflected in the
identified at the time the asset is made
adjusting those rate to incorporate mismatches right-of-use asset, or profit and loss if the right-
available to the Group;
in respective maturities of the bond and the of-use asset is already reduced to zero.
obligation.  The Group has the right to obtain
substantially all of the economic benefits from The Group has elected to account for short-
3.15.4.1. Description of accumulated use of the identified asset throughout the term leases and leases of low-value assets
staff leave period of use, considering its rights within the using the practical expedients. Instead of
The Group’s net obligation towards defined scope of the contract. recognizing a right-of-use asset and lease
accumulated staff leave is determined using liability, the payments in relation to these are
The Group has the right to direct the use of the
the Projected Unit Credit Method. Net change recognized as an expense in profit or loss on a
identified asset throughout the period of use.
in liability for accrued leave, including any straight-line basis over the lease term.
The Group assess whether it has the right to
actuarial gain and loss, are recognized in profit direct ‘how and for what purpose’ the asset is On the statement of financial position, right-
or loss as staff expense. used throughout the period of use. of-use assets have been included in property,
3.15.5. Terminal benefits plant and equipment and lease liabilities have
3.16.1. Measurement and recognition of
been included in trade and other payables.
Termination benefits are expensed at the earlier leases as Lessee
of when the Group can no longer withdraw the At lease commencement date, the Group Expenses recognized as per NFRS 16:
offer of those benefits and when the Group recognizes a right-of-use asset and a lease
PARTICULARS AMOUNT (NPR)
recognizes costs for a restructuring. If benefits liability on the balance sheet. The right-of-use
are not expected to be wholly settled within Depreciation 202,542,802
asset is measured at cost, which is made up
12 months of the reporting date, then they of the initial measurement of the lease liability, Interest Expenses 70,963,334
are discounted. The Group does not have any any initial direct costs incurred by the Group,
terminal benefit plan for the reporting period. an estimate of any costs to dismantle and
remove the asset at the end of the lease,

148 Nabil Bank Limited


Assets/Liabilities recognized as per NFRS 16 the commitment. The liability is subsequently
carried at the higher of this amortized amount
PARTICULARS AMOUNT (NPR) and the present value of any expected payment
Less than or equals 12 Months 192,766,717 to settle the liability when a payment under the
More than 12 Months 1,774,402,759 contract has become probable.

Total Committed Cash flow 1,967,169,476 3.19. Share capital and reserves
Interest Portion 74,253,378 Ordinary shares in the Bank are recognized
Lease Liability 1,892,916,098 at the amount paid per ordinary share.
Right of Use Assets (ROU) 1,713,666,161 Nabil Bank Ltd.’s shares are listed at Nepal
Addition during the year 309,085,309 Stock Exchange Ltd. The holders of ordinary
shares are entitled to one vote per share at
Gross Right of Use Assets (ROU) 2,022,751,470
general meetings of the bank and are entitled
Accumulated Depreciation – ROU (202,542,802) to receive the annual dividend payments.
Net Right of Use Assets (ROU) 1,820,208,668 The Bank does not have any other form of
Lease payment during the year 200,798,706 share capital (preference shares, convertible
instruments, share based payments, etc.) apart
As per NFRS 16 – Leases, if the lessee All non-monetary assets and liabilities held from the ordinary shares.
elects to apply this standard, the lessee shall at historical cost are translated at historical
There are a number of statutory and non-
recognize a lease liability at the date of initial exchange rates (rate prevailing at transaction
statutory reserve headings maintained by
application for leases previously classified date), and those held at fair value are
the Group in order to comply with regulatory
as an operating lease applying NAS 17 and translated at year-end exchange rate.
framework and other operational requirements.
Recognize a right-of-use asset at the date
The resulting exchange gains and losses The various reserve headings are explained
of initial application for leases previously
are recognized in profit or loss OR in other hereinafter:
classified as an operating lease applying NAS
comprehensive income. When gain or loss
17. Accordingly, the group has measured 3.19.1. General reserve
on a non-monetary item is recognized in
the lease liability at the present value of the
other comprehensive income, any exchange This is a statutory reserve under domestic
remaining lease payments, discounted using
component of that gain or loss is also banking regulations specified in NRB directive
the lessee’s incremental borrowing rate at the
recognized in other comprehensive income. no. 4/78. The Bank is required to appropriate
date of initial application.
Similarly, when gain or loss on a non-monetary a minimum 20% of current year’s net profit
item is recognized in profit or loss, any into this reserve heading each year until
In line with this requirement, previously
exchange component of that gain or loss is it becomes double of paid up capital and
recognized operating lease liability has been
also recognized in profit or loss. thereafter a minimum 10% of profit each year.
regrouped in to Lease liability and Right of Use
This reserve is not available for distribution
Assets.
3.18. Financial guarantee and loan to shareholders in any form and requires
3.17. Foreign currency transactions, commitment specific approval of the central bank for any
translation and balances Financial guarantees are contracts that require transfers from this heading. The Subsidiary
All foreign currency transactions are translated the Group to make specified payments to (Nabil Investment Banking Ltd. And Nepal
into the functional currency, which is Nepalese reimburse the holder for a loss that it incurs Bangladesh Capital Ltd) is also required to
Rupees, using the spot exchange rates because a specified debtor fails to make create a General reserve as per section 25(ka)
prevailing at respective transaction dates. All payment when it is due in accordance with the of Securities Business person (Merchant
foreign exchange gains and losses resulting terms of a debt instrument. Loan commitments Banker) Regulations, 2008 which mandates
from the settlement of such transactions are are firm commitments to provide credit under to allocate 10% of Net Profit as reserve for the
recognized in profit or loss. pre-specified terms and conditions. purpose of strengthening financial position and
managing institutional risk.
All monetary assets and liabilities denominated Liabilities arising from financial guarantees or
in foreign currencies are translated into the commitments to provide a loan at a below- 3.19.2. Exchange equalization reserve
functional currency by applying the year end market interest rate are initially measured This is a statutory reserve under domestic
exchange rates, and the resulting foreign at fair value and the initial fair value is banking regulations specified in NRB directive
exchange gains and losses are recognized in
amortized over the life of the guarantee or no. 4/78. The Bank is required to appropriate
profit or loss.

Annual Report 2021/22 149


25% of current year’s total foreign exchange capital grants and capital reserve arising 3.19.9. Capital adjustment /
revaluation gain (except gain from revaluation out of business combinations. Funds in this equalization fund
of Indian Currency) into this heading. There reserve are not available for distribution of This is a non-statutory reserve created by
is no such statutory requirement for the cash dividend but can be capitalized by issuing appropriating amounts from current year’s
Subsidiary. bonus shares upon obtaining approval from profit and by crediting amounts for calls in
the central bank. The Group has reclassified advance towards raising capital. The Bank
3.19.3. Fair value reserve the balance in debenture redemption reserve has acquired erstwhile Nepal Bangladesh
This is a non-statutory reserve and is a into capital reserve after full repayment of the Bank Limited in the reporting period which
requirement in the application of accounting corresponding debenture liability at maturity. was a “A” Class financial institution licensed
policy for financial assets. NFRS 9 requires
by NRB. The joint operation was started from
that cumulative net change in the fair value 3.19.6. Special reserve
27th Ashadh, 2079 (11th July, 2022). For
of financial assets measured at FVTOCI is This is a statutory reserve under domestic
the consideration of acquisition, the Bank
recognized under fair value reserve heading banking regulations specified in NRB
has issued 43,367,218.87 number of equity
until the fair valued asset is de-recognized. circular 12/072/73. The Bank is required to
shares at swap ratio of 100:43 (43 shares
Any realized fair value changes upon disposal appropriate an amount equivalent to 100%
of Nabil Bank Limited for every 100 shares
of the re-valued asset is reclassified from this of capitalized portion of interest income on
of Nepal Bangladesh Bank Ltd). Accounting
reserve heading to retained earnings. The borrowing accounts where credit facility was
for acquisition of Nepal Bangladesh Bank
Group has complied with this accounting rescheduled or restructured, resultant of the
Ltd has been done as per Nepal Financial
policy application. great earthquake that struck the nation in April
Reporting Standard (NFRS) 3 – Business
2015. Fund in this account can be reclassified
Combination and Merger Acquisition
3.19.4. Asset revaluation reserve to retained earnings upon full and final
Bylaws issued by Nepal Rastra Bank by
This is a non-statutory reserve and is a repayment of the credit facility. There is no
recognizing capital adjustment reserve of NPR
requirement in the application of accounting such statutory requirement for the Subsidiary.
5,748,677,850.21 for the difference of swap
policy for non-financial assets such as
adjusted paid up capital.
property, equipment, investment property 3.19.7. Capital redemption reserve
and intangible assets that are measured This is a non-statutory reserve created for 3.19.10. Corporate social responsibility
following a re-valuation model. Revaluation making payment towards redeemable non- fund
reserve often serves as a cushion against convertible preference shares. The Group does
This is a statutory reserve under domestic
unexpected losses but may not be fully not have any amount to present under capital
banking regulations specified in NRB
available to absorb unexpected losses due redemption reserve.
directive no. 6/78. The Bank is required to
to the subsequent deterioration in market
appropriate an amount equivalent to 1%
values and tax consequences of revaluation. 3.19.8. Dividend equalization fund
of net profit into this fund annually. The
The amount presented under the revaluation This is a non-statutory reserve created for
fund is created towards funding the Bank’s
reserve represents the amount of revaluation supporting the dividend payout policy by
corporate social responsibility expenditure
gain on assets acquired from erstwhile Nepal appropriating amounts from current year’s
during the subsequent year. The Subsidiary
Bangladesh Bank and United Finance Co. profit to fund for future period’s payout. Fund
(Nabil Investment Banking Ltd. And Nepal
Limited. The following is the position of the in this heading is available for distribution to
Bangladesh Capital Ltd) is also required to
reserve at the end of the reporting period: shareholders upon approval of the board
create a Corporate social responsibility fund
NPR as per section 30(ka) of Securities Business
person (Merchant Banker) Regulations, 2008
Reserve created on assets acquired from erstwhile UFL 47,911,831
which mandates to allocate and utilize at
Reserve created on assets acquired from erstwhile NBBL 512,224,194
least 1% of Net Profit for corporate social
Balance in reserve 560,136,025 responsibility. The following is the position of
the reserve at the end of the reporting period:
3.19.5. Capital reserve of directors and endorsement of the share
This is a non-statutory reserve and represents holders’ general meeting. The Group does not
the amount of all capital nature reserves such have any amount to present under dividend
as the amounts arising from share forfeiture, equalization fund.

150 Nabil Bank Limited


recognized against interest receivables; amount
NPR
of deferred tax assets, actuarial loss recognized
Opening balance in reserve 65,913,670 in other comprehensive income, amount of
Reserves acquired from erstwhile NBBL 20,433,126
Restated opening balance 86,346,796 goodwill recognized under NFRS, etc.
Balance in this reserve is not regarded as free
Add: Appropriation from current year profits 42,560,242
for distribution of dividend. The Bank has
Less: Expenses incurred from fund during the year (38,515,352)
complied with this regulatory requirement.
Closing balance in reserve 90,391,656 There is no such statutory requirement for the
Subsidiary. The details of movement in the
3.19.11. Investment adjustment reserve value defined benefit obligations be presented reserve has been laid out in Note 5.13.
under this reserve heading. Any change in
This is a statutory reserve under domestic
this reserve heading is recognized through 3.19.14. Other reserve fund
banking regulations specified in NRB directive
other comprehensive income and is not
no. 4/78 and 8/78. The Bank is required to Contingent reserve
an appropriation of net profit. The Group
maintain balance in this reserve heading which
has complied with this accounting policy This is a non-statutory reserve and is created
is calculated at fixed percentages of the cost
application. by the Bank towards meeting operational
of equity investments that are not held for
requirements. A fixed amount (NPR 1
trading. Changes in this reserve requirement 3.19.13. Regulatory reserve million) is annually appropriated from net
are reclassified to retained earnings. There
This is a statutory reserve under domestic profit into this fund. Balance in this fund is
is no such statutory requirement for the
banking regulations specified in NRB utilized towards providing financial support
Subsidiary.
directive no. 4/78. In the transition to NFRS to employees for treatment of severe cases
3.19.12. Actuarial gain / loss reserve from previous GAAP the Bank is required of life threatening ailments that are not
to reclassify all amounts that are resultant adequately covered under medical insurance
This is a non-statutory reserve and is a
of re-measurement adjustments and that policy. Amount paid to staff from this fund
requirement in the application of accounting
are recognized in retained earnings into this is re-classified to retained earnings and is
policy for employee benefits. NAS 19 requires
reserve heading. The amount reclassified recognized as personnel expense in profit or
that actuarial gain or loss resultant of
to this reserve includes re-measurement loss. No such reserve is maintained by the
thechange in actuarial assumptions used to
adjustments such as interest income Subsidiary.

Debenture Redemption Reserve Employees training and capacity development in the current year will have to be transferred
fund to this reserve fund through appropriation of
This is a statutory reserve under domestic
net profit and the amount shall accumulate
banking regulations specified in NRB directive This is a statutory reserve under domestic
in the fund available for related expenses in
no.16/78. The Bank is required to maintain banking regulations specified in NRB directive
the subsequent year. Balance in this fund is
a redemption reserve in respect of borrowing no. 6/78. The Bank is required to incur
directly reclassified to retained earnings in
raised through debenture issuance. The reserve expenses towards employee training and
the subsequent year to the extent of expenses
has been maintained on two out of the three development for an amount that is equivalent
made for employees training related activities.
debenture issued by the bank. The following to at least 3% of the preceding year’s total
The following is the position of the reserve at
is the position of the reserve at the end of the salary and allowances. Any shortfall amount in
the end of the reporting period:
reporting period: meeting this mandatory expense requirement

Title Nabil Debenture 2082 Nabil Debenture 2085 Nabil Debenture 2085
Face Value NPR 1,000 per unit NPR 1,000 per unit NPR 1,000 per unit
Maturity Period 7 Years 7 Years 10 Years
Interest Rate 10% p.a 10% p.a 10.25% p.a
No. of Units Issued 2 million units 2.207 million units 2 million units
Date of Issue 15-Mar-20 25-Jul-21 4-Jul-19
Issue Size NPR 2 billion NPR 2.207 billion NPR 2 billion
Redemption Reserve NPR 666,666,667 Nil NPR 666,666,667

Annual Report 2021/22 151


NPR ‘Cash and Cash Equivalents’, as referred to
Opening balance in reserve 7,113,005 in the statement of cash flows are the same
as presented on the face of the consolidated
Mandatory training expense budget for the year 63,262,333
statement of financial position. ‘Cash Flows’
Total amount available for training expenses 70,375,338 are inflows and outflows of cash and cash
Less: Eligible training expenses incurred in the year (47,744,931) equivalents.
Closing balance in reserve 22,630,408
The statement of cash flows reports cash
flows during the period classified by operating,
3.20. Earnings per share 3.21. Segment reporting
investing and financing activities as defined
The Group calculates basic and diluted The Group has disclosed information on
hereunder:
Earnings Per Share (EPS) data for its ordinary operating segments to enable users of financial
shares as required under Nepal Accounting statements to evaluate the nature and financial  Operating Activities: are the principal
Standards – NAS 33 on “Earnings Per Share”. effects of the Group’s business activities and revenue generating activities of the reporting
Basic EPS is calculated by dividing the entity and other activities that are not classified
that of the economic environment in which
profit or loss that is attributable to ordinary as investing or financing activities.
the Group operates. Detail information on the
shareholders of the Bank by the weighted Group’s operating segment is presented in  Investing Activities: are the acquisition and
average number of ordinary shares outstanding Note 5.4. disposal of long-term assets and other long
during the reported period. Diluted EPS is term investments.
calculated by adjusting the profit or loss that 3.22. Statement of cash flows
 Financing Activities: are activities that result
is attributable to the ordinary shareholders of The Group has reported its cash flow in changes in the size and composition of the
the Bank and the weighted average number of statement applying the ‘Direct Method’ in contributed equity and borrowed capital of the
ordinary shares outstanding adjusted for the accordance with NAS 07 – “Statement of Cash Group.
effects of all dilutive potential ordinary shares, Flows”. Application of the direct method in
such as share options granted to employees presenting cash flow statement discloses major
and hybrid capital instruments. classes of gross cash receipts and gross cash
payments, thereby provides information which
The Group does not hold any dilutive potential
may be useful in estimating future cash flows
ordinary shares, and as such the Basic EPS is
of an entity.
also the Diluted EPS of the Group.

152 Nabil Bank Limited


4. Schedules of explanatory information to financial statements
Following explanatory information relating to figures presented in the consolidated statement of financial position and in the consolidated statement
of profit or loss is presented in this section as per formats prescribed in directive 4/78 of the Nepal Rastra Bank.

Notes to Consolidated Financial Statements


For the period ended 32 Ashadh 2079 (Jul 16, 2022)

4.1 Cash and Cash Equivalent


NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Cash in Hand 5,161,464,551 3,234,149,797 5,161,464,551 3,234,149,797

Balances with BFIs (Domestic BFIs) 412,681,104 1,198,572,683 250,814,453 573,751,795

Money at Call and Short Notice 1,731,728,959 - 1,731,728,959 -

Other 3,907,531,163 3,477,734,864 3,907,531,163 3,477,734,864

Total 11,213,405,777 7,910,457,344 11,051,539,126 7,285,636,456

4.1.1 Reconciliation of domestic BFIs balance (Ledger and Statement Balance)


NPR
PARTICULARS LEDGER STATEMENT

Unreconciled balance as on 16.07.2022 250,814 219,631

We Debit (203) -

They Debit (48,368) -

We Credit 482 -

They Credit 16,906 -

Reconciled balance as on 16.07.2022 219,631 219,631

4.1.2 Ageing details of pending items is presented as under:


NPR
AGE LEDGER DEBIT STATEMENT DEBIT LEDGER CREDIT STATEMENT CREDIT

< 1 month 203 48,311 199 16,863

> 1 month < 3 months - 57 283 39

> 3 month < 6 months - - - 4

> 6 month < 12 months - - - -

> 12 month < 24 months - - - -

> 24 months - - - -

Total 203 48,368 482 16,906

Annual Report 2021/22 153


4.1.3 Balance with foreign Banks and Financial Institutions
4.1.3.1 Reconciliation of foreign BFIs balance (Ledger and Statement Balance)
NPR
PARTICULARS LEDGER STATEMENT
Unreconciled balance as on 16.07.2022 3,908,244 3,217,063
We Debit (163,016) -
They Debit (3,098,899) -
We Credit 605,561 -
They Credit 1,965,173 -
Reconciled balance as on 16.07.2022 3,217,063 3,217,063

4.1.3.2 Ageing details of pending items is presented as under:


NPR in 000
AGE LEDGER DEBIT STATEMENT DEBIT LEDGER CREDIT STATEMENT CREDIT
< 1 month 163,016 3,098,840 595,343 1,961,214
> 1 month < 3 months 1 7,985 3,960
> 3 month < 6 months - 58 2,233
> 6 month < 12 months
> 12 month < 24 months
> 24 months
Total 163,016 3,098,899 605,561 1,965,173

4.2 Due from Nepal Rastra Bank


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Statutory Balances with NRB 9,163,783,148 6,187,016,124 9,163,783,148 6,187,016,124
Securities purchased under Resale Agreement - - - -
Other Deposit and Receivable from NRB 3,873,456,296 1,837,155,731 3,873,456,296 1,837,155,731
Total 13,037,239,444 8,024,171,855 13,037,239,444 8,024,171,855

4.2.1 Balance with Nepal Rastra Bank (NRB)


4.2.1.1 Reconciliation of NRB Balance (Ledger and Statement Balance)
NPR in 000
PARTICULARS LEDGER STATEMENT
Unreconciled balance as on 16.07.2022 12,713,778 12,868,183
We Debit (286,328) -
They Debit (764) -
We Credit 129,239 -
They Credit 312,258 -
Reconciled balance as on 16.07.2022 12,868,183 12,868,183

154 Nabil Bank Limited


4.2.1.2 Ageing details of pending items is presented as under:
NPR in 000
AGE LEDGER DEBIT STATEMENT DEBIT LEDGER CREDIT STATEMENT CREDIT
< 1 month 286,328 764 19,565 310,244
> 1 month < 3 months - - - 2,014
> 3 month < 6 months - - 9,396 -
> 6 month < 12 months - - 43,364 -
> 12 month < 24 months - - 24,113 -
> 24 months - - 32,802 -
Total 286,328 764 129,239 312,258

4.3 Placements with Banks and Financial Instutions


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Placement with Domestic BFIs - 1,789,821,049 - 1,789,821,049
Placement with Foreign BFIs 8,870,895,241 8,075,390,925 8,870,895,241 8,075,390,925
Less: Allowances for Impairment - - - -
Total 8,870,895,241 9,865,211,974 8,870,895,241 9,865,211,974

4.4 Derivative Financial Instruments


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Held for Trading - - - -
Interest Rate Swap - - - -
Currency Swap - - - -
Forward Exchange Contracts - - - -
Others - - - -
Held for Risk Management 1,373,614,068 13,615,332,578 1,373,614,068 13,615,332,578
Interest Rate Swap - - - -
Currency Swap - - - -
Forward Exchange Contracts 1,373,614,068 13,615,332,578 1,373,614,068 13,615,332,578
Others - - - -
Total 1,373,614,068 13,615,332,578 1,373,614,068 13,615,332,578

4.5 Other Trading Assets


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Treasury Bills - - - -
Government Bonds - - - -
NRB Bonds - - - -
Domestic Corporate Bonds - - - -
Equities 148,295,803 139,485,135 29,728,860 -
Other(Mutual Fund) 43,986,651 36,016,424 - -
Total 192,282,454 175,501,559 29,728,860 -
Pledged - - - -
Not pledged 192,282,454 175,501,559 29,728,860 -

Annual Report 2021/22 155


4.6 Loans and Advances to BFIs
NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Loans to Micro-Finance Institutions 10,503,483,548 8,714,862,134 10,503,483,548 8,714,862,134

Other - - - -

Less: Allowances for Impairment (136,545,286) (113,293,208) (136,545,286) (113,293,208)

Total 10,366,938,262 8,601,568,926 10,366,938,262 8,601,568,926

4.6.1 Allowances for Impairment


NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Balance at Shrawan 01 (start of the year) 113,293,208 58,953,212 113,293,208 58,953,212

Impairment Losss for the year:

Charge for the year 23,252,078 54,339,996 23,252,078 54,339,996

Recoveries/Reversal - - - -

Amount Written Off - - - -

Balance at Asar end (end of the year) 136,545,286 113,293,208 136,545,286 113,293,208

4.7 Loans and Advances to Customers


NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Loans and Advances measured at Amortized Cost 307,876,072,448 201,959,189,441 307,876,072,448 201,959,189,441

Less: Impairment Allowances (7,670,419,521) (3,937,770,975) (7,670,419,521) (3,937,770,975)

Collective Impairment (4,352,832,507) (2,927,466,915) (4,352,832,507) (2,927,466,915)

Individual Impairment (3,317,587,014) (1,010,304,060) (3,317,587,014) (1,010,304,060)

Net Amount 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466

Loans and Advances measured at FVTPL - - - -

Total 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466

Note: Collective Impairment reflect loan loss provision against loans graded pass and allocated 1.3% loss provision and Individual impairment reflect loan
loss provision against all other loans, ccategorized as per NRB Directive 2/078.

156 Nabil Bank Limited


4.7.1 Analysis of Loans and Advances - By Product
NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Products:

Term Loans 58,459,810,327 36,787,590,227 58,459,810,327 36,787,590,227

Overdraft 44,274,953,620 23,387,045,102 44,274,953,620 23,387,045,102

Trust Receipt/Import Loans 10,938,687,407 18,991,375,297 10,938,687,407 18,991,375,297

Demand and other Working Capital Loans 82,000,729,708 54,428,117,193 82,000,729,708 54,428,117,193

Personal Residential Loans 16,529,191,257 15,064,161,412 16,529,191,257 15,064,161,412

Real Estate Loans 17,874,907,554 12,687,328,185 17,874,907,554 12,687,328,185

Margin Lending Loans 7,514,987,876 5,929,140,756 7,514,987,876 5,929,140,756

Hire Purchase Loans 7,182,925,110 3,976,815,838 7,182,925,110 3,976,815,838

Deprived Sector Loans 7,274,262,384 3,114,531,029 7,274,262,384 3,114,531,029

Bills Purchased 7,233,069 407,026,878 7,233,069 407,026,878

Staffs Loans 5,221,745,636 3,087,168,389 5,221,745,636 3,087,168,389

Other 38,839,322,545 18,130,586,097 38,839,322,545 18,130,586,097

Sub-Total 296,118,756,492 195,990,886,403 296,118,756,492 195,990,886,403

Interest Receivable on loans and advances to Customers 4,086,896,435 2,030,532,063 4,086,896,435 2,030,532,063

Grand Total 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466

4.7.2 Analysis of Loans and Advances - By Currency


NPR

GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31

Nepalese Rupee 294,869,560,728 184,124,497,807 294,869,560,728 184,124,497,807

Indian Rupee - - -

United States Dollar 5,335,644,259 13,867,276,850 5,335,644,259 13,867,276,850

Great Britain Pound 447,940 - 447,940

Euro - 29,643,809 - 29,643,809

Japanese Yen - - - -

Chinese Yuan - - - -

Other - - - -

Grand Total 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466

Annual Report 2021/22 157


4.7.3 Analysis of Loans and Advances - By Collateral
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Secured
Moveable/Immoveable Assets 286,714,062,196 182,544,490,404 286,714,062,196 182,544,490,404
Gold and Silver - - - -
Guarantee of Domestic BFIs - - - -
Government Guarantee - - - -
Guarantee of International Rated Bank - - - -
Collateral of Export Document 921,018,776 407,026,878 921,018,776 407,026,878
Collateral of Fixed Deposit Receipt 2,265,016,010 985,585,931 2,265,016,010 985,585,931
Collatereal of Government Securities 12,402,458 14,599,074 12,402,458 14,599,074
Counter Guarantee - - - -
Personal Guarantee - - - -
Other Collateral 9,840,773,035 13,803,164,905 9,840,773,035 13,803,164,905
Subtotal 299,753,272,476 197,754,867,193 299,753,272,476 197,754,867,193
Unsecured 452,380,451 266,551,273 452,380,451 266,551,273
Grand Total 300,205,652,927 198,021,418,466 300,205,652,927 198,021,418,466

4.7.4 Allowance for Impairment


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Specific Allowance for Impairment
Balance at Shrawan 01 (start of year) 1,010,304,060 1,216,985,267 1,010,304,060 1,216,985,267
Impairment Loss for the year 2,307,282,954 (206,681,207) 2,307,282,954 (206,681,207)
Charge for the year - - - -
Recoveries/Reversals during the year 2,307,282,954 (206,681,207) 2,307,282,954 (206,681,207)
Write-Offs - - - -
Exchange Rate Variance on Foreign Currency - - - -
Other Movement - - - -
Balance at Asar end (end of year) 3,317,587,014 1,010,304,060 3,317,587,014 1,010,304,060
Collective Allowances for Impairment
Balance at Sharawan 01 (start of year) 2,927,466,915 1,751,392,987 2,927,466,915 1,751,392,987
Impairment Loss for the year 1,425,365,592 1,176,073,928 1,425,365,592 1,176,073,928
Charge/(Reversal) for the year 1,425,365,592 1,176,073,928 1,425,365,592 1,176,073,928
Exchange Rate Variance on Foreign Currency - - - -
Other Movement - - - -
Balance at Asar end (end of year) 4,352,832,507 2,927,466,915 4,352,832,507 2,927,466,915
Total Allowances for Impairment 7,670,419,521 3,937,770,975 7,670,419,521 3,937,770,975

158 Nabil Bank Limited


4.8 Investment Securities
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Investment Securities measured at Amortized Cost 56,516,704,863 33,388,096,368 55,838,607,453 32,770,031,368
Investment in Equity measured at FVTOCI 6,680,177,518 7,119,061,610 6,616,436,941 7,119,061,610
Total 63,196,882,381 40,507,157,978 62,455,044,394 39,889,092,978

4.8.1 Investment Securities measured at Amortized Cost


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Debt Securities 123,093,000 110,000,000 - -
Government Bonds 37,222,637,772 26,340,831,834 37,222,637,772 26,340,831,834
Government Treasury Bills 17,624,079,681 4,834,088,979 17,624,079,681 4,834,088,979
Nepal Rastra Bank Bonds - - - -
Nepal Rastra Bank Deposit Instruments - - - -
Other 1,546,894,410 2,103,175,555 991,890,000 1,595,110,555
Less: Specific Allowances for Impairment - - - -
Total 56,516,704,863 33,388,096,368 55,838,607,453 32,770,031,368

4.8.2 Investment in Equity measured at FVTOCI


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Equity Instruments
Quoted Equity Securities 4,929,672,462 5,670,627,356 4,865,931,885 5,670,627,356
Unquoted Equity Securities 711,401,065 691,054,788 711,401,065 691,054,788
Mutual fund units 1,039,103,991 757,379,466 1,039,103,991 757,379,466
Total 6,680,177,518 7,119,061,610 6,616,436,941 7,119,061,610

Annual Report 2021/22 159


4.8.3 Information relating to investment in equities
NPR
2079 ASHADH 32 2078 ASHADH 31 (RESTATED) FAIR VALUATION
SECURITIES
COST FAIR VALUE COST FAIR VALUE HIERARCHY
1. Investments in equity instruments - Quoted 445,241,713 4,865,931,885 243,775,329 5,670,627,356
1.1 Rural Microfinance Development Centre Ltd. - ordinary shares promoter 50,720,000 507,206,204 50,720,000 692,515,800 Level 3 - Adjusted MTM

160 Nabil Bank Limited


[1,210,516 units @ NPR 100 paid up]
[108,138 units @ NPR 100 paid up acquired from erstwhile NBBL] 4,531,000 45,309,822 - - Level 3 - Adjusted MTM
1.2 Nirdhan Utthan Bank Ltd. - ordinary shares promoter 16,711,200 1,132,982,729 16,711,200 1,273,725,600 Level 3 - Adjusted MTM
[2,061,843 units @ NPR 100 paid up]
1.3 Chhimek Laghubitta Bikas Bank Ltd. - ordinary shares promoter 24,377,900 1,115,982,450 24,377,900 1,388,387,396 Level 3 - Adjusted MTM
[2,029,059 units @ NPR 100 paid up]
1.4 Chhimek Laghubitta Bikas Bank Ltd. - ordinary shares converted public - - 7,146,412 7,434,700 Level 1 - MTM
[4,300 units @ NPR 100 paid up in the previous year]
1.5 Deprosc Laghubitta Bikas Bank Ltd. - ordinary shares promoter 43,044,794 511,975,230 43,044,794 918,288,895 Level 3 - Adjusted MTM
[1,089,309 units @ NPR 100 paid up]
1.6 Sanakisan Bikas Bank Ltd. - ordinary shares promoter 9,561,600 252,647,820 9,561,600 311,242,480 Level 3 - Adjusted MTM
[474,456 units @ NPR 100 paid up]
1.7 Swabalamban Laghubitta Bikas Bank Ltd. - ordinary shares promoter 12,490,500 748,660,917 12,490,500 895,488,384 Level 3 - Adjusted MTM
[1,075,742 units @ NPR 100 paid up]
1.8 Grameen Bikash Laghubitta Bittiya Sanstha Ltd. - ordinary shares promoter 8,045,300 30,411,234 8,045,300 49,277,463 Level 3 - Adjusted MTM
[80,453 units @ NPR 100 paid up]
[145,215 units @ NPR 100 paid up acquired from erstwhile NBBL]] 11,340,500 54,891,270 - - Level 3 - Adjusted MTM
1.9 National Microfinance Laghubitta Bittiya Sanstha Ltd. - ordinary shares promoter 4,000,000 49,036,770 4,000,000 30,467,800 Level 3 - Adjusted MTM
[50,684 units @ NPR 100 paid up]
1.10 Citizen Investment Trust - ordinary shares promoter 39,686,800 100,245,385 39,686,800 69,820,000 Level 3 - Adjusted MTM
[39,859 units @ NPR 100 paid up]
1.11 Nepal Infrastructure Bank Limited - - 991,325 930,600 Level 1 - MTM
[1880 units @ NPR 100 paid up in the previous year]
1.12 Chilime Hydropower Company Limited - - 13,099,325 13,702,920 Level 1 - MTM
[20,762 units @ NPR 630.93 paid up in the previous year]
1.13 Arun Kabeli Hydropower Co. Ltd - - 564,190 673,500 Level 1 - MTM
[1500 units @ NPR 376.13 paid up in the previous year]
1.14 Sanima Mai Hydropower Ltd. - - - 489 Level 1 - MTM
[1 unit bonus share in the previous year]
1.15 National Life Insurance - - 9,278,599 9,051,050 Level 1 - MTM
[7,850 units @ NPR 1,181.99 paid up in the previous year]
1.16 Life Insurance Co. Nepal - - - 1,818,960 Level 1 - MTM
[780 units bonus shares in the previous year]
1.17 Shikhar Insurance Co. Ltd. - - 862,135 4,883,120 Level 1 - MTM
[2,480 units @ NPR 347.64 paid up in the previous year]
1.18 Sagarmatha Insurance Co. Ltd - - 1,528,731 1,340,000 Level 1 - MTM
[1,000 units @ NPR 1,528.73 paid up in the previous year]
NPR
2079 ASHADH 32 2078 ASHADH 31 (RESTATED) FAIR VALUATION
SECURITIES
COST FAIR VALUE COST FAIR VALUE HIERARCHY
1.19 Prabhu Life Insurance - - 1,008,725 985,400 Level 1 - MTM
[1,300 units @ NPR 775.94 paid up in the previous year]
1.20 Jyoti Life Insurance Limited - - 657,794 592,800 Level 1 - MTM
[800 units @ NPR 822.24 paid up in the previous year]
1.21 IME General Insurance Ltd. - promoter shares 97,470,738 145,260,224 - - Level 1 - MTM
[981,488 units acquired from erstwhile NBBL]
1.22 IME General Insurance Ltd. 13,755,693 100,825,370 - - Level 1 - MTM
[272,501 units acquired from erstwhile NBBL]
1.23 Prabhu Insurance Co. Ltd. 37,028,431 21,911,460 - - Level 1 - MTM
[51,195 units acquired from erstwhile NBBL]
1.24 Surya Life Insurance Co. Ltd. 29,651,184 18,756,342 - - Level 1 - MTM
[48,466 units acquired from erstwhile NBBL]
1.25 Himalayan General Insurance Co. Ltd. 11,359,643 9,115,080 - - Level 1 - MTM
[17,529 units acquired from erstwhile NBBL]
1.26 Gurans Life Insurance Co. Ltd. 31,466,432 20,466,515 - - Level 1 - MTM
[42,199 units acquired from erstwhile NBBL]
1.27 Neco Insurance Co. Ltd. - 247,064 Level 1 - MTM
[356 units bonus shares acquired from erstwhile NBBL]
2. Investments in equitiy instruments - Unquoted 32,564,353 711,401,065 11,602,101 691,054,788
2.1 Karja Suchana Kendra Ltd.
[154,402 units @ NPR 100 paid up] 1,235,500 36,142,679 1,235,500 36,142,796 Level 3 - Equity Valuation
[11,813 units @ NPR 100 paid up acquired from erstwhile UFL] 94,500 2,765,207 94,500 1,181,300 Level 3 - Equity Valuation
[170,640 units @ NPR 100 paid up acquired from erstwhile NBBL] 1,357,000 39,943,697 Level 3 - Equity Valuation
2.2 National Banking Training Institute Ltd.
[18,349 units @ NPR 100 paid up] 1,834,860 8,757,119 1,834,860 8,757,119 Level 3 - Equity Valuation
[12,000 units @ NPR 100 paid up acquired from erstwhile NBBL] 1,834,860 5,727,164 - - Level 3 - Equity Valuation
2.3 Nepal Clearing House Ltd.
[49,680 units @ NPR 100 paid up] 2,500,000 11,225,401 2,500,000 11,225,401 Level 3 - Equity Valuation
[4,218 units @ NPR 100 paid up acquired from erstwhile United Finance Limited] 351,500 953,075 351,500 421,800 Level 3 - Equity Valuation
[25,000 units @ NPR 100 paid up acquired from erstwhile NBBL] 2,500,000 5,648,853 - - Level 3 - Equity Valuation
2.4 Visa Inc. - Class C Common Stock - 331,417,789 - 365,668,649 Level 3 - Adjusted MTM
[6,166 units @ USD 0.0001 paid up]
2.5 MasterCard Incorporated - Class B Common Stock - 237,016,486 - 259,308,225 Level 3 - Adjusted MTM
[11,140 units @ USD 0.0001 paid up]
2.6 SWIFT Investment (denominated in €)
[13 units @ EUR 125 paid up] 5,086,470 8,330,197 5,580,741 8,330,197 Level 3 - Equity Valuation
[13 units @ EUR 125 paid up acquired from erstwhile NBBL] 759,663 8,330,197 - - Level 3 - Equity Valuation
2.7 Nepal Stock Exchange Ltd.
[1,146 units @ NPR 100 paid up acquired from erstwhile UFL] 5,000 114,600 5,000 19,300 Level 3 - Equity Valuation
[286 units @ NPR 100 paid up acquired from erstwhile NBBL] 5,000 28,600 - - Level 3 - Equity Valuation

Annual Report 2021/22


2.8 Nepal Electronic Payment System Co. Ltd. 15,000,000 15,000,000 Level 3 - Equity Valuation

161
[150,000 units @ NPR 100 paid up acquired from erstwhile NBBL]
NPR
2079 ASHADH 32 2078 ASHADH 31 (RESTATED) FAIR VALUATION
SECURITIES
COST FAIR VALUE COST FAIR VALUE HIERARCHY
3. Investments in Mutual Fund Units 1,020,908,942 1,039,103,991 528,007,920 757,379,466
3.1 Nabil Balance Fund 2
[16,800,000 units @ NPR 10 paid up] 168,000,000 181,104,000 168,000,000 236,880,000 Level 1 - MTM

162 Nabil Bank Limited


[1,738,912 units @ NPR 10 paid up in previous year acquired from erstwhile UFL] - - 17,389,120 24,970,776 Level 1 - MTM
[3,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 30,000,000 32,340,000 - - Level 1 - MTM
3.2 Global IME Sammunat Scheme 1
[2,373,293 units @ NPR 10 paid up] 23,732,930 23,732,930 23,732,930 48,130,382 Level 1 - MTM
[2,373,293 units @ NPR 10 paid up acquired from erstwhile NBBL] 23,732,930 23,732,930 - - Level 1 - MTM
3.3 Nabil Equity Fund
[17,500,000 units @ NPR 10 paid up] 175,000,000 175,000,000 175,000,000 255,500,000 Level 1 - MTM
[1,126,504 units @ NPR 10 paid up acquired from erstwhile NBBL] 11,265,040 11,265,040 - - Level 1 - MTM
3.4 NMB Capital Hybrid Fund L-1
[1,261,921 units @ NPR 10 paid up] 12,619,210 14,133,515 12,619,210 17,225,222 Level 1 - MTM
[1,261,921 units @ NPR 10 paid up acquired from erstwhile NBBL] 12,619,210 14,133,515 - - Level 1 - MTM
3.5 NIBL Pragati Fund 8,561,770 8,578,894 8,561,770 12,714,228
[856,177 units @ NPR 10 paid up] Level 1 - MTM
3.6 Laxmi Equity Fund
[2,924,792 units @ NPR 10 paid up] 29,247,920 28,955,441 29,247,920 40,362,130 Level 1 - MTM
[2,924,792 units @ NPR 10 paid up acquired from erstwhile NBBL] 29,247,692 28,955,441 - - Level 1 - MTM
3.7 Siddartha Equity Fund
[967,748 units @ NPR 10 paid up] 9,677,480 9,561,350 9,677,480 13,596,859 Level 1 - MTM
[393,620 units @ NPR 10 paid up acquired from erstwhile UFL] 3,936,200 3,888,966 3,936,200 5,510,680 Level 1 - MTM
[967,748 units @ NPR 10 paid up acquired from erstwhile NBBL] 9,677,470 9,561,350 - - Level 1 - MTM
3.8 Sanima Equity Fund
[2,400,000 units @ NPR 10 paid up] 24,000,000 30,600,000 24,000,000 40,296,000 Level 1 - MTM
[19,499 units @ NPR 10 paid up acquired from erstwhile UFL] 194,990 248,612 194,990 327,388 Level 1 - MTM
[240,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 24,000,000 30,600,000 - - Level 1 - MTM
3.9 Citizen Mutual Fund
[1,000,000 units @ NPR 10 paid up] 10,000,000 8,800,000 10,000,000 12,580,000 Level 1 - MTM
[2,50,000 units @ NPR 10 paid up acquired from erstwhile UFL] 2,500,000 2,200,000 2,500,000 3,137,500 Level 1 - MTM
[1,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 10,000,000 8,800,000 - - Level 1 - MTM
3.10 NIC Asia Growth Fund
[500,000 units @ NPR 10 paid up] 5,000,000 5,575,000 5,000,000 7,500,000 Level 1 - MTM
[1,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 10,000,000 11,150,000 Level 1 - MTM
3.11 NIBL Sahabhagita Fund 1,500,000 1,500,000 1,500,000 1,500,000
[150,000 units @ NPR 10 paid up] Level 1 - MTM
3.12 NIC Asia Dynamic Debt Fund 6,648,300 6,648,300 6,648,300 6,648,300
[664,830 units @ NPR 10 paid up] Level 1 - MTM
3.13 Kumari Equity Fund
[1,000,000 units @ NPR 10 paid up] 10,000,000 10,070,000 10,000,000 10,000,000 Level 1 - MTM
[2,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 20,000,000 20,140,000 - - Level 1 - MTM
NPR
2079 ASHADH 32 2078 ASHADH 31 (RESTATED) FAIR VALUATION
SECURITIES
COST FAIR VALUE COST FAIR VALUE HIERARCHY
3.14 Sanima Large Cap Fund
[1,000,000 units @ NPR 10 paid up acquired from erstwhile UFL] 10,000,000 9,320,000 10,000,000 10,400,000 Level 1 - MTM
[1,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 10,000,000 9,320,000 - - Level 1 - MTM
3.15 Prabhu Select Fund
[1,000,000 units @ NPR 10 paid up acquired from erstwhile UFL] 10,000,000 9,610,000 10,000,000 10,100,000 Level 1 - MTM
[1,468,100 units @ NPR 10 paid up acquired from erstwhile NBBL] 14,681,000 14,108,441 - - Level 1 - MTM
3.16 Nabil Balance Fund - 3 175,000,000 165,025,000 - -
[17,500,000 units @ NPR 10 paid up] Level 1 - MTM
3.17 Mega Mutual Fund I 4,363,400 3,486,357 - -
[4,36,340 units @ NPR 10 paid up] Level 1 - MTM
3.18 Kumari Dhanabridhhi Scheme
[500,000 units @ NPR 10 paid up] 5,000,000 5,000,000 - - Level 1 - MTM
[1,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 10,000,000 10,000,000 - - Level 1 - MTM
3.19 Citizens Mutual Fund - II
[5,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 50,000,000 50,600,000 Level 1 - MTM
3.20 NMB 50 Mutual Fund
[2,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 20,000,000 25,800,000 Level 1 - MTM
3.21 Sunrise First Mutual Fund
[70,340 units @ NPR 10 paid up acquired from erstwhile NBBL] 703,400 808,910 Level 1 - MTM
3.22 Sunrise Blue Chip Mutual Fund
[1,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 10,000,000 8,740,000 Level 1 - MTM
3.23 NIBL Sambridhhi Fund - II
[3,000,000 units @ NPR 10 paid up acquired from erstwhile NBBL] 30,000,000 26,010,000 Level 1 - MTM
Total investment securities at FVTOCI 1,498,715,009 6,616,436,942 783,385,350 7,119,061,610

Unit count of shares and mutual fund units presented in the above table are as of Jul 16, 2022. Cost and fair values presented are actual at respective reporting date.

Annual Report 2021/22


163
4.9 Current Tax Assets
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Current Tax Assets 24,756,630,771 16,459,970,263 24,747,102,983 16,410,907,996
Current year Income Tax Assets 24,756,630,771 16,459,970,263 24,747,102,983 16,410,907,996
Tax Assets of Prior Periods - - - -
Current Tax Liabilities 24,140,644,006 16,154,781,545 24,140,622,948 16,103,895,181
Current year Income Tax Liabilities 24,140,644,006 16,154,781,545 24,140,622,948 16,103,895,181
Tax Liabilities of Prior Periods - - - -
Total 615,986,765 305,188,718 606,480,035 307,012,815

4.10 Investment in Subsidiaries


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Investment in Quoted Subsidiaries - - - -
Investment in Unquoted Subsidiaries - - 298,000,000 78,000,000
Total Investment - - 298,000,000 78,000,000
Less: Impairment Allowances - - - -
Net Carrying Amount - - 298,000,000 78,000,000

4.10.1 Investment in Quoted Subsidiaries


NPR
BANK
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31
COST FAIR VALUE COST FAIR VALUE
None - - - -
Total - - - -

4.10.2 Investment in Unquoted Subsidiaries


NPR
BANK
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31
COST FAIR VALUE COST FAIR VALUE
Nabil Investment Banking Ltd. 78,000,000 78,000,000 78,000,000 78,000,000
(1,040,000 ordinary shares @ NPR 100 paid up
including 260,000 unit bonus shares)
Nepal Bangladesh Capital Ltd. 200,000,000 200,000,000 - -
(2,000,000 ordinary shares @ NPR 100 paid up)
NBBL Securities Ltd. 20,000,000 20,000,000 - -
(200,000 ordinary shares @ NPR 100 paid up)
Total 298,000,000 298,000,000 78,000,000 78,000,000

164 Nabil Bank Limited


4.10.3 Information relating to Subsidiaries of the Bank
NPR
PERCENTAGE OF OWNERSHIP HELD BY BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Nabil Investment Banking Ltd. 52% 52%
Nepal Bangladesh Capital Ltd. 100% 0%
NBL Securities Ltd. 100% 0%

4.10.4 Non Controlling Interest of the Subsidiaries


NPR
GROUP
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31
NABIL INVESTMENT BANKING LTD.
Equity Interest held by NCI (%) 48 48
Profit / (loss) allocated during the year 24,964,468 66,243,037
Accumulated Balances of NCI as on Asar end (end of year) 220,848,629 194,532,854
Dividend Paid to NCI 19,200,000 19,200,000

Note: Nepal Bangladesh Capital Limited is a wholly owned subsidiary.

4.11 Investment in Associates


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Investment in Quoted Associates 178,177,470 145,282,792 80,000,000 80,000,000
Investment in Unquoted Associates - - - -
Total Investment 178,177,470 145,282,792 80,000,000 80,000,000
Less: Impairment Allowances - - - -
Net Carrying Amount 178,177,470 145,282,792 80,000,000 80,000,000

4.11.1 Investment in Quoted Associates


NPR
GROUP BANK
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
NADEP Laghubitta Bittiya Sanstha Ltd. 80,000,000 178,177,470 80,000,000 145,282,792 80,000,000 178,177,470 80,000,000 145,282,792
(920,000 ordinary shares @ NPR
100 paid up including 120,000 unit
bonus shares)
Total 80,000,000 178,177,470 80,000,000 145,282,792 80,000,000 178,177,470 80,000,000 145,282,792

Note: Asociate company obtained listing in the year 2075/76 and is recognized at cost in the Bank’s separate financial statements and at fair value (equity
method) in the Group’s financial statements.

Annual Report 2021/22 165


4.11.2 Investment in Unquoted Associates
NPR
GROUP BANK
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE COST FAIR VALUE
NADEP Laghubitta Bittiya Sanstha Ltd. - - - - - - - -
(1,012,000 ordinary shares @ NPR 100 paid up)
Total - - - - - - - -

4.11.3 Information relating to Associates of the Bank


NPR
GROUP BANK
PARTICULARS % OF OWNERSHIP HELD BY GROUP % OF OWNERSHIP HELD BY BANK
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
1. NADEP Laghubitta Bittiya Sanstha Ltd. 25% 25% 25% 25%

4.11.4: Equity Value of Associates


NPR
GROUP
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
1. NADEP Laghubitta Bittiya Sanstha Ltd. 178,177,470 145,282,792

4.12 Investment Properties


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Investment Properties measured at Fair Value
Balance as on Shrwawan 01 (start of year) - - - -
Addition/(Disposal) during the year - - - -
Net Changes in fair value during the year - - - -
Adjustment/Transfer - - - -
Net Amount - - - -
Investment Properties measured at Cost
Balance as on Shrawan 01 (start of year) 10,075,063 8,218,665 10,075,063 8,218,665
Addition/(Disposal) during the year 1,308,522,520 1,856,398 1,308,522,520 1,856,398
Net Changes in fair value during the year - - - -
Adjustment/Transfer - - - -
Net Amount 1,318,597,583 10,075,063 1,318,597,583 10,075,063
Total 1,318,597,583 10,075,063 1,318,597,583 10,075,063

166 Nabil Bank Limited


4.13 Property and Equipment
NPR
GROUP
PARTICULARS LEASEHOLD COMPUTER & FURNITURE & EQUIPMENT & TOTAL ASAR TOTAL ASAR
LAND BUILDING VEHICLES MACHINERY
PROPERTIES ACCESSORIES FIXTURES OTHERS END 2079 END 2078
Cost
As on Shrawan 01, 2077 240,542,149 316,531,248 237,291,791 321,050,933 458,164,584 218,667,860 - 537,740,862 2,329,989,428 2,003,122,069
Addition during the year - - 46,440,258 13,173,399 61,887,934 8,556,300 - 16,381,777 146,439,667 378,230,385
Acquisition - - 46,440,258 13,173,399 61,887,934 8,556,300 - 16,381,777 146,439,667 378,230,385
Capitalization - - - - - - - - - -
Disposal during the year - - (9,880,118) (15,589,451) (44,256,065) (4,255,509) - (21,393,249) (95,374,393) (51,363,026)
Adjustment/Revaluation 67,117,412 - - - - - - - 67,117,412 -
Acquired during the year 273,204,588 10,000,000 45,107,286 26,282,555 35,310,779 17,100,183 - 36,119,676 443,125,067 -
Balance as on Asar end 2078 580,864,149 326,531,248 318,959,217 344,917,436 511,107,232 240,068,833 - 568,849,065 2,891,297,180 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 345,209,560 - - - - - - - 345,209,560 -
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
Capital WIP 180,000 180,000
Balance as on Asar end 2079 1,972,177,149 326,711,248 596,047,343 377,712,256 671,581,427 263,293,280 219,282,129 1,126,634,968 5,553,439,801 2,824,179,768
Depreciation and Impairment
As on Shrawan 01,2077 - 135,173,289 57,432,533 188,435,279 189,342,422 127,587,727 - 301,842,426 999,813,676 936,212,073
Depreciation charge for the year - 4,205,612 21,272,552 9,728,458 47,224,946 10,947,518 - 28,755,843 122,134,929 101,984,244
Impairment for the year - - - - - - - - - -
Disposals - - (10,157,101) (15,437,394) (27,715,989) (3,865,024) - (19,995,260) (77,170,768) (38,382,641)
Adjustment - - - - - - - - - -
Acquired during the year - 816,667 20,641,660 13,590,882 16,400,875 8,164,707 - 17,176,953 76,791,744
As on Asar end 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
Impairment for the year - - - - - - - - - -
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
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 97,573,229.66
As on Asar 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 1,142,351,066
Net book value of Capital Work in Progress 1,099,250 1,099,250 480,250

Annual Report 2021/22


As on Asar end 2078 580,864,149 186,335,681 229,769,573 148,600,210 285,854,979 97,233,906 - 241,069,103 1,770,207,851
As on Asar end 2079 1,972,177,149 183,039,474 403,276,839 171,261,544 330,876,663 108,076,033 43,278,676 334,368,759 3,546,355,137

167
4.13 Property and Equipment
NPR
BANK
PARTICULARS LEASEHOLD COMPUTER & FURNITURE EQUIPMENT & TOTAL ASAR TOTAL ASAR
LAND BUILDING VEHICLES MACHINERY
PROPERTIES ACCESSORIES & FIXTURES OTHERS END 2079 END 2078
Cost

168 Nabil Bank Limited


As on Shrawan 01, 2077 240,542,149 316,531,248 225,876,105 313,425,932 449,342,284 211,596,533 - 532,300,271 2,289,614,522 1,963,211,988
Addition during the year - - 46,436,719 12,211,366 61,887,934 8,514,300 - 16,223,314 145,273,633 229,901,133
Acquisition - - 46,436,719 12,211,366 61,887,934 8,514,300 - 16,223,314 145,273,633 229,901,133
Capitalization - - - - - - - - - -
Disposal during the year - - (9,876,579) (15,589,451) (44,256,065) (4,255,509) - (21,393,249) (95,370,853) (115,109,854)
Adjustment/Revaluation 67,117,412 - - - - - - - 67,117,412 -
Acquired during the year 273,204,588 10,000,000 45,151,772 - 46,682,699 14,261,329 63,151,784 11,454,380 463,906,553
Balance as on Asar end 2078 580,864,149 326,531,248 307,588,017 310,047,847 513,656,852 230,116,653 63,151,784 538,584,716 2,870,541,267 2,078,003,268
Addition during the Year - - 64,681,353 35,573,360 53,676,130 24,480,382 - 42,539,625 220,950,849 377,765,561
Acquisition - - 64,681,353 35,573,360 53,676,130 24,480,382 - 42,539,625 220,950,849 377,765,561
Capitalization - - - - - - - - - -
Disposal during the year - - (52,111,965) (3,681,966) (56,394,360) (1,591,994) - (11,725,031) (125,505,315) (51,363,026)
Adjustment/Revaluation 345,209,560 - (44,486) 26,282,555 (11,371,919) 2,838,854 (63,151,784) 24,665,295 324,428,074 -
Acquired during the year 1,046,103,440 - 263,951,779 - 163,192,426 - 219,282,129 526,375,438 2,218,905,211 -
Balance as on Asar 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 2,404,405,802
Depreciation and Impairment
As on Shrawan 01,2077 - 135,173,289 49,866,841 182,292,690 182,979,663 123,019,346 - 298,168,209 971,500,038 911,419,914
Depreciation charge for the year - 4,205,615 20,607,771 9,013,056 46,134,883 10,500,876 - 28,424,546 118,886,747 155,022,214
Impairment for the year - - - - - - - - - -
Disposals - - (10,157,101) (15,437,394) (27,715,989) (3,865,024) - (19,995,260) (77,170,768) (105,762,954)
Adjustment - - - - - - - - - -
Acquired during the year - 816,667 20,876,823 - 27,772,795 8,375,757 34,482,393 5,248,796 97,573,230
As on Asar end 2078 - 140,195,571 81,194,334 175,868,352 229,171,352 138,030,955 34,482,393 311,846,291 1,110,789,246 960,679,173
Impairment for the year - -
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 98,462,765
Disposals - - (43,456,348) (3,077,928) (43,920,483) (1,255,263) - (14,613,554) (106,323,576) (38,382,641)
Adjustment - (0.00) (235,163.29) 13,590,882.23 (11,371,919.47) (211,049.83) (34,482,392.67) (20,781,486) -
11,928,157.09
Acquired during the year - - 105,004,973 - 102,052,863 - 176,003,453 442,851,054 825,912,342
As on Asar 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 1,020,759,297
Net book value of Capital Work in Progress - 180,000 - - - - - - 180,000 -
As on Asar end 2078 580,864,149 186,335,678 226,393,683 134,179,495 284,485,500 92,085,698 28,669,392 226,738,426 1,759,752,021
As on Asar 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 -
4.14 Goodwill and Intangible Assets
NPR
GROUP
PARTICULARS SOFTWARE TOTAL ASAR TOTAL ASAR
GOODWILL OTHER
PURCHASED DEVELOPED END 2079 END 2078

Cost :
As on Shrawan 01, 2077 112,645,776 - - 112,645,776 112,645,776
Addition during the year 104,278,034 13,751,715 - - 118,029,749 13,751,715
Acquisition 13,751,715 - 13,751,715 13,751,715
Capitalization 104,278,034 - - - 104,278,034 -
Disposal during the year - - - - - -
Adjustment/Revaluation - 2,134,442 - - 2,134,442 2,134,442
Acquired during the year - 1,130,000 - - 1,130,000 -
Balance as on Asar end 2078 104,278,034 129,661,933 - - 233,939,967 128,531,933
Addition during the Year 65,875,689 84,624,998 - - 150,500,687 -
Acquisition - 84,624,998 - - 84,624,998 -
Capitalization 65,875,689 - - - 65,875,689 -
Disposal during the year - (56,143,652) - - (56,143,652) -
Adjustment/Revaluation - - - - - -
Acquired during the year - 54,225,313 - - 54,225,313
Balance as on Asar end 2079 170,153,724 212,368,592 - - 382,522,315 128,531,933
Depreciation and Impairment
As on Shrawan 01,2077 - 40,230,706 - - 40,230,706 40,534,876
Amortisation charge for the year - 22,926,028 - 22,926,028 15,287,591
Impairment for the year - - - - - -
Disposals - - - - - (2,991,675)
Adjustment - 3,260,442 - - 3,260,442 -
As on Asar end 2078 - 66,417,176 - - 66,417,176 52,830,792
Impairment for the year - - - - - 17,399,208
Depreciation charge for the year - 23,664,126 - - 23,664,126 -
Disposals - (52,861,985) - - (52,861,985) (17,703,378)
Acquired during the year - 50,773,647 - - 50,773,647 -
As on Asar end 2079 - 87,992,965 - - 87,992,965 52,526,622
Capital Work in Progress (Net Book Value) - - - - - -
As on Asar end 2078 104,278,034 63,244,757 - - 167,522,791
As on Asar end 2079 170,153,724 124,375,627 - - 294,529,350 -

Annual Report 2021/22 169


4.14 Goodwill and Intangible Assets
NPR
BANK
PARTICULARS SOFTWARE TOTAL ASAR TOTAL ASAR
GOODWILL OTHER
PURCHASED DEVELOPED END 2079 END 2078

Cost
As on Shrawan 01, 2077 - 109,893,904 - - 109,893,904 109,893,904
Addition during the year 104,278,034 16,851,177 - - 121,129,211 121,129,211
Acquisition - 16,851,177 - - 16,851,177 16,851,177
Capitalization 104,278,034 - - - 104,278,034 104,278,034
Disposal during the year - - - - - -
Adjustment/Revaluation - - - - - -
Balance as on Asar end 2078 104,278,034 126,745,081 - - 231,023,115 231,023,115
Addition during the Year 65,875,689 82,312,167 - - 148,187,856 -
Acquisition - 82,312,167 - - 82,312,167 -
Capitalization 65,875,689 - - - 65,875,689 -
Disposal during the year - (56,143,652) - - (56,143,652) -
Adjustment/Revaluation - - - - - -
Acquired during the year - 53,406,063 - - 53,406,063
Balance as on Asar end 2079 170,153,724 206,319,659 - - 376,473,382 231,023,115
Depreciation and Impairment
As on Shrawan 01,2077 - 38,144,089 - - - 38,144,089
Amortisation charge for the year - 22,688,015 - - 14,884,251 22,688,015
Impairment for the year - - - - 22,688,015 -
Disposals - - - - (1,709,770) -
Adjustment - - - - - -
Acquired during the year - 3,260,442 - - - -
As on Asar end 2078 - 64,092,546 - - 60,832,104
Impairment for the year - 23,189,622 - - 23,189,622 -
Depreciation charge for the year - - - - - -
Disposals - (52,861,985) - - - -
Acquired during the year - 50,332,476 - - - -
As on Asar end 2079 - 84,752,659 - - 84,752,659 60,832,104
Capital Work in Progress (Net Book Value) - - - - - -
As on Asar end 2078 104,278,034 62,652,535 - - - 166,930,570
As on Asar end 2079 170,153,724 121,566,999 - - 291,720,723 -

170 Nabil Bank Limited


4.15 Deferred Tax
NPR
SUBSIDIARY BANK
PREVIOUS FY 2077-78 PREVIOUS FY 2077-78
PARTICULARS
DEFERRED TAX DEFERRED TAX NET DEFERRED TAX DEFERRED DEFERRED TAX NET DEFERRED TAX
ASSETS LIABILITIES ASSETS/ (LIABILITIES) TAX 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 - (9,114,730) (9,114,730) - (1,900,702,878) (1,900,702,878)
Property and Equipment - (222,763) (222,763) - (123,658,314) (123,658,314)
Employees’ Defined Benefit Plan 493,765 - 493,765 181,599,670 - 181,599,670
Lease Liabilities 629,526 - 629,526 26,676,680 - 26,676,680
Provisions - - - 6,935,218 - 6,935,218
Other Temporary Differences - - - (1,402,162) (1,402,162)
Deferred tax on temporary differences 1,123,291 (9,337,493) (8,214,202) 215,211,568 (2,025,763,354) (1,810,551,786)
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 2078 - - (8,214,202) - - (1,810,551,786)
Deferred Tax Asset/ (Liabilities) as on Shrawan 01, 2077 - - 1,510,393 - - (1,438,830,024)
Origination / (Reversal) during the year - - 9,724,595 - - 371,721,761
Deferred Tax expense (income) recognized in profit or loss - - 9,724,595 - - (530,644,527)
Deferred Tax expense (income) recognized in OCI - - - - - 904,848,869
Deferred Tax expense (income) recognized directly in Equity - - - - - 484,747,332

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 2021/22


171
4.15 Deferred Tax
NPR
SUBSIDIARY BANK

CURRENT FY 2078-79 CURRENT FY 2078-79


PARTICULARS
DEFERRED TAX DEFERRED TAX NET DEFERRED TAX DEFERRED DEFERRED TAX NET DEFERRED TAX
ASSETS LIABILITIES ASSETS /(LIABILITIES) TAX ASSETS LIABILITIES ASSETS /(LIABILITIES)

172 Nabil Bank Limited


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 (7,707,237) 28,242,684 - (1,535,316,579) (1,535,316,579)

Property and Equipment 26,374 (188,389) (162,016) 6,897,360 (460,791,509) (453,894,149)

Employees’ Defined Benefit Plan 966,235 - 966,235 213,839,411 - 213,839,411

Lease Liabilities 152,039 - 152,039 7,208,058 (29,020,287) (21,812,229)

Provisions - - - 22,833,002 - 22,833,002

Other Temporary Differences - - - - (4,153,572) (4,153,572)

Deferred tax on temporary differences 37,094,568 (7,895,627) 29,198,941 250,777,831 (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 29,198,941 (1,778,504,117)

Deferred Tax Asset/ (Liabilities) as on Shrawan 01, 2078 (15,886,904) (1,810,551,786)

Origination / (Reversal) during the year (45,085,846) (32,047,669)

Deferred Tax expense (income) recognized in profit or loss (35,562,399) 91,306,537

Deferred Tax expense (income) recognized in OCI (9,523,446) (136,718,475)

Deferred Tax expense (income) recognized directly in Equity - 219,524,655

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.
4.16 Other Assets
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Assets held for Sale - - - -
Other Non-Banking Assets - - - -
Bills Receivable - - - -
Accounts Receivable 496,229,382 491,179,495 471,976,857 408,174,785
Accrued Income - - - -
Prepayments and Deposits 265,032,896 337,311,729 263,595,467 336,095,655
Income Tax Deposit 199,853,692 96,928,942 199,853,692 96,928,942
Deferred Employee Expenditure 2,846,751,500 1,744,955,366 2,846,751,500 1,744,955,366
Other Assets 2,530,637,199 949,299,050 2,514,372,424 948,587,970
Total 6,338,504,669 3,619,674,582 6,296,549,940 3,534,742,718

4.17 Due to Banks and Financial Institutions


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Money Market Deposits - - -
Interbank Borrowing - - - -
Other Deposits from BFIs - - -
Settlement and Clearing Accounts - - -
Other Deposits from BFIs 3,353,609,544 4,502,705,221 3,353,609,544 4,502,705,221
Total 3,353,609,544 4,502,705,221 3,353,609,544 4,502,705,221

4.18 Due to Nepal Rastra Bank


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Refinance from NRB 4,657,437,355 5,450,392,779 4,657,437,355 5,450,392,779
Standing Liquidity Facility - - - -
Lender of Last Resort facility from NRB - - - -
Securities sold under repurchase agreements - - - -
Other Payable to NRB - - - -
Total 4,657,437,355 5,450,392,779 4,657,437,355 5,450,392,779

Annual Report 2021/22 173


4.19 Derivative Financial Instruments
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Held for Trading - - - -
Interest Rate Swap - - - -
Currency Swap - - - -
Forward Exchange Contracts - - - -
Others, - - - -
Held for Risk Management 1,390,736,904 13,634,226,278 1,390,736,904 13,634,226,278
Interest Rate Swap - - - -
Currency Swap - - - -
Forward Exchange Contracts. 1,390,736,904 13,634,226,278 1,390,736,904 13,634,226,278
Others, - - - -
Total 1,390,736,904 13,634,226,278 1,390,736,904 13,634,226,278

4.20 Deposits from Customers


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Institutional Customers:
Term Deposits 90,692,913,008 52,318,910,309 90,692,913,008 52,318,910,309
Call Deposits 24,873,942,412 19,254,083,666 24,890,220,992 19,320,456,691
Current Deposits 27,343,093,947 29,168,017,255 27,363,053,947 29,168,017,255
Others 14,790,476,713 7,847,463,837 14,790,476,713 7,847,463,837
Individual Customers:
Term Deposits 84,659,657,841 40,957,992,159 84,659,657,841 40,957,992,159
Saving Deposits 81,974,367,325 72,214,687,827 81,974,367,325 72,214,687,827
Current Deposits 1,667,747,951 1,518,626,682 1,667,747,951 1,518,626,682
Others 183,872,596 128,315,602 183,872,596 128,315,602
Total 326,186,071,792 223,408,097,336 326,222,310,372 223,474,470,361

174 Nabil Bank Limited


4.20.1 Currency wise analysis of deposit from customers
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Nepalese Rupee 314,501,944,798 210,364,863,208 314,538,183,378 210,431,236,233
Indian Rupee - - -
United States Dollar 10,211,052,115 11,348,361,004 10,211,052,115 11,348,361,004
Great Britain Pound 580,471,133 529,088,225 580,471,133 529,088,225
Euro 605,228,263 901,088,808 605,228,263 901,088,808
Japanese Yen 140,807,249 145,147,804 140,807,249 145,147,804
Chinese Yuan - - - -
Other 141,541,686 119,548,288 141,541,686 119,548,288
Total 326,181,045,243 223,408,097,336 326,217,283,823 223,474,470,361
Accrued interest payable 5,026,549 - 5,026,549 -
Total Customer deposit including accrued interest payable 326,186,071,792 223,408,097,336 326,222,310,372 223,474,470,361

4.21 Borrowings
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Domestic Borrowings
Nepal Government - - - -
Other Institutions 8,103,106,849 - 8,103,106,849
Other - - - -
Sub Total 8,103,106,849 - 8,103,106,849 -
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 -

Annual Report 2021/22 175


4.22 Provisions
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Provisions for Redundancy - - - -
Provisions for Restructuring - - - -
Pending Legal Issues and Tax Litigation - - - -
Onerous Contracts - - - -
Other - - - -
Total - - - -

4.22.1 Movement in Provision


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Balance at Shrawan 01 (start of year) - - - -
Provisions made during the year - - - -
Provisions used during the year - - - -
Provisions reversed during the year - - - -
Unwind of Discount - - - -
Balance at Asar end (end of year) - - - -

4.23 Other Liabilities


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Liabilities for employees defined benefit obligations 74,244,393 61,345,245 62,939,197 61,345,245
Liabilities for long service leave 566,010,763 392,875,574 565,431,660 391,229,691
Short term employee benefits - - - -
Bills payable 1,622,089,230 2,046,922,427 1,622,089,230 2,046,922,427
Creditors and accruals 4,664,123,895 3,292,731,226 4,647,512,962 2,658,043,444
Interest payable on deposits - - - -
Interest payable on borrowing - - - -
Liabilities on deferred grant income 1,047,845 - 1,047,845 -
Unpaid Dividend 864,172,659 279,034,556 790,282,369 279,034,556
Liabilities under Finance Lease - - - -
Employee bonus payable 855,254,412 729,802,060 855,254,412 707,210,110
Other Liabilities: -
Proposed Cash Dividend Payable to Shareholders - - - -
Other Liabilities 4,112,287,678 1,061,355,207 3,683,623,767 559,565,783
Total 12,759,230,876 7,864,066,295 12,228,181,442 6,703,351,256

176 Nabil Bank Limited


4.23.1 Defined Benefit Obligation
The amounts recognised in the statements of financial positions are as follows :
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Present value of unfunded obligations - - - -
Present value of funded obligations 989,670,080 960,759,841 989,670,080 960,759,841
Total present value of obligations 989,670,080 960,759,841 989,670,080 960,759,841
Fair value of plan assets 922,225,900 899,414,596 922,225,900 899,414,596
Present value of net obligations 67,444,180 61,345,245 67,444,180 61,345,245
Recognised liability for defined benefit obligations 67,444,180 61,345,245 67,444,180 61,345,245

4.23.2 Plan Assets


Plan assets comprise of the following:
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Equity securities - - - -
Government bonds - - - -
Bank deposit - - - -
Other 922,225,900 899,414,596 922,225,900 899,414,596
Total 922,225,900 899,414,596 922,225,900 899,414,596
Actual return on plan assets - - - -

4.23.3 Movement in the present value of defined benefit obligations


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Defined benefit obligations at Shrawan 1 (start of the year) 960,759,841 836,194,498 960,759,841 836,194,498
Actuarial losses (32,021,047) (9,619,716) (32,021,047) (9,619,716)
Benefits paid by the plan (93,889,908) (174,160,750) (93,889,908) (174,160,750)
Current service costs and interest 154,821,194 308,345,809 154,821,194 308,345,809
Defined benefit obligations at Asar end (end of year) 989,670,080 960,759,841 989,670,080 960,759,841

Annual Report 2021/22 177


4.23.4 Movement in the fair value of plan assets
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Fair value of plan assets at Shrawan 1 (start of the year) 899,414,596 952,296,692 899,414,596 952,296,692
Contributions paid into the plan 116,701,212 121,278,654 116,701,212 121,278,654
Benefits paid during the year (93,889,908) (174,160,750) (93,889,908) (174,160,750)
Actuarial (losses) gains - - - -
Expected return on plan assets - - - -
Fair value of plan assets at Asar end (end of the year) 922,225,900 899,414,596 922,225,900 899,414,596

4.23.5 Amount recognised in profit or loss


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Service costs 72,085,290 235,187,301 72,085,290 235,187,301
Interest on obligation 82,735,904 73,158,508 82,735,904 73,158,508
Expected return on plan assets - - - -
Total 154,821,194 308,345,809 154,821,194 308,345,809

4.23.6 Amount recognised in other comprehensive income


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Actuarial (gain)/loss (32,021,047) (9,619,716) (32,021,047) (9,619,716)
Total (32,021,047) (9,619,716) (32,021,047) (9,619,716)

4.23.7 Actuarial assumptions


%
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Discount rate 9% 9% 9% 9%
Expected return on plan asset 0% 0% 0% 0%
Future salary increase 8% 8% 8% 8%
Withdrawal rate 5% 5% 5% 5%

178 Nabil Bank Limited


4.24 Debt securities issued
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Debt securities issued designated as at fair value - - - -
through profit or loss
Debt securities issued at amortised cost 6,484,843,749 2,096,633,378 6,484,843,749 2,096,633,378
Total 6,484,843,749 2,096,633,378 6,484,843,749 2,096,633,378

4.25 Subordinated Liabilities


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Redeemable preference shares - - - -
Irredemable cumulative preference shares (liabilities - - - -
component)
Other - - - -
Total - - - -

4.26 Share capital


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Ordinary shares 22,832,908,632 13,844,451,156 22,832,908,632 13,844,451,156
Convertible preference shares (equity component only) - - - -
Irredemable preference shares (equity component only) - - - -
Perpetual debt (equity component only) - - - -
Total 22,832,908,632 13,844,451,156 22,832,908,632 13,844,451,156

4.26.1 Ordinary Shares


NPR
BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Authorized Capital 23,000,000,000 14,000,000,000
- 230,000,000 Ordinary Shares @ NPR 100 nominal value -
Issued Capital 22,832,908,632 13,844,451,156
- 228,329,086 Ordinary Shares @ NPR 100 nominal value -
Paid Up Capital 22,832,908,632 13,844,451,156
- 228,329,086 Ordinary Shares @ NPR 100 paid up -
Total 22,832,908,632 13,844,451,156

Annual Report 2021/22 179


4.26.2 Ordinary share ownership
NPR
BANK
PARTICULARS 2079 ASHADH 32 2078 ASHADH 31
PERCENT AMOUNT PERCENT AMOUNT
Domestic ownership 52.35 11,953,411,616 51 7,028,666,656
Nepal Government - -
“A” class licensed institutions - -
Other licensed intitutions - -
Other Institutions 8.69 1,984,337,848 10 1,415,677,300
Public 41.56 9,489,345,782 40 5,532,725,656
Other 2.10 479,727,986 0.58 80,263,700
Foreign ownership 47.65 10,879,497,016 49 6,815,784,500
Total 100.00 22,832,908,632 100 13,844,451,156

Ordinary shareholders holding ≥ 0.5% shares


NPR
BANK
SHAREHOLDER 2079 ASHADH 32
PERCENT AMOUNT
1. NB International Limited 39.44 9,004,746,200
2. IFIC Bank Limited 7.77 1,773,608,800
3. Rastriya Beema Company Limited 7.54 1,722,421,400
4. Mr. Nirvana Chaudhary 0.70 160,123,200
5. Mr. Varun Chaudhary 0.67 152,657,000

4.27 Reserves
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Statutory general reserve 12,628,794,796 8,259,126,407 12,624,322,355 8,259,126,407
Exchange equilisation reserve 752,112,612 648,300,000 752,112,612 648,300,000
Corporate social responsibility reserve 90,724,131 65,913,670 90,391,687 65,913,670
Capital redemption reserve - - - -
Regulatory reserve 2,428,335,793 1,107,646,326 2,428,335,793 1,107,646,326
Investment adjustment reserve 5,580,742 5,580,741 5,580,742 5,580,741
Capital reserve 120,061,832 676,542,520 120,061,832 676,542,520
Assets revaluation reserve 560,136,025 47,911,831 560,136,025 47,911,831
Fair value reserve 3,568,817,601 4,434,973,381 3,582,405,352 4,434,973,381
Dividend equalisation reserve - - - -
Actuarial Gain / (Loss) on DBP (47,962,439) (70,377,172) (47,962,439) (70,377,172)
Special reserve 5,141,156 5,141,156 5,141,156 5,141,156
Other reserve 7,141,799,260 674,116,524 7,128,593,428 663,398,177
Total 27,253,541,510 15,854,875,384 27,249,118,543 15,844,157,037

180 Nabil Bank Limited


4.27.1 Other Reserve Break-up
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Special Contingency Fund 21,373,837 20,373,837 21,373,837 20,373,837
Debenture Redemption Reserve 1,333,333,332 333,333,333 1,333,333,332 333,333,333
Interest Spread Reserve 2,578,000 2,578,000 2,578,000 2,578,000
Staff Training and Development Fund 22,630,408 7,113,007 22,630,408 7,113,007
Capital Adjustment Fund 5,748,677,851 300,000,000 5,748,677,851 300,000,000
Other reserves 13,205,832 - -
Total 7,141,799,260 663,398,177 7,128,593,428 663,398,177

4.27.1.1 Movements in Staff Training and Development Fund


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Opening balance in reserve 7,113,005 7,113,005 7,113,005 7,113,005
Mandatory training expense budget for the year 63,262,333 - 63,262,333 -
Total amount available for training expenses 70,375,338 7,113,005 70,375,338 7,113,005
Less: Eligible training expenses incurred in the year (47,744,931) - (47,744,931) -
Closing balance in reserve 22,630,408 7,113,005 22,630,408 7,113,005

4.28 Contingent Liabilities and Commitments


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Contingent liabilities 164,083,956,071 83,601,207,676 164,083,956,071 83,601,207,676
Undrawn and undisbursed facilities 84736594750 43086972723 84736594750 43086972723
Capital commitment - - - -
Lease Commitment 2,351,843,714 1,967,169,476 2,351,843,714 1,967,169,476
Litigation - - - -
Total 251,172,394,535 128,655,349,875 251,172,394,535 128,655,349,875

4.28.1 Contingent Liabilities


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Acceptance and documentary credit 26,436,124,674 18,970,146,111 26,436,124,674 18,970,146,111
Bills for collection 1,646,105,612 932,720,043 1,646,105,612 932,720,043
Forward exchange contracts 1,390,736,904 13,634,226,278 1,390,736,904 13,634,226,278
Guarantees 112,094,528,132 30,905,412,927 112,094,528,132 30,905,412,927
Underwriting commitment - - - -
Other commitments 22,516,460,749 19,158,702,316 22,516,460,749 19,158,702,316
Total 164,083,956,071 83,601,207,676 164,083,956,071 83,601,207,676

Annual Report 2021/22 181


4.28.2 Undrawn and undisbursed facilities
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Undisbursed amount of loans 33,742,266,254 19,433,455,136 33,742,266,254 19,433,455,136
Undrawn limits of overdrafts 14,385,600,231 12,329,983,402 14,385,600,231 12,329,983,402
Undrawn limits of credit cards 1,068,921,660 1,020,523,281 1,068,921,660 1,020,523,281
Undrawn limits of letter of credit 7,445,775,986 5,315,022,632 7,445,775,986 5,315,022,632
Undrawn limits of guarantee 28,094,030,620 4,987,988,271 28,094,030,620 4,987,988,271
Total 84,736,594,750 43,086,972,723 84,736,594,750 43,086,972,723

4.28.3 Capital commitments


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Capital commitments in relation to Property and - - - -
Equipment
Approved and contracted for - - - -
Approved but not contracted for - - - -
Sub total - - - -
Capital commitments in relation to Intangible assets - - - -
Approved and contracted for - - - -
Approved but not contracted for - - - -
Sub total - - - -
Total - - - -

182 Nabil Bank Limited


4.28.4 Lease commitments
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Operating lease commitments
Future minimum lease payments under non cancellable
operating lease, where the bank is lessee
Not later than 1 year - 192,766,717 - 192,766,717
Later than 1 year but not later than 5 years - 887,467,586 - 887,467,586
Later than 5 years - 886,935,173 - 886,935,173
Sub total - 1,967,169,476 - 1,967,169,476
Finance lease commitments
Future minimum lease payments under non cancellable
finance lease, where the bank is lessee
Not later than 1 year 221,935,300 - 221,935,300 -
Later than 1 year but not later than 5 years 1,097,960,117 - 1,097,960,117 -
Later than 5 years 1,031,948,298 - 1,031,948,298 -
Sub total 2,351,843,714 - 2,351,843,714 -
Grand total 2,351,843,714 1,967,169,476 2,351,843,714 1,967,169,476

4.28.5 Litigation

The Bank is in dispute with Large tax Payers Office (LTPO) over certain cases of additional tax demanded by LTPO over and above the amounts
declared by the Bank. These cases relate to tax returns filed by the Bank under self-assessment system for annual income years from FY 2063/64
(2006-07) to FY 2073/74 (2016-17). The cumulative incremental tax demand in respect of all these periods is NPR 187 million along with fines
plus interest surcharge of NPR 176 million. Year specific cases are at different stages of legal resolution as per tax administrative proceedings
prescribed in the Income Tax Act of Nepal.

Annual Report 2021/22 183


4.29 Interest Income
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Cash and cash equivalent 12,765,130 16,355,462 10,435,775 12,330,848
Due from Nepal Rastra Bank 2,089,856 23,480,411 2,089,856 23,480,411
Placement with bank and financial institutions 168,359,114 226,223,829 168,359,114 226,223,829
Loan and advances to banks and financial institutions - - - -

Loans and advances to customers 20,930,596,894 14,472,030,560 20,930,596,894 14,472,030,560


Investment securities 1,880,865,549 1,438,567,184 1,802,704,513 1,377,520,946
Loan and advances to staff 224,377,997 169,589,826 224,377,997 169,589,826
Other Interest Income (Amortization of Deferred Employee Expenditure) 201,836,233 907,542,361 202,182,913 907,542,361
Total interest income 23,420,890,773 17,253,789,633 23,340,747,062 17,188,718,781

Note: Interest income presented under loans and advances to customer is inclusive of interest income on loans and advances to BFIs.

4.30 Interest Expenses


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Due to bank and financial institutions 235,421,499 20,231,517 235,421,499 20,231,517
Due to Nepal Rastra Bank 123,160,983 72,910,441 123,160,983 72,910,441
Deposits from customers 13,561,037,678 8,818,491,853 13,569,713,959 8,819,150,691
Borrowing 55,562,442 - 55,562,442 -
Debt securities issued 367,053,454 200,541,358 367,053,454 200,541,358
Subordinated liabilities - - - -
Other Charges 71,783,202 - 70,963,334 -
Total Interest expense 14,414,019,258 9,112,175,169 14,421,875,671 9,112,834,007

Note: Interest expense presented under deposits from customers also includes interest expense on deposits from BFIs.

184 Nabil Bank Limited


4.31 Fees and Commission Income
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Loan administration fees 492,942,808 577,604,466 492,942,808 577,604,466
Service fees 29,192,490 20,172,940 29,192,490 20,172,940
Consortium fees - - - -
Commitment fees 3,702,412 5,002,561 3,702,412 5,002,561
DD/TT/Swift fees 39,161,033 35,457,951 39,161,033 35,457,951
Credit card/ATM issuance and renewal fees 627,370,137 361,956,801 627,370,137 361,956,801
Prepayment and swap fees - - - -
Investment and merchant banking fees 155,576,827 140,810,230 - -
Asset management fees - - - -
Brokerage fees - - - -
Remittance fees 124,139,345 100,510,468 124,139,345 100,510,468
Commission on letter of credit 218,742,909 191,804,058 218,742,909 191,804,058
Commission on guarantee contracts issued 287,473,399 262,980,118 287,473,399 262,980,118
Commission on share underwriting/issue 6,298,836 5,702,180 - -
Locker rental 21,293,681 22,955,774 21,293,681 22,955,774
Other fees and commision income 205,857,338 160,936,761 199,255,749 161,436,761
Total Fees and Commission Income 2,211,751,216 1,885,894,309 2,043,273,963 1,739,881,898

4.32 Fees and Commission Expense


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
ATM management fees 5,987,481 6,284,660 5,987,481 6,284,660
VISA/Master card fees 348,328,718 174,086,538 348,328,718 174,086,538
Guarantee commission - - - -
Brokerage - - - -
DD/TT/Swift fees 13,337,737 12,717,410 13,337,737 12,717,410
Remittance fees and commission 24,168,664 13,130,334 24,168,664 13,130,334
Other fees and commission expense 91,363,563 55,412,617 72,553,129 45,094,076
Total Fees and Commission Expense 483,186,163 261,631,559 464,375,729 251,313,018

Annual Report 2021/22 185


4.33 Net Trading income
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Changes in fair value of trading assets (94,931,904) 31,345,934 - -
Gain/loss on disposal of trading assets 28,515,807 67,266,272 - 5,193,295
Interest income on trading assets - - - -
Dividend income on trading assets - - - -
Gain/loss foreign exchange transation 564,990,054 638,567,345 564,990,054 638,567,345
Other - - - -
Net trading income 498,573,957 737,179,551 564,990,054 643,760,640

4.34 Other Operating Income


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Foreign exchange revauation gain 130,069,994 129,570,606 130,069,994 129,570,606
Gain/loss on sale of investment securities 3,746,416 1,237,842,208 (2,164,390) 1,237,842,208
Fair value gain/loss on investment properties - - - -
Dividend on equity instruments 197,763,997 59,440,402 206,624,267 76,950,060
Gain/loss on disposal of property and equipment (4,451,385) 797,626 (4,451,385) 797,626
Gain/loss on sale of investment property - - - -
Operating lease income - - - -
Gain/loss on sale of gold and silver 16,397,206 6,275,179 16,397,206 6,275,179
Locker rent - - - -
Other Operating Income 64,306,252 6,730,583 63,934,437 -
Total 407,832,480 1,440,656,604 410,410,129 1,451,435,679

186 Nabil Bank Limited


4.35 Impairment charge/(reversal) for loan and other losses
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Impairment charge/(reversal) on loan and advances to BFIs 23,252,078 54,339,996 23,252,078 54,339,996
Impairment charge/(reversal) on loan and advances to 1,094,734,513 739,606,945 1,094,734,513 739,606,945
customers
Impairment charge/(reversal) on financial Investment - - - -
Impairment charge/(reversal) on placement with BFIs - - - -
Impairment charge/(reversal) on property and equipment - - - -
Impairment charge/(reversal) on goodwill and intangible - - - -
assets
Impairment charge/(reversal) on investment properties - - - -
Impairment charge/(reversal) on other assets 836,485 34,053,441 836,485 33,574,971
Total 1,118,823,076 828,000,382 1,118,823,076 827,521,912

4.36 Personnel Expenses


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Salary 543,226,981 482,721,358 527,577,263 475,046,012
Allowances 877,601,646 771,722,437 851,444,985 761,634,712
Gratuity Expense 156,330,506 324,973,636 154,821,194 324,185,094
Provident Fund 54,569,396 48,449,672 52,757,742 47,502,925
Uniform 23,240,000 - 23,240,000 -
Training & development expense 35,905,062 28,456,603 34,835,254 28,398,838
Leave encashment 88,609,425 149,895,325 86,814,233 148,982,179
Medical 3,831,361 2,540,951 3,831,361 2,540,951
Insurance 16,492,420 11,354,178 15,596,356 10,856,065
Employees incentive - - - -
Cash-settled share-based payments - - - -
Pension expense - - - -
Finance expense under NFRS 202,182,913 907,542,361 202,182,913 907,542,361
Other expenses related to staff 9,842,152 10,324,737 7,205,695 10,044,805
Prior period employee bonus - - - -
Subtotal 2,011,831,862 2,737,981,258 1,960,306,996 2,716,733,942
Employees bonus 707,498,532 717,643,254 698,618,048 695,051,304
Grand total 2,719,330,394 3,455,624,513 2,658,925,044 3,411,785,246

Annual Report 2021/22 187


4.37 Other Operating Expense
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Directors’ fee 6,933,670 4,503,000 6,530,170 4,183,000
Directors’ expense 3,325,452 1,324,466 3,325,452 1,324,466
Auditors’ remuneration 2,515,000 2,200,000 2,222,000 2,020,000
Other audit related expense 2,165 - - -
Professional and legal expense 58,717,153 46,662,285 58,347,998 46,141,276
Office administration expense 821,924,196 675,813,795 783,025,617 661,225,677
Operating lease expense 107,516,534 276,653,822 105,942,217 271,739,804
Operating expense of investment properties - - - -
Corporate social responsibility expense 952,198 207,700 - -
Onerous lease provisions - - - -
Other Expenses 70,764,416 98,071,852 64,406,831 66,110,790
Total 1,072,650,784 1,105,436,920 1,023,800,285 1,052,745,013

4.37.1 Office Administration Expense


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Water and Electricity 48,177,713 37,346,445 47,132,403 36,423,765
Repair and Maintenance
(a) Building 4,088,104 2,560,349 3,973,188 2,413,131
(b) Vehicle 6,234,248 4,780,286 6,045,981 4,569,513
(c) Computer and Accessories 1,274,630 1,767,418 1,123,889 1,706,082
(d) Office Equipment and Furniture 17,213,263 12,051,702 17,059,519 12,048,202
(e) Other - - - -
Insurance 44,756,002 55,169,020 44,653,694 55,073,097
Postage, Telex, Telephone, Fax 51,525,677 44,404,652 50,564,021 43,747,251
Printing, Stationery and Small Purchase 59,506,440 60,579,961 58,260,905 59,297,232
Newspaper, Books and Journal 64,307 116,907 29,232 90,762
Advertisement 73,914,337 68,560,426 71,461,966 68,099,970
Donation - 25,000 - 25,000
Security Expenses 142,530,519 123,277,835 142,005,267 123,177,992
Deposit and Loan Guarantee Premium 50,817,862 49,806,200 50,817,862 49,806,200
Travel Allowance and Expenses 7,271,844 4,300,348 7,074,018 4,278,031
Customer Entertainment 17,402,876 5,778,810 17,402,876 5,778,810
Annual / Special General Meeting Expenses 1,758,196 1,449,476 1,758,196 1,449,476
Other Expenses:
(a) Sponsorship 10,748,903 6,171,284 10,748,903 6,171,284
(b) Outsourced HR Services 111,844,613 97,316,357 110,435,420 87,774,494
(c) Fuel 29,020,958 16,422,063 28,375,858 15,974,304
(d) Janitorial and Cleaning 28,987,066 22,194,880 28,852,581 22,104,019
(e) Technical Service Fees 57,683,107 27,770,154 28,725,746 27,788,034
(f) Tea, Coffee and Snacks 13,468,343 10,194,985 12,990,051 9,738,780
(g) Vehicle Registration and Renewal 5,302,668 4,750,908 5,220,168 4,671,918
(h) Software Subscription Charges 34,166,822 15,808,627 34,148,177 15,808,627
(i) Small Purchase 4,165,696 3,209,703 4,165,696 3,209,703
Total 821,924,196 675,813,795 783,025,617 661,225,677

188 Nabil Bank Limited


4.38 Depreciation and Amortisation
NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Depreciation on property and equipment 376,491,113 122,134,929 366,840,411 118,886,744
Depreciation on investment property - - - -
Amortisation of intangible assets 23,827,976 22,926,028 23,189,622 22,688,015
Total 400,319,089 145,060,957 390,030,033 141,574,759

4.39 Non Operating Income


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Recovery of loan written off 8,701,513 3,398,681 8,701,513 3,398,681
Other income 32,894,678 50,912,364 - 31,905,690
Total 41,596,191 54,311,045 8,701,513 35,304,371

4.40 Non Operating Expenses


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Loan written off - 4,222,585 - 4,222,585
Redundancy provision - - - -
Expense of restructuring - - - -
Other expense 2,730,446 1,643,089 2,730,446 1,643,089
Total 2,730,446 5,865,674 2,730,446 5,865,674

4.41 Income Tax Expenses


NPR
GROUP BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31 2079 ASHADH 32 2078 ASHADH 31
Current tax expense - -
Current year 1,998,758,418 2,310,479,792 1,940,231,711 2,258,553,428
Adjustments for prior years 2,988,880 - - -
Deferred tax expense - - - -
Origination and reversal of temporary differences 55,744,138 (520,919,931) 91,306,537 (530,644,526)
Changes in tax rate - - - -
Recognition of previously unrecognised tax losses - - - -
Total income tax expense 2,057,491,435 1,789,559,861 2,031,538,248 1,727,908,902

Annual Report 2021/22 189


4.41.1 Reconciliation of tax expense and accounting profit of the Bank
NPR
BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Profit before tax stated in Statement of Profit or Loss 6,287,562,436 6,255,461,740
Add: Tax effect of expenses that are not deductible for tax purpose
Donation and CSR Expenses - -
Leave Provision - increase / (decrease) 174,201,969 74,464,066
Gratuity Provision (fair value changes through SoPL) - increase - -
Loss on disposal of Fixed Assets 4,506,703 2,604,922
Capital nature expense charged on revenue 1,714,844 1,714,844
Liabilities under operating lease - 16,096,818
Repairs disallowed as per IT Act (in excess of 7% of the block) - -
Depreciation charged on Books 390,030,033
Provision on Accounts Receivable 836,485 33,574,971
Impairment Provision on Investments - -
Gain on sale of securities routed through SOCI - 1,547,378,968
Interest expense as per NFRS 16 70,963,334
Less: Tax effect on exempt income
Provision written back on Other Assets - -
Deductible grauity expense paid from Gratuity Fund (4,504,983) (15,839,285)
Depreciation charged as per Income Tax (214,048,209) (77,894,577)
Gain on disposal of Fixed Assets (155,206) (3,402,556)
Final Withholding Income - Meeting Fees (265,625) (532,725)
Final Withholding Income - Dividend (4,484,059) (38,568,723)
Gratuity Provision (fair value changes through SoPL) - decrease (38,119,982) (202,906,440)
Debenture issuance expenses - (3,640,595)
Contribution to COVID Relief Fund - (60,000,000)
Rent expense claimed on the basis of actual payment (200,798,706) -
Taxable Income 6,467,439,035 7,528,511,428
Current Tax Expense @ 30% of taxable income 1,940,231,711 2,258,553,428
Deferrred Tax Expense/ (Income) 91,306,537 (530,644,526)
Total income tax expense 2,031,538,248 1,727,908,902
Effective tax rate 30% 30%

190 Nabil Bank Limited


4.42 Statement of distributable profit or loss
Statement of distributable profit or loss is calculated in line with the requirement of NRB Unified directive no. 4/78.
NPR
BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Net profit / (loss) as per statement of profit or loss 4,256,024,188 4,527,552,838
Less: appropriations (-) / contributions (+):
a. General reserve (852,000,000) (906,000,000)
b. Foreign exchange fluctuation fund (32,600,000) (32,400,000)
c. Capital redemption reserve (Debenture Redemption Reserve) (333,333,333) (333,333,333)
d. Corporate social responsibility fund (42,560,242) (45,275,528)
e. Employees’ training fund (5,085,171) -
f. Investment adjustment reserves - (133,073)
g. Others: (1,000,000) (1,000,000)
- Contingent reserve (1,000,000) (1,000,000)
- Cash dividend - -
- Bonus share - -
- CSR Expenses routed through SoPL - -
Transfer from Fair Value Reserve - 1,083,165,278
Profit or (loss) before regulatory adjustment 2,989,445,442 4,292,576,182
Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) 492,389,707 (86,966,480)
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) - -
d. Short loan loss provision on Non - Banking Assets (-)/reversal (+) (8,778,420) 3,044,268
e. Deferred tax assets recognised (-)/reversal (+) - 2,482,581
f. Goodwill recognised (-)/impairment of Goodwill (+) - -
g. Bargain purchase gain recognised (-)/reversal (+) - -
h. Actuarial loss recognised (-)/reversal (+) 32,021,047 (141,183,073)
i. Other (+/-) - 395,726
Total Adjustment in Regulatory Reserve 515,632,334 (222,226,978)
Total Distributable profit 3,505,077,776 4,070,349,204
Opening balance in retained earnings 37,264,297
Add: Distributable profit of NBB (639,314,207)
Less: Direct transfer from RE (3,483,300)
Total Distributable profit 2,899,544,566
Add: Free Reserves of NBB 5,748,677,851
Total Distributable profit and free reserves 8,648,222,417

BANK
PARTICULARS
2079 ASHADH 32 2078 ASHADH 31
Opening balance in retained earnings 4,162,928,789 3,576,422,832
Bonus shares issued during the year (4,125,664,492) (3,382,661,629)
CSR Fund expense (178,034,823)
UFL Reserves adjustment (3,483,300) 76,853,205
RE added from NBB (639,314,207) -
Net distributable profit out of current year profits 3,505,077,776 4,070,349,204
Total Balance in retained earnings available for distribution 2,899,544,566 4,162,928,789

Annual Report 2021/22 191


4.43 Principal Indicators

PARTICULARS INDICATORS
2017/18 2018/19 2019/20 2020/21 2021/22

1 Net Profit / Gross Income % 31.12 24.25 18.55 21.72 16.15

2 Earnings Per Share NPR 51.84 50.57 36.16 33.57 18.64

3 Market Value per Share NPR 921 800 765 1,359 824

4 Price Earning Ratio Times 18.60 15.82 21.15 40.48 44.21

5 Dividend (including bonus) on share capital % 34.00 34.00 35.26 38.00 30.00

6 Cash Dividend on Share Capital % 22.00 22.00 1.76 4.40 11.50

7 Interest Income / Loans and Advances % 11.36 11.41 10.98 9.37 10.28

8 Employee Expense / Total Operating Expense % 22.96 17.65 15.80 24.73 14.02

9 Interest Expense on Total Deposit and Borrowings % 4.04 4.96 5.39 4.35 5.77

10 Exchange Gain / Total Income % 5.69 4.66 4.14 3.68 2.64

11 Staff Bonus / Total Employee Expenses % 36.38 34.43 28.17 20.37 26.27

12 Net Profit / Loans and Advances % 3.99 3.38 2.33 2.49 1.88

13 Net Profit / Total Assets % 2.61 2.11 1.58 1.71 1.20

14 Total Credit / Deposit % 82.66 81.96 79.72 89.84 92.49

15 Total Operating Expenses / Total Assets % 4.93 5.49 5.80 5.22 5.33

16 Adequacy of Capital Fund on Risk Weighted Assets

a. Core Capital % 11.81 11.40 10.67 10.67 10.77

b. Supplementary Capital % 1.19 1.10 2.40 2.09 2.32

c. Total Capital Fund % 13.00 12.50 13.07 12.77 13.09

17 Liquidity (CRR) % 10.05 4.78 11.20 3.66 4.13

18 Non Performing Loans / Total Loans % 0.55 0.74 0.98 0.84 1.57

19 Base Rate % 7.78 8.09 7.32 5.86 8.77

20 Weighted Average Interest Rate Spread % 4.48 4.19 3.51 3.31 2.75

21 Book Net Worth per Share NPR 256 257 256 251 232

22 Total Shares Outstanding Number 80,432,210 90,118,454 100,974,974 138,444,512 228,329,086

23 Total Permanent Employees Number 1,005 1,080 1,128 1,271 2,130

24 Return on Equity % 20.94 17.76 13.61 15.19 9.78

25 Return on Assets % 2.61 2.11 1.58 1.71 1.20

26 Dividend Payout Ratio % 68.68 67.24 97.51 113.18 160.95

27 Earnings Yield % 5.38 6.32 4.73 2.47 2.26

28 Dividend Yield % 3.69 4.25 4.61 2.80 3.64

29 Cost to Income Ratio % 56.35 63.20 68.13 66.17 71.92

30 Total Assets to Shareholders’ Fund times 7.41 8.67 9.19 8.60 7.92

31 Shareholders’ Fund to Liability including Contingent Liability % 11.26 9.80 9.07 9.88 12.51

32 Number of Offices Number 74 82 118 135 231

33 Number of ATMs Number 116 136 185 185 250

192 Nabil Bank Limited


Note:
comprising of Gross Interest Income, Commission and Discount,
1 Gross Income in S.N. 1 comprises of Gross Interest Income,
Other Operating Income and Exchange Income.
Commission and Discount, Other Operating Income and Exchange
Income. 8 The Loans and Advances in S.N. 12 is same as Loans and
Advances in S.N. 7 and is the average balance for the entire
2 EPS computation policy is disclosed in “Significant Accounting
financial year.
Policies”.
9 Total Assets in S.N. 13 and S.N. 15 are average balance of assets
3 Market Value per Share in S.N. 3 is the closing price of ordinary
computed by averaging outstanding balance of previous financial
shares quoted in Nepal Stock Exchange on Friday, 15th July 2022,
year and current financial year.
the last trading day in the reporting period.
10 Credit and Deposit in S.N. 14 is the outstanding balance as of
4 The Interest Income in S.N. 7 is the interest income from loans and
balance sheet date.
advances (excluding staff loans) only. The loans and advances are
the average loans and advances for the entire financial year. 11 Return on Equity in S.N. 24 is computed by taking average Equity
including Proposed Dividend of previous year till the date of AGM
5 Total Operating Expense in S.N. 8 comprises Gross Interest
and average after-tax net profit of current year. Figures of previous
Expense, Staff Expense and Other Operating Expense.
years have been restated accordingly wherever necessary.
6 The Deposits and Borrowings in S.N.9 are the average deposits and
12 Earnings Yield represent earning (attributable to equityholders) per
borrowings (including debentures) for the entire financial year.
market value of share.
7 Total Income in S.N. 10 is same as Gross Income in S.N. 1
13 Dividend Yield represent dividend per market value of share.

Annual Report 2021/22 193


5. Disclosure and additional information

5.1 Risk management has been effective in practical application structure with well-defined transparent and
of the principles of good risk governance in consistent lines of responsibility.
Effective risk management has been the
the identification, evaluation, measurement,  Risk culture: Promotion of strong risk
key to the Bank’s success over the years
monitoring and mitigation of risks across all culture that support and provides
and it is integral to the Bank’s long term
functional areas of the organization. appropriate standard and incentive for
business sustainability. The Bank’s risk
management objective is to strike balance The Bank follows following principles to professional and responsible behavior.
between risk and return towards delivering manage risks in the organization:  Risk policies and process: Implementation
optimum risk-adjusted return on capital over  Risk appetite and strategy: Establishment of of policies to ensure that risk management
a longer time horizon. Towards achieving this risk appetite statement and strategy which practices and process are effective at
objective, the Bank has implemented robust articulates the nature, type and level of risk all levels and execution of sound risk
risk management architecture as well as the Bank is willing to assume. management process to actively identify,
policies and processes approved by its board  Capital management: Capital management measure, control, monitor and report risk
of directors. These encompass identification, is driven by Bank’s strategic objective and inherent in all products activities, process,
measurement and mitigation of risks across accounts for the regulatory, economic and systems and exposure.
various facets of banking operations. commercial environment in which the Bank  Risk management infrastructure:
operates. Ensure sufficient resources and systems
5.1.1 Risk Governance Framework
 Governance and oversight: Proper infrastructures are in place to enable
The Bank follows three lines of defenses model governance and oversight through a effective risk management.
in its risk governance framework. This model clear, effective and robust governance

Bank’s Risk Governance Framework

BOARDS OF DIRECTORS

194 Nabil Bank Limited


5.1.2. Risk Management Framework 5.1.3. Components in Risk Management (RMC) reports to the Board of the Bank for
Framework key risk areas on a periodic basis.
Nabil Bank manages risk through integrated
risk management framework of the Bank. It is The Bank’s risk management framework has  Appropriate Management Information
built upon the principles of Basel Committee following components: System
on Banking Supervision and follows the Risk
 Active Board and Senior Management Sound and effective management
Management Guideline issued by Nepal Rastra
Oversight information system (MIS) is crucial for
Bank.
Bank’s credit management. Information
Board level control has been exercised
The main objectives of the framework are to: generated by MIS helps Senior
on the management of risk across the
Management/Board to take decisions
 Establish common principles and standards Bank. There is presence of clear, effective
regarding risks, credit portfolio decisions,
for management and control of all risks. and robust structure with well-defined
and estimate capital requirements on a
transparent and consistent lines of
 Provide a shared framework and language meaningful and timely basis. The Bank
responsibilities. Board level committees
to improve awareness of risk management. has an effective MIS that helps senior
like Audit, Risk, AML Committee meets
 Anticipate and mitigate risk events before management/board to take decisions
regularly to review the risk profile and take
they become a reality. regarding credit risk management.
decision accordingly.
 Protect against possible losses.  Effective Internal Control and Limits
 Policies and Procedures:
 Integrate risk management in all levels of For the purpose of monitoring the risks with
The Bank has implemented policies/
decision making. the risk appetite of the Bank, approved risk
procedures to ensure that risk management
 Ensure earnings stability. limits are in place. Internal controls are
practices and process are effective at
embedded on day-to-day business and are
 Provide clear accountability and all levels and execution of sound risk
designed to ensure, to the extent possible,
responsibility for risk management management process to actively identify,
that the banking activities are efficient and
 Define the Bank’s risk appetite and align measure, control, monitor and report risk
effective, information is reliable, timely and
the Bank’s portfolios and business strategy inherent in all products activities, process,
complete and the bank is compliant with
accordingly. systems and exposure.
applicable laws and regulation.
 Maintain the Bank’s capital adequacy and  Risk Management Function
 Risk Appetite and Risk Tolerance
liquidity position. There are guidelines on key responsibilities
In line with the Risk Appetite Statement
 Further strengthen governance, controls and and escalation and risk reporting model in
and Risk Tolerance metric, responsibility
accountability across the organization. the Bank. Risk Management Committee
matrix has been developed for various risk

To Facilitate Risk Management Bank has Following Risk Organizational Structure in Place:

BOARDS OF DIRECTORS

Annual Report 2021/22 195


areas and trigger level monitoring. The risk governance and identifies the need of a strong board’s approval for its implementation.
appetite statement considers risk capacity, risk management framework, well defined  To keep the directors informed on the
financial position, and strength of its core risk management processes and effective risk adequacy and appropriateness of existing
earnings. Risk appetite is set and approved assessment, measurement and mitigation risk identification and risk management
by the Board and is overseen on an ongoing mechanism. system and contribute in the systems
basis. development.
Member secretary of this committee is Bank’s
The Bank has also set risk tolerance level Chief Risk Officer (CRO) who leads the risk  To regularly review the level of risk inherent
for different risk aspect such triggers level management function in the Bank. Within to business activities, risk tolerance
sets risk appetite of the Bank and the Bank’s organization structure, CRO has direct capacity, risk management strategy, policies
amount of uncertainty that Bank is willing reporting line to board’s Risk Management and guidelines, and submit its observation
to take. Risk Tolerance levels are defined Committee and a dotted line to the CEO. This reports to the board on the adequacy of the
in quantitative aspects which also work structure ensures an effective independent risk same.
as Key Risk Indicators which shall trigger management function with sufficient stature,  To receive risk management report from the
remedial measures in case such indicators independence, resources and a direct access to management on regular basis and discuss
are crossed. the board. on the methodology of risk assessment,
evaluation, monitoring and control; and
 Risk Culture The Committee oversees overall risk submit necessary inputs to the board.
Risk culture covers awareness, attitude governance framework of the Bank. It
 To conduct regular discussion and analysis
and behavior of staffs towards risk and ensures that proper risk management policy
of capital adequacy corresponding to
risk management. The Bank promotes and procedures are in place and effectively
risk asset, Internal Capital Adequacy
strong risk culture that support appropriate practiced at all levels within the Bank. In
Assessment Process (ICAAP), adequacy
standard for professional and responsible doing so it assesses whether or not the Bank’s
of systems and policies in line of business
behavior. The bank has defined three line policies and procedures are adequate and
strategy and risk tolerance and provide
of defense towards fostering risk culture implemented. It also reviews the adequacy
necessary inputs/suggestions to the board.
across organization: first (Branch/Strategic and effectiveness of Management Information
System and Internal Control System within the  To provide suggestions to the board for
Business Units), second (Risk Units) and
Bank. the development of policy and structures
third (Internal Audit).
according to central bank’s directives/
 Training The Committee, on an ongoing basis, defines guidelines, bank’s internal thresholds,
and reviews risk appetite of the Bank in and national as well as international best
Training has been provided internally and
relation to overall business risk with specific practices.
externally as per need to enhance skill and
focus on credit risk, market risk, operation  To suggest the board on necessary policy
knowledge in the area of risk management
risk and liquidity risk. It advises the board formulation or decision process based on
for the officials of the Bank.
on overall risk tolerance levels of the bank stress testing results.
5.1.4 Board Level Committees throughout the strategic implementation
 To submit reports to the board with
process. By doing so, it aims to achieve the
For effective management and active necessary suggestions after conducting
following objectives:
oversight of risk, Bank’s board of directors analysis of the limit and rationale of the
has constituted four board level committees  To ensure that the Bank has developed authority delegated by the board.
for oversight in specific risks areas. Each and implemented proper risk management  To submit reports to the board on the
committee has its own standard operating system as required by directives and risk Bank’s asset structure and status of asset
guideline which defines objectives, management guidelines of regulatory mobilization, anticipation of income from
responsibilities and operating procedures of the authority. their mobilization, increase or decrease in
committee. Brief description of the committees  To ensure adequacy and appropriateness of their quality and the tasks performed by
is given below: the Bank’s risk management system. Asset Liability Committee (ALCO).
 To study impact on financial position of the
5.1.4.1 Risk Management Committee Major roles and responsibilities of the Risk
bank due to change in economy and submit
The committee is constituted in line with the Management Committee are:
the report along with adequate mitigation
spirit of Risk Management Guidelines (RMG)  To devise appropriate risk management strategies to the board.
of Nepal Rastra Bank and the NRB Unified system and procedures and obtain the
Directives. This committee highlights on risk

196 Nabil Bank Limited


5.1.4.2 Audit Committee security position of the Bank in respect Bank’s board of directors.
of exposure to credit risk, operations risk,  To make assessment of AML/KYC risk to
The Committee is constituted and it functions
market risk and other risks. the Bank in national level perspective
in compliance to the regulatory provisions of
NRB Unified Directives and the provisions of  Advising and recommending the board on taking consideration of events and factors
Sections 164 and 165 of Company Act 2063. management actions required for achieving happening in domestic and international
The Committee’s role is extensive and strongly the desired level of effectiveness and markets.
supports the board in dealing with aspects of compliance in response to above reviews.
5.1.4.4 Committee Relating to Staff
good corporate governance, internal control,
Recommending the board on appointing Services and Facilities
risks management, financial reporting, legal
statutory auditor, auditor’s remuneration and
and regulatory compliance and ethical conduct The Committee is constituted in line with
reviewing that the auditor’s actions in course
of business. the provision of directives of the Nepal
of the bank’s audit, do not contravene with
Rastra Bank. The Committee’s roles and
Member secretary of this committee is the applicable laws and provisions.
responsibilities are extensive and the
Bank’s Head of Internal Audit function. Within committee strongly supports the board in
5.1.4.3 Anti Money Laundering (AML)
the Bank’s organization structure, Head of formulating policies, guidelines, and rules
Committee
Internal Audit has direct reporting line to relating to human resource function. The
board’s Audit Committee. Internal Audit is The Committee is constituted in line with the Committee functions and discharges its duties
conducted in line with the spirit of risk based provision of directives of the Nepal Rastra and responsibilities in compliance to regulatory
audit. Internal Auditors and Statutory Auditors Bank. The Committee oversees implementation requirements.
have direct access to the Audit Committee. of Assets (Money) Laundering Prevention Act,
2064, Assets (Money) Laundering Prevention Major responsibilities of the Committee
The Audit Committee reviews and discusses Rules, 2073, NRB Unified Directives and Relating to Staff Services and Facilities are:
a number of internal audit reports, statutory other legal and regulatory requirements
audit report and regulator’s inspection report. related to prevention of money laundering.  To assist the board in the formulation/
The Committee updates the board of its The committee oversees risk arising from update of human resource related policies.
actions by submitting copies of its minutes, noncompliance of AML policies and procedures  To conduct periodic study and analysis
which are discussed at board meetings. It also based on national and international best of remuneration structure of the Bank
provides recommendations for strengthening practices. vis.a.vis. industry.
the bank’s system of internal controls and
 To recommend to the board revisions in pay
its effectiveness in practice. The committee Member secretary of this committee is the
scale within prevailing rules, guidelines.
also invites members from the Bank’s senior Bank’s Head of AML and KYC, who reports to
the CRO, thereby ensuring independence of  To review systems and processes covering
management team for facilitating effective
this function within the Bank’s organization job description, key performance indicators
discussions on specific agenda on need basis.
structure. and performance appraisal.
Major responsibilities of the Audit Committee  To develop plan, policy and standard of
are: Major roles and responsibilities of the AML manpower planning related functions
Committee are: such as recruitment and selection,
 Reviewing the Bank’s overall system of
 To review AML/CFT related policies and appointment, placement, remuneration,
internal controls.
programs and recommend its review/ transfer, promotion, career development,
 Reviewing observations and
approval to the board as required. performance appraisal, reward and
recommendations made in audit reports
punishment and labor relations.
issued by internal auditors, statutory  To review the quarterly reports on
implementation status of the AML/CFT  To review employee bye-laws, organization
auditors and regulators.
framework in the Bank. structure and succession planning.
 Reviewing the Bank’s financial statements
for accuracy and compliance in relation to  To provide feedback/recommendations to 5.1.5 Managing Credit Risk
prevailing financial reporting standards and the board on issues pertaining to AML/CFT.
Banking business in Nepal is exposed to credit
regulatory provisions.  To accomplish any other additional
risk to a much larger extent and the Bank’s
 Reviewing compliance in relation to the responsibilities that may be entrusted upon
business is also concentrated around its credit
Bank’s internal policy and prevailing the committee from time to time as per the
risk exposure. Bulk of the earnings is generated
regulatory and legal provisions. requirement of prevailing laws, instructions/
from credit related business, be it in form of
directions of the regulatory authority or the
 Reviewing risk management systems and interest income, fee income or forex income.

Annual Report 2021/22 197


The Bank operates in a dynamic economic authorities assigned to credit business division and the loan gets settled once instrument is
environment where the margin between and recommends CEO for delegation of credit realized.
performing assets and non-performing assets approval authority based such reviews.
Bank has standardized Product Papers that
can often be very thin. Therefore, it is always
The Bank’s credit functions are broadly stipulate proper governance and procedure
a major threat that any of the Bank’s credit
categorized as Large and Corporate (including for all credit relationship. Similarly, periodic
exposure may experience default.
infrastructure financing), SME and Retail monitoring of business and annual review
The Bank’s objective in credit risk credit. Credit Control Division is manned of credit relationship provides the Bank a
management is to minimize the risk and with separate set of skills for analyzing risks fair idea on whether or not to continue the
maximize the risk adjusted rate of return by in these different credit functions and all of relationship. Besides, periodic review of same
on-boarding and maintaining credit exposure them report to the Chief Risk Officer. Besides, by the Internal Audit Department or Statutory
within the acceptable parameters. The Bank the Bank has a system to check and analyze Audit also assists in identifying the status
seeks to achieve this objective through the health of credit portfolio minutely at each of exposure/relationship in line with guiding
effective implementation of its Credit Policy borrowing unit level irrespective of size of the documents of the Bank. Any weaknesses
and its Investment Policy within its overall exposure on defined periodic manner. At all on the part of the business of borrower and
risk management structure. These policy times this system ensures that any borrowing the relationship strength are independently
documents guide on the dos and the donts in unit showing smoke signal gets prompt doses assessed by Internal Audit and the advice
business generation. Any generation of risk of correction as deemed appropriate. is taken positively for necessary changes.
assets and their impact on long term value Similarly, a separate division, Centralized
generation is well deliberated in every credit The Bank makes credit extension decision by Loan Administration Department (CLAD)
proposal. Risks and returns are properly assessing each business proposal thoroughly. It which has reporting lines to the COO and
weighed and risk mitigating measures are also ensures that the inherent credit risks that takes responsibility for exposure accounting,
explicitly spelled out. are associated with the business are addressed disbursement and settlement.
appropriately through coverage of better safety
Credit Risk Management function is primarily margin, additional collateral back up and lower Within the Credit Risk Management, processes
divided into two units, Credit Control Division exposure to keep the business at low leverage. are well defined where checking, control and
and Credit Risk Division. The heads of both independence of the credit extension, risk
credit risk management functions report There is separate Credit Administration assessment, review, monitoring and exposure
to Chief Risk Officer, thereby ensuring the and Support Division (CAS Division), which accounting is fully complied with.
independence of credit risk function from prepares security documents and retains
custody of same. This is a four eyes concept All such actions and processes are properly
business generation. These divisions neither
in verifying the security aspects in line with recorded, reported and discussed. These
have any business level targets, nor have any
the approved conditions. CAS Division is reports on need basis and on a defined
incentive for growth in business. The Credit
also independent to business division and it frequency are put to the oversight of Senior
Risk Division oversees risk at macro level,
ensures, on an ongoing basis, on the safety Management, Risk Management Committee
prepares plans, policies and other reference
and going concern of the borrowers, through and the Board. Internal Audit Department of
document, conducts credit risk review at
post relationship assessment. Periodic review the Bank too takes up the matter on credit
portfolio level, and focuses on capacity
of all accounts under credit exposure is one of observations and discusses the same at
development of credit staffs. The division
the prudent practices that the Bank follows in Audit Committee. Senior Management or the
oversees global, macro, micro and unit level
order to take necessary steps to avert/minimize Board, on need basis, issue instructions as
risk that arise out of daily business operation
the risk. Quarterly on-site inspection of the appropriate.
as well as out of changes in market conditions
that affect particular borrowing customers/ borrower and suggestion for timely corrective
5.1.6 Market Risk
counterparties. actions itself help protect borrowers as well.
Besides, in case any borrower faces difficulties Market Risks are discussed at Asset Liability
The Credit Control division is responsible for and pose a risk to the Bank in terms of fall Management Committee (ALCO) of the Bank
credit risk review/assessment of individual in the value of assets, the Bank sets aside and even discussed at respective division level
borrowers. It reviews credit proposals received adequate loan loss provision. Any business on open position on daily basis. The limits for
from business division and assesses inherent decision for credit exposure is taken only if it is open position are controlled level wise, which
credit risk of the proposal. The division vetted and approved by the credit risk division. ensures in-depth knowledge of the market and
conducts onsite/offsite reviews, reviews risk Business generation unit singly cannot take a movement before taking decision (by choice).
ratings, and supports capacity development of credit exposure decision except on instrument The monthly reports on such aspects are well
front line staffs. It also reviews credit lending purchase where security is instrument itself discussed and dealt in ALCO.

198 Nabil Bank Limited


ALCO ensures functioning of the jobs in line (Alco) in line with ALM Policy. Banking System on periodic basis and staffs identified for
with the policies and procedures and suggests/ (BS) is another area of concern and vulnerable the program get the opportunity for training,
recommends for necessary steps collectively to threats from outside. Information and seminar and workshop. Adequate numbers
to address the risk on interest rate movement, Technology Division in the Bank reviews and of trainings are conducted and staffs required
exchange rate movement and equity price checks the security aspects in line with IT with training are given the opportunity for skill
changes. Policy of the Bank. Bank has conducted an IS enhancement. Knowledge sharing is one of the
Audit of the Bank’s system and suggestions core methods of skill development. If a staff
Most of the market operations (investments) given by the audit with respect to safety and gets any training, s/he is encouraged to share
are done from the Treasury Front Office which security standards are being put in place. the same among the peers in the division/
directly reports to the CEO and exposure branch.
accounting including booking of income/ Bank has separate division to oversee
expense is done from Treasury Back Office operation risk including Compliance of KYC and In operations, the Bank has put in place
(TBO) which reports to the Chief Operating AML. The division is headed by senior level a maker and checker concept in which a
Officer. staff with adequate access to the daily report, transaction has to compulsorily go through
operational processes and right to recommend two individuals from a control standpoint with
Overall investment made and necessary the changes in the system and procedures. The proper transaction right to capture deviations,
analysis of the investments, including head of operation risk directly reports to the if any. Similarly, MIS Reports are generated
appropriate suggestions, are issued from Chief Risk Officer. Bank has SIMs (Standing to check correctness of transactions and any
Treasury Middle Office (TMO) which reviews Instruction Manuals) for all businesses of the errors are promptly addressed and rectified.
the portfolio periodically. TMO is independent Bank. All the activities are undertaken in line The activities of a personnel and division /
from other treasury units and reports to Chief with the set criteria in the SIMs, policies and branch can be viewed and monitored centrally
Risk Officer. Any credit impairment in the guidelines including Directives and circulars through an integrated system, which helps
investment books are accounted for, for fair from central bank. Similarly, daily functions at in minimizing the risk of misconduct, if any.
assessment of the portfolio. operations are independently reported through The Bank has an on-line replication Disaster
separate reporting line other than business Recovery Site (DRS) which captures the record
The Bank assesses the open position on
generation and credit risk where independence of each transaction that takes place at the
daily basis and calculates risk exposure for
of checking and control is complied with. Production Server. Both the sites (Production
allocation of required capital in line with Basel
Server and Disaster Recovery – Back up site)
provisions. Likely impact on earnings due to Processes are reviewed periodically so that are housed in well-conditioned and high shock
change in the market condition and change their perfection can be weighed and any resistant buildings and are at different seismic
in the standing of the counterparty are well shortcoming can be addressed. Most of the zone, far from each other. DRS is outsourced
assessed periodically and necessary actions functions like line approval, bill payment, to a professionally managed company having
are taken as appropriate. loan disbursement are centralized which expertise in the sector. Drill is being done
controls activities that can cause errors due periodically and is being tested occasionally to
TFO is equipped with advanced dealing
to inadequate knowledge on the part of staff. assess the functioning of DRS.
platform for timely and effectively concluding
Similarly, awareness to the public is made
the deals. Similarly, the unit is equipped with
on our services and products periodically by Each desktop is implemented with Active
modern and advanced information system
placing notices in the website of the Bank, Directory System (ADS) which does not allow
on global news, market movements and
or in branches or publishing notices as user to take away the data in devices like
any incidents so that bank can manage and
appropriate. Staffs are given orientation on data traveler (pen drive) or bring in data for
maintain the position favorably.
the job including that of system of the Bank processing or any other purposes posing threat
The Bank in line with Basel provisions before they are placed for the job and are to the repository. Similarly, individual data in
calculates risk exposure and allocates sufficient guided to follow the SIMs for the job. Any desk are also stored and backed up in periodic
capital/cushion for perceived market risks. staff for the first time in any job is put under interval at data center so that any loss of data
the supervision of an experienced staff and is in desktop can be retrieved from data center.
5.1.7 Operation Risk allowed to work independently after attaining
required skills. Bank has Whistle Blowing The Bank has a separate Legal division
Operations Risk that arises out of inefficient
Policy to report to senior or management which is adequately manned by qualified
processes and people inside and outside the
directly on anyone’s suspicious conduct outside and experienced staff. All legal agreements,
Bank is increasing these days. Operation risk,
and inside the Bank. Skill development and deeds and documents including claims and
market risk and other risks are discussed in
skill enhancement programs are conducted charges are thoroughly studied prior to making
the Asset Liability Management Committee
any decision involving such documents.

Annual Report 2021/22 199


Compliance with existing rules and regulations meeting its short term and predictable measured at a bid price, liabilities and short
and business practices practiced globally and outflows. Liquid funds are parked in many positions are measured at an asking price),
locally are taken into account before arriving at institutions and instruments to achieve the without any deduction for transaction costs.
the decision. Professional services of experts required diversification. Contingency funding
are sought after wherever the Bank needs arrangements are in place in the form of A market is considered as active if transactions
expert’s opinion on pertinent issues. unutilized credit limits in inter-bank market for assets or liabilities take place with
and the accessibility to the repo market. In sufficient frequency and volume to provide
The Bank in line with Basel provisions normal circumstances the Bank operates with reliable pricing information on an arm’s length
calculates risk exposure and allocates sufficient adequate buffer liquidity over the regulatory basis. The Group measures fair value of an
capital/cushion for perceived operational risks. required liquidity ratios and has been able to instrument at active market price without
manage its liquidity risk satisfactorily. adjustment for factors such as transaction
5.1.8 Liquidity Risk costs.
Liquidity risk is the Bank’s inability to meet 5.1.9 Legal and compliance risk
management Level 2
its contractual and contingent financial
obligations as they fall due, without incurring The Bank has a separate Legal division Fair value measurements are derived based on
unacceptable losses. The obligations could which is adequately manned by qualified and observable inputs, which are either observed
be both ‘On’ and ‘Off’ balance sheet. By the experienced staff. All legal agreements, deeds directly such as in terms of prices or observed
inherent nature of its business model, banks and documents including claims and charges indirectly such as in terms of factors that are
are always vulnerable to liquidity and solvency are thoroughly studied prior to making any derived from prices. Such observable inputs
problems that can arise from mismatches in decision involving such documents. In case include:
the tenor of its assets and liabilities. where the Bank needs expert’s opinion on
 quoted prices for similar instruments in
particular issue, experts from the industry are
The Bank’s primary liquidity risk management active markets;
consulted.
objective is to assess the funding requirement  quoted prices for identical or similar
towards meeting its obligations and to Bank has a separate division to oversee instruments in inactive markets;
ensure that adequate funds are available at operation risk including Compliance of KYC  financial instruments are valued using
appropriate times, both under normal and and AML. The division is headed by senior models where all significant inputs are
stressed conditions. Towards this the Bank level official with adequate access to the daily observable.
has its ALCO functioning as the main platform report, operational processes and right to
for its liquidity risk management. The ALCO recommend the changes in the system and If a market for a financial instrument is
reviews the liquidity risk management policies procedures. The head of Operation Risk, KYC/ not active, then the Group establishes fair
and procedures. Setting and reviewing liquidity AML directly reports to the Chief Risk Officer. value using a valuation technique. Valuation
targets, reviewing liquidity concentrations, techniques include using recent arm’s length
assessing default probability of liquid assets, 5.1.10 Fair value of financial assets and transactions between knowledgeable, willing
diversifying sources of funding and maturity liabilities parties (if available), reference to the current
of deposits, monitoring the liquidity impact of fair value of other instruments that are
5.1.10.1 Fair value hierarchy
off-balance sheet transactions are some of the substantially the same, discounted cash flow
primary jobs of the ALCO towards achieving All financial assets and financial liabilities analysis and option pricing models.
effective asset liability management. for which fair value is measured or disclosed
in the financial statements are categorized The chosen valuation technique makes
The ALCO uses tools such as structural within the following fair value hierarchy, which maximum use of market inputs, relies as
liquidity statements, interest rate risk reflects the significance of the inputs used in little as possible on estimates specific to
monitoring tables, stress test reports, and making the measurement, ranging from Level the Group, incorporates all factors that
liquidity profile of the Bank and that of the 1 inputs to Level 3 inputs. market participants would consider in setting
industry, liquidity ratio analysis, and trend a price, and is consistent with accepted
analysis and forecasting in reviewing and Level 1 economic methodologies for pricing financial
managing the liquidity risk. Minutes of the instruments.
Fair value measurements are derived based on
ALCO meeting are discussed at the board
the input of unadjusted quoted market prices
meetings to ensure senior oversight. Inputs to valuation techniques reasonably
in an active market, for identical instruments.
represent market expectations and measures
The Bank mitigates liquidity risk by These could be stock exchanges or dealer
of the risk-return factors inherent in the
maintaining adequate liquid assets towards price quotations (assets and long positions are
financial instrument. The Group calibrates

200 Nabil Bank Limited


valuation techniques and tests them for validity valued using valuation models which have for any other factors, such as liquidity risk
using prices from observable current market been tested against prices or inputs to actual or model uncertainties; to the extent that
transactions in the same instrument or based market transactions and make use of the the Group assumes a third-party market
on other available observable market data. Group’s best estimate of the most appropriate participant would take them into account in a
model assumptions. Unobservable inputs have pricing transaction.
The best evidence of the fair value of a a significant effect on the instrument’s value.
financial instrument at initial recognition is 5.1.10.2 Financial assets and liabilities
the transaction price, i.e. the fair value of the Valuation models are adjusted to reflect the measured at fair value
consideration given or received, unless the spread for bid and ask prices to reflect costs to
The Group carries the following financial
fair value of that instrument is evidenced by close out positions, credit and debit valuation
instruments at fair value:
comparison with other observable current adjustments, liquidity spread and limitations in
market transactions in the same instrument, the models. Also, profit or loss calculated when  derivative financial instruments
i.e. without modification or repackaging, such financial instruments are first recorded  trading assets (equities and mutual funds
or based on a valuation technique whose (day 1 profit or loss) is deferred and recognized measured at FVTPL)
variables include only data from observable only when the inputs become observable or on
 equity investments measured at FVTOCI
markets. de- recognition of the instrument.
Derivative financial instruments such as
When transaction price provides the best Valuation techniques include, among others,
forward foreign exchange contracts are
evidence of fair value at initial recognition, the applying Net Present Value and Discounted
valued using forward pricing model which
financial instrument is initially measured at the Cash Flow Models over similar instruments
incorporates various inputs (Level 2) including
transaction price and any difference between for which observable market prices exists and
foreign exchange spot and forward premiums.
this price and the value subsequently obtained comparing the results.
from a valuation model is subsequently Investment in equity instruments and mutual
recognized in profit or loss on an appropriate Assumptions and inputs used in valuation
funds are valued at closing market prices
basis over the life of the instrument but not models include risk-free and benchmark
(Level 1) for quoted securities. Where
later than when the valuation is supported interest rates, risk premiums in estimating
quoted securities are not frequently traded
wholly by observable market data or the discount rates, bond and equity prices, foreign
to guarantee a fair market value, those are
transaction is closed out. exchange rates, expected price volatilities and
valued using observable market inputs taking
corrections.
reference price of similar securities (Level 2).
Level 3
Fair values reflect the credit risk of the Where the securities are unquoted, those are
Fair value measurements are derived using instrument and include adjustments to take valued at net worth per share (Level 3).
valuation techniques in which current market account of the credit risk of counterparties
Information on financial instruments carried
transactions or observable market data are involved where appropriate. Fair value
at fair value and their position in the fair value
not available. Under this, instruments are fair estimates obtained from models are adjusted
hierarchy is presented below.

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

Annual Report 2021/22 201


Bank - 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

Group - at 15-Jul-2021 (2078 Ashadh 31)


NPR
LEVEL 1 LEVEL 2 LEVEL 3

Other Trading Assets 175,501,559 - -

- Equity instruments - quoted 139,485,135 - -

- Equity instruments - not quoted - - -

- Mutual Funds Units 36,016,424 - -

Equity Investments measured at FVTOCI 798,793,005 - 6,320,268,605

- Equity instruments - quoted 41,413,539 - 5,629,213,817

- Equity instruments - not quoted - - 691,054,788

- Mutual Funds Units 757,379,466 - -

Total 974,294,564 - 6,320,268,605

Bank - at 15-Jul-2021 (2078 Ashadh 31)


NPR
LEVEL 1 LEVEL 2 LEVEL 3

Other Trading Assets - - -

- Equity instruments - quoted - - -

- Equity instruments - not quoted - - -

- Mutual Funds Units - - -

Equity Investments measured at FVTOCI 798,793,005 - 6,320,268,605

- Equity instruments - quoted 41,413,539 - 5,629,213,817

- Equity instruments - not quoted - - 691,054,788

- Mutual Funds Units 757,379,466 - -

Total 798,793,005 - 6,320,268,605

202 Nabil Bank Limited


5.1.10.3 Fair value determination of the impact of adverse developments in its Ever since its establishment 34 years ago,
financial assets measured at FVTOCI internal operations and its external operating the Bank has been able to generate and
The Group has classified certain investments environment. Similarly, the Bank needs to retain substantial earnings in order to ensure
made in equity instruments and in mutual fund maintain sufficient capital for business growth. adequate capital formation, as required for its
units as financial assets measured at FVTOCI. The Bank has adopted ICAAP and it follows business growth. The Bank is well capitalized
Equity Instrument wise details of financial Risk Management Guidelines while taking and able to maintain the required capital
assets measured at FVTOCI is presented in decision on any business. through internal generation, and equally
Note 4.8.3. Information for the Group and the through other means if needed.
Capital planning is an integral part of the
Bank are the same because the Subsidiary has
Bank’s medium term strategic planning and 5.2.1 Qualitative disclosures
not classified any financial assets at FVTOCI.
annual budget formulation process. Total risk The bank has raised NPR 2.21 billion through
5.2 Capital management weighted exposures for the projected level of issuance of debentures in the reporting period.
business operations is calculated, the required These instruments bear a fixed coupon rate of
Capital is crucial component in any business
capital level is projected, and a plan is 10% and have a maturity period of 7 years.
and even more so in case of banks. Hence,
formulated to maintain the required capital.
bank capital is regulated so as to withstand

Annual Report 2021/22 203


5.2.2 Quantitative disclosures
5.2.2.1 Capital structure and capital adequacy
Tier I Capital and a breakdown of its Components
NPR
AMOUNT
PARTICULARS NABIL GROUP
Tier 1 Capital (Core Capital) (CET1 +AT1)
Common Equity Tier 1 (CET 1)
a. Paid up Equity Share Capital 22,832,908,632 22,832,908,632
b. Equity Share Premium 175,555 175,555
c. Proposed Bonus Equity Shares - -
d. Statutory General Reserves 12,624,322,355 12,628,794,796
e. Retained Earnings 2,899,544,565 3,139,621,635
f. Un-audited current year cumulative profit/(Loss) - -
g. Capital Redemption Reserve 1,333,333,332 1,333,333,332
h. Capital Adjustment Reserve (Debenture Redemption Reserve) 5,868,739,683 5,868,739,683
i. Dividend Equalization Reserves - -
j. Bargain Purchase Gain - -
k. Other Free Reserve 7,719,156 7,719,156
l. Less: Goodwill (170,153,724) (170,153,724)
m. Less: Intangible Assets (146,127,858) (147,391,743)
n. Less: Deferred Tax Assets - -
o. Less: Fictitious Assets - -
p. Less: Investment in equity in licensed Financial Institutions - -
q. Less: Investment in equity of institutions with financial interests (298,000,000) -
r. Less: Investment in equity of institutions in excess of limits - -
s. Less: Investments arising out of underwriting commitments - -
t. Less: Reciprocal crossholdings - -
u. Less: Purchase of land & building in excess of limit & unutilized - -
v. Less: Cash Flow Hedge - -
w. Less: Defined Benefit Pension Assets - -
x. Less: Unrecognized Defined Benefit Pension Liabilities - -
y. Less: Negative balance of reserve accounts (47,962,439) (47,962,439)
z. Less: Other Deductions - -
Adjustments under Pillar II
Less: Shortfall in Provision (6.4 a 1) - -
Less: Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) - -
Common Equity Tier 1 (CET 1) 44,904,499,258 45,445,784,884
a. Perpetual Non Cumulative Preference Share Capital - -
b. Perpetual Debt Instruments - -
c. Stock Premium - -
Additional Tier 1 (AT1) - -
Tier 1 Capital (Core Capital) (CET1 +AT1) 44,904,499,258 45,445,784,884

204 Nabil Bank Limited


Tier II Capital and a breakdown of its Components
NPR
AMOUNT
PARTICULARS
NABIL GROUP
a. Cumulative and/or Redeemable Preference Share - -
b. Subordinated Term Debt 4,873,774,668 4,873,774,668
c. Hybrid Capital Instruments - -
d. Stock Premium - -
e. General loan loss provision 3,999,557,314 3,999,557,314
f. Exchange Equalization Reserve 752,112,612 752,112,612
g. Investment Adjustment Reserve 5,580,742 5,580,742
h. Assets Revaluation Reserve - -
i. Other Reserves 21,373,837 21,373,837
Supplementary Capital (Tier II) 9,652,399,173 9,652,399,173

Detailed information about the Subordinated Term Debts with information on the outstanding amount, maturity, amount raised during the year
and amount eligible to be reckoned as capital funds:

Title Nabil Debenture 2082 Nabil Debenture 2085 NBBL Debenture 2085

Face Value NPR 1,000 per unit NPR 1,000 per unit NPR 1,000 per unit

Maturity Period 7 Years 7 Years 10 Years

Interest Rate 10% p.a. 10% p.a. 10.25% p.a.

No. of Units Issued 2 million units 2.207 million units 2 million units

Issue Size NPR 2 billion NPR 2.207 billion NPR 2 billion

The amount of debenture outstanding netted off by the amount of debenture redemption reserve is included in Tier II capital. The debenture
redemption reserve of NPR 1.33 billion is eligible for inclusion under Tier I Capital.

Deductions from Capital:


The bank has deducted the following items in calculation of Tier I Capital Fund:

 NPR 146.13 million in Software applications (net)


 NPR 298 million invested in the equity capital of the subsidiary companies
 NPR 47.96 million in negative balance of actuarial reserve

Total Qualifying Capital


NPR
AMOUNT
QUALIFYING CAPITAL
NABIL GROUP

Core Capital (Tier 1 Capital) 44,904,499,258 45,445,784,884

Supplementary Capital (Tier II) 9,652,399,173 9,652,399,173

Total Capital Fund (Tier I and Tier II) 54,556,898,431 55,098,184,057

Annual Report 2021/22 205


Capital Adequacy Ratio

PERCENTAGE
CAPITAL ADEQUACY RATIOS
NABIL BANK NABIL GROUP
Common Equity Tier 1 Ratio 10.77% 10.88%
Core Capital Ratio – Tier I 10.77% 10.88%
Total Capital Ratio – Tier I + Tier II 13.09% 13.19%

While emanating businesses in the bank, annual budget formulation process. Total risk
Summary of the Bank’s internal approach to
principles of risk, return, capital charge and weighted exposures for the projected level of
assess the adequacy of its capital to support
return against capital consumption (charge) are business is calculated, the required capital
current and future activities, if applicable:
taken into account. The bank also defines risk level is projected, and a plan is formulated to
Nabil Bank adopts robust risk management aspects, taking stock of domestic economic retain the required capital.
framework. The Bank’s policies and scenario, and puts in place the system to
Ever since its establishment, the Bank has
procedures that guides on management of minimize and remove such risk. The risk
been able to generate and retain substantial
risk are approved by the Board of Directors. appetite and approach towards risk taking is
earnings in order to ensure adequate capital
These documents guide on independent well discussed in management level and board
formation, as required for its business growth.
identification, measurement and management level. It is always aligned with the business, its
The Bank is well capitalized and able to
of risks across various businesses. return and capital.
maintain the required capital through internal
The Bank follows Internal Capital Adequacy Basel disclosures have been complied with, generation, and equally through capital
Assessment Process (ICAAP) and Risk addressing the risks and adopting measures to markets if needed.
Management Guideline while taking decision minimize their impact. Increasing complexities
Summary of the terms, conditions and main
on any business. It has always taken note in risks, vulnerabilities of businesses and fast
features of all capital instruments, especially
of ICAAP and has taken steps accordingly in changing world with intense competition pose
in case of subordinated term debts including
ensuring soundness of capital position and a threat to sustainability. The Bank, in order to
hybrid capital instruments.
sustainability of the business. Bank’s different address the varieties of risk that keep coming
committees like Audit Committee, Risk out of business operations, has identified The Bank has not raised any capital through
Management Committee review the business different risks and adopted different measures hybrid capital instruments.
and risks periodically and take account of to minimize them.
stress test results, scenario analysis so as to Information on the terms, conditions and main
align risk, return and capital in sustainable Capital planning is an integral part of the features of debenture issued by the Bank is
manner. Bank’s medium term strategic planning and stated in the preceding Note 5.2.2.1.

5.2.2.2 Risk Exposure


Risk weighted exposures for Credit Risk, Market Risk and Operational Risk
NPR

AMOUNT
RISK WEIGHTED EXPOSURES
NABIL GROUP

Risk Weighted Exposure for Credit Risk 392,084,956,357 392,785,664,573

Risk Weighted Exposure for Operational Risk 13,851,113,837 13,851,113,837

Risk Weighted Exposure for Market Risk 685,086,623 685,086,623

Add: 2% of the total RWE add by Supervisory Review 8,132,423,136 8,146,437,301

Add: 3% Capital Charge for Operational Risk 2,145,458,350 2,198,976,986

Total Risk Weighted Exposures (a+b+c) 416,899,038,303 417,667,279,320

206 Nabil Bank Limited


Risk weighted exposures under each 11 categories of Credit Risk
NPR
RISK WEIGHTED EXPOSURE
CATEGORIES OF CREDIT RISK
NABIL GROUP
1 Claims on Government and Central Bank - -
2 Claims on Other Financial Entities - -
3 Claims on Banks 6,460,215,723 6,867,549,647
4 Claims on Domestic Corporates and Securities Firms 191,947,027,171 191,947,027,171
5 Claims on Regulatory Retail Portfolio 17,900,980,281 17,900,980,281
6 Claims secured by residential properties 15,755,890,991 15,755,890,991
7 Claims secured by Commercial real estate 25,270,844 25,270,844
8 Past due claims 19,590,278,655 19,590,278,655
9 High Risk claims 54,668,677,438 54,937,440,079
10 Other Assets 10,865,512,959 10,890,124,611
11 Off Balance Sheet Items 74,871,102,295 74,871,102,295
Total Credit Risk Weighted Exposure 392,084,956,357 392,785,664,573

Total Risk Weighted Exposure calculation table


NPR
AMOUNT
RISK WEIGHTED EXPOSURES
NABIL GROUP
Credit Risk Exposure 392,084,956,357 392,785,664,573
Operational Risk Exposure 13,851,113,837 13,851,113,837
Market Risk Exposure 685,086,623 685,086,623
Adjustments under Pillar II
Add: 2% of the total RWE under Supervisory Review 8,132,423,136 8,146,437,301
Add: 3% Capital Charge for Operational Risk 2,145,458,350 2,198,976,986
Total Risk Weighted Exposures 416,899,038,303 417,667,279,320
Total Core Capital Fund 44,904,499,258 45,445,784,884
Total Capital Fund 54,556,898,431 55,098,184,057
Common Equity Tier 1 Capital to Total Risk Weighted Exposures 10.77% 10.88%

Total Tier 1 Capital to Total Risk Weighted Exposures 10.77% 10.88%

Total Capital Fund to Total Risk Weighted Exposure 13.09% 13.19%

Amount of Non-Performing Assets (both Gross and Net)


NPR
GROSS AMOUNT LOSS PROVISION NET AMOUNT
Restructured and rescheduled 209,657,641 110,103,840 99,553,801
Sub-Standard 1,651,813,071 407,923,726 1,243,889,346
Doubtful 1,253,086,163 621,996,209 631,089,955
Loss 1,889,482,849 1,881,432,705 8,050,144
5,004,039,725 3,021,456,478 1,982,583,246

Annual Report 2021/22 207


5.2.3. Compliance with external requirement
The Bank is subject to compliance requirement under NRB Directive No.1/78 which stipulated a minimum Total Capital Adequacy Ratio (CAR) of
11.00%. The Bank complied with this requirement at all times during the reporting period. Compliance position at the reporting date is presented
hereunder:

CAPITAL PARAMETER REQUIREMENT NABIL BANK


Minimum Common Equity Capital Ratio 4.50% 8.77%
Capital Conversation Buffer 2.00% 2.00%
Minimum common equity plus capital conservation buffer 7.00% 10.77%
Minimum Tier 1 Capital (Excluding conservation buffer) 6.00% 8.77%
Minimum Total Capital (Excluding conservation buffer) 8.50% 11.09%
Minimum Total Capital (Including conservation buffer) 11.00% 13.09%
Leverage Ratio 4.00% 6.96%

Table of Capital Fund


NPR
PARTICULARS AS AT 16 JULY 2022 AS AT 15 JULY 2021
1.1 Risk Weighted Exposures
a. Credit Risk 392,084,956,357 229,054,499,253
b. Operation Risk 13,851,113,837 12,236,646,315
c. Market Risk 685,086,623 3,881,153,977
Total Risk Weighted Exposures Before Adjustment 406,621,156,817 245,172,299,545
Adjustment under Pillar - II
ADD: 2% of the total RWE added under Supervisory Review as per 6.4.a.9 for Overall Risk 8,132,423,136 4,903,445,991
Management of Capital Adequacy Framework 2007, NRB Unified Directive
ADD:.. % of the total RWE due to non compliance to Disclosure Requirement
Add: 2% Capital Charge for Operational Risk 2,145,458,350 2,523,202,200
Total Risk Weighted Exposures 416,899,038,303 252,598,947,736
1.2 Capital As at 16 July 2022 As at 15 July 2021
Core Capital (Tier 1) 44,904,499,258 26,958,403,277
a. Paid up Equity Share Capital 22,832,908,632 13,844,451,155
b. Share Premium 175,555 158,758,428
c. Proposed Bonus Equity Shares - -
d. Statutory General Reserves 12,624,322,355 7,338,913,386
e. Retained Earnings 2,899,544,565 245,118,329
f. Un-audited current year cumulative profit - 4,527,552,838
g. Capital Redemption Reserves 1,333,333,332 -
h. Capital Adjustment Reserves 5,868,739,683 976,542,520
i. Dividend Equalization Reserves - -
j. Bargain Purchase Gain - -
k. Other Free Reserves 7,719,156 7,719,156
l. Less: Goodwill (170,153,724) -

208 Nabil Bank Limited


PARTICULARS AS AT 16 JULY 2022 AS AT 15 JULY 2021
m. Less: Intangible Assets (146,127,858) -
n. Less: Deferred Tax Assets - -
o. Less: Fictitious Assets - (62,652,536)
p. Less: Investment in equity in licensed Financial Institutions - -
q. Less: Investment in equity of institutions with financial interests (298,000,000) (78,000,000)
r. Less: Investment in equity of institutions in excess of limits - -
s. Less: Investments arising out of underwriting commitments - -
t. Less: Reciprocal crossholdings - -
u. Less: Purchase of land & building in excess of limit & unutilized - -
v. Less: Cash Flow Hedge - -
w. Less: Defined Benefit Pension Assets - -
x. Less: Un recognized Defined Benefit Pension Liabilities - -
y. Less: Negative balance of reserve accounts (47,962,439) -
z. Less: Other Deductions - -
Adjustments under Pillar II - -
Less: Shortfall in Provision (6.4 a 1) - -
Less: Loans and Facilities extended to Related Parties and Restricted lending (6.4 a 2) - -
Additional Tier 1 (AT1) - -
a. Perpetual Non Cumulative Preference Share Capital - -
b. Perpetual Debt Instruments - -
c. Stock Premium - -
Supplementary Capital (Tier II) 9,652,399,173 5,288,848,840
a. Cumulative and/or Redeemable Preference Share - -
b. Subordinated Term Debt 4,873,774,668 2,000,000,000
c. Hybrid Capital Instruments - -
d. Stock Premium - -
e. General loan loss provision 3,999,557,314 2,648,127,335
f. Exchange Equalization Reserve 752,112,612 615,900,000
g. Investment Adjustment Reserve 5,580,742 5,447,668
h. Assets Revaluation Reserve - -
i. Other Reserves 21,373,837 19,373,837
Total Capital Fund (Tier 1 and Tier 2) 54,556,898,431 32,247,252,117
1.3 Capital Adequacy Ratio As at 16 July 2022 As at 16 July 2022
Common Equity Tier 1 Capital to Total Risk Weighted Exposures (After Bank’s adjustments
of Pillar II) 10.77% 10.67%
Tier 1 Capital to Total Risk Weighted Exposures (After Bank’s adjustments of Pillar II) 10.77% 10.67%
Tier 1 and Tier 2 Capital to Total Risk Weighted Exposures(After Bank’s adjustments of
Pillar II) 13.09% 12.77%

Note: These tables are presented as per the Capital Adequacy Framework 2015 under NRB Directive No. 1.

Annual Report 2021/22 209


Credit Risk NPR

AS AT 16 JULY 2022 AS AT 15 JULY 2021


ASSETS SPECIFIC PRO- RISK RISK WEIGHTED RISK WEIGHTED
BOOK VALUE ELIGIBLE CRM NET VALUE NET VALUE
VISION WEIGHT EXPOSURE EXPOSURE
A. Balance Sheet Exposures a b c d=a-b-c e f=d*e
Cash Balance 5,161,464,551 - - 5,161,464,551 0% - 3,234,149,797 -

210 Nabil Bank Limited


Balance With Nepal Rastra Bank 12,705,614,319 - - 12,705,614,319 0% - 7,991,019,254 -
Gold - - - - 0% - - -
Investment in Nepalese Government Securities 54,370,230,419 - - 54,370,230,419 0% - 32,833,486,127 -
All Claims on Government of Nepal 288,215,121 - - 288,215,121 0% - 279,990,121 -
Investment in Nepal Rastra Bank Securities - - - - 0% - - -
All claims on Nepal Rastra Bank 302,155,124 - - 302,155,124 0% - 28,927,832 -
Claims on Foreign Government and Central Bank
(ECA Rating: 0-1) - - - - 0% - - -
Claims on Foreign Government and Central Bank
(ECA Rating: 2) - - - - 20% - - -
Claims on Foreign Government and Central Bank
(ECA Rating: 3) - - - - 50% - - -
Claims on Foreign Government and Central Bank
(ECA Rating: 4-6) - - - - 100% - 1,217,554,555 1,217,554,555
Claims on Foreign Government and Central Bank
(ECA Rating: 7) - - - - 150% - - -
Claims On BIS, IMF, ECB, EC and on Multilateral
Development Banks
(MDBs) recognized by the Framework - - - - 0% - - -
Claims on Other Multilateral Development Banks - - - - 100% - - -
Claims on Domestic Public Sector Entities - - - - 100% - - -
Claims on Public Sector Entity (ECA 0-1) - - - - 20% - - -
Claims on Public Sector Entity (ECA 2) - - - - 50% - - -
Claims on Public Sector Entity (ECA 3-6) - - - - 100% - - -
Claims on Public Sector Entity (ECA 7) - - - - 150% - - -
Claims on domestic banks that meet capital
adequacy requirements 12,796,590,741 - - 12,796,590,741 20% 2,559,318,148 11,454,582,570 2,290,916,514
Claims on domestic banks that do not meet capital
adequacy requirements - - - - 100% - - -
Claims on foreign bank (ECA Rating 0-1) 5,964,155,801 - - 5,964,155,801 20% 1,192,831,160 2,573,089,411 514,617,882
Claims on foreign bank (ECA Rating 2) 2,616,974,643 - - 2,616,974,643 50% 1,308,487,322 283,161,371 141,580,686
Claims on foreign bank (ECA Rating 3-6) 256,545,082 - - 256,545,082 100% 256,545,082 238,657,993 238,657,993
Claims on foreign bank (ECA Rating 7) - - - - 150% - - -
Claims on foreign bank incorporated in SAARC region
operating with a buffer of 1% above their respective
regulatory capital requirement 5,715,170,059 - - 5,715,170,059 20% 1,143,034,012 6,520,957,397 1,304,191,479
Credit Risk NPR

AS AT 16 JULY 2022 AS AT 15 JULY 2021


ASSETS SPECIFIC PRO- RISK RISK WEIGHTED RISK WEIGHTED
BOOK VALUE ELIGIBLE CRM NET VALUE NET VALUE
VISION WEIGHT EXPOSURE EXPOSURE
A. Balance Sheet Exposures a b c d=a-b-c e f=d*e
Claims on Domestic Corporates (Credit rating score
equivalent to AAA) - - - - 50% -
Claims on Domestic Corporates (Credit rating score
equivalent to AA+ to AA-) 615,993,952 - - 615,993,952 70% 431,195,766
Claims on Domestic Corporates (Credit rating score
equivalent to A+ to A-) 6,733,854,570 - - 6,733,854,570 80% 5,387,083,656
Claims on Domestic Corporates (Credit rating score
equivalent to BBB+ & below) 43,425,886,525 37,383,671 93,750,000 43,294,752,854 100% 43,294,752,854
Claims on Domestic Corporates 143,531,380,679 372,010,637 325,375,147 142,833,994,895 100% 142,833,994,895 128,954,272,442 128,954,272,442
Claims on Foreign Corporates (ECA 0-1) - - - - 20% - - -
Claims on Foreign Corporates (ECA 2) - - - - 50% - - -
Claims on Foreign Corporates (ECA 3-6) - - - - 100% - - -
Claims on Foreign Corporates (ECA 7) - - - - 150% - - -
Regulatory Retail Portfolio (Not Overdue) 25,807,703,476 15,236,559 1,924,493,209 23,867,973,708 75% 17,900,980,281 21,023,714,390 15,767,785,792
Regulatory Retail Portfolio Except for Granularity - - - - 100% - - -
Claims secured by residential properties 24,167,742,448 28,215,098 - 24,139,527,349 60% 14,483,716,410 17,678,264,629 10,606,958,777
Claims not fully secured by residential properties - - - - 150% - - -
Claims secured by residential properties (Overdue) 1,394,189,412 122,014,831 - 1,272,174,581 100% 1,272,174,581 931,167,288 931,167,288
Claims secured by Commercial real estate 25,270,844 - - 25,270,844 100% 25,270,844 148,110,472 148,110,472
Past due claims (except for claim secured by
residential properties) 16,272,976,111 3,202,726,978 10,063,363 13,060,185,770 150% 19,590,278,655 6,923,744,789 10,385,617,183
High Risk claims 32,597,882,291 20,642,921 469,447,821 32,107,791,549 150% 48,161,687,323 10,219,901,656 15,329,852,484
Lending against securities (bonds & shares) - - - - 0% - 5,827,063,024 5,827,063,024
Trust Receipt Loans for Trading Firms 3,706,334,949 9,176,798 - 3,697,158,151 120% 4,436,589,781
Investments in equity and other capital instruments 4,873,654,905 2,819,239,817 - 2,054,415,089 100% 2,054,415,089 849,824,139 849,824,139
of institutions listed in the stock exchange
Investments in equity and other capital instruments 124,671,377 114,014,547 - 10,656,830 150% 15,985,245 11,151,101 16,726,651
of institutions not listed in the stock exchange
Staff loan secured by residential property 6,625,773,541 - - 6,625,773,541 50% 3,312,886,770 4,614,697,912 2,307,348,956
Interest Receivable/claim on government securities 332,098,122 - - 332,098,122 0% - 278,691,913 -
Cash in transit and other cash items in the process - - - - 20% - - -
of collection
Other Assets 11,799,903,188 4,247,277,000 - 7,552,626,188 100% 7,552,626,188 6,489,118,428 6,489,118,428

Annual Report 2021/22


TOTAL 422,212,432,249 10,987,938,857 2,823,129,540 408,401,363,852 317,213,854,062 270,605,298,611 203,321,364,746

211
Credit Risk

AS AT 16 JULY 2022 AS AT 15 JULY 2021


ASSETS SPECIFIC PRO- RISK RISK WEIGHTED RISK WEIGHTED
BOOK VALUE ELIGIBLE CRM NET VALUE NET VALUE
VISION WEIGHT EXPOSURE EXPOSURE
B. Off Balance Sheet Exposures Gross Book a b c d=a-b-c e f=d*e d=a-b-c f=d*e
Revocable Commitments 71,727,483,140 - - 71,727,483,140 0% - 19,433,455,136 -

212 Nabil Bank Limited


Bills Under Collection 1,646,105,612 - - 1,646,105,612 0% - 932,720,043 -
Forward Exchange Contract 1,390,736,904 - - 1,390,736,904 10% 139,073,690 13,634,226,278 1,363,422,628
LC Commitments With Original Maturity Up to 6
months domestic counterparty 16,890,479,192 - 2,250,850,004 14,639,629,188 20% 2,927,925,838 13,773,658,791 2,754,731,758
foreign counterparty (ECA Rating: 0-1) - - - - 20% - - -
foreign counterparty (ECA Rating: 2) - - - - 50% - - -
foreign counterparty (ECA Rating: 3-6) - - - - 100% - - -
foreign counterparty (ECA Rating 7 ) - - - - 150% - - -
LC Commitments With Original Maturity Over 6
months domestic counterparty 705,296,805 - 78,022,997 627,273,809 50% 313,636,904 897,820,479 448,910,239
foreign counterparty (ECA Rating: 0-1 ) - - - - 20% - - -
foreign counterparty (ECA Rating: 2 ) - - - - 50% - - -
foreign couterparty (ECA Rating: 3-6 ) - - - - 100% - - -
foreign counterparty (ECA Rating: 7) - - - - 150% - - -
Bid Bond, Performance Bond and Counter guarantee
domestic counterparty 72,965,128,652 - 1,072,870,763 71,892,257,889 40% 28,756,903,156 8,768,744,759 3,507,497,904
foreign counterparty (ECA Rating: 0-1) 2,621,219,502 - 2,096,975,601 524,243,900 20% 104,848,780 573,221,618 114,644,324
foreign counterparty (ECA Rating: 2) 8,084,588,292 - 4,042,294,146 4,042,294,146 50% 2,021,147,073 3,801,498,739 1,900,749,370
foreign counterparty (ECA Rating: 3-6) 3,934,256,230 - - 3,934,256,230 100% 3,934,256,230 4,308,750,201 4,308,750,201
foreign counterparty (ECA Rating: 7) - - - - 150% - - -
Underwriting commitments - - - - 50% - - -
Lending of Bank’s Securities or Posting of Securities
as collateral - - - - 100% - - -
Repurchase Agreements, Assets sale with recourse
(including repo/reverse repo) - - - - 100% - - -
Advance Payment Guarantee 24,489,335,457 - 2,023,316,347 22,466,019,110 100% 22,466,019,110 3,886,200,080 3,886,200,080
Financial Guarantee - - - - 100% - - -
Acceptances and Endorsements 8,840,348,677 - - 8,840,348,677 100% 8,840,348,677 3,362,784,634 3,362,784,634
Unpaid portion of Partly paid shares and Securities - - - - 100% - - -
Irrevocable Credit commitments (short term) 22,203,564,101 - 205,847,307 21,997,716,794 20% 4,399,543,359 18,818,901,109 3,763,780,222
Irrevocable Credit commitments (long term) 1,228,192,662 - - 1,228,192,662 50% 614,096,331 - -
Credit Risk

AS AT 16 JULY 2022 AS AT 15 JULY 2021


ASSETS SPECIFIC PRO- RISK RISK WEIGHTED RISK WEIGHTED
BOOK VALUE ELIGIBLE CRM NET VALUE NET VALUE
VISION WEIGHT EXPOSURE EXPOSURE
B. Off Balance Sheet Exposures Gross Book a b c d=a-b-c e f=d*e d=a-b-c f=d*e
Claims on foreign bank incorporated in SAARC region
operating with a buffer of 1% above their respective
regulatory capital requirement - - - - 20% - - -
Other Contingent Liabilities 272,490,148 - - 272,490,148 100% 272,490,148 272,490,148 272,490,148
Unpaid Guarantee Claim 40,406,500 - - 40,406,500 200% 80,813,000 24,586,500 49,173,000
TOTAL 237,039,631,874 - 11,770,177,165 225,269,454,709 74,871,102,295 92,489,058,516 25,733,134,507
Total RWE for credit Risk (A) +(B) 659,252,064,123 10,987,938,857 14,593,306,705 633,670,818,561 392,084,956,357 363,094,357,126 229,054,499,253
Adjustment Under Pillar - II
Add: 10% of the loan and facilities in excess of
Single Obligor Limit
Add: 1% of the contract (Sale) value in case of the
sale of credit with recourse
Total RWE for Credit Risk
(After Bank’s Adjustment of Pillar - II) 659,252,064,123 10,987,938,857 14,593,306,705 633,670,818,561 392,084,956,357 363,094,357,126 229,054,499,253

Annual Report 2021/22


213
Credit Risk Mitigation
As at 16 July 2022
NPR
DEPOSITS G’TEE OF SEC/G’TEE OF G’TEE OF G’TEE
DEPOSITS GOVT. & NRB SEC/G’TEE OF
WITH OTHER GOLD GOVT. OF OTHER DOMESTIC OF TOTAL
CREDIT EXPOSURES WITH BANK SECURITIES FOREIGN BANKS
BANKS/ FIS NEPAL SOVEREIGNS BANKS MDBS

214 Nabil Bank Limited


A B C D E F G H I
Balance Sheet Exposures
Claims on Foreign government and
Central Bank (ECA: 2) - - - - - - - - - -
Claims on Foreign government and
Central Bank (ECA: 3) - - - - - - - - - -
Claims on Foreign government and
Central Bank (ECA: 4-6) - - - - - - - - - -
Claims on Foreign government and
Central Bank (ECA: 7) - - - - - - - - - -
Claims on Other Multilateral Development
Banks - - - - - - - - - -
Claims on Domestic Public Sector Entities - - - - - - - - - -
Claims on Public Sector Entity (ECA: 0-1) - - - - - - - - - -
Claims on Public Sector Entity (ECA: 2) - - - - - - - - - -
Claims on Public Sector Entity (ECA: 3-6) - - - - - - - - - -
Claims on Public Sector Entity (ECA: 7) - - - - - - - - - -
Claims on domestic banks that meet
capital adequacy requirements - - - - - - - - - -
Claims on domestic banks that do not
meet capital adequacy requirements - - - - - - - - - -
Claims on foreign bank (ECA Rating: 0-1) - - - - - - - - - -
Claims on foreign bank (ECA Rating: 2) - - - - - - - - - -
Claims on foreign bank (ECA Rating: 3-6) - - - - - - - - - -
Claims on foreign bank (ECA Rating: 7) - - - - - - - - - -
Claims on foreign bank incorporated in
SAARC region operating with a buffer
of 1% above their respective regulatory
capital requirement - - - - - - - - - -
Claims on Domestic Corporates (Credit
rating score equivalent to AAA) - - - - - - - - - -
Claims on Domestic Corporates (Credit
rating score equivalent to AA+ to AA-) - - - - - - - - - -
Claims on Domestic Corporates (Credit
rating score equivalent to A+ to A-) - - - - - - - - - -
Credit Risk Mitigation
As at 16 July 2022
NPR
DEPOSITS G’TEE OF SEC/G’TEE OF G’TEE OF G’TEE
DEPOSITS GOVT. & NRB SEC/G’TEE OF
WITH OTHER GOLD GOVT. OF OTHER DOMESTIC OF TOTAL
CREDIT EXPOSURES WITH BANK SECURITIES FOREIGN BANKS
BANKS/ FIS NEPAL SOVEREIGNS BANKS MDBS
A B C D E F G H I
Claims on Domestic Corporates (Credit
rating score equivalent to BBB+ & below) 93,750,000 - - - - - - - - 93,750,000
Claims on Domestic Corporates 219,507,972 - 105,037,935 829,240 - - - - - 325,375,146.95
Claims on Foreign Corporates (ECA: 0-1) - - - - - - - - - -
Claims on Foreign Corporates (ECA: 2) - - - - - - - - - -
Claims on Foreign Corporates (ECA: 3-6) - - - - - - - - - -
Claims on Foreign Corporates (ECA: 7) - - - - - - - - - -
Regulatory Retail Portfolio (Not Overdue) 1,430,125,092 - 494,368,116 - - - - - - 1,924,493,209
Regulatory Retail Portfolio Except for
Granularity - - - - - - - - - -
Claims secured by residential properties - - - - - - - - - -
Claims not fully secured by residential
properties - - - - - - - - - -
Claims secured by residential properties
(Overdue) - - - - - - - - - -
Claims secured by Commercial real estate - - - - - - - - - -
Past due claims (except for claim secured
by residential properties) 4,663,099 - 1,294,881 4,105,383 - - - - - 10,063,363
High Risk claims 408,655,597 - 53,161,035 7,631,190 - - - - - 469,447,821
Lending against securities (bonds & shares) - - - - - - - - - -
Investments in equity and other capital
instruments of institutions listed in the
stock exchange - - - - - - - - - -
Investments in equity and other capital
instruments of institutions not listed in
the stock exchange - - - - - - - - - -
Other Assets - - - - - - - - - -
Total (A) 2,156,701,760 - 653,861,967 12,565,814 - - - - - 2,823,129,540
Off Balance Sheet Exposures
Forward Exchange Contract Liabilities - - - - - - - - - -
LC Commitments With Original Maturity
Up to 6 months domestic counterparty 2,250,850,004 - - - - - - - - 2,250,850,004

Annual Report 2021/22


foreign counterparty (ECA Rating: 0-1) - - - - - - - - - -

215
foreign counerparty (ECA Rating: 2) - - - - - - - - - -
Credit Risk Mitigation
As at 16 July 2022
NPR
DEPOSITS G’TEE OF SEC/G’TEE OF G’TEE OF G’TEE
DEPOSITS GOVT. & NRB SEC/G’TEE OF
WITH OTHER GOLD GOVT. OF OTHER DOMESTIC OF TOTAL
CREDIT EXPOSURES WITH BANK SECURITIES FOREIGN BANKS
BANKS/ FIS NEPAL SOVEREIGNS BANKS MDBS

216 Nabil Bank Limited


A B C D E F G H I
foreign counterparty (ECA Rating: 3-6) - - - - - - - - - -
foreign counterparty (ECA Rating: 7) - - - - - - - - - -
LC Commitments With Original Maturity
Over 6 months domestic counterparty 78,022,997 - - - - - - - - 78,022,997
foreign counterparty (ECA Rating: 0-1) - - - - - - - - - -
foreign counterparty (ECA Rating: 2) - - - - - - - - - -
foreign counterparty (ECA Rating: 3-6) - - - - - - - - - -
foreign counterparty (ECA Rating: 7) - - - - - - - - - -
Bid Bond, Performance Bond and
Counter guarantee domestic counterparty 1,072,870,763 - - - - - - - - 1,072,870,763
foreign counterparty (ECA Rating: 0-1) - - - - - - - - 2,096,975,601 2,096,975,601
foreign counteparty (ECA Rating: 2) - - - - - - - - 4,042,294,146 4,042,294,146
foreign counterparty (ECA Rating: 3-6) - - - - - - - - - -
foreign counterparty (ECA Rating: 7) - - - - - - - - - -
Underwriting commitments - - - - - - - - - -
Lending of Bank’s Securities or Posting of
Securities as Collateral - - - - - - - - - -
Repurchase Agreements - - - - - - - - - -
Advance Payment Guarantee 53,037,876 - - - - - - - 1,970,278,471 2,023,316,347
Financial Guarantee - - - - - - - - - -
Acceptances and Endorsements - - - - - - - - - -
Unpaid portion of Partly paid shares and
Securities - - - - - - - - - -
Irrevocable Credit commitments (short
term) 147,320,120 - 54,637,617 3,889,570 - - - - - 205,847,307
Irrevocable Credit commitments (long term) - - - - - - - - - -
Other Contingent Liabilities - - - - - - - - - -
Unpaid Guarantee Claims - - - - - - - - - -
Total (B) 3,602,101,760 - 54,637,617 3,889,570 - - - - 8,109,548,218 11,770,177,165
Total Credit Risk (A+B) 5,758,803,519 - 708,499,583 16,455,383 - - - - 8,109,548,218 14,593,306,705

Note: These tables are presented as per the Capital Adequacy Framework 2015 under NRB Directive No. 1.
Operations Risk
As at 16 July 2022
NPR

PARTICULARS YEAR 1 YEAR 2 YEAR 3 PREVIOUS YEAR

Net Interest Income 7,159,253,729 6,983,665,257 8,075,884,774


Commission and Discount Income 1,291,005,348 1,305,227,134 1,565,795,360
Other Operating Income 494,669,764 430,411,639 1,450,638,053
Exchange Fluctuation Income 448,342,715 468,086,233 643,760,640
Additional Interest Suspense during the period 28,512,912 65,122,216 65,122,216
Gross income (a) 9,421,784,468 9,252,512,479 11,801,201,043
Alfa (b) 15% 15% 15%
Fixed Percentage of Gross Income [c=(a×b)] 1,413,267,670 1,387,876,872 1,770,180,156
Capital Requirement for operational risk (d) (average of c) - - 1,523,774,900 1,346,165,711
Risk Weight (reciprocal of capital requirement of 10%) in times (e) - - 9.09 9.09
Equivalent Risk Weight Exposure [f=(d×e)] - - 13,851,113,837 12,236,646,315
Adjustment Under Pillar - II
If Gross Income for all the last three years is negative - - -
Total Credit and Investment (Net of Specific Provision) - - -
Capital Requirement for operational risk (5%) - - -
Risk Weight (reciprocal of capital requirement of 10%) in times - - 9.09 9.09
Equivalent Risk Weight Exposure (g) - - -
Equivalent Risk Weight Exposure (h=f+g) - - 13,851,113,837 12,236,646,315

NOTES:
Year 1 = FY 2075/076
Year 2 = FY 2076/077
Year 3 = FY 2077/078
Note: These tables are presented as per the Capital Adequacy Framework 2015 under NRB Directive No. 1

Annual Report 2021/22 217


Market Risk
As at 16 July 2022
NPR
CURRENT YEAR NPR PREVIOUS YEAR NPR
CURRENCY OPEN POSITION OPEN POSITION RELEVANT OPEN RELEVANT OPEN
(FCY) (NPR) POSITION POSITION
1. INR 802,420,363 1,284,474,396 1,284,474,396 8,417,988,142
2. USD 1,062,866 135,993,755 135,993,755 77,408,059
3. GBP (29,999) (4,538,303) 4,538,303 4,323,061
4. EUR 182,611 23,452,697 23,452,697 7,905,885
5. THB 109,188 382,159 382,159 104,828
6. CHF 36,771 4,804,095 4,804,095 2,604,082
7. AUD 79,764 6,883,673 6,883,673 438,640
8. CAD (62,708) (6,129,689) 6,129,689 8,909,780
9. SGD 18,898 1,723,300 1,723,300 2,986,007
10. JPY 3,621,600 3,340,202 3,340,202 2,848,635
11. HKD 46,082 751,137 751,137 262,810
12. DKK 67,045 1,157,193 1,157,193 1,074,136
13. SEK 11,487 139,221 139,221 55,040
14. SAR 293,383 9,998,487 9,998,487 622,840
15. QAR 161,455 5,623,468 5,623,468 96,576
16. AED 147,479 5,138,170 5,138,170 1,393,879
17. MYR 120,338 3,462,121 3,462,121 214,960
18. KRW 4,026,323 388,943 388,943 428,875
19. CNY 365,805 6,924,681 6,924,681 9,113,747
20. KWD 3,027 1,249,555 1,249,555 608,621
21. BHD 2,331 786,060 786,060 4,085
Total Open Position (a) 812,684,108 1,486,005,320 1,507,341,305 8,539,392,689
Fixed Percentage (b) 5% 5%
Capital Charge for Market Risk [c=(a×b)] 75,367,065 426,969,634
Risk Weight (reciprocal of capital requirement of
10%) in times (d) 9.09 9.09
Equivalent Risk Weight Exposure [e=(c×d)] 685,086,623 3,881,153,977

Note: These tables are presented as per the Capital Adequacy Framework 2015 under NRB Directive No. 1.

218 Nabil Bank Limited


5.3 Classification of financial assets and how different classes of financial assets and The following tables provide a reconciliation
financial liabilities financial liabilities are measured, and how of the carrying amounts of financial assets
Financial assets and financial liabilities are income and expenses, including fair value and financial liabilities presented in the
measured on an ongoing basis either at fair gains and losses, are recognized. consolidated statement of financial position
value or at amortized cost. The summary and as per their classification in accordance
of significant accounting policies describes with NFRS 9.

Group - at 16-Jul-2022 (2079 Ashadh 32)


NPR
MEASURED AT FAIR VALUE MEASURED AT
TOTAL
FVTPL FVTOCI AMORTIZED COST

Financial Assets :

Cash and Cash Equivalents - - 11,213,405,777 11,213,405,777

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 192,282,454 - - 192,282,454

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 - 6,680,177,518 56,516,704,863 63,196,882,381

Total Financial Assets 1,565,896,522 6,680,177,518 400,210,836,514 408,456,910,554


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 - - 326,186,071,792 326,186,071,792

Debt Securities Issued - - 6,484,843,749 6,484,843,749

Subordinated Term Debt - - - -

Total Financial Liabilities 1,390,736,904 - 340,681,962,440 342,072,699,344

Annual Report 2021/22 219


Bank - at 16-Jul-2022 (2079 Ashadh 32)
NPR
MEASURED AT FAIR VALUE MEASURED AT
TOTAL
FVTPL FVTOCI AMORTIZED COST
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

Group – at 15-Jul-2021 (2078 Ashadh 31)


NPR
MEASURED AT FAIR VALUE MEASURED AT
TOTAL
FVTPL FVTOCI AMORTIZED COST
Financial Assets :
Cash and Cash Equivalents - - 7,910,457,344 7,910,457,344
Due from Nepal Rastra Bank - - 8,024,171,855 8,024,171,855
Placement with BFIs - - 9,865,211,974 9,865,211,974
Derivative Financial Instruments 13,615,332,578 - - 13,615,332,578
Other Trading Assets 175,501,559 - - 175,501,559
Loans and Advances to BFIs - - 8,601,568,926 8,601,568,926
Loans and Advances to Customers - - 198,021,418,466 198,021,418,466
Investment Securities - 7,119,061,610 33,388,096,368 40,507,157,978
Total Financial Assets 13,790,834,137 7,119,061,610 265,810,924,933 286,720,820,680
Financial Liabilities :
Due to BFIs - - 4,502,705,221 4,502,705,221
Due to Nepal Rastra Bank - - 5,450,392,779 5,450,392,779
Derivative Financial Instruments 13,634,226,278 - - 13,634,226,278
Deposits from Customers - - 223,408,097,336 223,408,097,336
Debt Securities Issued - - 2,096,633,378 2,096,633,378
Subordinated Term Debt - - - -
Total Financial Liabilities 13,634,226,278 - 235,457,828,714 249,092,054,992

220 Nabil Bank Limited


Bank – at 15-Jul-2021 (2078 Ashadh 31)
NPR
MEASURED AT FAIR VALUE MEASURED AT
TOTAL
FVTPL FVTOCI AMORTIZED COST
Financial Assets :
Cash and Cash Equivalents - - 7,285,636,456 7,285,636,456
Due from Nepal Rastra Bank - - 8,024,171,855 8,024,171,855
Placement with BFIs - - 9,865,211,974 9,865,211,974
Derivative Financial Instruments 13,615,332,578 - - 13,615,332,578
Other Trading Assets - - - -
Loans and Advances to BFIs - - 8,601,568,926 8,601,568,926
Loans and Advances to Customers - - 198,021,418,466 198,021,418,466
Investment Securities - 7,119,061,610 32,770,031,368 39,889,092,978
Total Financial Assets 13,615,332,578 7,119,061,610 264,568,039,045 285,302,433,233
Financial Liabilities :
Due to BFIs - - 4,502,705,221 4,502,705,221
Due to Nepal Rastra Bank - - 5,450,392,779 5,450,392,779
Derivative Financial Instruments 13,634,226,278 - - 13,634,226,278
Deposits from Customers - - 223,474,470,361 223,474,470,361
Debt Securities Issued - - 2,096,633,378 2,096,633,378
Subordinated Term Debt - - - -
Total Financial Liabilities 13,634,226,278 - 235,524,201,739 249,158,428,017

5.4 Operating Segment Information for offices and business units located in a trade finance operations are reported under
the Bank particular province are grouped together. financial intermediation.
All transactions between the units are  Treasury Operations: The Bank’s entire
5.4.1 General Information
conducted on arm’s length basis, with intra investment book and foreign currency
(a) Factors that management used to identify unit revenue and cost being nullified at the operations comes under treasury
the entity’s reportable segments bank level. operations. Treasury is responsible for
The Bank has adopted “Management overall liquidity management, open market
(b) Description of the types of products and
Approach” for identifying the operating operations and investment portfolio.
services from which each reportable
segments i.e. seven segments based on segment derives its revenues  Trade Finance Operations: The Bank’s
the geographic locations of its offices in entire trade finance operations like LC,
the 7 provinces of the country. Interest The products and services offered by the Bank Guarantee are handled by trade finance.
earnings and foreign exchange gains/losses can be broadly divided into the following  Cards, e-banking and alternate channels:
generated while conducting businesses categories: All the debit and credit card issuance,
under different segments are reported merchant relationships, e-banking,
 Financial Intermediation: The core business
under the respective segment. Equity m-banking and ATM management are
of deposit mobilization and lending
and Tax Expense are not allocated to the reported here.
activities along with other auxiliary banking
individual segments. For segmentation
services other than treasury, cards and
purpose, all business transactions of

Annual Report 2021/22 221


222 Nabil Bank Limited
5.4.2. Information about profit or loss, assets and liabilities
NPR
PARTICULARS PROVINCE 1 MADHESH BAGMATI GANDAKI LUMBINI KARNALI SUDUR PASHCHIM TOTAL
a. Revenues from external customers 2,079,220,427 1,655,770,667 17,894,707,413 1,912,855,522 2,084,208,358 221,473,591 519,886,742 26,368,122,721
b. Intersegment revenues 1,099,948,372 559,554,550 28,581,903,725 795,239,379 788,748,637 69,871,814 225,635,781 32,120,902,258
c. Net Revenue 609,970,755 540,293,016 4,569,513,722 510,429,682 478,767,233 89,541,355 187,664,721 6,986,180,485
d. Interest Revenue 1,937,555,539 1,526,669,399 15,406,693,313 1,788,034,421 1,976,612,801 213,746,186 491,435,402 23,340,747,062
e. Interest Expense (872,448,656) (424,487,516) (11,730,403,884) (630,475,342) (586,047,177) (27,661,781) (150,351,313) (14,421,875,671)
f. Net Interest Revenue (b) 1,065,106,883 1,102,181,883 3,676,289,429 1,157,559,079 1,390,565,624 186,084,404 341,084,089 8,918,871,391
g. Depreciation and amortisation (19,566,188) (13,173,140) (321,457,091) (10,693,039) (13,065,439) (4,176,309) (7,898,827) (390,030,033)
h. Segment profit/(loss) 609,970,755 540,293,016 4,569,513,722 510,429,682 478,767,233 89,541,355 187,664,721 6,986,180,485
i. Entity’s interest in the profit or loss of
associates accounted for using equity method - - - - - - - -
j. Other material non-cash items

- Deposits 23,186,415,574 13,038,901,597 253,185,488,139 13,718,671,211 15,099,249,527 2,702,026,195 5,291,558,128 326,222,310,372


- Loans 29,523,905,135 22,766,552,280 213,716,190,620 14,449,197,231 27,337,938,747 2,704,339,268 7,881,432,714 318,379,555,996
k. Impairment of assets (82,746,563) (25,952,430) (673,861,132) (109,267,407) (226,056,833) (15,348,999) 14,410,288 (1,118,823,076)
l. Segment assets 32,595,112,005 26,812,127,959 303,921,317,069 15,512,639,241 29,534,860,105 3,003,983,585 8,438,060,985 419,818,100,950
m. Segment liabilities 32,401,246,473 26,628,392,429 251,348,390,279 15,506,565,867 29,603,631,509 2,971,700,557 8,376,426,542 366,836,353,657
5.4.3 Measurement of operating All transactions between the units are D. Nature of any changes from prior periods
segment profit or loss, assets and conducted on arm’s length basis, with intra in the measurement methods used to
liabilities unit revenue and cost being nullified at the determine reported segment profit or loss
bank level. and the effect, if any,
A. Basis of accounting for any transactions
between reportable segments: B. Nature of any differences between the The Bank previously used to have
Interest earnings and foreign exchange measurements of the reportable segment’s segmental division on the basis of business
gains/losses generated while conducting profits or losses and the entity’s profit or segment and geographical segment.
businesses under different segments are loss before income tax: None The same has now been changed to
reported under the respective segment.     geographical segment on the basis of points
Equity and Tax Expense are not allocated to C. Nature of any differences between the of representation present in 7 provinces of
the individual segments. For segmentation measurements of the reportable segment’s the country.
purpose, all business transactions of assets and the entity’s assets: 
E. Nature and effect of any asymmetrical
offices and business units located in a None
allocations to reportable segments:
particular province are grouped together.
None

5.4.4 Reconciliations of reportable segment revenues, profit or loss, assets and liabilities
a. Revenue NPR

PARTICULARS AMOUNT
Total Revenues for reportable segments 58,489,024,978
Other Revenues -
Elimination of intersegment revenues (32,120,902,258)
Entity’s Revenues 26,368,122,721

b. Profit or Loss NPR

PARTICULARS AMOUNT
Total profit or loss for reportable segments 6,986,180,485
Other profit or loss (staff bonus) -
Elimination of intersegment profits
Unallocated amounts: (698,618,048)
Profit before income tax 6,287,562,436

c. Assets NPR

PARTICULARS AMOUNT
Total assets for reportable segments 419,818,100,950
Other assets -
Unallocated amounts
Entity’s assets 419,818,100,950

Annual Report 2021/22 223


d. Liabilities NPR

PARTICULARS AMOUNT
Total liabilities for reportable segments 366,836,353,657
Other liabilities -
Unallocated amounts
Entity’s liabilities 366,836,353,657

Note:

5.4.5 Information about products and services


NPR
PARTICULARS AMOUNT
a. From Financial Intermediation 56,736,201,677
b. From Treasury Operations 1,304,790,406
c. From Trade Finance Operations 291,939,208
d. Cards, e-banking and alternate channels 156,093,688

5.4.6 Information about geographical areas


NPR
PARTICULARS AMOUNT
a. Domestic 58,484,542,973
- Province 1 3,179,168,799
- Province 2 2,215,325,216
- Province 3 46,472,129,133
- Province 4 2,708,094,901
- Province 5 2,872,956,995
- Province 6 291,345,405
- Province 7 745,522,523
b. Foreign 4,482,005
Total (a+b) 58,489,024,978

5.4.7 Information about major 5.6 Contingent liabilities and in irrevocable commitments and contingent
customers commitment liabilities to the Group. These consist of
There is no concentration in revenue Contingent Liabilities are possible obligations financial guarantees, letter of credit and other
generation of the Group or the Bank to such whose existence will be confirmed only by undrawn commitments to lend. Guarantees,
extent that the revenue from a single external uncertain future events or present obligations Letters of Credit and Acceptances under
customer amounts to 10 percent or more of where the transfer of economic benefits is Letters of Credit commits the Group to make
the Group’s or the Bank’s revenue. not probable or cannot be reliably measured. payments on behalf of customers in the event
The Group applies NAS 37 - “Provisions, of a specific act, generally related to trade
5.5 Share options and share based Contingent Liabilities and Contingent Assets” transactions and performance under contracts.
payment in accounting of contingent liabilities and They carry a similar credit risk to loans.
The Group did not have any share options commitments.
In the normal course of business, the Group
or share-based payment transactions in
To meet the financial needs of customers, the makes various irrevocable commitments
the reporting period or the earliest period
Group enters into various contracts that result and incurs certain contingent liabilities with
presented in this financial statements.

224 Nabil Bank Limited


legal recourse to its customers. Even though 5.7 Related parties disclosures In considering each possible related party
these obligations may not be recognized on In the ordinary course of its business relationship, attention is directed to the
reporting date, they do contain credit risk and operation the Bank has conducted commercial substance of the relationship and not merely
are therefore a part of the overall risk profile transactions with parties who are defined as the legal form.
of the Group. Accordingly, they are disclosed related parties in NAS 24 - ‘Related Party
unless remote. Explanatory information on the Disclosures’. All those transactions were
Group’s contingent liabilities and commitments conducted on an arm’s length basis.
are given in Note 4.28.

5.7.1 List of related parties

S. NO. NAME OF RELATED PARTY RELATIONSHIP


1 Mr. Upendra Prasad Poudyal Chairman, Board of Directors
2 Mr. Nirvana Kumar Chaudhary Vice Chairman, Board of Directors
3 Mr. Malay Mukherjee Member, Board of Directors
4 Mrs. Asha Rana Adhikary Independent Director
5 Mr. Ananta Poudyal Member, Board of Directors
6 Mr. Pravin Tibrewala Member, Board of Directors
7 Mr. A.R.M. Nazmus Sakib Member, Board of Directors
8 Mr. Gyanendra Prasad Dhungana Chief Executive Officer
9 Nabil Investment Banking Ltd. Subsidiary Company
10 NB Capital Limited Subsidiary Company
11 NB Securities Limited Subsidiary Company
12 NADEP Laghubitta Bittiya Sanstha Ltd. Associate Company
13 Nabil Bank Ltd. Retirement Fund Post Employment Benefit Plan
14 NBBL Retirement Fund Post Employment Benefit Plan

5.7.2 Key management personnel (KMP)


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 Chief Executive Officer (CEO) of the bank are identified as KMP of the bank.

5.7.2.1 Transactions with Board of Directors


NPR
2022 2021
Board meeting fees/allowances 6,530,170 4,183,000
Travel, accommodation and other board expenses 3,325,452 1,324,466
Total 9,855,622 5,507,466

All board of directors are non-executive directors. The directors are entitled to meeting fees on attending board and board committee meetings as
well as monthly allowances to cover for expenses towards communication and periodicals.

Annual Report 2021/22 225


5.7.2.2 Transactions with Chief Executive Officer
NPR
PARTICULARS 2022 2021
Short Term Employee Benefits 26,930,330 23,050,933
Gross Salary Payments 12,856,250 13,200,000
Other current benefits and payments 14,074,080 1,763,395
Post-employment benefits 1,413,930 1,451,736
Total 28,344,260 24,502,669

5.7.3 Transactions and agreements involving KMP and their Close Family Members (CFM)
CFMs of a KMP are those family members who may be expected to influence, or be influenced by, that KMP in their dealings 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.

For the reported period there have been no payments or transactions with CFM of KMP except in the normal course of banking business like loans,
deposits and interest on the same, both for the Bank and the Group.

5.7.4 Transactions with Subsidiary and Associate companies


Statement of Profit or Loss
NPR

TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE


PARTICULARS
2022 2021 2022 2021

Interest Income - - 7,663,012 5,341,178

Interest Expense 3,577,650 660,861 7,663,012 5,493,310

Other Income 500,000 500,000 - -

Other Expense 2,219,355 750,000 - -

Dividend Income (net) 55,300,000 20,800,000 - -

Statement of Financial Position


NPR
TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE
PARTICULARS
2022 2021 2022 2021
Total Assets 4,317,689 - 93,250,000 113,500,000
Loans and advances - - 93,250,000 113,500,000
Other receivables 4,317,689 - - -
Total Liabilities 114,069,947 68,670,991 377,354 7,240,560
Customer deposits 114,069,947 68,670,991 377,354 7,240,560
Other Payables - - - -

226 Nabil Bank Limited


Commitments and Contingencies
NPR
TRANSACTIONS WITH SUBSIDIARY TRANSACTIONS WITH ASSOCIATE
PARTICULARS
2022 2021 2022 2021
Undrawn Credit Limits - - - -
Other Contingencies - - - -

Total - - - -

5.7.5 Transactions with post-employment benefit plan


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.

Statement of Profit or Loss


NPR
PARTICULARS 2022 2021
Interest Income - -
Interest Expense 120,527,653 122,740,196
Other Income 4,561,976 4,725,883
Other Expense (gratuity and provident fund contributions) - -

Statement of Financial Position


NPR
PARTICULARS 2022 2021
Total Assets - -
Loans and advances - -
Other receivables - -
Total Liabilities 2,722,766,947 457,180,552
Customer deposits 2,590,831,738 427,026,552
Other Payables (debenture liabilities) 131,935,209 30,154,000

Commitments and Contingencies


NPR
PARTICULARS 2022 2021
Undrawn Credit Limits - -
Other Contingencies - -
Total - -

Annual Report 2021/22 227


5.8 Notes on Business Combination For the consideration of acquisition, the Para 32 of NFRS 3 states that “The acquirer
The Bank has acquired erstwhile Nepal Bank has issued 43,367,218.87 number of shall recognize goodwill as of the acquisition
Bangladesh Bank Limited, for the purpose of equity shares at swap ratio of 100:43 (43 date measured as the excess of (a) over (b)
obtaining synergy gain to become the industry shares of Nabil Bank Limited for every 100 below:
forerunner, in the reporting period which was shares of Nepal Bangladesh Bank Limited).
(a) The aggregate of:
an “A” Class financial institution licensed by Accounting for acquisition of Nepal Bangladesh
NRB. The Memorandum of Understanding Bank Limited has been done as per NFRS (i) The consideration transferred measured
(MoU) for the acquisition was signed on – 3 Business Combination along with in accordance with this NFRS, which
2078/09/29, the prior approval (Letter of considering the explanatory notes prescribed generally requires acquisition-date fair
Intent) from Nepal Rastra Bank was obtained by The Institute of Chartered Accountants of value,
on 2078/11/29. The acquisition was approved Nepal (ICAN) by recognizing Goodwill NPR
(ii) The amount of any non-controlling interest
by the Special General Meetings of both the 65,875,689.48.
in the acquiree measured in accordance
institutions held on 2079/02/07. The final NFRS 3 – Business combination has been with this NFRS; and
approval of the acquisition was obtained from applied for the purpose of calculating goodwill/ (iii) In a business combination achieved in
Nepal Rastra Bank on 2079/03/15. The joint Gain on bargain purchase along with the stages, the acquisition-date fair value
operation was started from 2079/03/27. explanatory notes as below: of the acquirer’s previously held equity
interest in the acquiree.

(b) The net of the acquisition-date amounts equity interest of the acquirer by considering represents the expected synergies and other
of the identifiable assets acquired and the the business valuation of acquiree computed benefits arising from combining the businesses.
liabilities assumed measured in accordance based on Due Diligence Audit carried out by The assets and liabilities of the acquiree has
with this NFRS. professional experts that has been approved been recognized in fair value and the details
by AGM of the both acquirer and acquiree can be observed in the financial statements of
Accordingly, as per the standard goodwill has for the purpose of computing swap ratio. The the acquire as of acquisition date.
been recognized for the excess of the value excess of consideration paid by the acquirer
derived as per (a) over (b). Similarly, Accounting for acquisition of
erstwhile United Finance Company Limited
Goodwill/Gain on Bargain Purchase at acquisition date
(acquired in previous Fiscal Year) has also
PARTICULARS AMOUNT (NPR) been recognized by restating the financial
statement of the previous year as per
Consideration Transferred (A) (43,367,218.87 no of shares * NPR 373.09) 16,179,875,689.48
NFRS – 3 Business Combination along with
Fair Value of Net Identifiable Assets (B) 16,114,000,000.00
considering the explanatory notes prescribed
Good Will/Gain on Bargain Purchase (A-B) 65,875,689.48 by The Institute of Chartered Accountants of
Nepal (ICAN) by recognizing Goodwill of NPR
Goodwill has been measured in a business over the business value of the acquiree has
104,278,034.22 and the details of such
combination effected through exchange of been considered as goodwill because it
recognition has been stated below:

Goodwill/Gain on Bargain Purchase at acquisition date


NPR
Consideration Transferred (A) (3,642,921.1 no. of shares * NPR 490.55) 1,787,034,034.22

Fair Value of Net Identifiable Assets (B) 1,682,756,000.00

Good Will/Gain on Bargain Purchase (A-B) 104,278,034.22

228 Nabil Bank Limited


Reconciliation of carrying amount of goodwill at the beginning and end of the reporting period:

PARTICULARS AMOUNT (NPR)


Opening balance of goodwill -
Restatement of goodwill for the previous period 104,278,034
Additional goodwill recognised during the reporting period 65,875,689
Adjustments resulting from subsequent recognition of deferred tax assets -
Impairment losses recognised during the reporting period -
Any other changes in the carrying amount -
Closing balance of goodwill 170,153,724

5.9 Additional disclosures of non- 15 days after the year-end date. Further has recommended distribution of 11.50%
consolidated entities adjustment to interest income has been made cash dividend and 18.50% stock dividend
for refund to customers of NPR 470 million. (bonus shares) for the annual period ending
The Group does not have any non-consolidated
July 16, 2022 to be put up for approval at
entities to report for the reporting period and in 5.10.2 Merger between subsidiaries the upcoming shareholders’ annual general
the comparative previous period.
The merger between two subsidiaries of the meeting of the Bank. The equivalent amount
5.10 Events after reporting date bank namely Nabil Investment banking limited thus recommended for distribution would
and Nepal Bangladesh Capital Limited is in be NPR 6,849,872,589.60 that includes
5.10.1 Recognition of interest income NPR 2,625,784,492.68 in cash payout
initial phase and is planned to be completed
The Bank has availed the facility in NRB within next reporting period. and NPR 4,224,088,096.92 in bonus
Directive 4/78 that allows licensed institutions shares. The same are to be paid out of NPR
to recognize in distributable profit for the year 5.10.3 Proposed dividend 4,223,912,541.92 from capital adjustment
such interest income on loans and advance to reserve, NPR 175,555.00 from securities
The 615th meeting of the board of directors
customers that stood accrued at year end but premium, NPR 2,625,784,492.68 from
of the bank held on December 11, 2022
was subsequently recovered in cash within retained earnings.

Annual Report 2021/22 229


5.11 Interim financial reports – unaudited for Q4

Condensed Consoliated Statement of Financial Position


As on Quarter Ended 32nd Ashadh 2079
NPR in ‘000
GROUP BANK
ASSETS THIS QUARTER IMMEDIATE PREVIOUS THIS QUARTER IMMEDIATE PREVIOUS
ENDING YEAR ENDING ENDING YEAR ENDING
Cash and Cash Equivalent 9,404,812 7,910,457 9,319,810 7,285,636
Due from Nepal Rastra Bank 13,007,769 8,024,172 13,007,769 8,024,172
Placement with Banks and FIs 10,602,624 9,865,212 10,602,624 9,865,212
Derivative Financial Instruments 1,373,614 13,615,333 1,373,614 13,615,333
Other Trading Assets 127,392 175,502 - -
Loans and Advances to Banks and FIs 10,366,938 8,601,569 10,366,938 8,601,569
Loans and Advances to Customers 301,073,089 198,021,418 301,073,089 198,021,418
Investment Securities 62,458,185 40,507,158 61,681,088 39,889,093
Current Tax Assets 422,716 305,189 422,679 307,013
Investment in Subsidiaries - - 298,000 78,000
Investment in Associates 164,486 145,283 80,000 80,000
Investment Property 930,730 8,747 930,730 8,747
Property and Equipment 3,148,218 1,703,090 3,137,963 1,692,635
Goodwill and Intangible Assets 127,770 63,245 124,961 62,653
Deferred Tax Assets 29,310 - - -
Other Assets 3,781,444 3,619,675 3,750,974 3,534,743
Total Assets 417,019,099 292,566,049 416,170,241 291,066,223
Liabilities
Due to Banks and FIs 3,353,610 4,502,705 3,353,610 4,502,705
Due to Nepal Rastra Bank 4,657,437 5,450,393 4,657,437 5,450,393
Derivative Financial Instruments 1,390,737 13,634,226 1,390,737 13,634,226
Deposits from Customers 326,110,191 223,408,097 326,222,310 223,474,470
Borrowings 10,720,730 - 10,720,730 -
Current Tax Liabilities (8,939) - - -
Provisions - - - -
Deferred Tax Liabilities 1,490,389 1,354,552 1,490,389 1,346,338
Other Liabilities 9,769,831 7,864,066 9,252,646 6,703,351
Debt Securities Issued 6,498,689 2,096,633 6,498,689 2,096,633
Subordinated Liabilities - - - -
Total Liabilities 363,982,675 258,310,674 363,586,549 257,208,117
Equity
Share Capital 22,832,909 13,844,451 22,832,909 13,844,451
Share Premium 176 158,758 176 158,758
Retained Earnings 3,597,545 4,352,686 3,371,422 4,162,929
Reserves 26,384,431 15,702,686 26,379,186 15,691,967
Total Equity Attributable to Equity Holders 52,815,060 34,058,582 52,583,692 33,858,106
Non Controlling Interest 221,364 196,794 - -
Total Equity 53,036,424 34,255,375 52,583,692 33,858,106
Total Liabilities and Equity 417,019,099 292,566,049 416,170,241 291,066,223

230 Nabil Bank Limited


Condensed Consolidated Statement of Profit or Loss
For the Quarter Ended 32nd Ashadh 2079
NPR in ‘000
GROUP BANK
CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
PARTICULARS
UPTO THIS UPTO THIS UPTO THIS UPTO THIS
THIS QUARTER THIS QUARTER THIS QUARTER THIS QUARTER
QUARTER (YTD) QUARTER (YTD) QUARTER (YTD) QUARTER (YTD)
Interest Income 7,478,861 23,863,542 5,381,829 17,253,790 7,461,571 23,782,297 5,359,943 17,188,719
Interest Expense 4,614,225 14,342,500 2,380,942 9,112,175 4,619,848 14,350,317 2,381,020 9,112,834
Net Interest Income 2,864,636 9,521,042 3,000,888 8,141,614 2,841,723 9,431,981 2,978,922 8,075,885
Fees and Commission Income 476,758 1,862,446 250,124 1,711,808 437,044 1,694,294 182,030 1,565,795
Fees and Commission Expense 40,825 129,825 (92,137) 87,545 36,348 112,702 (98,206) 77,226
Net Fees and Commission Income 435,933 1,732,621 342,262 1,624,263 400,696 1,581,593 280,237 1,488,569
Net Interest, Fees and Commission Income 3,300,569 11,253,663 3,343,149 9,765,877 3,242,419 11,013,573 3,259,159 9,564,454
Net Trading Income 89,899 521,762 240,139 737,180 110,708 564,990 191,703 643,761
Other Operating Income 14,990 348,472 402,067 1,440,657 31,132 356,855 396,367 1,451,436
Total Operating Income 3,405,459 12,123,897 3,985,355 11,943,713 3,384,259 11,935,419 3,847,229 11,659,650
Impairment Charge/ (Reversal) for Loans and Other Losses 93,339 703,915 1,024,418 828,000 93,066 703,578 1,023,940 827,522
Net Operating Income 3,312,120 11,419,982 2,960,937 11,115,713 3,291,194 11,231,841 2,823,290 10,832,128
Personnel Expenses 557,120 2,785,360 1,576,648 3,455,625 534,893 2,725,614 1,559,166 3,411,785
Other Operating Expenses 408,040 1,286,418 334,593 1,105,437 394,609 1,232,121 315,909 1,052,745
Depreciation & Amortization 49,549 182,129 (36,104) 145,061 47,849 177,763 (37,000) 141,575
Operating Profit 2,297,411 7,166,075 1,085,800 6,409,591 2,313,843 7,096,342 985,214 6,226,023
Non-Operating Income (8,872) 27,905 31,906 54,311 1,595 8,702 31,906 35,304
Non-Operating Expense (157) 862 1,643 5,866 (157) 862 1,643 5,866
Profit Before Income Tax 2,288,695 7,193,118 1,116,062 6,458,036 2,315,595 7,104,181 1,015,477 6,255,462
Income Tax Expense 690,612 2,153,937 198,119 1,789,560 694,882 2,131,426 167,794 1,727,909
Current Tax 703,354 2,189,610 722,855 2,310,480 694,882 2,131,426 317,698 2,258,553
Deferred Tax (12,742) (35,673) (524,736) (520,920) - - (149,904) (530,645)
Profit /(Loss) For the Period 1,598,084 5,039,181 917,943 4,668,476 1,620,713 4,972,756 847,683 4,527,553

Annual Report 2021/22


231
Ratios as per NRB Directive

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
PARTICULARS

232 Nabil Bank Limited


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 13.56 12.75 13.44 12.69
Non-Performing Loan (NPL) to Total Loan (As per NRB Directive) 1.54 0.84 1.54 0.84
Total Loan Loss Provision to Total NPL (As per NRB Directive) 154.16 235.52 154.16 235.52
Costs of Funds 7.17 4.41 7.17 4.41
Credit to Deposit Ratio (As per NRB Directive) 89.79 79.22 89.79 79.22
Base Rate (As per NRB Directive) 8.77 5.86 8.77 5.86
Interest Rate Spread (As per NRB Directive) 4.22 3.79 4.22 3.79

Condensed Consolidated Statement of Comprehensive Income

GROUP BANK
CURRENT YEAR PREVIOUS YEAR CORRESPONDING CURRENT YEAR PREVIOUS YEAR CORRESPONDING
PARTICULARS
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 1,598,084 5,039,181 917,943 4,668,476 1,620,713 4,972,756 847,683 4,527,553
Other Comprehensive Income 50,266 (1,336,209) 323,649 2,111,314 91,534 (1,294,940) 323,649 2,111,314
Total Comprehensive Income 1,648,350 3,702,972 1,241,591 6,779,790 1,712,247 3,677,815 1,171,332 6,638,867
Basic Earnings Per Share 27.16 34.62 26.80 33.57
Diluted Earnings Per Share 27.16 34.62 26.80 33.57
Profit Attributable To:
Equity holders of the Bank 1,649,999 3,675,199 1,207,867 6,711,286 1,712,247 3,677,815 1,171,332 6,638,867
Non - controlling interest (1,650) 27,774 33,725 68,504 - - - -
5.12 Comparison of unaudited and audited financial statements
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR
VARIANCE
STATEMENT OF FINANCIAL POSITION UN-AUDITED AUDITED REASON FOR VARIANCE
AMOUNT %
Assets
Cash and Cash Equivalents 9,319,810,167 11,051,539,126 1,731,728,959 18.58% Regrouping of Money at Call from
Placement with Banks and FIs to
Cash and Cash Equivalents
Due from Nepal Rastra Bank 13,007,769,444 13,037,239,444 29,470,000 0.23% Regrouping of CSB receivables from
Investment Securities
Placement with Banks and FIs 10,602,624,200 8,870,895,241 (1,731,728,959) -16.33% Regrouping of Money at Call from
Placement with Banks and Fis to
Cash and Cash Equivalents
Derivative Financial Instruments 1,373,614,068 1,373,614,068 - 0.00%
Other Trading Assets - 29,728,860 29,728,860 0.00% Regrouping of Trading Assets of
erstwhile NBB from Investment
Securities
Loans and Advances to Banks and FIs 10,366,938,262 10,366,938,262 - 0.00%
Loans and Advances to Customers 301,073,089,098 300,205,652,927 (867,436,171) -0.29% Reassessment of fair value of staff
loans and additional provisioning
Investment Securities 61,681,087,763 62,455,044,394 773,956,631 1.25% FVTOCI investments updated per
balance confirmation from investee
companies
Current Tax Assets 422,679,325 606,480,035 183,800,710 43.48% Effect of changes in current tax
expense
Investment in Subsidiaries 298,000,000 298,000,000 - 0.00%
Investment in Associates 80,000,000 80,000,000 - 0.00%
Investment Property 930,730,233 1,318,597,583 387,867,350 41.67% Recognition of investment property
as per NFRS 3
Property and Equipment 3,137,963,466 3,536,100,347 398,136,881 12.69% Revaluation of property and
equipment as per NFRS 3
Goodwill and Intangible Assets 124,960,999 291,720,723 166,759,724 133.45% Recognition of goodwill as per
NFRS 3
Deferred Tax Assets - - - 0.00%
Other Assets 3,750,974,149 6,296,549,940 2,545,575,791 67.86% Recognition of Right of Use (RoU)
assets under NFRS 16 - Leases,
regrouping, netting and fair value
measurement effect
Total assets 416,170,241,174 419,818,100,950 3,647,859,776 0.88%

Annual Report 2021/22 233


NPR

VARIANCE
STATEMENT OF FINANCIAL POSITION UN-AUDITED AUDITED REASON FOR VARIANCE
AMOUNT %
Capital and Liabilities
Due to Banks and FIs 3,353,609,544 3,353,609,544 - 0.00%
Due to Nepal Rastra Bank 4,657,437,355 4,657,437,355 - 0.00%
Derivative Financial Instruments 1,390,736,904 1,390,736,904 - 0.00%
Deposits from Customers 326,222,310,372 326,222,310,372 - 0.00%
Borrowings 10,720,730,171 10,720,730,171 - 0.00%
Current Tax Liabilities - - - 0.00%
Provisions - - - 0.00%
Deferred Tax Liabilities 1,490,389,180 1,778,504,118 288,114,938 19.33% Remeasurements
Other Liabilities 9,252,646,495 12,228,181,442 2,975,534,947 32.16% Recognition of Lease Liability of 2
bio and regrouping, netting and fair
value measurement effect
Debt Securities Issued 6,498,688,989 6,484,843,749 (13,845,240) -0.21% Recognition of unamortised
debenture issuance cost
Subordinated Liabilities - - - 0.00%
Share Capital 22,832,908,632 22,832,908,632 - 0.00%
Share Premium 175,555 175,555 - 0.00%
Retained Earnings 3,371,421,980 2,899,544,565 (471,877,414) -14.00% Appropriation to reserves from
current year profit effected in
Audited
Reserves 26,379,185,997 27,249,118,543 869,932,546 3.30% Appropriation to reserves from
current year profit effected in
Audited
Total Capital and Liabilities 416,170,241,174 419,818,100,950 3,647,859,777 0.88%

234 Nabil Bank Limited


NPR
VARIANCE
STATEMENT OF PROFIT OR LOSS UN-AUDITED AUDITED REASON FOR VARIANCE
AMOUNT %
Particulars
Interest Income 23,782,297,385 23,340,747,062 (441,550,323) -1.86% Amortization of deferred employee
expenditure, interest suspense
recognition and interest refund of
NPR 470 million
Interest Expense 14,350,316,587 14,421,875,671 71,559,084 0.50% Recognition of interest expense
under NFRS 16
Net Interest Income 9,431,980,798 8,918,871,391 (513,109,407) -5.44%
Fee and Commission Income 1,694,294,438 2,043,273,963 348,979,525 20.60% Card related expenses netted off in
fee income regrouped
Fee and Commission Expense 112,701,917 464,375,729 351,673,812 312.04% Card related expenses netted off in
fee income regrouped
Net Fee and Commission Income 1,581,592,521 1,578,898,234 (2,694,287) -0.17%
Net Interest, Fee and Commisson
Income 11,013,573,319 10,497,769,625 (515,803,694) -4.68%
Net Trading Income 564,990,054 564,990,054 - 0.00%
Other Operating Income 356,855,398 410,410,129 53,554,731 15.01% Reversal of lease fund maintained
as per previous accounting standard
Total Operating Income 11,935,418,771 11,473,169,808 (462,248,963) -3.87%
Impairment Charge/ (Reversal) for 703,578,185 1,118,823,076 415,244,891 59.02% Additional provisioning
Loans and Other Lossess recommended by the statutory
auditors and the regulator
Net Operating Income 11,231,840,586 10,354,346,732 (877,493,854) -7.81%
Operating Expense
Personnel Expenses 2,725,614,200 2,658,925,044 (66,689,156) -2.45% Amortization of deferred employee
expenditure
Other Operating Expenses 1,232,121,232 1,023,800,285 (208,320,947) -16.91% Derecognition of operating lease
payments
Depreciation & Amortisation 177,763,279 390,030,033 212,266,754 119.41% Recognition of depreciation of RoU
assets as per NFRS 16
Operating Profit 7,096,341,875 6,281,591,369 (814,750,506) -11.48%
Non Operating Income 8,701,513 8,701,513 - 0.00%
Non Operating Expense 861,949 2,730,446 1,868,497 216.78% Effect of adjustments made after
year end
Profit Before Income Tax 7,104,181,439 6,287,562,436 (816,619,003) -11.49%

Annual Report 2021/22 235


NPR
VARIANCE
STATEMENT OF PROFIT OR LOSS UN-AUDITED AUDITED REASON FOR VARIANCE
AMOUNT %
Income Tax Expense
Current Tax 2,131,425,690 1,940,231,711 (191,193,979) -8.97% Update to income tax computation
in line with income tax act
Deferred Tax - 91,306,537 91,306,537 0.00% Deferred tax income recognition
Profit/(loss) for the period 4,972,755,749 4,256,024,188 (716,731,560) -14.41%
Other Comprehensive income (1,294,940,356) (574,575,796) 720,364,560 -55.63% Impact of updates to fair value
changes in FVTOCI investments
and impact of actuarial gain / (loss)
Total Comprehensive income 3,677,815,392 3,681,448,392 3,633,000 0.10%
Distributable Profits
Net profit/(loss) as per profit or loss 4,972,755,749 4,256,024,188 (716,731,560) -14.41%
Add/Less: Regulatory adjustment as
per NRB Directive
Add: Interest receivable recognized 394,365,412 492,389,707 98,024,295 24.86% Impact of interest suspense
income recognised as per NRB income
recognition guideline
Add: Addition/(Reversal) of provision (8,778,420) (8,778,420) (0) 0.00%
Add: Reversal of deferred tax expense - - - 0.00%
Less: Actuarial loss recognized on 32,021,047 32,021,047 - 100.00%
DBOs
Less: Impairment charged under NFRS - - - 0.00%
Free profit/(loss) after regulatory
adjustments 5,390,363,788 4,771,656,522 (618,707,266) -11.48%
Add : opening balance in retained 37,264,297 37,264,297
earnings
Less : Appropriations to reserves and (1,398,643,857) (1,266,578,746)
dividends paid out
Total Distributable profit 4,028,984,228 3,542,342,073 (486,642,155) -12.08% Assessment of cummulative
distributable profit
Add: Distributable Profit of NBB (657,562,248) (639,314,207) 18,248,041 -2.78% Assessment of retained earnings
upon finalisation of audit of
erstwhile NBB
Add: Free Reserves of NBB 5,748,677,851 5,748,677,851 - 0.00%
Less: Direct transfer from RE - (3,483,300) (3,483,300) 0.00% Effect of adjustments made after
year end
Total Distributable profit and free
reserves 9,120,099,830 8,648,222,417 (471,877,413) -5.17%

236 Nabil Bank Limited


Comparision Projected financuail statement for Debenture issuance and Audited Financial Statements
For the period ended 32 Ashadh 2079 (Jul 16, 2022)
NPR in ‘000
PROJECTED VARIANCE
STATEMENT OF FINANCIAL POSITION FINANCIAL AUDITED REASON FOR VARIANCE
STATEMENT AMOUNT %

Assets
Cash and Cash Equivalents 25,239,498 11,051,539 (14,187,959) -56.21% Actual deposit volume lower than projected
Due from Nepal Rastra Bank 9,298,763 13,037,239 3,738,476 40.20% Actual deposit volume higher than projected
Placement with Banks and FIs 11,603,523 8,870,895 (2,732,628) -23.55% Actual deposit volume lower than projected
Derivative Financial Instruments 10,859,598 1,373,614 (9,485,984) -87.35% Actual business volume lower than
projected
Other Trading Assets - 29,729 29,729 0.00%
Loans and Advances to Banks and FIs 8,188,424 10,366,938 2,178,514 26.60% Actual business volume higher than
projected
Loans and Advances to Customers 217,284,951 300,205,653 82,920,702 38.16% Actual business volume higher than
projected
Investment Securities 44,321,052 62,455,044 18,133,992 40.92% Actual business volume higher than
projected
Current Tax Assets 445,313 606,480 161,167 36.19% Actual business volume higher than
projected
Investment in Subsidiaries 78,000 298,000 220,000 282.05% Due to the addition of nepal bangladesh
capital and NBBL securities
Investment in Associates 80,000 80,000 - 0.00%
Investment Property 8,219 1,318,598 1,310,379 15943.28% Actual Purchase higher than projected
Property and Equipment 1,862,787 3,536,100 1,673,313 89.83% Actual Purchase higher than projected
Goodwill and Intangible Assets 98,041 291,721 193,680 197.55% Due to the acquisition of Erstwhile NBBL
and Erstwhile UFL
Deferred Tax Assets - - - 0.00%
Other Assets 3,211,661 6,296,550 3,084,889 96.05% Actual receivable higher than projected
Total assets 332,579,830 419,818,101 87,238,271 26.23%

Annual Report 2021/22 237


NPR in ‘000
PROJECTED VARIANCE
STATEMENT OF FINANCIAL POSITION FINANCIAL AUDITED REASON FOR VARIANCE
STATEMENT AMOUNT %

Capital and Liabilities


Due to Banks and FIs 2,947,669 3,353,610 405,941 13.77% Actual due to BFIs higher than Projected
Due to Nepal Rastra Bank 64,476 4,657,437 4,592,961 7123.52% Actual due to Nepal Rastra Bank higher
than Projected
Derivative Financial Instruments 10,764,203 1,390,737 (9,373,466) -87.08% Actual Derivative instruments lower than
projected
Deposits from Customers 265,678,929 326,222,310 60,543,381 22.79% Actual business volume higher than
projected
Borrowings - 10,720,730 10,720,730 0.00%
Current Tax Liabilities - - - 0.00%
Provisions - - - 0.00%
Deferred Tax Liabilities 1,438,830 1,778,504 339,674 23.61% Effect of other variance in deffered tax
liabilities
Other Liabilities 12,179,791 12,228,181 48,390 0.40%
Debt Securities Issued 5,217,210 6,484,844 1,267,634 24.30% Effect of interest payables in issued debt
securities
Subordinated Liabilities - - - 0.00%
Share Capital 13,480,159 22,832,909 9,352,750 69.38% Adjustment of bonus share
Share Premium 74 176 102 137.24%
Retained Earnings 5,262,083 2,899,545 (2,362,538) -44.90% Actual profit lower than projected
Reserves 15,546,406 27,249,119 11,702,713 75.28% Adjustment of amount from erstwhile NBBL.
Total Capital and Liabilities 332,579,830 419,818,101 87,238,271 26.23%

238 Nabil Bank Limited


NPR
PROJECTED VARIANCE
STATEMENT OF PROFIT OR LOSS FINANCIAL AUDITED REASON FOR VARIANCE
STATEMENT AMOUNT %

Particulars
Interest Income 20,631,810 23,340,747 2,708,937 13.13% Higher income earned than projected
Interest Expense 12,406,665 14,421,876 2,015,211 16.24% Higher Expenses than projected
Net Interest Income 8,225,145 8,918,871 693,726 8.43%
Fee and Commission Income 1,842,332 2,043,274 200,942 10.91% Higher fees and commission income earned
than projected
Fee and Commission Expense 86,991 464,376 377,385 433.82% Higher fees and commission Expenses than
projected
Net Fee and Commission Income 1,755,341 1,578,898 (176,443) -10.05%
Net Interest, Fee and Commisson
Income 9,980,486 10,497,770 517,284 5.18%
Net Trading Income 629,810 564,990 (64,820) -10.29% Lower trading income than projected
Other Operating Income 461,840 410,410 (51,430) -11.14% Lower other operating income than
projected
Total Operating Income 11,072,136 11,473,170 401,034 3.62%
Impairment Charge/ (Reversal) for 653,457 1,118,823 465,366 71.22% Lower reversal of loan than projected
Loans and Other Lossess
Net Operating Income 10,418,679 10,354,347 (64,332) -0.62%
Operating Expense -
Personnel Expenses 2,446,738 2,658,925 212,187 8.67% Higher expenses than projected
Other Operating Expenses 1,268,489 1,023,800 (244,689) -19.29% Lower expenses than projected
Depreciation & Amortisation 135,443 390,030 254,587 187.97% Higher Purchase than projected
Operating Profit 6,568,009 6,281,591 (286,418) -4.36%
Non Operating Income 4,902 8,702 3,800 77.51% Higher non operating income than projected
Non Operating Expense 2,882 2,730 (152) -5.26% Lower non operating expenses than
projected
Profit Before Income Tax 6,570,029 6,287,562 (282,467) -4.30%
Income Tax Expense -
Current Tax 1,971,009 1,940,232 (30,777) -1.56% Effect of ther variance in current tax
Deferred Tax - 91,307 91,307 0.00% Effect of ther variance in Deffered tax
Profit/(loss) for the period 4,599,020 4,256,024 (342,996) -7.46%

Annual Report 2021/22 239


240 Nabil Bank Limited
5.13 Movement in Regulatory Reserve
NPR
SHORT SHORT PROVISION GAIN ON FAIR VALUE LOSS
INTEREST SHORT PROVISION DEFERRED ACTURIAL LOSS
FY LOAN LOSS FOR POSSIBLE LOSSES GOODWILL BARGAIN RECOGNIZED OTHER TOTAL
RECEIVABLE ON NBA TAX ASSETS RECOGNISED
PROVISION ON INVESTMENT PURCHASE 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 - From UFL 104,812 - - 336 2,483 - - - 396 - 108,027
2077/78 86,966 - - (3,044) (2,483) - - 141,183 (396) - 222,227
2078/79 From NBBL 1,198,375 - - 572,071 - - - - - - 1,770,446
2078/79 (492,390) - - 8,778 - 170,154 - (32,021) - - (345,479)
Total 1,603,304 - - 586,360 - 170,154 - 68,518 - - 2,428,336
5.14 COVID -19 related disclosures

AS OF ASHADH END 2079


PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)

Accrued Interest Received after Asadh end 2079 till 15 Shrawan 2079 20,484 468,945,099
Extension of moratorium period of loan provided to Industry or Project under construction 11 644,706,875
Restructured/Rescheduled Loan with 5% Loan Loss Provision 727 5,960,407,523
Enhancement of Working Capital Loan by 20% to COVID affected borrowers 6 41,625,000
Enhancement of Term Loan by 10% to COVID affected borrowers - -
Expiry Date of Additional 20% Working Capital Loan (COVID Loan) extended for upto 1 year with 5%
provisioning - -
Expiry Date of Additional 10% Term Loan (COVID Loan) extended for upto 1 year with 5% provisioning - -
Time Extension provided for repayment of Principal and Interest for upto two years as per clause 41 of NRB
Directives 2 10 190,696,043

AS OF ASHADH END 2079


PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)

Refinance Loan 381 4,050,004,194

Business Continuity Loan - -

AS OF ASHADH END 2079


PARTICULARS
NO. OF CUSTOMERS AMOUNT (NPR)

Subsidized Loan 7039 12,721,131,575

Annual Report 2021/22 241


5.15 Restatements in the financial statements
5.15.1 Restatement in Statement of Financial Position
Investment Property NPR

PARTICULARS GROUP BANK


Investment Property presented in previous year’s financial statements 8,747,002 8,747,002
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd. 1,328,061 1,328,061
Restated balance as per current year’s financial statements 10,075,063 10,075,063

Property and Equipment NPR

PARTICULARS GROUP BANK


Property and equipment presented in previous year’s financial statements 1,703,090,439 1,692,634,609
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd. 67,117,412 67,117,412
Restated balance as per current year’s financial statements 1,770,207,851 1,759,752,021

Goodwill and Intangible Assets NPR

PARTICULARS GROUP BANK


Goodwill and intangible assets presented in previous year’s financial statements 63,244,757 62,652,536
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd. 104,278,034 104,278,034
Restated balance as per current year’s financial statements 167,522,791 166,930,570

Deferred Tax Liabilities NPR

PARTICULARS GROUP BANK


Deferred Tax Liabilities presented in previous year’s financial statements 1,354,552,298 1,346,338,096
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd. 20,533,642 20,533,642
Restated balance as per current year’s financial statements 1,375,085,940 1,366,871,738

Reserves NPR

PARTICULARS GROUP BANK


Reserves presented in previous year’s financial statements 15,702,685,519 15,691,967,172
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd.
on Asset Revaluation Reserve 47,911,831 47,911,831
- Impact of recognition of business combination as per NFRS 3 for acquisition of erstwhile United Finance Co. Ltd.
on Other Components of Equity 104,278,034 104,278,034
Restated balance as per current year’s financial statements 15,854,875,384 15,844,157,037

242 Nabil Bank Limited


5.15.2 Restatement in Statement of Profit and Loss
Fee and Commission Income NPR

PARTICULARS GROUP BANK


Fee and commission income presented in previous year’s financial statements 1,711,807,771 1,565,795,360
- Impact of regrouping of card related expenses previously netted off 174,086,538 174,086,538
Restated balance as per current year’s financial statements 1,885,894,309 1,739,881,898

Fee and Commission Expense NPR

PARTICULARS GROUP BANK


Fee and commission expense presented in previous year’s financial statements 87,545,021 77,226,480
- Impact of regrouping of card related expenses previously netted off with fee and commission income 174,086,538 174,086,538
Restated balance as per current year’s financial statements 261,631,559 251,313,018

Annual Report 2021/22 243


06 BANGLADESH BANK LIMITED
ERSTWHILE NEPAL

Nepal Bangladesh Bank Limited (Acquired By Nabil Bank Limited)


Consolidated Statement of Financial Position
As On 26 Ashad 2079 (10 July, 2022)
NPR
GROUP BANK
PARTICULARS NOTE AS AT END OF AS AT AS AT END OF AS AT
26 ASHAD 2079 31 ASHAD 2078 26 ASHAD 2079 31 ASHAD 2078
Assets
Cash and cash equivalent 4.1 3,207,742,965 5,995,671,403 3,099,658,031 5,995,671,138
Due from Nepal Rastra Bank 4.2 4,467,091,011 8,206,042,245 4,467,091,011 8,206,042,245
Placement with Bank and Financial Institutions 4.3 203,040,000 3,276,032,600 203,040,000 3,276,032,600
Derivative financial instruments 4.4 - 39,769,600 - 39,769,600
Other trading assets 4.5 68,174,355 99,081,652 30,514,092 78,097,002
Loan and advances to B/FIs 4.6 3,029,675,820 2,472,711,676 3,029,675,820 2,472,711,676
Loans and advances to customers 4.7 77,600,860,309 68,686,150,938 77,600,860,309 68,686,150,938
Investment securities 4.8 13,924,695,767 19,977,790,214 13,789,313,121 19,820,861,381
Current tax assets 4.9 227,740,021 91,315,387 227,705,166 90,930,470
Investment in susidiaries 4.10 - - 220,000,000 220,000,000
Investment in associates 4.11 - - - -
Investment property 4.12 908,049,231 440,335,785 908,049,231 440,335,785
Property and equipment 4.13 1,394,157,818 1,471,475,440 1,393,172,869 1,470,136,164
Goodwill and Intangible assets 4.14 3,451,666 36,637,433 3,073,586 36,095,504
Deferred tax assets 4.15 - - - -
Other assets 4.16 489,203,271 796,527,397 486,416,567 760,138,451
Total Assets 105,523,882,234 111,589,541,770 105,458,569,806 111,592,972,954

244 Nabil Bank Limited


NPR
GROUP BANK
PARTICULARS NOTE AS AT END OF AS AT AS AT END OF AS AT
26 ASHAD 2079 31 ASHAD 2078 26 ASHAD 2079 31 ASHAD 2078
Due to Bank and Financial Instituions 4.17 1,615,533,667 2,252,570,500 1,615,533,667 2,252,570,500
Due to Nepal Rastra Bank 4.18 2,092,482,194 3,173,163,239 2,092,482,194 3,173,163,239
Derivative financial instruments. 4.19 - - - -
Deposits from customers 4.20 81,517,308,058 87,006,029,300 81,517,308,058 87,127,871,373
Borrowing 4.21 - - - -
Current Tax Liabilities 4.9 - - - -
Provisions 4.22 - - - -
Deferred tax liabilities 4.15 54,182,328 170,471,265 60,439,640 162,798,563
Other liabilities 4.23 2,409,485,514 1,481,288,706 2,329,202,966 1,424,465,457
Debt securities issued 4.24 1,995,083,659 1,994,381,325 1,995,083,659 1,994,381,325
Subordinated Liabilities 4.25 - - - -
Total liabilities 89,684,075,420 96,077,904,336 89,610,050,184 96,135,250,457
Equity
Share capital 4.26 10,085,399,738 9,004,821,195 10,085,399,738 9,004,821,195
Share premium 101,555 101,555 101,555 101,555
Retained earnings (643,911,511) 1,504,255,804 (639,314,207) 1,465,819,551
Reserves 4.27 6,398,217,029 5,002,458,880 6,402,332,533 4,986,980,196
Total equity attributable to equity holders 15,839,806,811 15,511,637,434 15,848,519,619 15,457,722,497
Non-controlling interest
Total equity 15,839,806,811 15,511,637,434 15,848,519,619 15,457,722,497
Total liabilities and equity 105,523,882,234 111,589,541,770 105,458,569,806 111,592,972,954
Contingent liabilities and commitment 4.28 89,831,300,569 86,187,972,002 89,831,300,569 86,187,972,002
Net assets value per share 157.14 171.66 157.14 171.66

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants

Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22 245


Consolidated Statement of Profit or Loss
For the Cut Off Date ended 26 Ashad 2079 (10 July, 2022)
NPR
GROUP BANK
PARTICULARS NOTE UPTO ASHAD UPTO ASHAD
26 ASHAD 2079 END 2078 26 ASHAD 2079 END 2078
Interest income 4.29 8,160,264,803 6,973,797,422 8,154,516,060 6,969,782,910
Interest expense 4.30 5,536,488,263 4,334,905,893 5,536,488,263 4,334,909,600
Net interest income 2,623,776,540 2,638,891,529 2,618,027,797 2,634,873,310
Fee and commission income 4.31 1,308,393,801 1,260,084,641 1,297,299,256 1,255,315,425
Fee and commission expense 4.32 66,837,093 55,450,360 66,837,093 55,450,360
Net fee and commission income 1,241,556,708 1,204,634,281 1,230,462,164 1,199,865,065
Net interest, fee and commission income 3,865,333,248 3,843,525,810 3,848,489,960 3,834,738,375
Net trading income 4.33 150,737,472 467,306,687 171,426,672 456,843,037
Other operating income 4.34 332,787,473 205,546,616 325,743,513 155,749,169
Total operating income 4,348,858,193 4,516,379,113 4,345,660,146 4,447,330,581
Impairment charge/(reversal) for loans and other losses 4.35 885,616,273 (384,987,335) 885,616,273 (384,987,335)
Net operating income 3,463,241,919 4,901,366,448 3,460,043,873 4,832,317,916
Operating expense
Personnel expenses 4.36 1,358,263,719 1,220,257,431 1,351,737,472 1,210,451,234
Other operating expenses 4.37 643,226,581 432,239,837 637,871,451 428,845,041
Depreciation & Amortisation 4.38 132,188,790 138,069,506 131,490,268 137,578,800
Operating Profit 1,329,562,829 3,110,799,674 1,338,944,682 3,055,442,841
Non operating income 4.39 83,013,882 54,417,086 83,013,882 54,417,086
Non operating expense 4.40 12,231,295 8,842,038 12,231,295 8,842,038
Profit before income tax 1,400,345,416 3,156,374,722 1,409,727,268 3,101,017,889
Income tax expense 4.41
Current Tax 488,793,613 934,495,734 484,694,867 919,191,820
Deferred Tax (40,217,582) (1,480,737) (40,217,582) (4,116,061)
Profit/(loss) for the period 951,769,385 2,223,359,725 965,249,983 2,185,942,130
Profit attributable to:
Equity holders of the Bank 951,769,385 2,223,359,725 965,249,983 2,185,942,130
Non-controlling interest - - - -
Profit for the year 951,769,385 2,223,359,725 965,249,983 2,185,942,130
Earnings per share
Basic earnings per share 9.44 24.69 9.57 24.28
Diluted earnings per share 9.44 24.69 9.57 24.28

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

246 Nabil Bank Limited


Consolidated Statement of Other Comprehensive Income
For the Cut Off Date ended 26 Ashad 2079 (10 July, 2022)
NPR
GROUP BANK
PARTICULARS UPTO UPTO
ASHAD END 2078 ASHAD END 2078
26 ASHAD 2079 26 ASHAD 2079
Profit/(loss) for the period 951,769,385 2,223,359,725 965,249,983 2,185,942,130
Other comprehensive income, net of income tax
a) Items that will not be reclassified to profit or loss
Gains/(losses) from investments in equity instruments (390,171,478) 567,907,842 (365,094,315) 552,680,701
measured at fair value
Gains/(losses) on revaluation
Actuarial gains/(losses) on defined benefit plans - - - -
Income tax relating to above items 117,051,443 (170,372,353) 109,528,295 (165,804,210)
Net other comprehensive income that will not be reclassified to
profit or loss (273,120,034) 397,535,489 (255,566,021) 386,876,491
b) Items that are or may be reclassified to profit or loss
Gains/(losses) on cash flow hedge
Exchange gains/(losses) (arising from translating financial
assets of foreign operation)
Income tax relating to above items
Reclassify to profit or loss
Net other comprehensive income that are or may be reclassified
to profit or loss - - - -
c) Share of other comprehensive income of associate accounted
as per equity method
Other comprehensive income for the year, net of income tax (273,120,034) 397,535,489 (255,566,021) 386,876,491
Total comprehensive income for the period 678,649,351 2,620,895,214 709,683,963 2,572,818,621
Total comprehensive income attributable to:
Equity holders of the Bank 678,649,351 2,620,895,214 709,683,963 2,572,818,621
Non-controlling interest
Total comprehensive income for the period 678,649,351 2,620,895,214 709,683,963 2,572,818,621
Profit attributable to:
Equity holders of the Bank 678,649,351 2,620,895,214 709,683,963 2,572,818,621
Non-controlling interest - - - -
Total 678,649,351 2,620,895,214 709,683,963 2,572,818,621

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22 247


Consolidated Statement of Changes in Equity
For the Cut Off Date ended 26 Ashad 2079 (10 July, 2022)

NPR

GROUP

248 Nabil Bank Limited


ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK
NON-
EXCHANGE
PARTICULARS SHARE SHARE GENERAL REGULATORY FAIR VALUE REVALUATION RETAINED OTHER CONTROLLING TOTAL EQUITY
EQUALISATION TOTAL
CAPITAL PREMIUM RESERVE RESERVE RESERVE RESERVE EARNING RESERVE INTEREST
RESERVE
Balance as at Shrawan 1, 2077 8,495,814,295 - 2,860,835,960 69,178,478 429,207,318 100,184,835 - 846,783,484 301,585,709 13,103,590,080 - 13,103,590,080
Adjustment/Restatement - -
Adjusted Restated Balance at
Shrawan 1, 2077 8,495,814,295 - 2,860,835,960 69,178,478 429,207,318 100,184,835 846,783,484 301,585,709 13,103,590,080 - 13,103,590,080
Comprehensive Income for the
year
Profit for the year 2,223,359,725 2,223,359,725 2,223,359,725
Other Comprehensive income,
net of tax
Gains/(losses) from investments
in equity instruments measured
at fair value 395,924,194 395,924,194 395,924,194
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
Transfer to reserve during the year 101,555 441,660,867 1,899,531 68,659,895 - (764,617,797) 252,397,504 101,555 101,555
Transfer from the reserve during
the year (81,471,832) 81,084,785 (387,047) (387,047)
Transactions with owners,
directly recognized in equity - -
Share issued 509,006,900 509,006,900 509,006,900
NPR

GROUP
ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK
NON-
EXCHANGE
PARTICULARS SHARE SHARE GENERAL REGULATORY FAIR VALUE REVALUATION RETAINED OTHER CONTROLLING TOTAL EQUITY
EQUALISATION TOTAL
CAPITAL PREMIUM RESERVE RESERVE RESERVE RESERVE EARNING RESERVE INTEREST
RESERVE
Share based payments - -
Dividends to equity holders: - -
Bonus Shares issued (509,006,900) (509,006,900) (509,006,900)
Cash Dividend Paid (206,836,747) (206,836,747) (206,836,747)
Other (3,954,129) (160,197) (4,114,326)
Total contributions by and
distributions 509,006,900 101,555 441,660,867 1,899,531 68,659,895 395,924,194 - 657,472,320 333,322,092 2,408,047,354 2,412,161,680
Balance as at Ashad End, 2078 9,004,821,193 101,555 3,302,496,828 71,078,009 497,867,213 496,109,029 - 1,504,255,804 634,907,801 15,511,637,434 - 15,511,637,434
Balance as at Shrawan 1, 2078 9,004,821,193 101,555 3,302,496,828 71,078,009 497,867,213 496,109,029 - 1,504,255,804 634,907,801 15,511,637,434 - 15,511,637,434
Adjustment/Restatement
Adjusted Restated Balance at
Sawan 1, 2078 9,004,821,193 101,555 3,302,496,828 71,078,009 497,867,213 496,109,029 - 1,504,255,804 634,907,801 15,511,637,434 - 15,511,637,434
Comprehensive Income for
the year
Profit for the year 951,769,385 951,769,385 951,769,385
Other Comprehensive income,
net of tax - -
Gains/(losses) from investments
in equity instruments measured
at fair value (275,145,409) (275,145,409) (275,145,409)
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 - -

Annual Report 2021/22


249
NPR

GROUP
ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK
NON-
EXCHANGE
PARTICULARS SHARE SHARE GENERAL REGULATORY FAIR VALUE REVALUATION RETAINED OTHER CONTROLLING TOTAL EQUITY
EQUALISATION TOTAL
CAPITAL PREMIUM RESERVE RESERVE RESERVE RESERVE EARNING RESERVE INTEREST

250 Nabil Bank Limited


RESERVE
Transfer to reserve during the
year - 215,171,562 134,603 1,272,578,895 - (1,664,481,896) 186,751,396 10,154,561 10,154,561
Transfer from the reserve during
the year (1,692,726) (3,732,899) (5,425,625) (5,425,625)
Transactions with owners,
directly recognized in equity
Share issued - - -
Share based payments - -
Dividends to equity holders: - -
Bonus Shares issued 1,080,578,543 (1,080,578,539) 4 4
Cash Dividend Paid (353,183,538) (353,183,538) (353,183,538)
Other - - - - - - -
Total contributions by and
distributions 1,080,578,543 - 215,171,562 134,603 1,272,578,895 (275,145,409) - (2,148,167,314) 183,018,497 328,169,378 - 328,169,377
Balance as at 26 Ashad, 2079 10,085,399,738 101,555 3,517,668,389 71,212,612 1,770,446,108 220,963,620 - (643,911,511) 817,926,299 15,839,806,811 - 15,839,806,811

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal
Consolidated Statement of Changes in Equity
For the Cut Off Date ended 26 Ashad 2079 (10 July, 2022)
NPR

BANK

ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

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

Balance as at Shrawan 1, 2077 8,495,814,295 - 2,860,835,960 69,178,478 429,207,318 98,573,540 - 841,639,256 301,425,512 13,096,674,359

Adjustment/Restatement -

Adjusted Restated Balance at Shrawan 1, 2077 8,495,814,295 - 2,860,835,960 69,178,478 429,207,318 98,573,540 841,639,256 301,425,512 13,096,674,359

Comprehensive Income for the year

Profit for the year 2,185,942,130 2,185,942,130

Other Comprehensive income, net of tax

Gains/(losses) from investments in equity


instruments measured at fair value 386,876,491 386,876,491

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 -

Transfer to reserve during the year 101,555 437,188,426 1,899,531 68,659,895 - (759,798,111) 252,050,260 101,555

Transfer from the reserve during the year - (81,278,309) 81,084,786 (193,523)

Transactions with owners, directly


recognized in equity -

Share issued 509,006,900 509,006,900

Annual Report 2021/22


251
NPR

BANK

252 Nabil Bank Limited


ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

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

Share based payments -

Dividends to equity holders: -

Bonus Shares issued - (509,006,900) (509,006,900)

Cash Dividend Paid (206,836,747) (206,836,747)

Other (4,841,767) (4,841,767)

Total contributions by and distributions 509,006,900 101,555 437,188,426 1,899,531 68,659,895 386,876,491 - 624,180,296 333,135,046 2,361,048,138

Balance as at Ashad End, 2078 9,004,821,195 101,555 3,298,024,386 71,078,009 497,867,213 485,450,031 - 1,465,819,551 634,560,557 15,457,722,497

Balance as at Shrawan 1, 2078 9,004,821,195 101,555 3,298,024,386 71,078,009 497,867,213 485,450,031 - 1,465,819,551 634,560,557 15,457,722,497

Adjustment/Restatement

Adjusted Restated Balance at Shrawan 1,


2078 9,004,821,195 101,555 3,298,024,386 71,078,009 497,867,213 485,450,031 - 1,465,819,551 634,560,557 15,457,722,497

Comprehensive Income for the year

Profit for the year 965,249,983 965,249,983

Other Comprehensive income, net of tax -

Gains/(losses) from investments in equity (255,566,021) (255,566,021)


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 -

Transfer to reserve during the year - 215,171,562 134,603 1,272,578,895 - (1,674,636,457) 186,751,396 (0)
NPR

BANK

ATTRIBUTABLE TO EQUITY HOLDERS OF THE BANK

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

Transfer from the reserve during the year - - (3,718,101) (3,718,101)

Transactions with owners, directly


recognized in equity -

Share issued - -

Share based payments -

Dividends to equity holders: -

Bonus Shares issued 1,080,578,543 (1,080,578,539) 4

Cash Dividend Paid (315,168,742) (315,168,742)

Other - - - -

Total contributions by and distributions 1,080,578,543 - 215,171,562 134,603 1,272,578,895 (255,566,021) - (2,105,133,755) 183,033,295 390,797,123

Balance as at Ashad 26, 2079 10,085,399,738 101,555 3,513,195,948 71,212,612 1,770,446,108 229,884,010 - (639,314,207) 817,593,853 15,848,519,619

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22


253
Consolidated Statement of Cash Flows
For the Quarter ended 26 Ashad 2079 (10 July, 2022)
NPR

GROUP BANK
PARTICULARS AS AT END OF AS AT AS AT END OF AS AT
26 ASHAD 2079 31 ASHAD 2078 26 ASHAD 2079 31 ASHAD 2078
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received 8,160,264,803 6,973,797,422 8,154,516,060 6,969,782,910
Fees and other income received 1,723,656,742 1,450,373,882 1,705,518,238 1,445,604,666
Divided received - 6,454,088 - 10,254,088
Receipts from other operating activities 150,737,472 510,440,483 171,426,672 456,843,037
Interest paid (5,536,488,263) (4,334,905,893) (5,536,488,263) (4,334,909,600)
Commission and fees paid (66,853,161) (55,450,360) (66,837,093) (55,450,360)
Cash payment to employees (1,358,263,719) (1,220,257,431) (1,351,737,472) (1,210,451,234)
Other expense paid (659,176,307) (443,898,840) (653,820,848) (440,504,044)
Operating cash flows before changes in operating
assets and liabilities 2,413,877,568 2,886,553,350 2,422,577,295 2,841,169,462
(Increase)/Decrease in operating assets
Due from Nepal Rastra Bank 3,738,951,234 5,279,527,635 3,738,951,234 5,279,527,635
Placement with bank and financial institutions 3,072,992,600 (772,153,121) 3,072,992,600 (772,153,121)
Other trading assets 30,907,297 40,167,339 47,582,910 28,043,073
Loan and advances to bank and financial institutions (556,964,144) (862,796,687) (556,964,144) (862,796,687)
Loans and advances to customers (9,800,325,644) (9,192,625,687) (9,800,325,644) (9,192,625,687)
Other assets 347,093,727 (363,573,294) 313,491,484 (334,788,296)
(3,167,344,929) (5,871,453,815) (3,184,271,559) (5,854,793,083)
Increase/(Decrease) in operating liabilities
Due to bank and financial institutions (637,036,833) (4,505,025,300) (637,036,833) (4,505,025,300)
Due to Nepal Rastra Bank (1,080,681,045) 3,029,950,738 (1,080,681,045) 3,029,950,738
Deposit from customers (5,488,721,242) 20,738,614,749 (5,610,563,315) 20,692,816,950
Borrowings - - - -
Other liabilities 971,866,274 150,406,830 952,124,466 128,799,382
(6,234,572,846) 19,413,947,016 (6,376,156,727) 19,346,541,770
Net cash flow from operating activities before tax paid (6,988,040,207) 16,429,046,551 (7,137,850,992) 16,332,918,149
Income taxes paid (621,469,563) (942,739,850) (621,469,563) (927,255,594)
Net cash flow from operating activities (7,609,509,771) 15,486,306,701 (7,759,320,555) 15,405,662,555

254 Nabil Bank Limited


NPR

GROUP BANK
PARTICULARS AS AT END OF AS AT AS AT END OF AS AT
26 ASHAD 2079 31 ASHAD 2078 26 ASHAD 2079 31 ASHAD 2078
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of investment securities 5,662,922,970 (12,337,797,023) 5,666,453,945 (12,262,213,873)
Receipts from sale of investment securities - - - -
Purchase of property and equipment (54,871,168) (66,627,518) (54,526,972) (65,840,121)
Receipt from the sale of property and equipment - - - -
Purchase of intangible assets 33,185,767 9,675,731 33,021,917 9,958,231
Receipt from the sale of intangible assets - - - -
Purchase of investment properties (467,713,446) (72,553,779) (467,713,446) (72,553,779)
Receipt from the sale of investment properties - -
Interest received - -
Dividend received - -
Net cash used in investing activities 5,173,524,123 (12,467,302,589) 5,177,235,443 (12,390,649,542)
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt from issue of debt securities 702,334 702,334 702,334 702,334
Repayment of debt securities
Receipt from issue of subordinated liabilities
Repayment of subordinated liabilities
Receipt from issue of shares - 101,555 - 101,555
Dividends paid (353,183,538) (210,836,747) (315,168,742) (206,836,747)
Interest paid
Other receipt/payment - (193,523) (193,523)
Net cash from financing activities (352,481,204) (210,226,381) (314,466,408) (206,226,381)
Net increase (decrease) in cash and cash equivalents (2,788,466,851) 2,808,777,731 (2,896,551,520) 2,808,786,631
Cash and cash equivalents at Shrawan 1, 2078 5,995,671,403 3,179,295,548 5,995,671,138 3,179,286,383
Effect of exchange rate fluctuations on cash and cash 538,413 7,598,124 538,413 7,598,124
equivalents held
Cash and cash equivalents at 26 Ashad 2079 3,207,742,965 5,995,671,403 3,099,658,031 5,995,671,138

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22 255


Statement of Distributable Profit/(Loss)
For the Cut Off Date ended 26 Ashad 2079 (10 July, 2022)
(As per NRB Regulation)
NPR
CURRENT YEAR LAST YEAR
PARTICULARS
UPTO 26 ASHAD 2079 ASHAD END 2078
Opening Retained Earnings 70,072,266 127,629,534
Net profit or (loss) as per statement of profit or loss 965,249,983 2,185,942,130
Appropriations:
a. General reserve 215,171,562 437,188,426
b. Foreign exchange fluctuation fund 134,603 1,899,531
c. Capital redemption reserve - -
d. Corporate social responsibility fund 9,652,500 2,050,260
e. Employees’ training fund 10,432,230 -
f. Other
Investment adjustment reserve - -
Capital reserve - -
Debenture redemption reserve 166,666,666 250,000,000
Profit or (loss) before regulatory adjustment 563,192,422 1,494,803,912
Regulatory adjustment :
a. Interest receivable (-)/previous accrued interest received (+) (946,109,019) (24,860,386)
b. Short loan loss provision in accounts (-)/reversal (+) - -
c. Short provision for possible losses on investment (-)/reversal (+) - -
d. Short loan loss provision on Non Banking Assets (-)/reversal (+) (320,482,786) (19,885,566)
e. Deferred tax assets recognised (-)/ reversal (+) - -
f. Goodwill recognised (-)/ impairment of Goodwill (+) - -
g. Bargain purchase gain recognised (-)/resersal (+) - -
h. Acturial loss recognised (-)/reversal (+) - -
i. Other (+/-) -
Fair Value Gain on Trading Assets (5,987,090) (23,913,942.60)
Distributable profit or (loss) for the period (709,386,473) 1,426,144,018
Total Distributable profit as on 26 Ashad 2079 (639,314,207) 1,553,773,552

As per our report of even date

Sandip Babu Paudel Manoj K. Gyawali Gyanendra Prasad Dhungana Upendra Prasad Poudyal Nirvana Chaudhary CA Gyanendra B. Bhari
Head - Finance DCEO- Finance & HR Chief Executive Officer Board Chairman Board Vice Chairman Partner
BRS & Company,
Chartered Accountants
Malay Mukherjee Asha Rana Adhikary Ananta Poudyal Pravin Tibrewala A.R.M.Nazmus Sakib
Board Member Board Member Board Member Board Member Board Member

Date: December 11, 2022


Place: Kathmandu, Nepal

256 Nabil Bank Limited


07 INFORMATION SHAREHOLER’S

7.1 STRUCTURE OF SHARE CAPITAL 7.4 STOCK SYMBOL


Shareholding Structure Nabil Bank’s shares are traded on Nepal stock exchange Ltd. (NEPSE)
with stock symbol “NABIL”.
SHAREHOLDERS SHARE STRUCTURE % HOLDING

NB International Ltd. 90,047,462 39.44% 7.5 NOTICE OF ANNUAL GENERAL MEETING


Ordinary Shareholders 94,893,474 41.56% The 38th Annual General meeting (AGM) of the bank will be held on
IFIC 17,736,088 7.77% 13th January 2022 at 10:00 am at Silver Oak Banquet and Event
Rastriya Beema Company Ltd 17,415,179 7.63%
Center situated at Gairidhara, Kathmandu, Nepal. Following resolutions
will be discussed in the meeting:
Muthoot Finance 1,011,418 0.44%
Nepal Stock Exchange Ltd 601,131 0.26% Ordinary Resolution
MAW Enterprises Pvt Ltd 491,349 0.22% 1. To approve Director’s Report 2021/22 (2078/79).
Others 6,132,985 2.69% 2. To approve Balance sheet as of 16 July 2022, Profit and Loss
Account and Cash Flow Statement for the year ended thereat,
Total 228,329,086.00 100.00%
together with Auditor’s Report.
3. To approve consolidated books of accounts i.e. including books
7.2 REPRESENTATION IN THE BOARD OF DIRECTOR
of accounts of Bank’s subsidiary Nabil Investment Banking Ltd.,
Representation of promotor group Nepal Bangladesh Capital Ltd. and NBBL Securities Ltd. for the FY
1. Mr. Upendra Prasad Paudyal 2021/22 (2078/79).

2. Mr. Nirvana Kumar Chaudhary 4. To approve cash dividend @ 11.50% (for the purpose of tax on
bonus share and cash dividend) of the paid up capital as proposed
3. Mr. Malay Mukherjee
by the Board
4. Mr. Udaya Krishna Upadhyay
5. To appoint the auditor for the Fiscal Year 2022/23 (2079/80) and to
Representation of public shareholder group fix the auditor’s remuneration for the same; and
6. Election of 3 directors representing the promotor shareholders in the
1. Mrs Asha Rana Adhikari
Board of Director.
2. Mr. Ananta Poudyal
3. Mr. Pravin Tibrewal Special Resolution
1. To increase the Bank’s authorized capital to NPR 28,000,000,000.
7.3 SHAREHOLDER’S PROFILE
2. To approve increment in the Bank’s paid up capital to NPR
As at balance sheet dated (16th July 2022), the Bank’s Share Registrar, 4,224,088,096.92 by issuing bonus shares of 18.50% per unit
M/s Nabil Investment Banking Ltd. has recorded following details of existing share from the profit of the year ended 2021/22.
shareholders: 3. To approve some changes in the section/provisions of the
Memorandum of Association and to authorize the Board (or
SHAREHOLDING NO. OF its nominee) for making necessary changes in the proposed
TOTAL SHARES HELD
RANGE SHAREHOLDERS
amendments if the same is advised by Regulatory Authority(ies).
1-100 110,359 38,78,646
4. To ratify the expenses made by the Bank during FY 2021/22
101-500 55,503 12,80,61,23 (2078/79) under corporate social responsibility as quantified in
501-1,000 12,443 86,68,522 Schedule 4.37 of the financial statements for the purpose of Section
1,001-2,500 7,558 11,55,55,63 105 (1)(c) of the Companies Act, 2063, and
2,501-5,000 2,932 10,21,51,28 5. If it seems suitable for the Bank to merge with and/or acquire any
5,001-10,000 1,242 86,19,169 other suitable bank or financial institution by the Bank, or enter
10,001-25,000 970 14,11,50,12 into strategic foreign partnership, authorize the Board to appoint a
25,001-50,000 193 66,55,801 valuator to make the valuation of all the assets, liabilities and the
business of the bank, to enter into merger or acquisition agreement
50,001-100,000 75 51,30,706
and to make the decision relating to strategic foreign partnership and
Above 100,000 62 14,65,95,009
carrying out all the required activities.
Fractional shares - 89,408
Total 191,337 228,329,086

Annual Report 2021/22 257


7.6 SHAREHOLDER ENQUIRIES The tax is final withholding tax as per Section Gain or loss arising from disposal of shares
AND COMMUNICATION 92(1) (a) of the Act and need not require under Section 37 of the Act shall be the
further assessment while filing annual tax amount that is determined by reducing the
Communication
return under Section 96. amount incurred while acquiring the shares
The Bank regularly communicates all the with the amount that is received at the time
pertinent information to shareholders, Capitalization of profits is deemed as of its disposal. The amount of disposal in case
customers and general public through print distribution under Section 53(1) (b) of the Nabil Bank’s shares are sold through stock
media (national daily) and electronically Act and hence, issuance of bonus shares by exchange shall be the net amount received
through Bank’s official website www. the Bank from the profits earned (excluding from the buyer less brokerage and other costs
nabilbank.com. The detailed information on dividend received) is subject to withholding tax incurred during the transaction. The costs
AGM including ordinary agendas and special at the rate of 5% under Section 88(2). incurred for the shares by the way of an
agendas to be discussed in the meeting is acquisition through stock exchange shall be
Capital Gains On Disposal Of Shares
published in the national daily newspapers the amount paid to the beneficiary plus all
21 days prior to the date of AGM. Similarly, Pursuant to clause (a) of Section 95A (2)
costs attributable to the acquisition. Further,
interim financial highlights are published of the Income Tax Act, 2002 (amended by
the costs incurred for the shares by the way of
within the stipulated deadline prescribed by subsequent Finance Ordinance), the gain on
transfer from the deceased person shall be the
the Securities Board of Nepal and the central disposal of shares listed in the Securities Board
market value prevailing immediately before the
bank. These statements along with Basel of Nepal computed as per Section 37 of the
death of the transferor. The tax being withheld
Disclosures as prescribed by Point 7.4(b) of Act is subject to withholding tax. Shares of
on the gains arising from disposal of shares is
Capital Adequacy Framework 2015 under Nabil Bank are listed both in the Securities
an advance tax and the tax credit is available
Directive 1 of NRB Unified Directives are Board of Nepal and Nepal Stock Exchange for
at the time of filing annual tax returns.
posted in the Bank’s official website. the purpose of public trading and therefore the
gain on disposal of Bank’s shares is subject to
Enquires withholding tax in accordance to clause (a) of
Any enquiries related to the shareholders Section 95A (2).
of Nabil Bank on the share registrar viz.,
maintenance of shareholder’s record, share FISCAL YEAR AMOUNT (NPR)
transfer including domestic transfer in case 1. FY 2001/02 3,23,000
of death of a shareholder, replacement of lost 2. FY 2002/03 4,18,000
share certificates, pledge of shares, dividend 3. FY 2003/04 4,56,000
warrants/bonus shares declared and ratified
4. FY 2004/05 4,76,853
by the AGM, payment against dividend/
5. FY 2005/06 4,69,205
lost warrant, opening of demat account,
dematerialization of shares, etc. should be sent 6. FY 2006/07 7,20,323

to the address given below: 7. FY 2007/08 18,50,862


8. FY 2008/09 24,09,200
Nabil Investment Banking Ltd.
9. FY 2009/10 77,64,735
Naxal, Narayan Chaur, Kathmandu, Nepal 10. FY 2010/11 1,05,26,931
Tel : 977-1-4411604, 4411733 11. FY 2011/12 1,60,73,799
Fax : 977-1-4410554 12. FY 2012/13 1,80,64,708
Email : [email protected] 13. FY 2013/14 2,84,46,590
Web : www.nabilinvest.com.np 14. FY 2014/15 2,76,39,819
15. FY 2015/16 4,60,75,577
7.7 TAXATION ON DIVIDENDS AND
16. FY 2016/17 4,70,98,208
BONUS SHARES
17. FY 2017/18 7,18,33,591
Taxation On Dividends
18. FY 2018/19 8,86,51,127
(Cash And Bonus Dividends) 19. FY 2019/20 8,49,65,959
Pursuant to Section 88(2) of the Income Tax 20. FY 2020/21 3,85,68,723
Act 2002, the tax on dividend received by the
21. FY 2021/22 44,84,059
shareholders of Nabil Bank from the Bank is
Total 492,833,210
subject to withholding tax at the rate of 5%.

258 Nabil Bank Limited


Annual Report 2021/22 259
08 BANKING LIMITED NABIL INVESTMENT

8.1 OVERVIEW valuation. The subsidiary has entered into decrease in the total assets and liabilities
Management Service Agreement and Service (42%) but a slight increase in equity
Nabil Investment Banking Ltd. (Nabil Invest)
Level Agreement with the Bank. Under the (12.22%). The company’s capital and
is one of the Subsidiary of Nabil Bank Ltd.
Management Service Agreement, the actual liabilities have mainly been concentrated
established as per Companies Act, 2006 on
cost of the staff deputed from the Bank on ‘Payables and Refundable to Investors’
7th of February 2010. It is a Merchant Banker
to the Subsidiary is reimbursed on actual occupying 49.50% and Reserve and Surplus
licensed by the Securities Board of Nepal
basis. Likewise, under the Service Level occupying 20.87% of its total capital and
under the Securities Businessperson (Merchant
Agreement, the Bank has been providing liabilities. On utilization side, the subsidiary
Banker) Rule, 2064. Nabil Bank, as at the
various administrative services necessary held most of the investment in secured
balance sheet date, holds 52% controlling
for the Subsidiary’s service operations. investments in the form of varying terms banks
interest in Nabil Invest.
Such administrative services include general deposit and debentures. The company has also
The other institutional shareholder CG Finco administration, accounting, finance and held investment in equity instruments which
Private Ltd. holds 48% shares. The subsidiary planning, information technology, legal, has occupying a major chunk of utilization
and the parent company share a common advisory and fund management services. (13.97%) to stand at NPR 127.29 million as
financial year that ended on July 16th, 2022. of the fiscal year end.
The transactions between Bank and its
The principal activity of Nabil Invest is to Subsidiary during the review year 2021-22 Under assets side, Cash & Bank Balance and
provide merchant banking and investment has been presented in point 5.7.4 of “Note to Investments occupy major portion thereby
banking services that includes issuance and the Consolidated Financial Statements”. holding 9.88% and 81.27% of total asset
management of public offering, share registrar, respectively.
8.2 COMMENTARY ON KEY ITEMS
depository participant services, mutual fund
OF STATEMENT OF FINANCIAL
services and portfolio management service.
POSITION OF PAST FIVE YEARS
The unit also provides corporate advisory
services that includes services related to loan Financial position of the Subsidiary has
syndication, financial advisory and business changed over the year, with a significant

NPR. IN ‘000
AT MID JULY 2022 2021 2020 2019 2018 2017
Capital and Liabilities
Share Capital 270,000 200,000 200,000 200,000 200,000 150,000
Reserves & Surplus 190,101 209,987 107,270 102,603 111,130 148,319
Payables and Refundable to Investors 438,590 1,133,697 174,391 191,736 465,143 290,579
Other Liabilities and Provisions 12,399 37,057 59,525 17,330 49,468 65,662
Total 911,090 1,580,740 541,186 511,669 825,741 654,559
Assets
Cash and Bank Balance 90,056 691,194 48,282 148,986 511,508 338,444
Investments 740,417 793,567 433,922 298,180 229,553 221,697
Advance Tax (Net of Tax Liability) - - - 5,374 12,241 15,309
Fixed Assets (net of accumulated depreciation) 9,270 11,048 12,727 16,012 22,014 22,332
Deferred Tax Assets 20,221 - 1,510 4,027 4,033 -
Other assets 51,126 84,932 44,745 39,090 46,391 56,777
Total 911,090 1,580,740 541,186 511,669 825,741 654,559

260 Nabil Bank Limited


8.3 COMMENTARY ON THE KEY Income are Merchant Banking Fees, income Major contributor of increase in Gross Expense
ITEMS OF INCOME STATEMENT OF from mutual fund operation, Interest Income are Personnel Expense and Depreciation
PAST FIVE YEARS and Other Income. Income from mutual charges. Personnel expense increased by
fund operation increased by NPR 14.85 23.60 Million (110.27%). Depreciation
Subsidiary reported operating profit of NPR
Million (26.13%) during the fiscal year. charges increased by 6.10 Million (175.12%).
79.92 Million, which was lower than the
Likewise, Interest Income increased by NPR Major proportion of depreciation charges is
corresponding year. The main sources of
17.34 Million (26.38%) during the fiscal related to the depreciation of the Right of use
income for the company during the year were
year. Major contribution towards increase assets created from the implementation of
income from merchant banking activity, mutual
in Interest Income is interest income due to NFRS 17 – Leases.
fund operations, interest income, and other
Fixed Deposit. In the same line, Other Income
income. However, the company suffered a net Net profit of the entity stood at NPR 52.01
decreased by NPR 125.99 Million (- 94.20%)
loss on financial investments due to loss on Million this was lower than the previous year’s
during the fiscal year which was due to loss on
financial investments Held through Profit/Loss, Net profit of NPR 142.71 Million.
financial investments Held through Profit/Loss.
which reduced its operating income.
Major contribution towards decrease in other
Major contributors of increase in Gross income is gain on sale of securities.

PERIOD ENDING MID JULY 2022 2021 2020 2019 2018 2017
Merchant Banking Fees 45,359 59,072 12,340 23,828 23,188 37,189

Income from Mutual Fund operations 71,699 56,847 52,687 25,339 53,254 60,482

Interest Income 83,071 65,730 30,997 47,528 41,725 70,914


Other Income 7,752 133,744 37,792 12,127 -396 12,485

Gross Income 207,882 315,392 133,817 108,822 117,771 181,071


Personnel Expenses 44,999 21,400 16,796 15,799 -17,009 -14,658
General Operating Expenses 63,862 64,108 41,232 32,981 -33,412 -29,688
Depreciation Charge 9,591 3,486 3,751 4,329 -5,497 -5,554
Interest Expenses 626 - - - -2 -1,129

Gross Expenses 119,077 88,994 61,779 53,109 -55,919 -51,028

Operating Profit 88,805 226,398 72,038 55,713 61,851 130,043


Impairment - -478 -1,044 -3,901 -316
Provision for Staff Bonus 8,880 -22,592 -7,099 -5,181 -6,154 -12,286

Profit before tax 79,924 203,328 63,895 46,631 55,382 117,758


Tax Expense -84,786 -60,611 -19,228 -15,158 -12,570 -30,586
- Current Tax -56,350 -50,886 -16,711 -15,153 -17,719 -30,692
- Deferred Tax -28,435 -9,725 -2,517 -5 5,149 106

Profit after tax 52,009 142,717 44,667 31,473 42,811 87,171


Opening Retained Earning 189,375 102,357 102,603 111,130 128,519 71,348
Restatement/Adjustment -2,098 - - - - -
Dividend Payout -70,000 -40,000 -40,000 -40,000 -60,200 -30,000
Deferred Tax Reserve - - - - - -

Closing Retained Earning 164,705 189,375 102,357 102,603 111,130 128,519

Annual Report 2021/22 261


8.4 DIRECTOR’S REPORT Statement of Cash Flow, Statement of Change  Remittances increased by 4.8 percent in
in Equity and Accounting Policies & Notes Nepalese rupee and 2.2 percent in USD.
Respected Shareholders,
along with the accompanied Directors’ Report  The balance of payments remained at a
On behalf of Nabil Investment Banking for your discussion and onward approval. deficit of Rs.255.26 billion compared to a
Limited, I would like to welcome all the surplus of Rs.1.23 billion in last year.
Now, I proceed to briefly inform you about the
shareholders to the Thirteenth Annual General  Gross foreign exchange reserves stood
macroeconomic and financial situation along
Meeting (AGM) of the Company. Nabil Bank at USD 9.54 billion. This level of foreign
with the overall capital market situation of
Limited with its mission to be the First Choice exchange reserve is sufficient to cover the
Nepal during the review fiscal year:
Provider of Complete Financial Solutions merchandise and services imports for 6.94
incepted “Nabil Investment Banking Ltd. 1. Current Macroeconomic and Financial months.
(Nabil Invest)” as a Subsidiary in order to Situation of Nepal:
develop the company as an Investment Banker The financial situation of Nepal during the
The macroeconomic situation of Nepal based
of First Choice, in the long run, expanding review period has been briefed as under:
on annual data of FY 2021/22 has been
continuously its scope of activities.
highlighted as hereunder: 1.1 Financial Access
I will be presenting the achievements of the  Central Bureau of Statistics has estimated The total number of BFIs licensed by NRB
Company during the review year 2021/22, economic growth of 5.84 percent for FY remained at 126 in mid-July 2022. As of
policies and strategies adopted by, and future 2021/22 against the targeted growth rate of mid-July 2022, 26 commercial banks, 17
plans of the Company in this AGM for your 6.5 percent. development banks, 17 finance companies,
endorsement and resolution. In this context, I 65 microfinance financial institutions, and
 The annual average Inflation remained at
would like to seek your consent for presenting 1 infrastructure development bank are in
6.32 percent.
financial glimpses of the company for the operation. The number of BFIs branches
 Imports increased 24.7 percent and exports
review period including an audited Statement reached 11,528 in mid-July 2022 from
increased 41.7 percent. In the previous year,
of Financial Position, Statement of Profit 10,683 in mid-July 2021.
imports increased 28.7 percent and exports
or Loss and Other Comprehensive Income,
increased 44.4 percent.

NUMBER OF BFIS BRANCHES OF BFIS


BANK AND FINANCIAL INSTITUTIONS
MID- JULY 2021 MID-JULY 2022 MID- JULY 2021 MID-JULY 2022
Commercial Banks 27 26 4,753 5,009
Development Banks 18 17 1,023 1,118
Finance Companies 17 17 222 267
Microfinance Financial Institutions 70 65 4,685 5,134
Infrastructure Development Bank 1 1 - -
Total 133 126 10,683 11,528
Source: https://www.nrb.org.np/contents/uploads/2022/08/Current-Macroeconomic-and-Financial-Situation-English-Based-on-Annual-data-of-2021.22-1.pdf

1.2 Deposit mobilization 1.3 Credit Disbursement production sector by 8 percent, transportation,
Deposits at banks and financial institutions Private sector credit from BFIs increased 13.1 communication, and public sector by 15.7
(BFIs) increased 9 percent in the review year percent in the review year compared to a percent, wholesale and retail sector by 13.3
compared to a growth of 21.4 percent in the growth of 27.3 percent in the previous year. percent, and service industry sector by 8.7
previous year. The share of demand, saving, In the review year, private sector credit from percent in the review year.
and fixed deposits in total deposits stand at commercial banks, development banks, and
1.4 Liquidity Management
8.9 percent, 27.6 percent, and 55.8 percent finance companies increased 12.7 percent,
In the review year, NRB mopped up Rs.60
respectively in mid-July 2022. Such shares 13.9 percent, and 29.8 percent respectively.
billion in liquidity of which Rs.28.35 billion
were 10.4 percent, 34.2 percent, and 47 Outstanding loans of BFIs to the agriculture
was through reverse repo auction and
percent respectively a year ago. sector increased by 19.7 percent, industrial
Rs.31.65 billion through deposit collection.

262 Nabil Bank Limited


In the previous year, Rs.303.29 billion in The average base rate of commercial banks Collective Investment Fund and Qualified
liquidity was mopped up. In the review increased to 9.54 percent in the review month Institutional Investors count have reached 18
year, NRB injected NRs. 9,702.41 billion (mid-June to mid-July) of 2022 from 6.86 and 116 respectively in mid-July 2022.
in liquidity of which Rs.476.39 billion was percent a year ago. The weighted average
through a repo, Rs.55.92 through outright deposit rate and lending rate of commercial 2.2 NEPSE Index
purchase, and Rs.9170.11 billion through a banks stood at 7.41 percent and 11.62 NEPSE index stood at 2,009.47 in mid-July
standing liquidity facility (SLF). In the previous percent respectively in the review month. Such 2022 compared to 2,883.41 in mid-July
year, Rs.438.28 billion in liquidity was rates were 4.65 percent and 8.43 percent 2021. Based on a daily close, the NEPSE
injected. respectively a year ago. index has recorded the highest and lowest level
of 3,199.03 (August 18, 2021) and 1,848.28
1.5 Inter-Bank Transaction 2. Securities Market: (June 23, 2022) respectively during the review
In the review year, BFIs interbank transactions The main glimpses of the securities market of year.
amounted to Rs. 3,100.35 billion including the country during FY 2021/22 are as follows:
Rs. 2,784.10 billion inter-bank transactions 2.3 Market Capitalization
among commercial banks and Rs. 316.25 2.1 Stock Exchange, Central Depository, Stock market capitalization in mid-July 2022
billion among other financial institutions Credit Rating Agency and Securities stood at Rs. 2,869.34 billion compared
(excluding transactions among commercial Businesspersons and Securities Business to Rs. 4,010.96 billion in mid-July 2021.
banks). In the previous year, such transactions There was 1 recognized stock exchange (Nepal The ratio of market capitalization to GDP in
were Rs. 1,996.58 billion including Stock Exchange Ltd.), 1 central depository mid-July 2022 stood at 59.14% compared
Rs. 1,782.96 billion among commercial banks (CDS and Clearing Ltd.), 3 credit rating to 93.77% in mid-July 2021. The share of
and Rs.213.62 billion among other financial agencies, 30 merchant bankers, 83 DPs, 45 BFIs and insurance companies in stock market
institutions (excluding transactions among RTAs, 50 C-ASBA members, 50 stock brokers, capitalization remained at 67.3 percent.
commercial banks). and 1 stock dealer (Nagarik Stock Dealer Such a share for hydropower companies is 11
Company Ltd.) in mid-July 2022, catering percent, investment companies 6.9 percent,
1.6 Interest rates variety of services relating to securities and manufacturing and processing industries 4.3
The weighted average interest rates of Mid- securities market. percent, hotels 1.6 percent, trading companies
July of the review year via-a-vis same period 0.4 percent, and the share of other companies
previous year is as summarized in the table is 8.5 percent.
hereunder:
2.4 Securities Turnover
TYPES MID-JULY 2021 MID-JULY 2022 A total of 2.49 billion units of securities have
91-day Treasury Bills rate 4.55 10.66 been traded amounting to Rs. 1,202.1 billion
in value in the review year compared to 3.4
Inter-bank rate (Commercial Banks) 4.12 6.99
billion units worth Rs. 1,454.44 billion in
Base rate (Commercial Banks) 6.86 9.54 value in the previous year. There has been a
Deposit rate (Commercial Banks) 4.65 7.41 decline of 26.8% and 17.35% in the traded
Lending rate (Commercial Banks) 8.43 11.62 quantity and turnover in the review year
compared to the previous year.
Source: https://www.nrb.org.np/contents/uploads/2022/08/Current-Macroeconomic-and-Financial-
Situation-English-Based-on-Annual-data-of-2021.22-1.pdf

Annual Report 2021/22 263


2.5 Approval of Securities Issue
Securities Board of Nepal (SEBON) approved the total public issuance of securities worth Rs.31.37 billion which includes debenture worth
Rs.12.48 billion, ordinary shares worth Rs.7.20 billion, mutual fund worth Rs.6.9 billion, and right shares worth Rs.4.79 billion in the review
period.

ISSUES APPROVED/ REGISTERED BY SEBON


TYPE
COUNT NO. OF SECURITIES ISSUE AMOUNT
IPO (excluding Mutual Funds) 28 72,036,425 7,203,642,500
Right 11 47,871,883 4,787,188,295
Mutual Fund 7 690,000,000 6,900,000,000
Debenture 10 12,480,000 12,480,000,000
Total 201 822,388,308 31,370,830,795

Source: https://sebon.gov.np/public-issues-data

During the review year, Sarbottam Cements The listing of securities during the review year 3.1 Major Activities:
Ltd. and Reliance Spinning Mills Ltd. have has been summarized in below table: Issue Management:
initiated book-building methods for IPO and
are in pipeline for SEBON approval. The IPO NO. OF During the review year, Nabil Invest has
TYPE COUNT
pipeline status as of August 21, 2022, is as SECURITIES concluded two issue management as
undermentioned: IPO 22 257,821,652 mentioned hereunder:
Right 12 119,693,597  Nabil Balanced Fund III (NBF3)
NO. OF
IPO PIPELINE STATUS Bonus 144 563,129,858
COMPANIES  8.5% MBL Debenture 2087

1. Under Preliminary Review 12 Mutual Fund 4 500,000,000


Similarly, it has auctioned the Swabalamban
2. Reviewed and Comment Sent 11 Debenture 22 53,216,197
Bikas Bank Ltd. (SWBBL) promoter
3. Replied and Under Review 6 Total 204 1,493,861,303 shareholding of Nabil Bank Ltd.

Total 29 Source: https://www.nepalstock.com.np/reports/


Besides, the company has signed the following
annual-reports
Source: https://sebon.gov.np/uploads/2022/08/25/ agreements during the review year.
C2oUJHUKHltVl0EDwj1sQ7FYhu2g86kC7y3ZXiCK. 2.7 Paid-up capital of Listed Companies A. IPO (share) Issue Management
pdf
The paid-up value of 6.77 billion shares listed
A.1. Kalinchowk Darshan Ltd.
2.6 Listed Companies at NEPSE stood at Rs.667.75 billion in mid-
A.2. Ghorahi Cement Industry Ltd.
July 2022. The paid-up value of shares listed
The number of companies listed at NEPSE A.3. Laughing Buddha Power Nepal Ltd.
at NEPSE in mid-July 2021 was NRs. 573.24
reached 234 in mid-July 2022, out of which
billion. The paid-up capital listed in NEPSE B. Right Issue Management
146 are Bank and Financial Institutions (BFIs)
has increased by 16.49% in mid-July 2022
and insurance companies, 51 hydropower Arun Kabeli Power Ltd.
compared to mid-July 2021.
companies, 19 manufacturing and processing
industries, 6 investment companies, 5 hotels, C. Mutual Fund Scheme NFO Management
3. Summary of Financial Information of
4 trading companies, and 3 others. The FY 2021/22 Nabil Flexi Cap Fund
number of companies listed at NEPSE was
The major activities of the company and its
219 in mid-July 2021.
financial highlights during FY 2021/22 have
been presented below:

264 Nabil Bank Limited


D. Debenture Issue Management The total gross income from PMS in the review
10 Nabil Balanced Fund-3 (NBF3)
year was NRs. 36.74 million.
D.1. Himalayan Bank Debenture 11 Nabil Bank Limited (NABIL)

D.2. Lumbini Bikas Bank Debenture 12 Nabil Debenture 2085 (NBLD85) As of the end of the review year, the company
13 Nabil Equity Fund (NEF)
has been managing a portfolio of 735 clients
D.3. Nepal Bank Debenture
with total Assets under Management (AUM) of
14 NADEP Laghubitta Bittiya Sanstha Ltd.
E. Auction Management NRs. 2,844.21 million.
(NADEP)
Prabhu Bank promoter share Fund Management & Depository Services to
15 Prime Life Insurance Company Limited
The total contribution from issue management (PLIC) Nabil Mutual Fund:
in the review year towards gross revenue of the
16 Sana Kisan Bikas Laghubitta Bittiya
company was NRs. 4.99 million. The company has been appointed as the fund
Sanstha Limited (SKBBL)
manager and depository for Nabil Mutual
Underwriting: 17 Swabalamban Laghubitta Bittiya Fund by the fund sponsor Nabil Bank Ltd.
Sanstha Limited (SWBBL) During the review year, it has catered its fund
In the review year, the company has signed an
18 United Insurance Co. (Nepal) Ltd. (UIC) management and depository service to 3
Issue Underwriting agreement for the issue of
mutual fund schemes namely:
following companies: The RTS service agreement with SWBBL
was valid till July 15, 2022 and was not (i) Nabil Equity Fund (NEF),
 Mandakini Hydropower Company Limited
renewed for a further period. With the exit of (ii) Nabil Balanced Fund II (NBF2) and
 Reliable Nepal Life Insurance Limited SWBBL, the RTS client count as of the end of
(iii) Nabil Balanced Fund III (NBF3) under
Issue underwriting has contributed total of the review period declined to 17. Gross RTS
Nabil Mutual Fund
NRs. 1.31 million in the gross income of the income accounted for in the review year was
company in the review year. NRs. 2.32 million. The contribution from fund management
and depository towards gross revenue of the
Registrar to Shares (RTS): Depository Participant (DP):
company in the review year was NRs. 71.7
million.
During the review year, the company has The company has been rendering DP services
rendered share registrar service to 18 (relating to the De-mat account) to the general
Corporate Advisory Services:
securities of different companies. public. In the review year, the company
has opened 75,700 new De-mat accounts The company has been rendering advisory
1 10% Nabil Debenture 2082 (NBLD82) and achieved the De-mat account count of services to institutions in the form of loan
2 8.5% Nepal Bank Debenture 2087 199,436 level as of the end of the review year. syndication, investment advisory, business
(NBLD87) valuation, etc. The company has introduced
A sum of NRs. 38.22 million has been
6 more products titled E-learning courses
3 Bottlers Nepal (Balaju) Limited (BNL) accounted for in the review year as a
on Capital Market and Investment Banking,
4 Bottlers Nepal (Terai) Limited (BNT) contribution from DP to the gross income of
Share Loan Financing Framework, Techno-
5 Butwal Power Company Limited (BPCL) the company.
Commercial Report, FDI Advisory, Consultancy
6 Deprosc Laghubitta Bittiya Sanstha Services for Development Agencies, and
Portfolio Management Services (PMS):
Limited (DDBL) Escrow Agency Services in the review year.
7 Himalaya Urja Bikas Company Limited The company has been rendering PMS under 3
There has been a total contribution of NRs.
(HURJA) broader categories namely: (i) discretionary, (ii)
6.31 million from this segment to the gross
non-discretionary, and (iii) guaranteed return. A
8 Himalayan Distillery Limited (HDL) revenue of the company in the review year.
variety of products have been offered to clients
9 Nabil Balanced Fund-2 (NBF2)
under these 3 classifications.

Annual Report 2021/22 265


3.2 Financial Highlights:
The financial position of the company as on mid-July 2022 is as under:
Amt. (NRs. in ‘000)
PARTICULARS FY 21/22 FY 20/21 GROWTH %
Share Capital 270,000.00 200,000.00 35.00%
Total Assets 911,090.13 1,580,740.39 -42.36%
Net Worth 460,101.31 409,987.05 12.22%
Total Income 207,882.16 315,391.94 -34.09%
Total Expenses 127,957.81 112,064.38 14.18%
Operating Profit 79,924.35 203,327.55 -60.69%
Net Profit (After Tax) 52,009.31 142,716.59 -63.56%
Proposed Dividend (Cash & Bonus) 54,000.00 73,784.21 -26.81%
No. of outstanding shares (in ‘000) 2,700.00 2,000.00 35.00%
Earnings Per Share (Rs.) 19.26 71.36 -73.01%
Return on Assets (%) 5.71 9.00 -36.56%
Net worth per Share (Rs.) 170.41 204.99 -16.87%

There has been a shrink in the review year gross income by 34.09% the regulatory bodies and authorities therefrom for their cooperation
while the expenses have increased by 14.18% as compared with the and guidance. I extend my sincere thanks to S.A.R. Associates,
immediately preceding previous year. The net profit of the company Chartered Accountants’ Partner CA Aman Uprety for professionally
has fallen by 63.56% in the review year. The company has distributed completing the audit of the company. Furthermore, I am thankful to R
35% bonus share (equivalent to NRs. 70,000,000) and 1.8421053% & P Associates, Chartered Accountants’ Partner CA Prahlad Basnet, for
cash dividend (equivalent to NRs. 3,684,210.60) in the current his suggestion and contribution to the audit of Nabil Balanced Fund
period and has proposed for distribution of 20% cash dividend (i.e II and Nabil Balanced Fund III, and Joshi and Bhandary, Chartered
NRs 54,000,000) on the current paid up capital of Rs 270,000,000. Accountants’ partner CA Manmohan Raj Kafle for his contribution in
The proposed dividend is subject to the approval of the members at the audit of Nabil Equity Fund under Nabil Mutual Fund. Similarly, my
the ensuing AGM. The shareholders of the company as on the date special thanks to all the employees of the company for their noteworthy
immediately preceding the AGM date shall be entitled to the dividend contributions to achieving the objectives of the company, and expect
declared by the AGM. similar contributions in the days ahead. Further, I would like to thank
the board members for their valuable suggestions and support.
The additional details as required by section 109(4) of the prevailing
Companies Act have been presented in Annexure. Thank you.

Expression of Gratitude: On behalf of the Board


On behalf of the Board, I would like to express sincere gratitude to all
Adarsha Bazgain Varun Chaudhary
the customers, well-wishers, promoter company Nabil Bank Limited and
Director Chairman
its employees, institutional shareholder CG Finco Pvt. Ltd. and all other
stakeholders for their continuous support and cooperation. I also thank Date: September 15, 2022

266 Nabil Bank Limited


8.5 INFORMATION UNDER b) Any impact that is caused to the business participants. All of these have had an ultimate
SECTION 109(4) OF COMPANIES of the company due to national and adverse impact on the company’s business.
ACT, 2063 international conditions:
c) Current year’s achievement until the date
a) Business assessment of review fiscal year: The business of the company is significantly of preparation of the Report and the Board
related to the securities market. And, the of Director’s view on future activities of the
During the review year, the company has:
Nepalese securities market and the fiscal company:
i. successfully concluded the issue policy along with monetary policy are positively
management of Nabil Balanced Fund III co-related. Besides, liquidity is another The company has been catering its current
(NBF3) and 8.5% Machhapuchchhre significant factor affecting any market. In the services of issue management and other
Debenture 2087 (MBLD87) review year, Nepal Rastra Bank implemented services like depository participant and
a cap on share loans. BFIs have gone through registrar to shares, fund management
ii. signed agreement for 3 IPO (Share)
issue management, 3 debenture issue the worst situation resulting from liquidity and depository services to mutual fund
management, 1 mutual fund scheme NFO constrictions. The implementation of the share schemes under Nabil Mutual Fund, portfolio
management, 1 right management, and 1 loan cap and months of liquidity constrictions management service, and advisory services,
promoter share auction management which are still prevailing have had a severe and will continue with these services in future
impact on the Nepalese securities market and too.
iii. signed agreement of underwriting
commitment for 2 NFOs the business of the company. Moreover, the
The company is an industry leader in
iv. catered share registrar services to 18 Securities Board of Nepal has recently revised
portfolio management and advisory wings
securities the ASBA fee to be received by the issue
and will continue to nourish the stand. The
manager, reducing it to Re. 1 from the existing
v. opened 75,700 new De-mat accounts company has recently initiated ‘Pitch Neck’ as
NRs. 10 per valid applicant.
vi. enrolled 181 new PMS clients with a entrepreneurship consulting for individuals and
total investment amount of NRs. 349.44 With the increasing globalization, the world organizations to assist them in transforming
million enrolled through the collective has become even more interconnected. Though their business idea into reality. Likewise, the
effort of the PMS unit and Marketing unit. the Nepalese securities market has no direct company has adopted a policy of broadening
vii. rendered fund management and depository linkage with international markets, because, its customer base under PMS and thereby
service to 3 close-ended mutual fund the Nepalese economy is heavily dependent enhancing assets under management. Further,
schemes under Nabil Mutual Fund on imports and Nepal imports far more than the company has widened DP-related services
it exports, the international conditions do through increased resources and outlets.
viii. introduced additional products under
Corporate Advisory as such E-learning have an influence on the Nepalese market
During the review year, the company initiated
courses on Capital Market and Investment including the securities market. With the
regulatory procedures for the launching of the
Banking, Share Loan Financing post-COVID financial crisis and Russia-Ukraine
first open-ended mutual fund scheme named
Framework, Techno-Commercial Report, conflict, the supply chain of the world has
‘Nabil Flexi Cap’ under Nabil Mutual Fund,
FDI Advisory, Consultancy Services for been affected resulting in the skyrocketing oil
and it is in the final stage of approval as on
Development Agencies, and Escrow price, and a surge in the price of essentials
date. The company intends to start Systematic
Agency Services as well as luxury items. The increased
Investment Plan (SIP) under the specified
ix. suffered gigantic loss (net of realized gain/ inflation has affected the consumption cost
scheme. SEBON has granted license to the
loss) of NRs. 43.23 million in proprietary and pattern of Nepalese on one side and
company for Specialized Investment Fund (SIF)
investment due to an unexpected downfall on the other reducing the country’s forex
management on September 4, 2022. Only 8
in the overall securities market as a result reserve capacity to sustain imports in terms
entities have been granted SIF license so far.
of policy level intervention by Nepal of the number of months. It has significantly
The present time with minimum competitors
Rastra Bank on share loan cap, liquidity hampered the savings and capital formation
constriction in the banking channel almost is an opportunity to the company to create as
ability of the general Nepalese. Besides, the
throughout the review year, impacts of edge for itself for which the company has to
ongoing situation of neighboring nations as
global conflicts on the national economy toil on ensuring cost efficient and time bound
such Srilanka, Pakistan, and Bangladesh has
and Forex reserve. delivery along with quality.
also instilled fear in the securities market

Annual Report 2021/22 267


d) Industrial and professional relation of the always highly emphasized on compliance with member. It has always given importance
company: related acts, laws and directives issued by the to healthy competition and has been doing
regulators from time to time. The company its business being based on that principle.
The company has been maintaining cordial has been contributing towards the growth of There is amicable relationship between the
relationship with industrial and professional overall capital market in association with the management and other employees in the
corporate bodies and enhancing its business Merchant Bankers’ Association as an active company.
substantially there from. The company has

e) Board of Directors:

The Board of Directors (BoD) of the company comprises of following members:

Mr. Varun Chaudhary Chairman Representative Group “B”


Mr. Adarsha Bazgain Director Representative Group “A”
Mr. Ganesh Prasad Awasthi Director Representative Group “A”
Mr. Sanjay Pokhrel Director Representative Group “B”
Mr. Bharat Adhikari Director Professional Independent Director
Mr. Shankar Prasad Pandey Director Professional Independent Director

There has been no change of any members of the BoD during the review year.

f) Board of Directors response on Independent h) Details of shares forfeited: l) Shares held by the directors and officials
Auditor’s Report: of the company and information received by
The company has not forfeited any shares the company on their involvement in trading
The audit of review period was carried out during the review year and to date. shares:
by S.A.R Associates, Chartered Accountants
appointed by the 12th AGM of the company i) Review of the progress made by the The ordinary directors of the company have
convened on 2078/07/17. The engagement company and its subsidiary and the position been nominated as representational directors
partner is CA Aman Urpety. The suggestions of the same at the end of the fiscal year: by the institutional shareholders and they
and remarks indicated by the auditor in the along with KMPs of the company have neither
The progress made and major activities
management letter has been and shall be shareholding nor involvement in trading
undertaken by the company during the review
addressed and implemented to the extent thereon. The same fact applies in the case of
period have already been mentioned above.
reasonable and appropriate to the company independent professional directors.
Until now, the company does not have any
considering the industrial practice, standards
subsidiaries. m) Information provided on the personal
and regulatory framework. The Board
discussed on the auditor’s report and approved interest of Board of Directors and their close
j) Major activities of the company during the
the audited annual financials comprising of relatives regarding contract or agreement
period
statement of financial position, statement done with the company:
of profit & loss, statement of change in The major activities performed/ undertaken
The company has not received any information
equity, statement of cash flow and significant by the company during the review year have
from any directors regarding existence of any
accounting policies & notes to account of the already been mentioned above.
personal interest of themselves and their close
company.
k) Any information is given to the company by relatives in any contract or agreement done
g) Details about proposed dividend its fundamental shareholders: with the company during the review year.

The Board of Directors has proposed 20% There has been no change in the fundamental n) Buy back of shares by the company and
cash dividend equivalent to NRs. 54,000,000 shareholders’ list during the review year and information pertaining to this:
out of the profit of fiscal year 2078/79. The from reporting date until now, thereby, no
The company has not bought back any shares
proposed dividend is subject to approval by information u/s 50(2) and 50(3) of the Act has
during the review year and from reporting date
shareholders at the ensuing AGM. been received in the specified period.
until now.

268 Nabil Bank Limited


o) Information of internal control system: are reported directly to the audit committee. The employees of the company are being
The audit committee conducts a review of the provided remuneration, allowances and
The Audit Committee has appointed M/s GSN audit issues and gives necessary directions to benefits as provided in the Employees’ Bylaws
Associates, Chartered Accountants as an the management. of the company approved by the Board.
internal auditor to carry out internal audit, of The annual emoluments paid to the Chief
the company and mutual funds schemes under The Company has paid NRs. 50,000 towards Executive Officer of the company in the review
its management, on quarterly basis for the allowance to audit committee members during period amounts to NRs. 15,159,394 which
review period. The internal audit of the review the review year. includes the basic pay, allowance (including
period has also been completed accordingly. festival allowance and leave fare allowance),
The audit committee chaired by professional r) Any payables to Directors or key
provident fund, gratuity, insurance, bonus
independent director Mr. Bharat Adhikari management personnel associated firms and
and welfare, performance linked bonus. CEO
with other member Mr. Sanjay Pokhrel and institutions
has been provided with a vehicle and actual
Mr. Ganesh Prasad Awasthi, reviews overall consumption-based fuel facility as well.
There are no such payables.
internal audit and control environment as
mandated by the Financial Administration s) Remuneration, allowances and benefits t) Dividend receivables by Shareholders
Bylaws 2067 and prevailing statutory Laws. paid to directors, managing director, chief
There are no pending dividend receivables by
executive officer and officials:
Further, the Board of the company has shareholders as on date.
approved Financial Administration Bylaws, HR The Articles of Association (AOA) of the
Bylaws including Product Paper and Standard u) Buy/Sale of assets as per Section 141
company lays down a provision of providing
Instruction Manual (SIM) of services rendered board meeting allowance of NRs. 10,000 There is no such transaction referred to u/s
for maintaining effective internal control system per member in each board meeting and 141(1) during the review year.
and enhancing service quality. The Company audit committee meeting allowance of NRs.
has been reviewing and revising the above- 10,000 per member in each audit committee v) Related party’s transaction as per Section
mentioned documents as per necessity. meeting. The directors representing Nabil 175
Bank Ltd. have decided not to accept any
p) Details of management expenses incurred Nabil Invest has the following related parties:
meeting fees until otherwise decided at a later
during the year:
stage. However, this decision does not apply
NAME RELATIONSHIP
The total management expenses under the to the director representing CG Finco Ltd.
and Professional Independent Directors. The 1. Nabil Bank Limited Holding – Subsidiary
heading of employee and administrative
expenses incurred by the company during Company has paid NRs. 100,000 and NRs. 2. CG Finco Limited Associate

the review period are NRs. 124,290,464 50,000 towards sitting fees to the members 3. Nabil Equity Fund Fund Manager &
excluding depreciation and amortization. of the Board of Directors and Audit Committee Depository
respectively during the review year. In addition, 4. Nabil Balanced Fund II Fund Manager &
q) Details of the audit committee the Company pays NRs. 4,000 per month to Depository
Professional Independent Directors towards 5. Nabil Balanced Fund III Fund Manager &
An independent audit committee comprising communication and transportation allowance, Depository
of professional independent director Mr. the total of which is NRs. 96,000 in the
Bharat Adhikari as a Coordinator, and other review year. The Company has not provided The Company has entered into the following
two directors as members namely Mr. Sanjay any other financial benefits to the member transactions with its related parties during FY
Pokhrel and Mr. Ganesh Prasad Awasthi is in of its Board of Directors (BoD) or any sub- 2078/79:
existence. The observations during the internal committee of BoD except mentioned above.
audit along with management response thereto

Annual Report 2021/22 269


S. NO. RELATED PARTY TRANSACTIONS AMOUNT (RS.)
1 Nabil Bank Ltd. Balance in Call/Current Account 16,278,580
2 Nabil Bank Ltd. Interest Income on Call & Fixed Deposit Accounts 3,529,601

3 Nabil Bank Ltd. Proceeds realized from rendering operational support assistance for the Bank 294,000

4 Nabil Bank Ltd Annual Fee of RTS Service Provided 862,500


5 Nabil Bank Ltd. SLA Fees paid 500,000
6 Nabil Bank Ltd Payable To Nabil bank (commission) 3,189,482
7 Nabil Balanced Fund I Redemption and other payable 43,799,015
8 Nabil Equity Fund Fund Management & Depository fee 28,982,050
9 Nabil Balanced Fund II Fund Management & Depository fee 26,151,252
10 Nabil Balanced Fund III Fund Management & Depository fee 16,565,886

w) Income Tax: using the accounting software of P.C.S. (P.) Ltd. Besides, the company has tied up with NPG,
for accounting and reporting of mutual fund Khalti, eSewa, PrabhuPay, and Connect IPS for
The company has made provisions for NRs. schemes under its management. Similarly, convenience to customers in making payments
27,915,044 towards tax expense for the WEALTH is being used for record maintenance for DP-related service fees.
review period which includes the current tax and reporting of PMS clients. The company
liability of NRs. 53,361,522 calculated @ is also working with another vendor for the Furthermore, the company has been
30% on taxable profit of NRs. 177,871,741 development of industry disruptor all-in-one customizing the existing software as required
deferred tax expense of NRs. 28,435,358 and software beginning with PMS. A human and looking to implement new software/
prior period tax adjustment expense of NRs. resource management system (HRMS) is systems for economic automation of office
2,988,880. The total tax expense may change being used for handling the overall HR-related operations.
with the finalization of the tax audit. aspects.
z) Merger/ Acquisition:
x) Location of office: Share Issue Management software and RTS
The company has formed a Merger/ Acquisition
software of P.C.S. (P.) Ltd. is used for issue
The company currently has its office in Naxal, committee and elected therefrom the
management and maintenance of shareholders’
Kathmandu. representative for the Joint Merger/ Acquisition
records and dividend records of RTA clients.
committee to take the process onwards relating
y) Technology: WebCDAS of CDS & Clearing Ltd. is in use
to the merger/ acquisition of Nepal Bangladesh
for rendering DP services. The company has
Capital Ltd.
The company has been using the accounting initiated an ONLINE DE-MAT opening service
software of Micro-Banker Pvt. Ltd. for its as well from the review year.
overall accounting and reporting. It has been

270 Nabil Bank Limited


Annual Report 2021/22 271
272 Nabil Bank Limited
Annual Report 2021/22 273
8.7 FINANCIAL STATEMENT OF NABIL INVESTMENT BANKING LIMITED
Statement of Financial Position
As at 16th July 2022
NPR
PARTICULARS NOTE 16/07/2022 15/07/2021
Assets
Cash and Cash Equivalents 1 90,055,857 691,193,913
Financial Investments - at Amortized Cost (HTM) 2 613,123,000 618,065,000
Financial Investments - at FVTPL (HFT) 3 127,293,915 175,501,559
Financial Investments at FVOCI (AVS) 4 - -
Property Plant & Equipment 5 9,269,839 10,455,827
Intangible Assets 6 2,430,546 592,219
Right-of-use Assets 7 11,891,839 -
Other Assets 8 27,312,910 84,931,864
Current Tax Assets 9 9,491,068 -
Deferred Tax Assets 10 20,221,158 -
Total Assets 911,090,131 1,580,740,382
Liabilities
Refundable to Investors 11 410,509,733 501,107,433
Other Financial Liabilities 12 16,424,169 632,589,361
Other Liabilities 13 11,656,285 27,018,244
Lease Liabilities 14 12,398,634 -
Current Tax Liabilities 9 - 1,824,097
Deferred Tax Liabilities 10 - 8,214,201
Total Liabilities 450,988,820 1,170,753,336
Equity
Share Capital 15 270,000,000 200,000,000
Retained Earnings 16 164,705,480 189,374,841
Other Reserves 17 25,395,831 20,612,205
Total Equity 460,101,311 409,987,046
Total Liabilities and Equity 911,090,131 1,580,740,382

Schedules and Explanatory Notes forms integral part of Statement of Position


As per our report of even date

Rimi Shahi Varun Chaudhary Ganesh Prasad Awasthi CA. Aman Uprety
Accounts Incharge Director Director Partner
S.A.R. Associates
Manish Narayan Joshi Adarsha Bazgain Shankar Prasad Pandey
Chief Executive Officer Director Professional Independent Director

Date: October 11, 2022


Place: Naxal, Kathmandu

274 Nabil Bank Limited


Statement of Profit or Loss and Other Comprehensive Income
Year Ended 16th July 2022
NPR
PARTICULARS NOTE 16/07/2022 15/07/2021
Income
Income from Merchant Banking Activity 18 45,359,318 59,071,619
Income from Mutual Fund operations 19 71,699,187 56,846,678
Interest Income 20 83,071,248 65,729,691
Other Income 21 51,078,719 40,325,037
Net gain/(loss) on financial investments Held through P/L 22 (43,326,313) 93,418,911
Total Income 207,882,160 315,391,936
Expense
Personnel Expense 23 53,879,103 43,991,668
Depreciation on Property and Equipment 5 3,192,840 3,248,185
Amortization of Intangible Assets 6 474,504 238,014
Depreciation on Right-of-use Asset 7 5,923,190 -
Other Operating Expenses 24 63,861,998 64,108,048
Finance Cost 25 626,173 -
Impairment 478,470
Total Expenses 127,957,808 112,064,385
Profit Before Tax from Continuing Operations 79,924,352 203,327,551
Income Tax Expense - Current Tax 53,361,522 50,886,364
Income Tax Expense - Previous Year 2,988,880
Deferred Tax Expense (Income) (28,435,358) 9,724,594
Profit For the Year 52,009,308 142,716,593
Profit for the year 52,009,308 142,716,593
Total other comprehensive income /(loss) - -
Income tax income /(expense) relating to components of OCI - -
Other comprehensive income for the year, net of tax 52,009,308 142,716,593
Annualized Earning per share (EPS) 19.26 71.36
Restated BEPS 52.86

Schedules and Explanatory Notes forms integral part of Statement of Position


As per our report of even date

Rimi Shahi Varun Chaudhary Ganesh Prasad Awasthi CA. Aman Uprety
Accounts Incharge Director Director Partner
S.A.R. Associates
Manish Narayan Joshi Adarsha Bazgain Shankar Prasad Pandey
Chief Executive Officer Director Professional Independent Director

Date: October 11, 2022


Place: Naxal, Kathmandu

Annual Report 2021/22 275


Statement of Changes in Equity
Year Ended 16th July 2022
NPR
TOTAL
SHARE RETAINED GENERAL OTHER
PARTICULARS SHAREHOLDERS’
CAPITAL EARNINGS RESERVE RESERVE
FUNDS
Balance as at July 16, 2020 200,000,000 102,357,072 4,466,709 446,671 307,270,452
Adjustments
Issue of Bonus Share - - - - -
Dividend Declared & Paid - (40,000,000) - - (40,000,000)
Net profit for the year - 142,716,594 - - 142,716,594
General Reserve - (14,479,359) 14,479,359 - -
Other Reserves (CSR) - (1,219,466) - 1,219,466 -
Balance as at July 15, 2021 200,000,000 189,374,841 18,946,068 1,666,137 409,987,046
Restatement/Adjustment - 2,098,421 - - 2,098,421
Restated Balance as at July 16,2021 200,000,000 191,473,262 18,946,068 1,666,137 412,085,467
Adjustments
Issue of Bonus Share 70,000,000 (70,000,000) - - -
Dividend Declared & Paid - (3,684,211) - - (3,684,211)
Prior period adjustments - (309,256) - - (309,256)
Transfer from CSR reserve to Retained Earning - 937,398 - (937,398) -
Net profit for the period - 52,009,311 - - 52,009,311
General Reserve - (5,200,931) 5,200,931 - -
Other Reserves (CSR) - (520,093) - 520,093 -
Balance as at July 16, 2022 270,000,000 164,705,480 24,146,999 1,248,832 460,101,311

Schedules and Explanatory Notes forms integral part of Statement of Position


As per our report of even date

Rimi Shahi Varun Chaudhary Ganesh Prasad Awasthi CA. Aman Uprety
Accounts Incharge Director Director Partner
S.A.R. Associates
Manish Narayan Joshi Adarsha Bazgain Shankar Prasad Pandey
Chief Executive Officer Director Professional Independent Director

Date: October 11, 2022


Place: Naxal, Kathmandu

276 Nabil Bank Limited


Statement of Cash Flows
As at 16th July 2022
NPR
PARTICULARS 16/07/2022 15/07/2021
Operating Activities
Cash Flow from Operating Activities (A) (599,865,330) 1,065,558,040
1. Cash Received from Income 279,724,280 284,046,002
1.1 Income from Merchant Banking Operation 45,359,318 59,071,619
1.2 Income from Mutual Fund Operation 71,699,187 56,846,678
1.3 Interest Income 83,071,248 65,729,691
1.4 Other Income 79,594,526 102,398,014
2. Cash Payment 191,449,236 161,868,177
2.1 Personnel Expenses 53,879,103 43,991,668
2.2 Office Operating Expenses 63,861,998 64,108,048
2.3 Income Tax Paid 67,665,567 53,768,461
2.4 Lease Payment 6,042,568 -
Cash Flow before changes in Working Capital 88,275,044 122,177,825
(Increase)/Decrease in Current Assets 21,585,844 11,874,511
1. (Increase)/Decrease in Investments (23,634,476) 52,539,773
2. (Increase)/Decrease in Other Financial Assets (12,398,634)
3. (Increase)/Decrease in Other Assets 57,618,954 (40,665,262)
Increase/(Decrease) in Current Liabilities (709,726,218) 931,505,704
1. Increase/(Decrease) in Public Dues (90,597,700) 326,716,577
2. Increase/(Decrease) in Other Financial Liabilities (603,766,559) 590,629,546
3. Increase/(Decrease) in Other Liabilities (15,361,959) 14,159,581
Cash Flow from Investing Activities (B) 622,320 (382,645,724)
1. (Increase)/Decrease in HTM Investment 4,942,000 (380,838,000)
2. (Increase)/Decrease in Fixed Assets (4,319,680) (1,807,724)
Cash Flow from Financing Activities C) (1,895,046) (40,000,000)
1. Increase/(Decrease) in Share Capital - -
2. Share Premium - -

3. Payment of Dividend (3,684,211) (40,000,000)


4. Increase/ (Decrease) in Retained Earning 1,789,165
(d) Net increase/(decrease) in cash and cash equivalents (A+B+C) (601,138,056) 642,912,317
(e) Cash and cash equivalents at the beginning of the year 691,193,913 48,281,597
(f) Cash and cash equivalents at the end of the year 90,055,857 691,193,913

Schedules and Explanatory Notes forms integral part of Statement of Position


As per our report of even date

Rimi Shahi Varun Chaudhary Ganesh Prasad Awasthi CA. Aman Uprety
Accounts Incharge Director Director Partner
S.A.R. Associates
Manish Narayan Joshi Adarsha Bazgain Shankar Prasad Pandey
Chief Executive Officer Director Professional Independent Director

Date: October 11, 2022


Place: Naxal, Kathmandu

Annual Report 2021/22 277


Notes to the Financial Statements
As at 16th July 2022

1. Cash & Cash Equivalents


NPR
PARTICULARS 16/07/2022 15/07/2021
Bank Balance 90,055,857 691,193,913
Other Fixed income Instrument - -
Total 90,055,857 691,193,913

2. Financial Investments - at Amortized Cost (HTM)


NPR
PARTICULARS 16/07/2022 15/07/2021
Fixed Deposits with Banks 539,000,000 508,065,000
Investment in Debentures 74,123,000 110,000,000
Total 613,123,000 618,065,000

3. Financial Investments -at FVTPL (HFT)


NPR
PARTICULARS 16/07/2022 15/07/2021
Investments in Quoted Equities 88,693,844 139,485,135
Investments in Unquoted Equities (Process of Listing) 729,448 -
Investment in Quoted Mutual Fund Units 37,870,623 36,016,424
Investment in Unquoted Mutual Fund Units - -
Total 127,293,915 175,501,559

4. Financial Investments - at FVTOCI (AVS)


NPR
PARTICULARS 16/07/2022 15/07/2021
Investment - -
Total - -

278 Nabil Bank Limited


5. Property Plant & Equipment
As at 16th July 2022
NPR
ASSETS 16/07/2022 15/07/2021
PARTICULARS COMPUTER OFFICE
BUILDING VEHICLES FURNITURE LEASEHOLD CWIP TOTAL TOTAL
HARDWARE EQUIPMENT
1. Cost Price
a. Previous Year Balance - 8,822,300 7,113,327 8,571,814 5,614,274 11,415,686 480,250 42,017,651 40,374,905
b. Addition during the period - 92,295 980,425 238,080 268,556 2,360,000 3,939,355 1,642,746
c. Revaluation/Write Back This Year - - - - - - - -
d. Sold during the Year - - - (76,998) (84,990) - (161,988) -
e. Write off during the Year - - - - - - - -
f. Transferred to Fixed assets - - - - - - (1,921,000) (1,921,000)
Total Cost (a+b+c+d+e) - 8,822,300 7,205,622 9,475,240 5,767,364 11,684,242 919,250 43,874,018 42,017,651
2. Depreciation
a. Up to Previous Year - 7,452,822 5,015,023 6,844,087 4,019,418 8,230,473 - 31,561,823 28,313,638
b. For This period - 853,434 452,475 814,281 344,187 728,462 - 3,192,840 3,248,185
c. Revaluation/Write Back This Year - - - - - - - - -
d. Depreciation on Sold Assets - - (67,010) (83,473) - - (150,484) -
e. Depreciation on Writen Off Assets - - - - - - - - -
Total Depreciation - 8,306,256 5,467,498 7,591,358 4,280,132 8,958,935 - 34,604,179 31,561,824
3. Book Value (WDV*) (1-2) - 516,044 1,738,124 1,883,883 1,487,232 2,725,307 919,250 9,269,839 10,455,827

Annual Report 2021/22


279
6. Intangible Assets
NPR
SOFTWARES
PARTICULARS
16/07/2022 15/07/2021
Cost:
Opening 2,916,852 2,751,872
Additions 2,312,831 164,980
Disposals - -
Closing 5,229,683 2,916,852
Accumulated Amortization
Opening 2,324,633 2,086,618
Additions
Disposals
Amortization 474,504 238,014
Closing 2,799,137 2,324,633
Net book value: 2,430,546 592,219

7. Right-Of-Use Asset
NPR
PARTICULARS 16/07/2022 15/07/2021
Cost or Deemed Cost
Balance at 15/07/2021 - -
Addition 17,815,029 -
Disposal or Classified as held for sale - -
Balance at 16/07/2022 17,815,029 -
Accumulated Depreciation
Balance at 15/07/2021 -
Depreciation 5,923,190 -
Disposal or Classified as held for sale - -
Balance at 16/07/2022 5,923,190 -
Carrying Amount
At 15th July 2021 - -
At 16th July 2022 11,891,839 -

8. Other Assets
NPR
PARTICULARS 16/07/2022 15/07/2021
Account Receivables 24,252,525 83,004,710
Deposit 529,280 523,000
Staff Advances 1,832,834 711,080
Prepayments 698,272 693,074
Total 27,312,910 84,931,864

280 Nabil Bank Limited


9. Current Tax Assets/Liabilities
NPR
PARTICULARS 16/07/2022 15/07/2021
Advance Income Tax 62,852,590 49,062,267
Current Tax Liability 53,361,522 50,886,364
Total 9,491,068 (1,824,097)

10. Deferred Tax Assets


NPR
PARTICULARS 16/07/2022 15/07/2021
Deferred Tax Assets/(Liabilities) 20,221,158 (8,214,201)
Total 20,221,158 (8,214,201)

11. Refundable to Investors


NPR
PARTICULARS 16/07/2022 15/07/2021
Refundable to Investors 410,509,733 501,107,433
Total 410,509,733 501,107,433

12. Other Financial Liabilities


NPR
PARTICULARS 16/07/2022 15/07/2021
Creditors and Accounts Payable 16,424,169 632,589,361
Total 16,424,169 632,589,361

13. Other Liabilities


NPR
PARTICULARS 16/07/2022 15/07/2021
Employee Benefit Liability (12(A)) 11,305,196 24,237,833
Accrued Rent (As per NFRS) 9,840 2,098,421
TDS Payable 341,249 681,990
Total 11,656,285 27,018,244

13 (A). Employee Benefit Liability


NPR
PARTICULARS 16/07/2022 15/07/2021
Non Current Liability
Payable for Leave 2,424,712 1,645,883
Current Liability
Bonus Payable 8,880,484 22,591,950
Total 11,305,196 24,237,833

Annual Report 2021/22 281


14. Leasehold Liabilities
NPR
PARTICULARS 16/07/2022 15/07/2021
Current Lease Liabilities 6,480,302 -
Lease Liabilities 5,918,332 -
Total 12,398,634 -

15. Share Capital


NPR
PARTICULARS 16/07/2022 15/07/2021
Ordinary Shares as at 1st Shrawan 200,000,000 200,000,000
Issue of Share Capital 70,000,000
Total 270,000,000 200,000,000

16. Retained Earnings


NPR
PARTICULARS 16/07/2022 15/07/2021
Retained Earnings 164,705,480 189,374,841
Total 164,705,480 189,374,841

17. Other Reserves


NPR
PARTICULARS 16/07/2022 15/07/2021
General Reserve 24,146,999 18,946,068
Other Reserve (Corporate Social Responsibility) 1,248,832 1,666,137
Total 25,395,831 20,612,205

18. Income from Merchant Banking Activity


NPR
PARTICULARS 16/07/2022 15/07/2021
Issue Management Income 6,298,836 5,702,180
Registrar to Shares 2,320,205 2,188,503
Portfolio Management Services 36,739,277 50,724,336
Income from Auction of Shares Management 1,000 456,600
Total 45,359,318 59,071,619

19. Income from Mutual Fund Operations


NPR
16/07/2022 15/07/2021
Fund Management Fees - NBF II 23,074,634 23,331,865
Depository Fees - NBF II 3,076,618 3,110,915
Fund Management Fees - NEF 25,572,397 26,826,969
Depository Fees - NEF 3,409,653 3,576,929
Fund Management Fees - NBF III 14,616,958 -
Depository Fees - NBF III 1,948,928 -
Total 71,699,187 56,846,678

282 Nabil Bank Limited


20. Interest Income
NPR
PARTICULARS 16/07/2022 15/07/2021
Interest from FD 66,965,771 48,046,238
Interest from Call Deposit 3,830,101 1,313,024
Interest from Debentures/Bonds 11,195,264 13,000,000
Interest from Merchant Banking Activity 1,080,111 3,370,429
Total 83,071,248 65,729,691

21. Other Income


NPR
PARTICULARS 16/07/2022 15/07/2021
Business Advisory 3,282,009 6,097,917
Dividend Income 9,553,256 2,250,342
Income from Depository Participant Service 38,216,638 31,344,111
Gain or loss on Sale of Fixed Assets 25,135
Miscellaneous Income 1,681 632,667
Total 51,078,719 40,325,037

22. Net Gain/(Loss) on Financial Investments-HFT


NPR
PARTICULARS 16/07/2022 15/07/2021
Unrealized gain/(loss) on financial investments-HFT (71,842,120) 31,345,934
Gain on Sale of Securities 28,515,807 62,072,977
Total (43,326,313) 93,418,911

23. Personnel Expenses


NPR
PARTICULARS 16/07/2022 15/07/2021
Salary 13,591,026 7,675,346
Allowances 23,093,225 8,953,380
Contribution to Provident Fund 1,599,276 946,747
Overtime 16,791 19,999
Training Expenses 933,625 57,765
Dashain Expenses 2,220,874 1,134,345
Staff Insurance Premium 863,577 498,113
Leave Encashment 1,229,755 913,146
Gratuity Expenses 1,332,401 788,542
Staff Recruitment Expense 21,143 21,823
Hardship/Teller Allowance 38,900
Staff Welfare 58,026 238,110
Contract staff expense - 152,402
Staff Bonus 8,880,484 22,591,950
Total 53,879,103 43,991,668

Annual Report 2021/22 283


24. Other Operating Expenses
NPR
PARTICULARS 16/07/2022 15/07/2021
General Operating Expenses
Supplies and Stationeries 1,198,385 1,282,729
Communication Expenses 646,545 592,708
Expenses relating to Audit
a.External Audit Fees and expenses 180,000 180,000
b. Internal Audit Fees and Expenses 239,150 270,602
Repairs & Maintenance 626,314 422,828
Water 239,620 224,640
Electricity 792,808 698,040
Janitorial 134,485 90,861
Advertisement Expenses/Marketing 2,452,371 460,456
Insurance - Fire & Others 102,308 95,923
Board Meeting Fees & Allowances 246,000 320,000
Professional Services - Others - 121,050
Fuel Expenses - Vehicle 465,614 439,049
Fuel Expenses - Generator 33,700 8,710
Newspapers/Periodicals/ Books 32,075 26,145
Refreshment Expenses 478,292 456,205
Membership Fees 105,000 105,000
Sebon Commission Expense 5,654,073 5,264,234
Vehicle Registration & Renewal 82,500 78,990
Outsourced Service Expenses 1,934,445 9,641,705
Miscellaneous Expenses 160,729 111,321
General Meeting Expenses 7,594 7,780
Travelling Expenses 6,000 -
AMC Charges 1,419,770 1,114,261
Bank Charges 16,484 32,530
Leasehold Expenses- Rental expense 454,477 368,187
Rent Expenses 120,000 4,895,564
Deferral Rent Expenses 9,840 (349,732)
Semi-annual & Budget Review Expenses 392,812 399,959
Legal Fees & Expenses 323,505 16,950
Issue Management Expenses - -
Local Conveyance 24,874 22,317
Postage & Courier 66,517 64,693
Farewell to CEO - 7,900
Sebon Licence Renewal 800,000 810,000
DP & PMS Commission Expenses 12,079,583 9,916,422
Corporate Advisory Expense 121,790 232,120
Escrow Expense 29,819,861 24,878,082
Issue Management Commission 92,119
CSR Expense 937,398 207,700
Other Interst expenses 193,695 -
Other Fees and taxes 671,778 -
SLA Service Expenses 500,000 500,000
PMS Adjustment Expense 91,605
Total 63,861,998 64,108,048

25. Finance Cost


NPR
PARTICULARS 16/07/2022 15/07/2021
Interest Cost on Lease 626,173 -
Total 626,173 -

284 Nabil Bank Limited


09 CAPITAL LIMITED NEPAL BANGLADESH

9.1 OVERVIEW at Bijulibazaar, Kathmandu, Nepal. The holding 33.21% and 61.85% of total assets
subsidiary is not listed. Furthermore, Balance respectively.
Nepal Bangladesh Capital Ltd is a public
sheet size of the company is NPR 265.19
limited company domiciled in Nepal. It was Similarly, the company reported loss for the
Million as on mid July 2022. The company’s
incorporated on 25th October 2017 under period ended July 16, 2022 of NPR 8.9
Capital and liabilities are mainly concentrated
the then Companies Act 2006 AD of Nepal Million, compared to a profit of NPR 41.40
on ‘Due to customer’ occupying 42.51%
It is a Merchant Banker licensed under the Million for the corresponding previous year.
which was 19.20% a year prior.
Securities Businessperson (Merchant Banker) Due to the fair value loss in the financial
Regulations, 2008 A.D. It commenced Under Assets side, Cash and Cash equivalent investment, the company’s operating profit has
its commercial operation on January 10, and investment occupy major portion thereby been affected.
2019 and operates its registered office

Annual Report 2021/22 285


286 Nabil Bank Limited
Annual Report 2021/22 287
9.3 FINANCIAL STATEMENT OF NEPAL BANGLADESH CAPITAL LIMITED

Statement of Financial Position


As at 32 Ashad, 2079 (16 July, 2022)
NPR
PARTICULARS NOTES 16 JULY, 2022 15 JULY, 2021
Assets
Cash and Cash Equivalents 5.1 88,052,717 101,932,288
Financial Investments measured at Amortized Cost 5.2 64,974,410 43,970,000
Financial Investments measured at Fair Value through other Comprehensive Income(Shares) 5.3 63,740,577 112,958,834
Financial Investments measured at Fair Value through Profit or Loss(Shares) 5.4 35,259,680 20,984,650
Property, Plant & Equipment 7 984,950 1,339,276
Intangible Assets 8 378,079 541,929
Deferred Tax Assets 10.2 8,977,785 -
Other Assets 5.5 2,540,106 36,322,852
Prepayments 5.6 209,877 66,092
Current Tax Assets 9 - 384,917
Total Assets 265,118,179 318,500,839
Liabilities
Due to Customer 5.7 78,670,680 48,807,443
Other Liabilities 5.8 769,088 7,577,484
Current Tax Liabilities 9 21,058 -
Deferred Tax Liabilities 10.2 - 7,672,702
Retirement Benefit Obligations 11.1 579,103 207,127
Total Liabilities 80,039,929 64,264,757
Equity
Share capital 12 200,000,000 200,000,000
Retained earnings 13.1 (6,138,885) 38,757,398
Other Reserves 13.2 (8,782,865) 15,478,684
Total Equity 185,078,250 254,236,082
Total Liabilities and Equity 265,118,179 318,500,839

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Dhirendra Joshi Mr. Ram Kumar Mahat Mr. Mukundanath Dhungel CA Pratish Shakya
Head - Finance Deputy General Manager Chairman Partner
Pradhan & Shakya Associates,
Mr. Krishna Dutta Bhattarai Mr. Krishna Prasad Subedi Mr. Sandip Babu Paudel Mr. Jyotiman Shrestha Chartered Accountants
Director Director Director Director

Date: September 07, 2022


Place: Kathmandu, Nepal

288 Nabil Bank Limited


Statement of Changes in Equity
For the period ended 32 Ashad, 2079 (July 16, 2022)
NPR
SHARE RETAINED FAIR VALUE STATUTORY CSR
PARTICULARS TOTAL
CAPITAL EARNINGS RESERVE RESERVE RESERVE
Balance as at July 15, 2020 200,000,000 4,739,851 1,074,223 332,742 33,274 206,180,090
Net profit for the year
Transfer to Statutory reserve 41,396,993 41,396,993
CSR Reserve (4,139,699) 4,139,699
Transfer from CSR Reserve to Retained Earning (413,970) 413,970
Prior period adjustment 100,000 (100,000)
Cash dividend (4,000,000) -
Proposed bonus share of previous year (4,000,000)
Issue of share capital -
Staff Related Reserve Funds -
Dividend Equalization Fund -
Fair Value Reserve 1,074,223 10,658,999 -
Transfer to Retained Earning from Fair Value Reserve (1,074,223) 10,658,999
Balance as at July 15, 2021 200,000,000 38,757,398 10,658,999 4,472,441 347,244 254,236,082
Net profit for the year (8,936,458) (8,936,458)
Transfer to Statutory reserve - -
Expense from CSR Reserve - (14,800)
Transfer from CSR Reserve to Retained Earning 14,800 -
Prior period adjustment -
Cash dividend (38,000,000) (38,000,000)
Proposed bonus share of previous year -
Issue of share capital -
Staff Related Reserve Funds -
Dividend Equalization Fund -
Fair Value Reserve (22,221,375) (22,221,375)
Transfer to Retained Earning from Fair Value Reserve 2,025,375 (2,025,375)
Balance as at July 16, 2022 200,000,000 (6,138,885) (13,587,751) 4,472,441 332,444 185,078,250

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Dhirendra Joshi Mr. Ram Kumar Mahat Mr. Mukundanath Dhungel CA Pratish Shakya
Head - Finance Deputy General Manager Chairman Partner
Pradhan & Shakya Associates,
Mr. Krishna Dutta Bhattarai Mr. Krishna Prasad Subedi Mr. Sandip Babu Paudel Mr. Jyotiman Shrestha Chartered Accountants
Director Director Director Director

Date: September 07, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22 289


Statement of Comprehensive Income
For the period ended 32 Ashad, 2079 (July 16, 2022)
NPR
PARTICULARS NOTES 16 JULY, 2022 15 JULY, 2021
Revenue
Income from Operation 14.1 11,280,919 4,769,216
Income from Financial Investment 14.2 5,910,806 53,209,751
Other Income 14.3 6,535,217 4,405,914
Net Changes in Gain/(Losses) on Financial Investments at fair value 14.4 (23,089,784) 10,463,650
Total revenue 637,159 72,848,531
Expenses
General Administration Expenses 15 5,457,413 3,215,396
Employee Expenses 11.2 6,390,064 3,213,282
Depreciation and Amortization 16 698,522 490,707
Employee Bonus Expenses 11.3 - 6,592,915
Total Expenses 12,545,999 13,512,300
Income before taxation (11,908,840) 59,336,231
Current Tax 4,154,658 15,303,914
Deferred Tax (Income)/Expense (7,127,041) 2,635,324
Total Tax Expense (2,972,383) 17,939,238
Profit / (loss) for the year (8,936,458) 41,396,993
Profit / (loss) attributable to
Equity Shareholders (8,936,458) 41,396,993

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Dhirendra Joshi Mr. Ram Kumar Mahat Mr. Mukundanath Dhungel CA Pratish Shakya
Head - Finance Deputy General Manager Chairman Partner
Pradhan & Shakya Associates,
Mr. Krishna Dutta Bhattarai Mr. Krishna Prasad Subedi Mr. Sandip Babu Paudel Mr. Jyotiman Shrestha Chartered Accountants
Director Director Director Director

Date: September 07, 2022


Place: Kathmandu, Nepal

290 Nabil Bank Limited


Statement of Cash Flow
For the period ended 32 Ashad, 2079 (July 16, 2022)
NPR
PARTICULARS 16 JULY, 2022 15 JULY, 2021
Cash flows from operating activities
Profit/ (Loss) for the year before Tax (11,908,840) 59,336,231
Adjustment for
Depreciation and Amortization 698,522 490,707
Net Changes in Gain/Losses on Financial Investments-FVTPL 23,089,784 (10,463,650)
Income Tax Paid 2,972,383 (17,939,238)
Changes in operating assets and liabilities
(Increase)/ decrease in Other Assets 33,782,747 (28,422,070)
(Increase)/ decrease in Prepayments (143,785) (66,092)
(Increase)/ decrease in Current Tax Assets 384,917 (180,342)
Increase / (decrease) in Due to Customer 29,863,237 8,684,579
Increase/(decrease) in Financial Liabilities (29,029,771) 16,197,832
Increase/(decrease) in Current Tax Liabilities 21,058 -
Increase/(decrease) in Deferred Tax Liabilities (16,650,487) 7,203,467
Increase/(decrease) in Retirement Benefit Obligations 371,977 94,876
Net cash from operating activities 33,451,741 34,936,298
Cash flow from investing activities
Purchase of Property, Plant and Equipment (180,346) (787,397)
Purchase of Intangible Assets - (282,500)
Financial Investments (9,150,966) (75,583,150)
Net cash used in investing activities (9,331,312) (76,653,047)
Cash flows from financing activities
Issue of share capital - -
Collection of Share Premium -
Dividends paid to ordinary shareholders, net of scrip (38,000,000) (4,000,000)
Net cash used in financing activities (38,000,000) (4,000,000)
Net increase/(decrease) in cash and cash equivalents (13,879,572) (45,716,749)
Cash and cash equivalents at beginning of year 101,932,289 147,649,038
Cash and cash equivalents at end of year 88,052,717 101,932,289

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Dhirendra Joshi Mr. Ram Kumar Mahat Mr. Mukundanath Dhungel CA Pratish Shakya
Head - Finance Deputy General Manager Chairman Partner
Pradhan & Shakya Associates,
Mr. Krishna Dutta Bhattarai Mr. Krishna Prasad Subedi Mr. Sandip Babu Paudel Mr. Jyotiman Shrestha Chartered Accountants
Director Director Director Director

Date: September 07, 2022


Place: Kathmandu, Nepal

Annual Report 2021/22 291


5.1 Cash and Cash Equivalents
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Cash in Hand - 265
Balance in Bank 88,052,717 101,932,024
Total 88,052,717 101,932,288

5.2 Financial Investments measured at Amortized Cost


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Debentures 48,970,000 43,970,000
Fixed Deposits 16,004,410 -
Total 64,974,410 43,970,000

Details
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
10.25% Global IME Bank Ltd. Debenture 14,359,000 14,359,000
10.25% Sunrise Bank Ltd. Debenture 2083 2,500,000 2,500,000
10% Laxmi Bank Ltd. Debenture 2086 2,000,000 2,000,000
10% Prabhu Bank Ltd. Debenture 2084 20,111,000 20,111,000
8.5% Sanima Bank Ltd. Debenture 5,000,000 5,000,000
8% Nabil Bank Ltd. Debenture 5,000,000
10.71% Manjushree Finance Ltd.FD 5,477,014 -
10.25% Sangrila Development Bank Ltd. FD 527,395 -
10.03% Nabil Bank Ltd. FD 10,000,000 -
Total 64,974,410 43,970,000

5.3 Financial Investments measured at Fair Value through other Comprehensive Income(Shares)
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Investment in Shares 63,740,577 112,958,834
Total 63,740,577 112,958,834

5.4 Financial Investments measured at Fair Value through Profit or Loss (Shares)
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Investment in Shares 35,259,680 20,984,650
Total 35,259,680 20,984,650

292 Nabil Bank Limited


5.5 Other Assets
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Interest Receivable 1,613,624 1,364,012
Commission Receivable 100,000 162,500
Other Receivable 826,481 34,796,340
Total 2,540,106 36,322,852

5.6 Prepayments
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Prepayments 209,877 66,092
Total 209,877 66,092

5.7 Due to Customers


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Retention Amount 14,690 55,370
Interest on Debenture 190,261 93,480
Cash Dividend Payable 73,890,290 48,148,643
Other Payables 4,575,438 509,951
Total 78,670,680 48,807,443

5.8 Other Liabilities


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Sundry Creditors 176,925 196,275
Other Payables - 9,083
Provision for Staff Bonus - 6,592,915
Audit Fee Payable 113,000 56,500
TDS Payables 271,051 20,362
Advance Income 160,113 640,451
Local House Rent Tax 9,900 22,500
Board Meeting Allowances Payable 18,700 34,000
National Welfare Fund - -
Staff Welfare Fund 19,400 5,400
Total 769,088 7,577,484

9 Current Tax Asset / Liabilities


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Current Tax Receivables 19,437,514 15,688,831
Current Tax Liabilities 19,458,572 15,303,914
Net Current Tax Assets / (Liabilities) (21,058) 384,917

Annual Report 2021/22 293


10 Tax Expenses
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 16, 2022
Current Income Tax Expenses 4,154,658 15,303,914
Deferred Tax Expense (7,127,041) 2,635,324
Total (2,972,383) 17,939,238

10.2 Deferred Tax Asset


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Deferred Tax (8,977,785) 7,672,702
Total (8,977,785) 7,672,702

11.1 Retirement Benefit Obligations


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Leave Encashment Payable 579,103 207,127
Total 579,103 207,127

11.2 Employee Expenses


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Basic Salary 2,058,692 1,331,000
Staff Allowances 1,851,121 931,516
Vehicle Allowance 360,000 89,032
House Allowance 420,000 103,871
Transportation 132,414 109,000
Provident Fund 212,378 133,100
Utilities 204,000 91,113
Gratuity 176,911 110,872
Leave Encashment 565,437 208,666
Festival Allowances 300,000 82,800
Overtime Alowance - 21,864
Intern Allowance 76,624 -
Staff Medical Insurance 22,413 309
Staff Accidental Insurance 10,074 139
Total 6,390,064 3,213,282

294 Nabil Bank Limited


11.3 Provision for Bonus
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Provision for Bonus - 6,592,915
Total - 6,592,915

12 Share Capital
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Authorized Share Capital
(3,000,000 at NPR 100 each) 300,000,000 300,000,000
Issued Share Capital
(2,000,000 at NPR 100 each) 200,000,000 200,000,000
Paid up Share Capital
(2,000,000 shares at NPR 100 each) 200,000,000 200,000,000

13.1 Retained Earnings


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Retained earnings (6,138,885) 38,757,398
Total (6,138,885) 38,757,398

13.2 Other Reserves


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
General Reserve 4,472,441 4,472,441
CSR Reserve 332,444 347,244
Fair Value Reserve (13,587,751) 10,658,999
Total (8,782,865) 15,478,684

14.1 Income from Operation


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Underwriting Commision Income 1,660,000 3,162,500
Lost Notice Publish Charge 34,500 19,000
Share Transfer Fees 5,310 2,800
Dividend Processing Income - 237,805
RTA Commission Income 1,256,855 500,000
RTA Commission Income (Debenture) 200,000 200,000
Certificate Distribution Charge - 6,660
Income from Advisory Services 480,338 640,451
Issue Management Commission Income 100,000 -
Share Dematerilization Income 80,896 -
Income from DP 7,463,020 -
Total 11,280,919 4,769,216

Annual Report 2021/22 295


14.2 Income from Financial Investment
NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Profit on Disposal of Investment 5,910,806 53,209,751
Total 5,910,806 53,209,751

14.3 Other Income


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Interest Income 5,748,743 4,018,218
Cash Dividend 786,474 387,696
Total 6,535,217 4,405,914

14.4 Net Changes in Gain/Losses on FVTPL Financial Investments


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Net Gain/(Loss) on FVTPL Financial Investments (23,089,784) 10,463,650
Total (23,089,784) 10,463,650

15 General Administration Expenditures


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Audit Fees 113,000 56,500
Email & Website Expenses 44,906 27,120
Internet Expenses 162,343 169,974
Printing & Stationery Expenses 47,150 43,775
Telephone Expenses 11,345 9,865
Bank Commission & Charges 475 515
Newspaper, Books & Magazines 3,000 -
Office Rent 990,000 675,000
License & Taxes 700,000 650,000
Advertisement Expenses - 19,826
Electricity Expenses - 5,000
Cleaning Expenses 12,882 -
Office Expenses 99,608 86,751
BOD Meeting Allowances 152,500 156,000
Software Expenses 73,558 99,463
Legal Expenses - -
Miscellaneous Expenses 1,500 16,910
AGM Expense 85,262 7,940
Fuel Expense 145,787 30,923
SEBON Charge 73,800 125,875
Membership Fee 40,000 40,000

296 Nabil Bank Limited


PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Professional Charges 45,650 33,900
Certification Charges - 33,900
Staff Welfare Expenses - 3,285
Wages - 3,326
Staff Covid Test Expenses 2,000 2,000
Tax Expenses - 645,050
Staff Covid Insurance - 1,500
CSR Expenses 14,800 100,000
Fine and Penalties - 171,000
Travelling Expenses 166,952 -
Training Expenses 136,182 -
Registration and Renewal Expenses 27,000 -
Audit Expenses 2,165 -
Mobile Expenses 30,000 -
Audit Committee Meeting Allowance 5,000 -
Notice Publish Charge 31,055 -
Demat Renewal Charge 100 -
Web Hosting Expenses 33,900 -
Annual BO Maintenance Charge 564,515 -
Account Opening Fees and Renewals 1,640,979 -
Total 5,457,413 3,215,396

16 Depreciation and Amortization


NPR
PARTICULARS AS AT JULY 16, 2022 AS AT JULY 15, 2021
Depreciation Expenses 534,672 383,357
Amortization Expenses 163,850 107,350
Total 698,522 490,707

Annual Report 2021/22 297


Statement of Other Comprehensive Income
For the period ended 32 Ashad, 2079 (July 16, 2022)
NPR
PARTICULARS NOTES 16 JULY, 2022 15 JULY, 2021
Profit for the year (8,936,458) 41,396,993
Other Comprehensive income:
A. Items that will not be reclassified to income statement:
Actuarial gains/(losses) on retirement benefit obligations - -
Taxation relating to items that will not be reclassified to - -
profit or loss
Total - -
B. Items that may be reclassified subsequently to income statement
Net valuation gains / (losses) on FVTOCI investment taken to equity (31,744,821) 15,227,141
Taxation relating to items that may be reclassified subsequently to income statement (9,523,446) (4,568,142)
Total other comprehensive income (22,221,375) 10,658,999
Total comprehensive income for the year (31,157,832) 52,055,992

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Dhirendra Joshi Mr. Ram Kumar Mahat Mr. Mukundanath Dhungel CA Pratish Shakya
Head - Finance Deputy General Manager Chairman Partner
Pradhan & Shakya Associates,
Mr. Krishna Dutta Bhattarai Mr. Krishna Prasad Subedi Mr. Sandip Babu Paudel Mr. Jyotiman Shrestha Chartered Accountants
Director Director Director Director

Date: September 07, 2022


Place: Kathmandu, Nepal

298 Nabil Bank Limited


Fair Value Movement on Financial Investments measured through Other Comprehensive Income (FVTOCI)

AS AT 16 JULY 2022 AS AT 15 JULY 2021


PARTICULARS
NO. OF SHARES COST FAIR VALUE NO. OF SHARES COST FAIR VALUE
Agricultural Development Bank Ltd.(ADBL) 7,448 2,973,153 2,465,288 11,500 5,487,110 5,508,500
Nerude Laghubitta Bittiya Sanstha Ltd.(NLBBL) 16,629 21,640,602 14,633,520 13,688 12,557,724 21,640,602
Prabhu Insurance Company Ltd.(PRIN) 3,899 3,372,480 1,668,772 5,513 2,640,269 5,292,480
Surya Life Insurance Company Ltd.(SLICL) 1,127 922,000 436,149 1,000 629,407 922,000
NIC Asia Bank Ltd.(NICA) - - - 1,900 1,030,150 1,888,600
NADEP Laghubitta Bittiya Sanstha Ltd.(NADEP) 11,295 9,780,107 9,780,107 9,413 8,729,733 9,780,107
IME General Insurance Ltd.(IGI) 1,499 1,249,000 554,630 1,000 568,005 1,209,000
Premier Insurance Company Ltd.(PIC) 6,855 7,020,000 3,948,480 6,000 6,294,329 7,020,000
Nabil Bank Ltd.(NABIL) - - - 5,000 5,595,556 6,795,000
Nepal Bank Ltd.(NBL) 37,604 14,579,914 11,205,992 58,986 26,508,482 26,071,812
Asha Laghubitta Bittiya Sanstha Ltd.(ALBSL) 3,671 5,421,702 4,405,200 3,437 5,960,248 6,344,702
Sangrila Development Bank Ltd.(SADBL) 1 424 290 1 336 424
NLG Insurance Company Ltd.(NLG) 17,477 17,594,010 8,354,006 14,445 18,826,387 17,594,010
Sunrise Bank Ltd.(SRBL) 27,597 10,162,006 5,712,579 5,877 2,145,013 2,121,597
Machhapuchchhre Bank Ltd.(MBL) 2,266 770,000 575,564 2,000 758,945 770,000
Total - 95,485,398 63,740,577 97,731,692 112,958,834

Annual Report 2021/22


299
300 Nabil Bank Limited
Fair Value Movement on Financial Investments measured through Profit or Loss(FVTPL)

AS AT 16 JULY 2022 AS AT 15 JULY 2021


PARTICULARS
NO. OF SHARES COST FAIR VALUE NO. OF SHARES COST FAIR VALUE
Agriculture Development Bank Ltd (ADBL) - - - 5,750 1,925,000 2,754,250
Mero Microfinance Laghubitta Bittiya Sanstha Ltd (Mero) 1,606 2,067,210 1,360,282 2,338 1,348,000 3,612,210
National Life Insurance Company Ltd (NLICL) 9,817 9,495,750 5,664,409 8,250 4,965,000 9,495,750
Nerude Laghubitta Bikas Bank Ltd (NLBBL) 2,721 3,541,440 2,394,480 3,240 2,283,000 5,122,440
Manju Shree Finance Limited(MFIL) 6,722 6,253,527 3,004,734 - - -
Global Ime Summunat Scheme 1(GIMES1) 75,158 1,804,509 751,580 - - -
Mirmire Microfinance Development Bank Limited(MMFDB) 2,400 3,939,716 2,520,000 - - -
RSDC Laghubitta Bittiya Sanstha Limited( RSDC) 1,100 904,307 610,280 - - -
RMDC Laghubitta bittiya Sanstha Limited(RMDC) 3,704 4,874,363 3,103,952 - - -
Universal Power Company Limited(UPCL) 1,000 496,818 227,800 - - -
Citizens Bank Limited(CZBIL) 23,385 8,521,500 4,735,463 - - -
Himal Dolakha Hydropower Company Limited(HDHPC) 19,000 8,288,172 3,876,000 - - -
Civil Bank Limited(CBL) 7,000 1,927,388 1,491,000 - - -
Shine Resunga Development Bank Limited(SHINE) 3,000 1,234,763 884,700 - - -
RBB Mutual Fund 1(RMF1) 500,000 5,000,000 4,635,000 - - -
Total - 58,349,463 35,259,680 - 10,521,000 20,984,650
10 SECURITIES LIMITED
NBBL

10.1 OVERVIEW
NBBL Securities is a public limited company domiciled in Nepal. It was incorporated on 9th August, 2019 with paid up capital of NPR 20 Million.
The subsidiary is not listed. The group represents the Bank and its Subsidiaries.

Annual Report 2021/22 301


302 Nabil Bank Limited
Annual Report 2021/22 303
304 Nabil Bank Limited
10.3 FINANCIAL STATEMENT OF NBBL SECURITIES LIMITED

Statement of Financial Position


As at 32 Ashad, 2079 (16 July, 2022)
NPR
PARTICULARS 16 JULY, 2022 15 JULY, 2021
Assets
Cash and Cash Equivalents 19,996,657 19,910,050
Financial Investments
Property, Plant & Equipment
Intangible Assets
Other Assets
Prepayments
Current Tax Assets 36,720
Total Assets 20,033,377 19,910,050
Liabilities
Due to Customer
Other Liabilities 41,742 231,195
Current Tax Liabilities
Deferred Tax Liabilities -
Retirement Benefit Obligations
Total Liabilities 41,742 231,195
Equity
Share capital 20,000,000 20,000,000
Retained earnings (8,365) (321,145)
Other Reserves
Total Equity 19,991,635 19,678,855
Total Liabilities and Equity 20,033,377 19,910,050

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Bhupendra Pandey Mr. Dhiraj Raj Subedi Mr. Bishwa Prakash Poudel CA Gyanendra Bahadur Bhari
Chairman Director Director Partner
B.R.S. Neupane & Co.
Date: October 20, 2022 Chartered Accountants
Place: Kathmandu, Nepal

Annual Report 2021/22 305


Statement of Comprehensive Income
For the period ended 32 Ashad, 2079 (July 16, 2022)
NPR
PARTICULARS NOTES 16 JULY, 2022 15 JULY, 2021
Revenue
Income from Operation
Income from Financial Investment
Other Income 346,680
Total revenue 346,680
Expenses
General Administration Expenses 33,900 179,400
Employee Expenses
Depreciation and Amortization
Employee Bonus Expenses -
Total Expenses 33,900 179,400
Income before taxation 312,780 (179,400)
Cumulative Loss of last year (321,145)
Net Profit (8,365)
Current Tax -
Deferred Tax (Income)/Expense
Total Tax Expense - -
Profit / (loss) for the year (8,365) (179,400)
Profit / (loss) attributable to
Equity Shareholders (8,365) (179,400)

Significant Accounting Policies and Notes to Account form integral part of financial statements
As per our report of even date

Mr. Bhupendra Pandey Mr. Dhiraj Raj Subedi Mr. Bishwa Prakash Poudel CA Gyanendra Bahadur Bhari
Chairman Director Director Partner
B.R.S. Neupane & Co.
Date: October 20, 2022 Chartered Accountants
Place: Kathmandu, Nepal

306 Nabil Bank Limited


OUR NETWORKS
HEAD OFFICE: NABIL CENTER
Beena Marga, Teendhara, Durbar Marg
Kathmandu, Nepal
TEL: 01-4221718, 01-4227181
FAX: 01-4226905
SWIFT: NARBNPKA

PROVINCE 1
BRANCH NAME ADDRESS CONTACT
Biratnagar Branch Biratnagar, Morang 021-526213
Itahari Branch Itahari, Sunsari 025-580741
Dharan Branch Dharan, Sunsari 025 530130
Birtamod Branch Birtamod, Jhapa 023-543727
Damak Branch Damak, Jhapa 023 575190
Khandbari Branch Khandbari, Sankhuwasabha 029 560873
Chandragadhi Branch Chandragadhi, Jhapa 023-457021
Urlabari Branch Urlabari, Morang 021-540929
Gaighat Branch Gaighat, Udayapur 035-421172
Biratchowk Branch Biratchowk, Morang 021-545639
Inaruwa Branch Inaruwa, Sunsari 025-561007
Duhabi Branch Duhabi, Sunsari 025-541307
Hile Branch Hile, Dhankuta 026-540708
Mahendra Chowk Branch Biratnagar, Morang 9842026708
Tarahara Branch Tarahara, Sunsari 025-475301
Kanchanbari Branch Kanchanbari, Morang 021-460426
Katari Branch Katari, Udayapur 035-450554
Biratnagar (Hanumandas Road) Branch Hanumandas road, Biratnagar, Morang 021-450447
Ilam Branch Ilam Bazar, Ilam 027-524639
Jhumka Branch Jhumka, Sunsari 25-562609
Kakarvitta Branch Kakarvitta, Jhapa 9842654964
Surunga Branch Surunga, Jhapa 9842620000
Biratnagar Rangeli Road Branch Rangeli Road, Biratnagar, Morang 021-514263
Dharan Mahendrapath Branch Mahendrapath, Dharan, Sunsari 025-530166
Bhojpur Branch Bhojpur Bazar, Bhojpur 029-420713
Birtamod BNC Branch BNC Hospital, Birtamod, Jhapa 023-545724
Sankranti Bazar Branch Sankranti Bazar, Terhathum 026-680052
Karsia Branch Karsia, Morang 021-565038
Phidim Branch Phidim Bazar, Panchthar 9845029080
Itahari Pashchim Line Branch Itahari, Sunsari 025-582411
Sindhuwa Branch Sindhuwa, Dhankuta 026-404169
Sangurigadhi Branch Sangurigadhi, Dhankuta 025-400078
Chhathar Branch Chhathar Pokhari, Terhathum 026-420005
Panchkhapan branch Panchkhapan, Sankhuwasabha 029-411084
Salpasilicho Branch Salpasilicho, Bhojpur 9841660142
Rajarani Branch Rajarani, Dhankuta 026-411062
Fikkal Branch Fikkal, Illam 027-540595
Fedap Branch Fedap, Terhathum 026-681031
Diktel Branch Diktel Rupakot, Diktel 9849382685

Annual Report 2021/22 307


MADHESH PROVINCE
BRANCH NAME ADDRESS CONTACT
Birgunj Branch Birgunj, Parsa 051-521476
Power House Chowk Branch Powerhouse Chowk, Birgunj 051-528680
Janakpur Branch Janakpurdham, Dhanusa 041-528706
Simara Branch Simara, Bara 053-521936
Hariwan Branch Hariwan, Sarlahi 046-530760
Bardibas Branch Bardibas, Mahottari 044-550733
Lahan Branch Lahan, Siraha 033-560010
Chandrapur Branch Chandrapur, Rautahat 055-540030
Mirchiya Branch Mirchaiya, Siraha 033-550590
Siraha Branch Siraha Bazar, Siraha 033 520591
Golbazar Branch Golbazar, Siraha 033-540401
Jeetpur Branch Jeetpur, Simara 051-520914
Nijgadh Branch Sahid Chowk, Nijgadh, Bara 053-540278
Dhalkebar Branch Dhalkebar, Dhanusa 9845256085
Mahendranagar Dhanusa Branch Mahendranagar, Dhanusa 9851213666
Janakpur Bhanuchowk Branch Bhanuchowk Janakpur, Dhanusa 041-521548
Birgunj 2 Branch Birgunj , Parsa 9851085897
Brahmapuri Branch Brahmapuri, Sarlahi 9854089099
Kaudena Branch Kaudena, Sarlahi
Parwanipur Branch Parwanipur, Bara 9854027499
Bishnu Branch Bishnu, Sarlahi 9842871602
Dhanauji Branch Dhanauji, Dhanusa 9813094594
Arnama Branch Arnama, Siraha 9844260155
Chandranagar Branch Chandranagar, Sarlahi 9854020034
Dewahi Gonahi Branch Dewahi Gonahi, Rautahat
Malangwa Branch Malangawa, Sarlahi 046-521706
Rajbiraj Branch Rajbiraj, Saptari 031-530045
Barahathawa Branch Barahathawa, Sarlahi 9854089099
Lalbandi Branch Lalbandi, Sarlahi 046-590011

308 Nabil Bank Limited


BAGMATI PROVINCE
BRANCH NAME ADDRESS CONTACT
New Road Branch New Road, Kathamndu 4224592
Jorpati Branch Jorpati, Kathmandu 4470498
Maharajgunj Branch Maharajgunj, Kathmandu 4720870
Tindhara Branch Tindhara, Durbarmarg, Kathmandu 01-4227181
Tripureshwar Branch Tripureshwar, Kathmandu 4117014-17
Lalitpur Branch Kupandol, Lalitpur 5542891
Hetauda Branch Hetauda, Makwanpur 57 524667
Narayangadh Branch Narayangadh, Chitawan 056 523033
New Baneshwar Branch New Baneshwar, Kathmandu 4485212
Halchowk Branch Halchowk, Kathmandu 01-4033553
Thamel Branch Thamel, Kathmandu 4212167
Kaushaltar Branch Kaushaltar, Bhaktapur 6635184
Chabahil Branch Chabahil, Kathmandu 4464470
Maitidevi Branch Maitidevi, Kathmandu 4439488
Balaju Branch Balaju, Kathmandu 4388915
Kuleshwar Branch Kuleshwar, Kathmandu 4287576
Satdobato Branch Satdobato, Lalitpur 5550332
Charikot Branch Charikot, Dolakha 049-421882
Dhulikhel Branch Dhulikhel, Kavrepalanchok 011-490731
Kantipath Branch Kantipath, Kathmandu 4239204
Dhapashi Branch Dhapashi, Kathmandu 01-4384990
Anamnagar Branch Anamnagar, Kathmandu 01 5706884
Sinamangal Branch Sinamangal, Kathmandu 01 4110850
Gwarko Branch Gwarko, Lalitpur 15541590
Attarkhel Branch Attarkhel, Kathmandu 01-4912990
Taandi Branch Ratnanagar, Chitawan 056-560591
Kalanki Branch Kalanki, Kathmandu 5234706
Suryabinayak Branch Suryabinayak, Bhaktapur 01-5708020
Kadaghari Branch Kadaghari, Kathmandu 01-4993004
Kumaripati Branch Kumaripati, Lalitpur 9851191500
Bhaisepati Branch Bhaisepati, Lalitpur 01-5591469
Gajuri Branch Gajuri, Dhading 01-0402426
Panauti Branch Panauti, Kavrepalanchok 011-441063
Parsa Branch Khairahani, Parsa, Chitwan 056-582801
Hattigauda Branch Hattigauda, Kathmandu 01 4379297
Kamalbinayak Branch Kamalbinayak, Bhaktapur 01 6620297
Kapan Branch Kapan, Kathmandu 01 4813113
Banepa Branch Banepa, Kavrepalanchok 011-660168
Panchkhal Branch Panchkhal, Kavrepalanchok 011-499472
Kirtipur Branch Kirtipur, Kathmandu 01-590622
Galchi Branch Galchi, Dhading 010-403197
Hakimchowk Branch Hakimchowk, Chitawan 056 525224
Bhatbhateni Branch Bhatbhateni, Kathmandu 01-4446397
Dhumbarahi Branch Kalopul, Maligaun, Kathmandu 01-4241648
Narayanghat (Kamal Nagar) Branch Kamalnagar Narayanghat, Chitawan 056-571520
New Road (Dharmapath) Branch Newroad, Kathmandu 9841575599
Kalimati Branch Kalimati, Kathmandu 01-4280607

Annual Report 2021/22 309


BAGMATI PROVINCE
BRANCH NAME ADDRESS CONTACT
Duwakot Branch Duwakot, Bhaktapur 01-6635731
Mulpani Branch Mulpani, Kathmandu 01-4160170
Hetauda (Chisapani) Branch Hetauda, Makwanpur 057-590556
Gusingal Branch Patan, Lalitpur 9851067927
Thaiba Branch Thaiba, Lalitpur 01-5914100
Jarankhu Branch Jarankhu, Kathmandu 01-4025557
Gongabu Jalpa Branch Gongabu, Kathmandu 01-4355948
Shankhamul Branch Shankhamul, Kathmandu 01-5910764
Imadol Branch Imadol, Lalitpur 01 4813113
Thali Danchhi Branch Danchhi, Kathmandu 01 4813113
Dahachowk Branch Dahachowk, Kathmandu 9851189828
Bhandara Branch Bhandara, Chitawan 9851155659
Ghantaghar Branch Ghantaghar, Kathmandu 01-4233780
Khichapokhari Branch Khichapokhari, Kathmandu 01 4241368
Battar Branch Battar, Nuwakot 010-560256
Bhaisepati 2 Branch Bhaisepati, Kathmandu 01-5590028
Bijuli Bazar Branch Bijuli Bazar, Kathmandu 01-4790770
Kalimati 2 Branch Kalimati, Kathmandu 01-4277298
Barahbise Branch Barahbise, Sindhupalchowk 011-480005
Kumaripati 2 Branch Kumaripati, Lalitpur 01-5553011
Sallaghari Branch Sallaghari, Bhaktapur 01-6613170
Kapan 2 Branch Kapan, Kathmandu 01-482335
Dhunche Branch Dhunche, Rasuwa 010-540015
Naya Bazzar Branch Naya Bazar, Kathmandu 01-4383768
Jorpati 2 Branch Jorpati, Kathmandu 01-4910997
Kirtipur 2 Branch Kirtipur, Kathmandu 01-5195123
Imadol 2 Branch Imadol, Lalitpur 01-5204202
Maharajgunj 2 Branch Maharajgunj, Kathmandu 01-4376565
Mitrapark Branch Mitrapark, Kathmandu 01-4482692
Bhumlu Branch Bhumlu, Kavrepalanchowk 9851138695
Makwanpurgadhi Branch Makwanpurgadhi, Makwanpur 057-621130
Koteshwor Branch Koteshwor, Kathmandu 01-460021
Maitidevi 2 Branch Maitidevi, Kathmandu 9849980897
Timure Branch Timure, Rasuwa 9841530088
Sanepa Branch Sanepa, Lalitpur 01-5546010
Tokha Branch Tokha, Kathmandu 01-4381150
Chyamasing Branch Chyamasing, Bhaktapur 01-6620425
Tatopani Branch Tatopani, Sindhupalchowk 011-480005
Tilganga Branch Tilganga, Kathmandu 985206291
Khokana Branch Khokana, Lalitpur 01-5591644
Kadaghari 2 Branch Kadaghari, Kathmandu 9851325751
Mandikhatar Branch Mandhikatar, Kathmandu 9841269285
Sirutar Branch Sirutar, Bhaktapur 9858422541
Dallu (Bhagwan Pau) Branch Dallu, Kathmandu 9808556699
Sankhu Branch Sankhu, Kathmandu 9841239828
Mangal Bazar Branch Mangal Bazar, Lalitpur 9841633097

310 Nabil Bank Limited


GANDAKI PROVINCE
BRANCH NAME ADDRESS CONTACT
Pokhara Branch Pokhara, Kaski 061 520162
Baglung Branch Baglung 068 522194
Gorkha Branch Gorkha 064 421529
Besisahar Branch Besisahar, Lamjung 066 520805
Lakeside Branch Lakeside Pokhara, Kaski 061 464268
Damauli Branch Damauli, Tanahu 065-562527
Taalchowk Branch Taalchowk, Kaski 061-561844
Bagar Branch Bagar Pokhara, Kaski 061-551472
Amarsingh Chowk Branch Amarsingh Chowk Pokhara, Kaski 9846223708
Gaindakot Branch Gaindakot, Nawalparasi 078-501920
Daldale Branch Daldale, Nawalparasi 078-575337
Kawasoti Branch Kawasoti, Nawalparasi East 078-541186
Dulegauda Branch Dulegauda, Tanahu 065-414473
Waling Branch Waling, Syangja 063-440001
Birauta Branch Birauta, Kaski 061-468077
Pokhara (New Road) Branch Pokhara, Kaski 061-536214
Chipledhunga Branch Chipledhunga, Kaski 061-533134
Kushma Branch Kushma Bazar, Parbat 9860132540
Lekhnath Branch Lekhnath, Kaski 061-411445
Bulingtar Branch Bulingtar, Nawalparasi East 9851019461
Aanbhu Khaireni Branch Aanbhu Khaireni, Tanahu 9856017094

LUMBINI PROVINCE
BRANCH NAME ADDRESS CONTACT
Butwal Branch Butwal, Rupandehi 071-541059
Bhalwadi Branch Bhalwadi, Rupandehi 071-560357
Bhairahawa Branch Bhairahawa, Rupandehi 071- 524041
Nepalgunj Branch Nepalgunj, Banke 081-524221
Tulshipur Branch Tulshipur, Dang 082 522673
Ghorahi Branch Ghorahi, Dang 082 561685
Sunwal Branch Sunwal, Nawalparasi west 78570506
Kohalpur Branch Kohalpur, Banke 081-541726
Lamahi Branch Lamahi, Dang 082-540848
Sammarimai Branch Sammarimai, Rupandehi 9847386516
Bardaghat Branch Bardaghat, Nawalparasi west 9847020211
Chandrauta Branch Chandrauta, Kapilvastu 076-540661
Manigram Branch Manigram, Rupandehi 071 56125
Kalikanagar Branch Kalikanagar, Rupandehi 071-438031
Bansgadi Branch Bansgadi, Bardiya 084-400194
Butwal (Chauraha) Branch Butwal, Rupandehi 071-542621
Nepalgunj (Dhamboji) Branch Dhamboji Nepalgunj, Banke 081-521081
Tansen Branch Bishal Bazar, Tansen, Palpa 9857073255
Murgiya Branch Murgiya, Rupandehi 9806922883
Khaireni Branch Khaireni, Rupandehi 9847366895
Butwal 2 Branch Butwal, Rupandehi 071-544845
Nepalgunj 2 Branch Dhamboji, Banke 081-524170
Ghorahi 2 Branch Ghorahi, Dang 9851139008
Khajura Branch Khajura, Banke 081-560428
Chatragunj Branch Chatragunj, Arghakhanchi 077-690436
Hapure Branch Hapure, Dang 082-403057
Sandhikharka Branch Sandhikharka, Arghakhanchi 077-420965
Gulariya Branch Gulariya, Bardiya 9851131234
Tamghas Branch Tamghas, Gulmi 9857028975

Annual Report 2021/22 311


KARNALI PROVINCE
BRANCH NAME ADDRESS CONTACT
Surkhet Branch Birendranagar, Surkhet 083-52148
Barah Taal Branch Barahataal, Surkhet 9841915982
Tila Branch Tila, Jumla 9758005526
Darma Branch Darma, Salyan 9741466646
Pachaljharna Branch Pachaljharna, Kalikot 9741466645
Palata Branch Palata, Kalikot 9741466640
Salyan Branch Shreenagar, Salyan 088-480182
Musikot Branch Khalanga Musikot, Rukum West 088-530364
Sinja Branch Sinja, Jumla 9841912373
Kalimati (Rampur) Branch Kalimati Rampur, Salyan 9848439719

SUDURPASHCHIM PROVINCE
BRANCH NAME ADDRESS CONTACT
Dhangadhi Branch Dhangadi, Kailali 091-417652
Mahendranagar Branch Mahendranagar, Kanchanpur 099-525450
Tikapur Branch Tikapur, Kailali 091-560701
Alitaal Branch Alitaal, Dadeldhura 9857051400
Bittadchir Branch Bittadchir, Bajhang 9857030985
Pancheshwor Branch Pancheshwor, Baitadi 9741466644
Ramaroshan Branch Ramaroshan, Achham 9741466643
Sayal Branch Sayal, Doti 9841197380
Turmakhand Branch Turmakhand, Achham 9741466642
Lamki Branch Lamki, Kailali 091-540732
Attariya Branch Attariya, Kailali 091-550788
Ratopul Branch Ratopul, Kailali 091-525941
Dhangadhi 2 Branch Chauraha Dhangadhi, Kailali 091-521785
Darchula Branch Darchula 093-420242
Jhalari Branch Jhalari, Kanchanpur 099-540067
Chainpur Branch Chainpur Bazar, Bajhang 091-421143
Chandev Branch Laljhadi, Kanchanpur 9848751003
Calcatta Branch Calcatta, Kanchanpur 9858784510

312 Nabil Bank Limited

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