By Sandeep Chaudhary
Major Financial Indicators as of Chaitra End, 2080 (Mid-April, 2024)
Introduction The financial health of a country is often reflected in the key indicators tracked by its banking and financial institutions. This article provides an overview of the major financial indicators for Class "A", "B", and "C" financial institutions in Nepal as of Chaitra End, 2080 (Mid-April, 2024). These indicators include credit and deposit ratios, liquidity ratios, capital adequacy ratios, financial access metrics, and interest rates.
A. Credit and Deposit Ratios
Total Deposit/GDP: Class "A" institutions have a total deposit to GDP ratio of 101.16%, while Class "B" and "C" institutions show ratios of 11.08% and 2.29%, respectively. Overall, the ratio stands at 114.54%.
Total Credit/GDP: The total credit to GDP ratio is 84.20% for Class "A", 9.27% for Class "B", and 1.81% for Class "C" institutions, with an overall ratio of 95.27%.
Total Credit/Total Deposit: This ratio is relatively consistent across classes, with Class "A" at 83.23%, Class "B" at 83.66%, and Class "C" at 78.84%. The overall ratio is 83.18%.
CD Ratio: The Credit to Deposit (CD) ratio stands at 80.75% for Class "A", 82.80% for Class "B", and 77.45% for Class "C", resulting in an overall ratio of 80.88%.
Fixed Deposit/Total Deposit: Class "A" institutions have 57.42% of their total deposits in fixed deposits, compared to 65.34% for Class "B" and 71.72% for Class "C". Overall, the fixed deposit ratio is 58.50%.
Saving Deposit/Total Deposit: The ratio of saving deposits to total deposits is 29.43% for Class "A", 26.33% for Class "B", and 19.16% for Class "C", with an overall ratio of 28.93%.
Current Deposit/Total Deposit: Class "A" institutions have 5.80% of their deposits in current accounts, while Class "B" and "C" institutions have 1.64% and 1.14%, respectively, resulting in an overall ratio of 5.31%.
Call Deposit/Total Deposit: The call deposit to total deposit ratio is 6.57% for Class "A", 6.34% for Class "B", and 7.07% for Class "C", with an overall ratio of 5.56%.
NPL/Total Loan: The non-performing loan (NPL) ratio is 3.89% for Class "A", 3.63% for Class "B", and 10.40% for Class "C", resulting in an overall NPL ratio of 3.98%.
Total LLP/Total Loan: Loan loss provision (LLP) to total loan ratio is 4.51% for Class "A", 3.89% for Class "B", and 9.35% for Class "C", with an overall ratio of 4.54%.
Deprived Sector Loan/Total Loan: The ratio for deprived sector loans is 6.12% for Class "A", 8.63% for Class "B", and 7.11% for Class "C", resulting in an overall ratio of 6.38%.
B. Liquidity Ratios
Cash & Bank Balance/Total Deposit: The liquidity ratio for cash and bank balance to total deposit is 8.27% for Class "A", 6.85% for Class "B", and 8.63% for Class "C", with an overall ratio of 8.14%.
Investment in Gov. Securities/Total Deposit: Class "A" institutions invest 18.45% of their total deposits in government securities, while Class "B" and "C" institutions invest 15.78% and 17.76%, respectively, resulting in an overall ratio of 18.17%.
Total Liquid Assets/Total Deposit: The ratio of total liquid assets to total deposits is 28.02% for Class "A", 25.31% for Class "B", and 33.56% for Class "C", with an overall ratio of 27.87%.
C. Capital Adequacy Ratios
Core Capital/RWA: The core capital to risk-weighted assets (RWA) ratio is 9.68% for Class "A", 10.12% for Class "B", and 12.88% for Class "C", resulting in an overall ratio of 9.78%.
Total Capital/RWA: The total capital to RWA ratio is 12.50% for Class "A", 13.01% for Class "B", and 14.90% for Class "C", with an overall ratio of 12.59%.
D. Financial Access
No. of Institutions: There are 20 Class "A", 17 Class "B", and 17 Class "C" institutions, totaling 54 institutions.
No. of Branches: The number of branches is 5,042 for Class "A", 1,135 for Class "B", and 288 for Class "C", resulting in a total of 6,465 branches.
No. of Deposit Accounts: Class "A" institutions have 46,892,032 deposit accounts, Class "B" have 6,996,942, and Class "C" have 856,613, totaling 54,745,587 deposit accounts.
No. of Loan Accounts: There are 1,554,703 loan accounts in Class "A", 289,499 in Class "B", and 42,697 in Class "C", totaling 1,886,899 loan accounts.
No. of Branchless Banking Centers: Class "A" institutions have 1,178 branchless banking centers, Class "B" have 17, and Class "C" have none, totaling 1,195 centers.
No. of Branchless Banking Customers: There are 311,652 customers for Class "A", 1,586 for Class "B", and none for Class "C", totaling 313,238 customers.
No. of Mobile Banking Customers: Class "A" institutions have 20,663,461 mobile banking customers, Class "B" have 3,203,808, and Class "C" have 186,360, totaling 24,053,629 customers.
No. of Internet Banking Customers: There are 1,334,692 internet banking customers in Class "A", 55,027 in Class "B", and 15,054 in Class "C", totaling 1,904,773 customers.
No. of ATMs: Class "A" institutions have 4,704 ATMs, Class "B" have 348, and Class "C" have 44, totaling 5,096 ATMs.
No. of Debit Cards: Class "A" institutions have issued 11,606,180 debit cards, Class "B" have issued 1,046,252, and Class "C" have issued 62,429, totaling 12,714,861 debit cards.
No. of Credit Cards: There are 282,889 credit cards issued by Class "A" institutions, 1,783 by Class "B", and none by Class "C", totaling 284,672 credit cards.
No. of Prepaid Cards: Class "A" institutions have issued 163,548 prepaid cards, Class "B" have issued 1,784, and Class "C" have issued none, totaling 165,332 prepaid cards.
E. Interest Rates
Wt. Avg. Interest Rate on Deposit: The weighted average interest rate on deposits is 6.53%. This includes:
Saving: 4.01%
Fixed: 8.72%
Call: 1.70%
Wt. Avg. Interest Rate on Credit: The weighted average interest rate on credit is 10.55%.
Conclusion These financial indicators provide a comprehensive view of the performance and stability of Nepal's banking sector. The data highlights the sector's credit and deposit ratios, liquidity positions, capital adequacy, financial access, and interest rates, offering valuable insights for stakeholders, policymakers, and the general public.
