Q2 2082/83 Banking Sector Overview
Nepal has 19 commercial banks listed on NEPSE, contributing over 60% of total market capitalization. With Q2 2082/83 financial results now available, investors have fresh data to evaluate which banks offer the strongest fundamentals. The sector average EPS stands at approximately Rs 15.72, with significant variation ranging from negative earnings to over Rs 30.
Top 5 Banks by Quality Score
Our proprietary Bank Quality Score (BQS) evaluates banks across five dimensions: Capital Strength, Asset Quality, Profitability, Valuation, and Business Quality.
| Rank | Bank | BQS Score | Rating | LTP (Rs) | EPS | ROE (%) |
|---|---|---|---|---|---|---|
| 1 | NABIL | 75.95 | A | 496.10 | 29.69 | 14.86 |
| 2 | EBL | 74.95 | B+ | 670.00 | 30.86 | 13.76 |
| 3 | SCB | 71.45 | B+ | 631.00 | 27.35 | 13.20 |
| 4 | KBL | - | - | 184.10 | 20.74 | 14.56 |
| 5 | PCBL | - | - | 235.80 | 19.50 | 12.32 |
Complete Bank Metrics: All 19 Commercial Banks
| Symbol | LTP | EPS | ROE% | P/E | Book Value | NIM% | Div Yield% |
|---|---|---|---|---|---|---|---|
| NABIL | 496.10 | 29.69 | 14.86 | 18.40 | 214.49 | 3.58 | 2.36 |
| EBL | 670.00 | 30.86 | 13.76 | 18.53 | 235.04 | 3.70 | 2.02 |
| SCB | 631.00 | 27.35 | 13.20 | 22.95 | 210.97 | 4.72 | 2.93 |
| KBL | 184.10 | 20.74 | 14.56 | 10.59 | 151.16 | 4.84 | 6.54 |
| SANIMA | 330.00 | 20.48 | 12.40 | 16.18 | 172.39 | 3.56 | 2.02 |
| PCBL | 235.80 | 19.50 | 12.32 | 11.77 | 165.80 | 4.12 | 0.15 |
| SBI | 400.00 | 18.93 | 10.12 | 22.55 | 193.10 | 3.44 | 1.14 |
| SBL | 380.80 | 17.93 | 8.94 | 13.44 | 211.23 | 3.68 | 1.48 |
| NBL | 241.00 | 17.76 | 6.76 | 7.67 | 262.43 | 3.72 | 3.36 |
| GBIME | 225.80 | 17.06 | 9.88 | 13.44 | 175.29 | 3.56 | 3.11 |
| NMB | 233.00 | 17.10 | 10.34 | 15.35 | 169.36 | 3.80 | 1.88 |
| MBL | 224.20 | 16.73 | 10.78 | 12.23 | 161.63 | 3.66 | 1.60 |
| HBL | 189.00 | 11.45 | 6.66 | 33.16 | 174.23 | 3.82 | 2.67 |
| NIMB | 191.50 | 9.45 | 4.96 | 11.81 | 194.77 | 3.72 | - |
| PRVU | 184.00 | 8.62 | 5.92 | 8.46 | 146.17 | 4.24 | 0.72 |
| ADBL | 295.10 | 7.17 | 3.86 | 14.92 | 190.14 | 4.08 | 3.01 |
| CZBIL | 194.60 | 4.63 | 3.14 | 30.45 | 149.79 | 3.72 | 0.12 |
| NICA | 326.00 | 1.76 | 0.88 | 343.16 | 198.33 | 3.98 | 0.19 |
| LSL | 208.60 | -2.04 | -1.26 | 20.84 | 166.23 | 3.52 | 0.23 |
Why NABIL Tops the Rankings
Nabil Bank leads with a BQS score of 75.95 (A rating), driven by exceptional asset quality with an NPL ratio of just 0.88% - the lowest among large banks. Its ROE of 14.86% and ROA of 1.48% demonstrate strong profitability. The bank maintains a healthy CD ratio of 78.12% and NIM of 3.58%, indicating balanced growth and margin management.
Value Picks: Lowest P/E Ratios
For value investors, these banks trade at attractive earnings multiples:
- NBL (P/E: 7.67) - Nepal Bank offers the lowest P/E with solid EPS of Rs 17.76 and the highest book value (Rs 262.43) in the sector
- PRVU (P/E: 8.46) - Prabhu Bank trades at a deep discount with EPS of Rs 8.62
- KBL (P/E: 10.59) - Kumari Bank combines low valuation with the highest ROE (14.56%) and highest dividend yield (6.54%)
- NIMB (P/E: 11.81) - Nepal Investment Mega Bank offers value with strong book value of Rs 194.77
- PCBL (P/E: 11.77) - Prime Commercial shows strong fundamentals at reasonable valuation
Income Picks: Highest Dividend Yields
Income-focused investors should note these high-yield banking stocks:
- KBL: 6.54% - Stands out with an exceptionally high yield
- NBL: 3.36% - Nepal Bank Limited offers consistent payouts
- GBIME: 3.11% - Global IME Bank provides above-average yield
- ADBL: 3.01% - Agriculture Development Bank maintains steady dividends
- SCB: 2.93% - Standard Chartered Bank is known for reliable payouts
Banks to Watch Out For
Not all banks present favorable investment opportunities at current levels:
- LSL (Laxmi Sunrise Bank) - The only bank with negative EPS (-2.04) and negative ROE (-1.26%). Merger integration challenges continue to weigh on performance.
- NICA - Despite a high LTP of Rs 326, its EPS of just Rs 1.76 results in an extreme P/E of 343.16. The ROE of 0.88% is significantly below the sector average.
- CZBIL - Citizens Bank trades at a P/E of 30.45 with low EPS (Rs 4.63) and ROE (3.14%), suggesting stretched valuation relative to earnings power.
Investment Recommendation Summary
Strong Buy: NABIL, EBL, KBL - These banks combine strong earnings, healthy asset quality, and reasonable valuations.
Buy: SCB, PCBL, SANIMA, MBL - Good fundamentals with moderate valuations.
Hold: GBIME, NMB, SBI, SBL, NBL - Decent performers trading at fair value.
Caution: LSL, NICA, CZBIL - Weak earnings and stretched valuations warrant careful consideration.
Note: This analysis is based on Q2 2082/83 published financial data. Stock prices are subject to market conditions. Always conduct your own research before making investment decisions.