Kathmandu, November 16:

Nepal Bank Ltd (NBL) has registered a growth of Rs 700 million in operating profits during the fiscal year 2005-06.

Based on the provisional balance sheet, the bank says that it earned the net profit of Rs 1.2 billion including extra ordinary items in 12 months ending in mid-July 2006. The good loan portfolio has been increased to Rs 10.2 billion during the period, up by 20 per cent over the previous year.

John Fitzgerald, CEO at NBL disclosed the figures at a programme organised to mark the 70th anniversary of the bank in the capital today. He said that the non-performing assets (NPAs) of the bank have been reduced to 16.3 per cent. The current NPA of the bank stands at two billion rupees.

According to him, NBL — out of total NPAs — has recovered over Rs 1.7 billion in cash.

“We will continue to concentrate on the big defaulters,” he said, adding that the support from government, central bank and other concerned agencies is crucial in recovering the NPAs, especially from big and wilful defaulters.

NBL has allotted Rs 120 million to distribute as bonus to its employees that is subject to approval from the Nepal Rastra Bank (NRB). “The progress so far made in restructuring the bank and recovery of NPAs are satisfactory,” said Krishna Bahadur Manandhar, acting governor of the NRB. He expressed satisfaction over the changing face of NBL over the last three years. Stating that the customers’ confidence towards the bank is very crucial, Manandhar urged the NBL management and officials to do its best to serve the customers. “The customers will penalise, if a bank fails to deliver,” he said, referring to an example of management takeover of Nepal Bangladesh Bank, recently.

Manandhar also suggested the NBL officials to be ready to run the bank after the management contract with ICC Bank is over. The foreign management team is here to restructure the bank and to bring it back on track, he said. He also gave away gold medals to the employees, who have completed 25 years of service at the NBL. The board of directors awarded silver medals to those employees, who have completed 20 years of service.

“Computerisation of 44 branches of the bank has been completed and all of them are online now,” said Fitzgerald. “An additional 38 branches will be computerised within a few months.”

“We will also be introducing ‘Anywhere Branch Banking Service (ABBS)’ in all the computerised branches,” he said, adding that the bank plans to install ATMs in a number of branches after ABBS.

Semanta Gauli, president of Financial Institutions’ Employees Association, said that NBL has yet to go a long way to recover bad loans, especially from the big wilful defaulters and to retain its past glory.