कामना सेवा विकास बैंकको आर्थिक वर्ष २०८३/०८४ को प्रथम त्रैमासिक वित्तीय विवरणKamana Sewa Bikas Bank 1st Quarter Financial Results FY 2083/084

Unaudited Financial Results (Quarterly)

As on 31 Ashwin 2083

Condensed Statement of Financial Position

As on Quarter ended 31 Ashwin 2083

(Amount in NPR)

Particulars	This Quarter ending	Immediate Previous Year Ending (Audited)
Assets
Cash and Cash Equivalent	2,224,289,880	1,492,916,101
Due from Nepal Rastra Bank	2,856,174,157	2,644,109,552
Placement with Bank and Financial Institutions	-	-
Derivative Financial Instruments	-	-
Other Trading Assets	-	-
Loans and Advances to BFIs	1,242,667,844	1,584,461,749
Loans and Advances to Customers	56,345,333,166	54,203,871,013
Investment Securities	12,453,460,317	13,751,321,311
Current Tax Assets	-	-
Investment in Subsidiaries	-	-
Investment in Associates	-	-
Investment Property	334,397,240	364,060,168
Property and Equipment	827,065,272	826,326,286
Goodwill and Intangible Assets	14,568,925	12,318,291
Deferred Tax Assets	66,181,479	58,158,540
Other Assets	567,069,565	719,083,659
Total Assets	76,931,207,846	75,656,626,669
Liabilities
Due to Bank and Financial Institutions	518,592,085	566,106,644
Due to Nepal Rastra Bank	-	-
Derivative Financial Instruments	-	-
Deposits from Customers	67,904,709,256	66,177,524,639
Borrowings	-	-
Current Tax Liabilities	95,627,632	5,020,453
Provisions	25,963,114	28,186,617
Deferred Tax Liabilities	-	-
Other Liabilities	790,149,547	902,700,791
Debt Securities Issued	995,865,317	995,865,317
Subordinated Liabilities	-	-
Total Liabilities	70,330,906,951	68,675,404,461
Equity
Share Capital	4,211,930,815	4,211,930,815
Share Premium	-	-
Retained Earnings	160,042,543	612,683,080
Reserves	2,228,327,537	2,156,608,314
Total Equity Attributable to Equity Holders	6,600,300,895	6,981,222,208
Non Controlling Interest	-	-
Total Equity	6,600,300,895	6,981,222,208
Total Liabilities and Equity	76,931,207,846	75,656,626,669
Net Assets Value per share	161.84	171.71

Note: Share capital for this year includes NPR 350 Million 'KSBBL 9% PNCPS'

Condensed Statement of Profit or Loss

For the Quarter ended 31 Ashwin 2083

(Amount in NPR)

	Particulars Current Year This Quarter Current Year Upto	Particulars Current Year This Quarter Current This Quarter (YTD)	Corresponding Previous Year This Quarter Corresponding Previous Year Upto	Corresponding Previous Year This Quarter Corresponding Previous This Quarter (YTD)
Interest Income	1,254,837,293	1,254,837,293	1,393,631,747	1,393,631,747
Interest Expense	628,349,994	628,349,994	775,995,134	775,995,134
Net Interest Income	626,487,299	626,487,299	617,636,613	617,636,613
Fee and Commission Income	116,575,625	116,575,625	90,632,014	90,632,014
Fee and Commission Expense	6,339,346	6,339,346	6,210,212	6,210,212
Net Fee and Commission Income	110,236,279	110,236,279	84,421,802	84,421,802
Net Interest, Fee and Commission Income	736,723,578	736,723,578	702,058,415	702,058,415
Net Trading Income	929,574	929,574	233,094	233,094

Statement of Distributable Profit or Loss

For the Quarter ended 31 Ashwin 2083

(As per NRB Regulation)

(Amount in NPR)

Particulars Current Year Upto this Quarter YTD Previous Year Corresponding Quarter YTD
Net profit or (loss) as per statement of profit or loss	231,155,624	197,584,139
Appropriations:
a. General reserve	(45,611,541)	(43,668,947)
b. Foreign exchange fluctuation fund	-	(58,942)
c. Capital redemption reserve	(35,714,286)	(35,714,286)
d. Corporate social responsibility fund	(2,311,556)	(1,975,841)
e. Employees' training fund	-	-
f. Other	-	-
Investment adjustment reserve	-	3,000,000
CSR Expenses	1,837,610	-
Fair Value Reserve	(3,097,918)	20,760,597
Profit or (loss) before regulatory adjustment	146,257,933	139,926,720
Regulatory Adjustment:
a. Interest receivable (-)/previous accrued interest received (+)	(20,304,963)	(44,758,297)
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 (+)	14,763,239	6,822,123
e. Deferred tax assets recognized (-)/ reversal (+)	-	-
f. Goodwill recognized (-)/ impairment of Goodwill (+)	-	-
g. Bargain purchase gain recognized (-)/reversal (+)	-	-
h. Actuarial loss recognized (-)/reversal (+)	-	-
i. Fair value Loss on investment	-	-
j. Other (+/-)	-	-
Net Profit for the quarter end available for distribution	140,716,209	101,990,546
Opening retained earnings	612,683,080	587,575,801
Adjustment/Restatement	-	-
Distribution:
Bonus Share issued	-	(351,084,620)
Cash dividend paid	(593,356,746)	(203,260,440)
Total Distributable profit or loss as on quarter end date	160,042,543	135,221,287
Preference Dividend	7,875,000	-
Distributable profit after preference dividend	152,167,543	135,221,287
Annualised Distributable Profit/Loss per share (Equity Shareholders)	15.76	14.01

Notes to Interim Financial Statements :

१. The above financial statements have been prepared in accordance with Nepal Financial Reporting Standards (NFRS) in line with NRB Directives. In compliance with NRB's ECL Guidelines, Bank has de-recognized interest income on loans and advances classified as Lifetime ECL under Stage-3. Bank has considered the impairment on credit exposures as the higher of total ECL provision as per NFRS 9 and existing regulatory provision in Unified Directives. Separate reporting of ECL shall be done to NRB by the Bank. Bank has considered the impact of Effective Interest Rate as not significant for the period of 1st quarter of FY 2083-084. Bank will assess its impact on subsequent quarters of FY 2083-084.

२. Loans and advances include interest receivable on loans and are presented net of loan impairments.

३. Bank has set aside Rs. 14.29 crore per year starting from Fiscal year 2080-81 for Debenture Redemption Reserve fund. Till the first quarter of current FY accumulated figure of Debenture Redemption reserve is Rs. 46.43 crore.

४. Above figures are subject to change if directed by regulator or external audit.

५. Wherever necessary, figures have been regrouped and rearranged.

६. There are no related party transactions for the quarter with related parties apart from BOD allowance to BOD members and salary and allowances to CEO and DCE0.

७. The interim unaudited financial statement has been updated in Bank's website https://www.kamanasewabank.com

Additional Disclosure as per Securities Registration and Issue Regulation - 2073 (Sub-Rule (1) of Rule 26, Annex 14) for 1st Quarter Report Fiscal Year 2083/084

1. Financial Statement

a. Statement of Financial Position and Statement of Profit and Loss as per Nepal Financial Reporting Standard: Published along with this report. There has been no transaction between related parties.

b. Key Financial indicators and ratios

Earnings Per Share (Equity Shareholders) (NPR) 23.13

Other Operating Income	8,231,281	8,231,281	52,144,330	52,144,330
Total Operating Income	745,884,433	745,884,433	754,435,839	754,435,839
Impairment Charge / (Reversal) for Loans and Other Losses	49,417,226	49,417,226	110,693,770	110,693,770
Net Operating Income	696,467,207	696,467,207	643,742,069	643,742,069
Operating Expense
Personnel Expenses	242,221,549	242,221,549	242,813,097	242,813,097
Other Operating Expenses	80,870,030	80,870,030	98,309,805	98,309,805
Depreciation & Amortisation	34,605,233	34,605,233	17,990,684	17,990,684
Operating Profit	338,770,395	338,770,395	284,628,483	284,628,483
Non Operating Income	2,595,912	2,595,912	150,000	150,000
Non Operating Expense	11,143,987	11,143,987	2,515,428	2,515,428
Profit Before Income Tax	330,222,320	330,222,320	282,263,055	282,263,055
Income Tax Expense
Current Tax	99,066,696	99,066,696	84,678,917	84,678,917
Deferred Tax	-	-	-	-
Profit for the Period	231,155,624	231,155,624	197,584,139	197,584,139
Profit Attributable to:
Equity-holders of the Bank	231,155,624	231,155,624	197,584,139	197,584,139
Non-Controlling Interest	-	-	-	-
Profit for the Period	231,155,624	231,155,624	197,584,139	197,584,139
Preference Dividend	7,875,000	7,875,000	-	-
Profit after preference dividend	223,280,624	223,280,624	197,584,139	197,584,139

Condensed Statement of Other Comprehensive Income

For the Quarter ended 31 Ashwin 2083

(Amount in NPR)

	Particulars Current Year This Quarter Current Year Upto	Particulars Current Year This Quarter Current This Quarter (YTD)	Corresponding Previous Year This Quarter Corresponding Previous Year Upto	Corresponding Previous Year This Quarter Corresponding Previous This Quarter (YTD)
Profit for the year	231,155,624	231,155,624	197,584,139	197,584,139

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	(26,743,131)	(26,743,131)	(69,124,473)	(69,124,473)
Gains/(losses) on revaluation	-	-	-	-
Actuarial gains/(losses) on defined benefit plans	-	-	-	-
Income tax relating to above items	8,022,939	8,022,939	20,737,342	20,737,342
Net other comprehensive income that will not be reclassified to profit or loss	(18,720,192)	(18,720,192)	(48,387,131)	(48,387,131)

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	(18,720,192)	(18,720,192)	(48,387,131)	(48,387,131)
Total Comprehensive Income for the Period	212,435,432	212,435,432	149,197,008	149,197,008
Total Comprehensive Income attributable to:
Equity-Holders of the Bank	212,435,432	212,435,432	149,197,008	149,197,008
Non-Controlling Interest	-	-	-	-
Total Comprehensive Income for the Period	212,435,432	212,435,432	149,197,008	149,197,008
Earnings per Share
Basic Earnings per Share	23.13	20.46
Diluted Earnings per Share	23.13	20.46

EPS (Equity Shareholders)= (Net profit after tax - PNCPS Dividend)/Number of Equity Shares

Ratio as per NRB Directive

Particulars Current Year This Quarter Current Year Upto This Quarter (YTD) Previous Year Corresponding This Quarter Previous Year Corresponding Upto This Quarter (YTD)

Capital Fund to RWE 12.97% 12.26%

Tier 1 Capital to RWA 10.59% 9.61%

CET 1 Capital to RWA 9.95% 9.61%

Annualized Return on Equity 13.62% 13.37%

Annualized Return on Assets 1.21% 1.10%

Non-Performing Loan (NPL) to Total Loan 3.93% 4.41%

Net Non-Performing Loan (NPL) to Total Loan 0.84% 1.24%

Total Loan Loss Provision to Total NPL 115.41% 107.69%

Cost of Funds 3.50% 4.59%

Credit to Deposit Ratio (CD) 86.89% 86.35%

Base Rate 5.36% 6.55%

Interest Rate Spread 3.95% 4.32%

Price Earnings Ratio (P/E Ratio) (Times) 20.58

Net worth Per Share (Equity Shareholders) (NPR) 161.84

Liquidity Ratio 23.76%

Total Assets per share (Equity Shareholders) (NPR) 1,992.04

Capital Adequacy Ratio 12.97%

Note: Earnings per share (Equity Shareholders) = (Net profit after tax - PNCPS Dividend)/Number of Equity Shares

Net worth per share (Equity Shareholders) = (Total Equity Fund - Preference Share Capital)/Number of Equity Shares

2. Management Analysis

a. The bank has registered NPR 231.16 million in net profit.

b. There has been change in the bank's reserve, profit and liquidity position in line with the growth in business volume.

c. The bank has issued 'KSBBL 9% Perpetual Non-Cumulative Preference Share' amounting to Rs. 350 Million (35,00,000 Kitta @ NPR 100 Each) during FY 2082-83. The Capital instrument has been reflected under Share Capital in the Bank's Statement of Financial Position. With the issuance of Preference Share, Bank's Capital Adequacy position have been strengthened.

d. The bank has been able to generate satisfactory financial results as of 1st Quarter of Fiscal year 2083-84.

3. Details relating to legal action

a. Case filed against the bank

There were no major cases except those arising during the normal course of the bank's business.

b. Case relating to disobedience of prevailing law or commission of criminal offence filed by or against the promoter or director of the bank

No such information has been received.

c. Case relating to financial crime filed against any promoter or director

No such information has been received.

4. Analysis of share transaction and progress of the bank

a. Management's view on share transaction of bank in the secondary market

As the prices in the secondary market is determined by open share market operations, management view is neutral on this.

b. Maximum, minimum, closing price, total traded days and total share transacted during the quarter (Source www.nepalstock.com )

Maximum Price 490 Total Days Transacted 61

Minimum Price	440.80	1,539,635
Closing Price	475.90	720,431,379

5. Problem and Challenges

Internal

• Recruitment and retention of quality manpower.

• Increasing cost of operation.

• Increasing trend of Non-Performing Assets.

• Limited scope for increasing non-interest income.

• Challenges in liquidity management and interest risk management.

External

• Slowdown in country's economic activities.

• Competitive banking business.

• Limited credit opportunities in productive sectors.

• Excess availability of liquid funds in market

• Global economic uncertainty and geopolitical developments.

• Increasing cyber frauds and information security risks.

• Current trend of selection of foreign countries for better opportunity by the youths.

Strategy

• Identification of new possibilities for business development.

• Focus on quality onboarding of customers/ borrowers.

• Strong risk management approach and portfolio diversification.

• Reinforcement of prudent banking practices.

• Re-pricing of assets and liabilities keeping in view the market fluctuations.

• Prioritization of digitization in banking services to enhance efficiency.

• Robust recovery management.

6. Corporate Governance

The bank follows zero tolerance culture on governance and compliance. It ensures absolute compliance of directives and guidelines issued by Nepal Rastra Bank. To ensure adequate compliance and risk management the bank has developed strong policy and procedural framework along with dedicated independent compliance, audit and risk management function.

The board of directors, audit committee, risk management committee, human resource management committee, recruitment committee and all other management committee are committed to enforce highest standard of corporate governance within the bank.

7. Declaration by CEO

I hereby declare that the data and information provided in this report is true, complete and factual to the best of my knowledge. No any conscious attempt has been made to misguide the investors.