Nepal Investment Bank

Annual Report 2008/2009 AnnuAl 2008 2009 RepoRt 3 Annual Report 2008-2009 C o n t e n t s Vision Mission Statement About Us Strategic Objectives Core values and Ethical Principles Chairman’s Statement Financial Highlights Shareholder information Last 7 years at a Glance Management review and discussion Corporate Governance Risk Management Board of directors Senior Management Team Management Team domestic network Global network Board of directors report Corporate Social responsibility Financial Statements Principal accounting Policies notes to account 4 4 4 5 5 6 10 10 11 14 18 20 24 30 31 36 38 39 48 53 85 86 Nepal Investment Bank Limited Our Vision To be the most preferred provider of Financial Services in Nepal About Us Nepal Investment Bank Ltd. (NIBL), previously Nepal Indosuez Bank Ltd. , was established in 1986 as a joint venture between Nepali and French partners. The French partner (holding 50%) of the capital) was Credit Agricole Indosuez, a subsidiary of one of the largest banking groups in the world. When Credit Agricole Indosuez decided to divest, a group of companies omprising of bankers, professionals, industrialists and businessmen acquired 50% of the holdings of Credit Agricole Indosuez in Nepal Indosuez Bank in April 2002. The name of the Bank was changed to Nepal Investment Bank Ltd. upon approval of the Bank’s Annual General Meeting, Nepal Rastra Bank and Company Registrar’s Office. The shareholding structure comprises of: • • • • A group of companies holding 50% of the Capital. Rastriya Banijya Bank holding 15% of the Capital. Rastriya Beema Sansthan holding 15% of the Capital. The general public holding 20% of the Capital. Mission Statement

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We aspire to be the leading Nepali bank, delivering world class service through a blend of state-ofthe-art technology and visionary management in partnership with competent and committed staff, to achieve sound financial health with sustainable value addition to all our stakeholders. We are committed to fulfilling this mission while ensuring the highest levels of ethical standards, professional integrity, corporate governance and regulatory compliance. We believe that NIBL, being managed by a team of experienced bankers and professionals with a proven track record, can match your particular needs.

We are sure that your choice of bank will be guided, among other things, by its reliability and professionalism. Over the past 7 years, we have grown to become one of the biggest commercial banks in Nepal. Our overall growth record in deposits, lending, net profit and capital base is second to none. • No. 1 lender in Nepal with total loans and advances of NRs. 36. 83 billion. • No. 1 private sector bank in deposits with NRs. 46. 7 billion. • Highest paid up capital base of NRs. 2. 41 billion. • 7th largest taxpayer in Nepal. • Highest growth rate among banks in Nepal. • 23 years of stable banking. Non Performing Assets (NPA) at 0. 58%. • Customer base of over 270,000 clients. • The highest capital base with NRs. 3. 91 billion. • Experienced management & sound corporate governance. • Net Profit growth of 1480% in last 7 years. 5 Strategic Objectives • To develop a customer oriented service culture with special emphasis on customer care and convenience. • To increase our market share by following a disciplined growth strategy. • To leverage our technology platform and pen scalable systems to achieve cost-effective operations, efficient Management Information Systems, improved delivery capability and high service standards. To develop innovative products and services that attract our targeted customers and market segments. • To continue to develop products and services that reduce our cost of funds. • To maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders’ value. • To explore new avenues for growth and profitability. Core Values and Ethical Principles Our core values tell us, our customers and the communities we serve, who we really are; what we are about; and the principles by which we pledge to conduct business.

In essence, we believe that success can only be achieved by being true to our core values and principles: • Customer Focus: At NIBL, our prime focus is to perfect our customer service. Customers are our first priority and driving force. We wish to gain customer confidence and be their trusted partner. • Quality: We believe a quality service experience is paramount to our customers and we are strongly committed to fulfilling this ideal. • Honesty and Integrity: We ensure the highest level of integrity to our customers by creating an ongoing relationship of trust and confidence.

We treat our customers with honesty, fairness and respect. • Belief in our people: We recognize that employees are our most valuable asset and our competitive strength. We respect the worth and dignity of individual employees who devote their careers for the progress of the Bank. • Teamwork: We are a firm believer in teamwork and feel that loyal and motivated teams can produce extraordinary results. We are driven by a performance culture where recognition and rewards are based on individual merit and demonstrated track record. Good Corporate Governance: Effective Corporate Governance procedures are essential towards achieving and maintaining public trust and confidence in any company, more so in a bank. At NIBL, we are committed to following practices which result in good corporate governance. • Corporate Social Responsibility: As a responsible corporate citizen, we consider it important to act in a responsible manner towards the environment and society. Our commitment has always been to behave ethically and contribute towards the improvement of the quality of life of our people, the community and society at large, of which we are an integral part.

Annual Report 2008-2009 Chairman’s Statement 6 “Nepal Investment Bank Limited attained a substantial market share Nepal Investment Bank Limited of 8. 9%, 10. 2% and 8. 1% in terms of Deposits, Loans and Total Bank Assets. ” — PriThivi B. Pande 7 Dear Shareholders, Your bank has delivered another solid performance during the financial year 2008/09 despite all the continuing political uncertainty and increased competition. Your bank has continued its long term vision to consolidate itself as the leading bank in the country by pursuing a strategy of growth and consolidation while delivering quality services and shareholder returns.

Your bank has achieved remarkable growth in all areas, be it in deposits, lending, profit, products, services etc. Because of your Bank’s stellar performance, The Banker Magazine awarded your Bank “The Bank of the Year” award for 2008 for the 3rd time since 2003. In the fiscal year 2008/09, number of commercial banks rose to 26 from 25 in the previous year. However, despite intense competition among the Banks and challenging economic atmosphere and political uncertainty, Nepal Investment Bank Limited attained a substantial market share of 8. 9%, 10. 2% and 8. 1% in terms of deposits, loans and total bank assets.

This year we have proposed a 20% cash dividend from the profit of fiscal year 2007-08. In order to consolidate the Bank’s existing customer base as well as attract potential clients, your Bank has been active in launching new products and revising existing products and schemes. In FY 2008-09, the Bank added a total of 11 new branches making a total of 30 branches all over Nepal. Among the 11 new branches 5 were opened within Kathmandu valley and 6 in other areas outside Kathmandu. The Bank’s target is to open up to 50 branches by 2010 all over Nepal. We now have 766 staff operating among all 30 branches out of which 327 are female staffs and 1 staff members have completed more than 10 years of service in the institution. NIBL has pioneered adopting new technology to streamline banking operations and facilitate services to our esteemed customers. In the FY 2008/09, the Bank deployed an additional 23 ATM’s in and outside Kathmandu valley during the year, totaling 57 ATM’s in our consortium. The Bank also leads in card issuance as it issued over 220,000 cards and altogether there are now 320,000 card holders in our network now. We are also in the process of adding MasterCard services in addition to our existing Visa brand.

The Bank also implemented the Finacle Core Banking and E-banking Solution from Infosys during FY 2008-09. The system change-over commenced in July 2008 and was completed in November 2008. Going forward, I believe that these technological adoptions will pay off in the future in terms of lower cost and a better bottom line. With a strategy to strengthen the Bank’s position in the worker’s remittance market, the Bank appointed 45 new remittance disbursement agents during the year raising the total number of remittance disbursement locations to 200 in order to facilitate banking services to Nepali workers overseas.

The operating profit of the Bank grew in Rs. 1310 million from Rs. 1013 million recorded the previous year, an increase of Rs 287 million. Provisions for Tax were Rs 397. 98 million, making our Bank one of the top ten tax payers in Nepal, with a resulting after tax profit growth of 29. 26%. The Bank has registered a record increase in net profit to Rs. 900. 6 million from Rs. 696. 7 million, one of the highest net profit increments of any bank in Nepal. 9 Annual Report 2008-2009 10 8 Lending Deposit Market share in % In order to consolidate the Bank’s existing customer base as well as attract potential clients, your Bank has been active in launching new products and revising existing products and schemes. ” Assets 8 8 Nepal Investment Bank Limited This impressive performance is due to the continuation of our corporate strategy to diversify into fee based income sources and continue consolidating our share of interest income. Our Card Business, Treasury, Remittance and International Banking divisions have had strong organic growth and contributed significantly to our income. Our deposit base has increased by Rs. 2. 2 billion – a growth of 35. 6% vis-a-vis last year – giving us a total deposit base of Rs. 46. 7 billion, which is the highest deposit base amongst private sector commercial banks in the country. Loans made during this period increased by 33. 8% to reach Rs. 36. 83 billion making us the highest lender among all banks in the country. Our assets are well managed with a prudent risk management outlook, coupled with local expertise to yield quality credit and investment decisions. As a result, our non-performing loans are now at 0. 58% of our total loan portfolio compared to 1. 2% in the previous year. The global financial crisis and collapse of Lehman Brothers, Northern Rock and Wachovia, among others, has underscored the need for adequate capitalization of financial institutions to weather the systemic risks during times of financial crisis. Understanding these risks, NIBL has been periodically increasing its Tier-1 capital over the years. NIBL now has the highest Tier-1 capital among all commercial banks in Nepal. The Bank registered the highest growth in our core and supplementary capital base of any commercial bank in Nepal at Rs. 3. 91 billion which puts us in a proper position to face challenges and risks in the future. We also have the largest paid up capital base at Rs. 2. 41 billion. Our capital adequacy stands at 11. 24% of our risk weighted assets. In order to support enhanced capital requirements due to record growth in our asset base, the Bank has also focused on retention of profits and has ventured into the domestic bond market. Our Tier 1 core capital ratio at 8. 56% is considerably more than the government requirement of 5. 5%. The global economy is still coming in terms with the financial crisis of 2008 and early 2009.

The spillover of the financial crisis from Wall Street to Main Street led to a severe economic contraction in major developed and emerging economies. Though economists are arguing that the recession has bottomed out in major developed economies, experts argue that economic recovery will at best be tepid and it will take many years before economic output can reach pre-crisis levels. On the domestic front, the monetary policy prescribed by the Central Bank has not reduced inflationary pressure despite worldwide decreases in general price levels. The average consumer inflation rose to 13. % in 2008/09 from 7. 7% a year ago. The central bank also needs to monitor financial institutions’ exposure to the real estate market to protect the Banking sector from a domino effect of possible contraction in real estate prices. Moreover, deposit rates need to move towards parity with Indian rates to prevent further capital flight. Nepal’s GDP expanded by 3. 8% in FY 2008-09 compared to 5. 3% the previous year. The labor unrest, energy crisis and strikes in the Terai have constrained Nepal’s economic prospects. The business sector has also been reeling under the worst possible energy crisis.

The external sector displayed satisfactory performance in 2008-09. Total exports rose by 13. 5% while total imports increased by 28. 2%. The depreciation of the Nepali Currency (NPR) vis-a-vis the United States Dollar (USD) was one of the major factors behind the surge in exports. Given the state of the economy, the political environment and developments in the banking industry, the year ahead is challenging for the Bank. It is expected that a stable political environment will pave the way for economic growth and prosperity and create a positive investment climate in the country.

Despite the global financial crisis, remittance income witnessed a substantial increment of 47% in 2008/09. The total remittance inflow in 2008/09 was Rs. 209. 7 billion which amounts to 22% of Nepal’s Gross Domestic Product (GDP). Huge remittance inflow accounted for the Balance of Payments (BOP) registering a substantial surplus of Rs. 41. 4 billion in 2008/09. Due to the significant surplus in the BOP, the gross foreign exchange reserves stood at Rs. 220 billion at the end of the 2008/09 which is about 31. 7% higher than during the previous year. After a dip in 2008, China and India are again projected to grow at rapid rates.

Political stability coupled with economic reforms to attract foreign investment has been the cornerstone of economic growth in these two emerging giants. However, political instability and lack of serious economic reforms have hampered Nepal’s growth prospects. Lack of foreign direct investment remains a major hurdle to the country’s growth. Sans foreign investment, policymakers need to devise plans to channel remittance inflows towards productive sectors. Given the state of the economy, the political environment and developments in the banking industry, the year ahead is challenging for the Bank.

It is expected that a stable political environment will pave the way for economic growth and prosperity and create a positive investment climate in the country. The Government should also give strong emphasis on agriculture and SME development. Poverty alleviation needs to address the severe regional imbalances within Nepal in terms of socioethnic disparities. — PriThivi B. Pande 9 9 The Bank has a strategy for nationwide expansion of opening over 50 branches by 2010 to serve the people’s banking needs. The Bank is in the process of ringing out a slew of new products and services to cater to the needs of our valued customers and create a niche among its competitors. The Bank is also in its final stage of starting a Proprietary Card Network to facilitate prospective commercial banks, development banks and finance companies for issuing and acquiring domestic card related products. We plan to further increase our customer base and market share. Nepal Investment Bank is looking ahead to the future with confidence. The Bank intends to expand its international operations to tap into remittance flows and improve its range of products.

We will continue to strive towards our vision of being the preferred provider of financial services in Nepal, exploring new business opportunities and diversifying into new sectors. I would like to express my gratitude and appreciation to our energetic and hardworking staff and efficient management team. They have provided the splendid performance in 2009 that has led to the growth and good reputation of Nepal Investment Bank. I would like to thank the Nepal Rastra Bank; Ministry of Finance and all other Government Agencies for providing us support in our endeavors.

I also wish to express my gratitude to my colleagues on the Board for their valuable contributions. “Provisions for tax were rs 397. 98 million, making our Bank one of the top ten tax payers in nepal. ” Annual Report 2008-2009 Sincerely, Prithivi B. Pande Chief Executive Director Financial Highlights • • • • • • • • • • No. 1 lender amongst commercial bank with total loan portfolio of Rs. 36. 83 billion. Highest paid up capital among financial institutions in Nepal at Rs. 2. 41 billion. Total assets growth of Rs. 14. 14 billion. 20% cash dividend. 30. 22% cost/income Ratio. 9. 27% increase in Net Profit. Return on shareholder’s equity (ROE) of 23. 06%. Non-Performing Loans Ratio at 0. 58%. Technology investment: Implementation of Finacle core banking & E-banking Solution from Infosys. One of the highest growth rates in terms of deposits, lending, profits and market capitalization for the past 8 years running. FY 2008-09 53,010 46,698 36,827 7,399 1,477 901 0. 58 FY 2007-08 38,873 34,452 27,529 6,874 1,149 697 1. 12 Growth in % 36. 37% 35. 55% 33. 78% 7. 64% 28. 55% 29. 27% NPR in millions Growth in nPr 14,137 12,246 9,298 525 328 204 – 10

Nepal Investment Bank Limited Particulars Total Assets Total Deposits Total Loans and Advances Total Investments Total Operating Profit (before provision for possible loss) Total Net Profit Non-Performing Assets (in %) Shareholder information Management Efficiency higlights Ownership Structure General Public Promoters 20% 50% Particulars Return on Assets (ROA) Return on Shareholder’s Equity (ROE) Cost to income ratio* FY 2004-05 1. 44% 19. 67% 35. 66% FY 2005-06 1. 64% 24. 77% 32. 44% FY 2006-07 1. 82% 26. 68% 31. 20% FY 2007-08 1. 79% 25. 93% 30. 33% FY 2008-09 1. 70% 23. 05% 30. 22% 5% 15% valuation highlights Rastriya Banijya Bank Rastriya Beema Sansthan Particulars Earning Per Share (EPS in NPR) Book Value per Share (in NPR) Market Price Per Share (in NPR) P/E Ratio P/B Ratio Effective Dividend Yield FY 2004-05 39. 5 201 800 20. 25 3. 98 1. 56% FY 2005-06 59. 35 240 1260 21. 23 5. 25 4. 40% FY 2006-07 FY 2007-08 62. 57 234 1729 27. 63 7. 39 1. 74% 57. 87 223 2450 42. 34 10. 99 1. 67% FY 2008-09 37. 42 162 1388 37. 09 8. 57 1. 44% Leverage ratio Particulars Debt to Equity Ratio FY 2004-05 12. 89 FY 2005-06 FY 2006-07 14. 35 13. 95 FY 2007-08 13. 67 FY 2008-09 12. 72 Cost to income ratio is calculated as operating cost over operating income FY 03 FY 03 639 FY 04 729 FY 05 FY 06 1,415 1,878 2,687 FY 07 1,180 1. 98% FY 04 2. 47% FY 05 2. 69% FY 06 2. 07% Last 7 years at Glance Annual Report 2008-2009 Non-Performing Assets Shareholder’s Fund Growth (Rs million) FY 08 FY 07 2. 37% FY 08 +18. 65% 1. 12% -0. 54% FY 09 0. 58% FY 09 3,908 FY 03 FY 04 20. 93% 795 FY 03 18. 29% FY 04 FY 05 19. 67% 24. 77% 26. 68% 25. 93% 940 FY 05 FY 06 FY 07 800 Return on Equity FY 06 1,260 Market Price Per Share (in Rs) -2. 88% 2,450 -27. 67% FY 09 23. 05% FY 07 FY 08 1,729 FY 08 FY 09 ,388 FY 03 39. 56 216 FY 03 FY 04 51. 7 247 FY 04 FY 05 39. 50 201 FY 05 FY 06 FY 07 FY 06 59. 35 62. 57 57. 87 -21. 46% Book Value Per Share (in Rs) Earning Per Share ( in Rs) FY 08 162 FY 07 240 234 223 -15. 844% FY 08 FY 09 37. 42 FY 09 11 12 Nepal Investment Bank Limited “We are one of the largest Infrastructure Financiers in the Economy, supporting projects ranging from Steel and Cement to Mining. ” 13 Annual Report 2008-2009 Management review & discussion Economic review 14 14 The global economy is slowly starting to come out from the worst global economic slump since the Second World War.

After shrinking in the first half of the 2009, major economies like United States, Japan, United Kingdom and Germany are expected to register positive growth in the second half of 2009. Likewise, emerging economies like China and India, whose growth was dampened due to the economic crisis, are again expected to register growth in the coming quarters. According to the International Monetary Fund’s (IMF) World Economic Outlook published in October 2009, the world economy is projected to grow at 0. 8% in the 4th quarter of 2009 compared to negative growth of 0. % in the 4th quarter of 2008. Improving equity markets around the world and stable commodity prices also point that the global economic slump has ended. The coordinated efforts of major economies (G-20), massive fiscal stimulus programmes and loose monetary policies have prevented the global economy from spiraling further downwards towards another great depression. However, despite improving economic indicators, the global economy still faces significant problems. Though the recession might have ended in major economies, unemployment in these countries is still rising.

On the one hand, there is a threat that the nascent recovery could stall due to a premature exit from the accommodative fiscal and monetary policy. On the other hand, monetarists are arguing that global economic growth faces danger of high inflation from the dual forces of massive fiscal stimulus and loose monetary policy. A right balance in fiscal and monetary policy is required to give momentum to current growth without fueling inflation. 1 On the domestic front, economic growth in 2007/08 largely due to power crisis, decline in capital expenditure and unfavorable weather conditions.

As a result, after growing at 5. 3% in 2007/08, growth dipped back to 4. 7% in 2008/09 according to the annual Monetary Policy of the Nepal Rastra Bank (NRB). Dissecting the growth figures, our agriculture sector expanded by a tepid 2. 2% while the non-agriculture sector expanded by 4. 8%. The agriculture sector showed tepid performance largely due to unfavorable weather conditions. On the non-agriculture side, the industry sector witnessed a slow growth of 1. 8% while service sector grew at 5. 8%. The financial intermediation sector, which expanded by 13. 8% in 2007/08, grew only at 3. 3% during 2008/09.

Domestic price levels have witnessed a dramatic surge during the past one year. As a result, the Consumer Nepal Investment Bank Limited 2 13. 2% 8% 7. 7% 6. 4% 4. 5% 04-05 05-06 06-07 07-08 08-09 Annual CPI based inflation for last 5 yrs 3 1 5. 3% 4. 7% 142. 7 209. 7 3. 1% 3. 7% 3. 2% 97. 9 65. 5 100. 1 04-05 05-06 06-07 07-08 08-09 04-05 05-06 06-07 07-08 08-09 Annual GDP Growth in last years Annual remittance for last 5 yrs (amount in Rs. Billion) Snapshot of the nepali Economy 4 2008/09 2007/08 35. 66% 32. 446% 31. 20% 30. 33% 30. 22% 04-05 05-06 06-07 07-08 08-09 Cost to income ratio for last 5 years

GDP at Producers Price (Rs Billion) ** GDP Growth Rate % Balance of Payment (BOP) Exchange rate Rs/USD (End-Year) Gross Foreign Exchange Reserves US$ Billion Rate of Inflation % Growth in Money Supply (M2) % 586 4. 7 37. 7 78. 05 3. 59 13. 2 27 560 5. 3 29. 7 68. 5 3. 10 7. 7 25. 2 15 15 Annual Report 2008-2009 Price Index (CPI) based inflation surged to 13. 2% in 2008/09 compared to 7. 7% in 2007/08. The food and beverage price – which surged by 16. 7% during 2008/09 – accounted for the high inflation rate. 2 Total exports went up by 13. 5% in 2008/09. Exports to India increased by 6. % while export to other countries went up by 26. 9% in 2008/09. The depreciation of the Nepali Currency (NPR) vis-a-vis United States Dollar (USD) helped domestic exporters. Total imports increased by a 28. 2% percent during the review period due to substantial increases in imports from other countries. Despite the widening trade deficit, Balance of Payments (BOP) registered a substantial surplus of Rs. 37. 7 billion in 2008/09. The huge surplus in BOP is due to the surge in remittance from overseas workers. Total remittance inflow from overseas workers amounted to Rs. 209. 7 billion in 2008/09 compared to Rs. 42. 68 billion in 2007/08. 3 Due to the significant surplus in the BOP, gross foreign exchange reserves stood at Rs. 280 billion at the end 2008/09 – an increment of 31. 7% compared to last year. In terms of US Dollar, the gross foreign exchange reserves went up by 15. 6% to US$ 3. 59 billion in mid-July 2009. This level of reserves is adequate to finance merchandise imports of 11. 8 months and merchandise and service imports of 9. 7 months. In comparison to mid-July 2007, the NPR depreciated by 12. 24% vis-a-vis USD. The exchange rate of one US dollar stood at Rs. 78. 05 in mid-July 2009.

Broad Money also registered a growth of 27% in 2008/09. A total of 1 new commercial bank, 5 new development banks and 3 new micro finance institutions were established in 2008/09. Moreover, the number of commercial bank branches increased by 194 to 752 during the review period. General Manager’s review The Bank has delivered another year of good performance. Our Net Profit has jumped from Rs. 697 million in FY 2007/08 to Rs. 901 million in FY 2008/09 – an increment of 29% over last year. This jump in net profit can largely be attributed to the hard work of our staff and patronage from our valued customers.

Over the past one year, we have increased our assets base from Rs. 38. 9 billion to Rs. 53 billion, a jump of around 36% during the period. Our total lending has also surged from Rs. 27. 5 billion to Rs. 36. 8 billion making the Bank the No. 1 lender amongst all commercial banks in the country. Our total paid up capital of Rs. 2. 41 billion is also the highest amongst all commercial banks in the country. Moreover, the decrease in the Bank’s Non Performing Loans (NPLs) to 0. 58% 5 2. 69% 2. 37% 2. 07% 1. 12% 0. 58% 04-05 05-06 06-07 07-08 08-09 NPA for last 5 years from 1. 2% during the last year underlines the quality of our asset base. 4 Generally when an organization grows in size, its efficiency starts to drop and cost goes up. However, despite our significant growth over the last few years, we have been able to maintain our service levels and decrease our Non Performing Assets indicating healthy and sound growth. Similarly, our decreasing cost-to-income ratio demonstrates that our income is growing at a higher rate than our cost – indicating improved efficiency. 5 Because of the growing number of commercial banks and financial institutions, the year ahead is a great challenge for us.

Though Nepal’s domestic economy was largely untouched by the global financial crisis, energy crisis, political uncertainty, and high inflation pose a threat to overall business confidence. These uncertainties and crisis have reduced investment opportunities in our country. Amidst this background, the entry of new commercial banks and financial institutions is expected to undermine profit margin in months ahead. The only option left is to grow within an acceptable risk framework. To support increasing business volume, additional capital has been raised from the debt capital markets as well as from retention of profits.

In the review year, the Bank increased the shareholders fund from Rs. 2. 69 billion to Rs. 3. 91 billion and at the same time maintained the shareholder’s return on equity at healthy rate of 23. 06%. 16 16 Nepal Investment Bank Limited In other to aid other financial institutions run their card business, the Bank has started its own National Payment Network (NPN). NPN will facilitate prospective commercial banks, development banks and finance companies for issuing and acquiring domestic cards related products. Furthermore, the Bank is in the final stage of launching Master Card related products.

This will provide wider coverage in availing ATM and POS related services to our customers. Two member financial institutions are already operating under our NPN network and two other members are in the process of doing so. Besides providing online payment of all examination fees, we have been providing Student and Exchange Visitor’s Programme (SEVIS) – a visa fees payment service for students going to the US. remittance In order to tap into the burgeoning remittance market and strengthen its position in workers’ remittance inflows, the Bank joined hands with Remitmaster Sdn.

Bhd. in Malaysia. Disbursement agents were appointed in 45 different locations during the year raising the total number of the Bank’s remittance disbursement locations to 200. During the year, Bank Albilad Saudi Arabia started sending transactions through their online system which has been integrated with our Prithivi Express online system. To further broaden its remittance network, the Bank plans to increase the number of remittance disbursement agents in Nepal to 250 by the end of the current fiscal year.

Our Bank plans to depute two more staff members in Saudi Arabia and three more in Malaysia and increase the number of our representatives in Qatar and the UAE. Performance Overview: retail Bank Our new and innovative deposit products have propelled us to become the largest deposit holder among private sector banks in Nepal. At the end of FY 2008/09, our deposit base stood at Rs. 46. 7 billion compared to Rs. 34. 5 billion at the end of the previous year. Our customer base has also grown to 268,345 at the end of 2008/09 from 165,649 during previous year.

Customer mapping is being done on a regular basis that has helped the Bank to study and identify locations for new branches and installation of new ATMs. Currently, we have 58 ATMs in various locations throughout the country. After opening 11 new branches in the FY 2008/09, our total branch network is at 31. Corporate Banking The total loans and advances at the end of 2008/09 stood at Rs. 36. 83 billion with a growth of 33. 8% during the review year. With our total loan portfolio size, the Bank has become the highest lender in the country. The branch network of the Bank possesses a satisfactory share of the Bank’s lending and growth.

Despite significant increment in our loan size, we have been able to reduce our NPA to 0. 58% from 1. 12%. No. of credit files has increased from 856 to 1,026 at the year end of 2008/2009 compared to the year end of 2007/2008. In order to diversity our loan portfolio and tap into emerging and profitable sectors. We have been focusing on cement, hydropower and infrastructure projects. Card Centre The Bank has issued over 220,000 cards, and continues to be the leader in card issuance in Nepal. As of the end of the review period, there were more than 320,000 card holders in the NIBL network. Trade Finance

Despite the global economic downturn, our trade finance department did substantial business in 2008/09. The total number of import LCs issued in 2008/09 was 1518, amounting to a total LC volume of Rs. 18,857 million – a growth of over 44 percent during the review period. Similarly, the total number of bank guarantees issued in 2008/09 was 2009 compared to 1863 bank guarantees in 2007/08. Furthermore, a total number of 45 counter guarantees amounting to USD 14. 5 million were issued in 2008/09. The Bank earned over Rs. 296. 18 million as interest income from trust receipt loan, export credit and inward bills in 2008/09.

The total commission income from trade finance in the review period was Rs. 80. 3 million. NIBL’s card network is also the largest in the country. Hence, to facilitate card users, the Bank has migrated to a new card process switch system called Electra from OPUS. Human Resources Nepal Investment Bank has built the human resource side over the years and has trained and skilled staff that have been instrumental in driving the Bank forward to what it is today. The Bank will continue to focus on the training needs of its staff to ensure that it is able to develop its skill base to remain ahead of its competitors in service delivery.

The Bank has adopted an effective human resource management strategy that unlocks the potential of employees. As of the end of the FY 2065/066, the Bank’s total staff strength was 766 against 622 in the previous reporting period. Of the total staff, female staff accounted for 327 which is about 43% of the total staff of the Bank. Seventy-one staff members have served the Bank for 10 or more years. In order to enhance the level of skilled manpower in the Bank, the Bank has been organizing appropriate training both at home and abroad.

Considering the paucity of skilled manpower in the Banking industry, training has become an important tool. In the period under review, a total of 307 staff attended 72 different courses both at home & outside. Training / workshops in the areas of credit risk management, information technology, customer service, treasury, marketing, card services and project finance were organized for staff. 17 17 Annual Report 2008-2009 Treasury This year the Bank’s profit from Treasury operations was Rs. 185. 33 million compared to last year’s figure of Rs 165. 84 million, an increase of 11. 5%. The T-bill portfolio of the Bank at the end of 2008/09 was Rs. 2531 million compared to last year’s figure of Rs. 3155 million. The interest earned on this portfolio was Rs 140. 69 Million compared to Rs 99. 99 Million in the last fiscal year. It is indeed noteworthy that we have not been directly affected by the global economic crisis, which was caused by US sub-prime lending. All our investments abroad were safe and protected. The crisis has increased the volatility in the market, providing us with an opportunity to gain advantage through cross currency dealings.

The drastic cut in the Fed funds rate has resulted in a slight decrease of our FCY interest income. The treasury department is fully equipped with state of the art technology for day- to- day dealings. Among other things, the Bank’s treasury department is involved in checking foreign currency position, fund management, forward contract execution and inter-bank placement. Conclusion Despite the stiff competition from 26 commercial banks, the Bank recorded another solid performance during the financial year 2008/09. Nepal Investment Bank Limited consolidated its position as one of the premiere banks in Nepal.

The market share taken by our Bank in deposits and advances are substantial and the Bank is striving to achieve its aim of being the most preferred provider of financial services in Nepal. The Bank now commands 8. 9% and 10. 2% of the market shares in deposits and loans and advances of the country respectively. The Bank is committed to maintaining its current position and is striving hard to progress even further. information Technology To sustain growth in our customer base and branch network, as well as pave the way for future growth and profitability, the Bank has been heavily investing in Information Technology.

In the review year, the Bank migrated from existing Pumori software to a new banking software “Finnacle” – a product of Infosys. To facilitate end users and provide faster and reliable service to customers, the Bank also implemented a centralized Management Information System. Moreover, during the review year the Bank deployed additional ATMs at seven different locations in Putalisadak, Battisputali, Boudha, Chetrapati, Sukuldhoka, Maitidevi and Newroad taking the total number of NIBL’s ATMs to 58. Thank You, Jyoti Prakash Pandey General Manager. Corporate Governance 18 18

Nepal Investment Bank Limited Nepal Investment Bank Limited Board Structure and Members Nepal Investment Bank Ltd (NIBL)’s share structure is divided among four groups. A group of companies holding 50% of the capital, Rastriya Banijya Bank and Rastriya Beema Sansthan holding 15 % each and the remaining 20% is held by the general public. During the last fiscal year, Mr. Rajesh Rajkarnikar, nominee Director from Rastriya Beema Sansthan, vacated the office of Director and in his place, Dr. Shiva Hari Shrestha, Administrator, was nominated as Director on the Board of the Bank by Rastriya Beema Sansthan.

Currently the Bank’s Board of Directors comprises of Mr. Prithivi Bahadur Pande, Mr. Prajanya Rajbhandari, Mr. Deepak Man Sherchan, Mr. Krishna Prasad Sharma, Dr. Shiva Hari Shrestha, Mr. Surendra Bahadur Singh and Mr. Damodar Prasad Sharma Pandey. Among these, Mr. Damodar Prasad Sharma Pandey is an independent board member and Mr. Surendra Bahadur Singh represents the public shareholders. Mr. Prithivi B. Pande is the Chairman of the Bank’s Board. Internal Control Mechanism and various Committees The Bank has an independent Internal Audit and Compliance Department headed by an experienced auditor.

The Department performs its functions under the direct supervision and control of the Audit Committee and submits its reports directly to the latter. To supplement the in-house internal audit department, the Bank has also hired a firm of Chartered Accountants to conduct internal audit functions in the review year. In addition, the Bank has also constituted a ‘Compliance Committee’ comprising of various departmental heads to further strengthen compliance and internal control systems of the Bank.

Besides these committees, the Bank has a number of high level committees, namely Executive Credit Committee, Human Resource Development Committee, Construction Committee and Asset Liability Management Committee, each with a defined scope and terms of reference. These Committees comprise of Board members and senior Management officials. The Bank’s Audit Committee, under the chairmanship of a non-executive director, Mr. Damodar Prasad Sharma Pandey, comprises of Mr. Deepak Man Sherchan and Dr. Shiva Hari Shrestha as Member Directors along with the Bank’s Head of Internal Audit, Mr. Binod Upadhyay, as its Member Secretary.

The Committee reviews the Bank’s financial condition, its internal control and risk management systems, statutory and regulatory compliances, audit programmes etc. After detailed discussion on the findings of the internal audit as well as external audit reports, the Committee initiates necessary corrective action. The Committee periodically apprises the Board of Directors of the issues and the corrective measures initiated. During the year, seven such meetings were held. name of the Committees Members Audit Committee Human Resource Development Committee (HRDC) Executive Credit Committee (ECC) Construction Committee

Damodar Prasad Pandey (Chairman), Deepak Man Sherchan, Shiva Hari Shrestha, Head Internal Audit (Member Secretary) Prithivi Bdr. Pande (Chairman), Krishna Pd. Sharma, Head Human Resource (Member Secretary) Prithivi Bdr. Pande (Chairman), Surendra Bdr. Singh, and Prajanya Rajbhandari Deepak Man Sherchan (Chairman), Prithivi Bdr. Pande, Prajanya Rajbhandari 19 Annual Report 2008-2009 “We have been assisting the aviation industry and introducing innovative solutions such as e-ticketing via our ebanking platform adding value to our clients and customers. ” Risk Management 20 20

Being a financial institution, risk management is an integral part of Nepal Investment Bank Limited (NIBL). With the continuing increase in the scale as well as complexity of the Banking sector and the rapid growth in the volume of financial transactions, risk management has become a core part of business. Moreover the current financial crisis due to financial institutions’ high exposure to risky assets, and the collapse of large financial institutions such as Lehman Brothers, Wachovia and Bear Stearns, due to their inability to manage risky assets has further emphasized the need for prudent and effective risk management.

The management team and board of NIBL manages the overall risk profile, aiming for a balance between risk and returns. Risk management includes risk identification, measurement and assessment, and its objective is to minimize negative effects that risks can have on the financial result and capital of a bank. Risk management strategies include the transfer of risk, avoidance of risk, reduction of the negative effect of the risk and acceptance of the consequences of a particular risk.

The design of our risk management system depends on parameters such as size, capital structure, complexity of functions, technical expertise, and quality of Management Information System (MIS) and is structured to address both banking as well as nonbanking risks to efficiently maximize shareholder value. The risk management system ensures that the Bank takes well-calculated business risks while safeguarding the Bank’s capital, its financial resources and profitability. The Bank’s primary business activity is commercial banking whereby substantial risk comprises of credit risk.

To a lesser extent, commercial banking activities also expose the Bank to market risk arising from repricing, maturity and currency mismatches of assets and liabilities. These mismatches give rise to interest rate risk, liquidity risk and foreign exchange risk. The Board of Directors of NIBL recognizes that a critical factor in the Bank’s continued growth, profitability and stability lies in its effective risk management capabilities and risk- return trade-off. In this respect, the Bank ensures its risk management capabilities and promotes proactive risk management in the Bank. Operational risk Management

Operational risk is the risk of loss resulting from inadequate internal processes, people, and systems, or from external events. Operational risk itself is not a new concept, and banks have been addressing it in their internal controls and corporate governance structures. However, applying an explicit regulatory capital charge against operational risk is a relatively new and evolving idea. Basel II requires banks to hold capital against the risk of unexpected loss that could arise from the failure of operational systems. The most important types of operational risk involve breakdowns in internal controls and corporate governance.

Such breakdowns can lead to financial losses through error, fraud, or failure to perform in a timely manner or cause the interests of the Bank to be compromised in some other way, for example, by its dealers, lending officers or other staff exceeding their authority or conducting business in an unethical or risky manner. Other aspects of operational risk include major failure of information technology systems or events such as major fires or other disasters. The failure to properly manage operational risk can result in a misstatement of an institution’s risk/return profile and expose the institution to significant losses.

Gross income, used in the Basic Indicator Approach is only a proxy for the scale of operational risk exposure of a bank and in some cases can underestimate the need for capital. NIBL has developed a framework for managing operational risk and evaluating the adequacy of capital covering the Bank’s appetite and tolerance for operational risk, as specified through the policies for managing this risk, including the extent and manner in which operational risk is transferred outside the Bank. It also includes policies outlining the Bank’s approach of identifying, assessing, monitoring controlling and mitigating the risk.

Nepal Investment Bank Limited Credit Risk Management Credit risk is the major risk that banks are exposed to during the normal course of lending and credit underwriting. Within Basel II, there are two approaches for credit risk measurement: the standardized approach and the internal ratings based (IRB) approach. Due to various inherent constraints within the Nepali banking system, the standardized approach in its simplified form, Simplified Standardized Approach (SSA), has been prescribed in the initial phase.

Credit risk is the probability that a Bank’s borrower or counter party will fail to meet its payment obligations in accordance with the terms of approval of the credit. This includes non-repayment of capital and/or interest within the agreed time frame, at the agreed rate of interest and in the agreed currency. The goal of credit risk management is to maximize a bank’s risk-adjusted rate of return by maintaining credit risk exposure within acceptable parameters. The effective management of credit risk is a critical component of a comprehensive approach to risk management and is essential to the long-term success of any banking organization.

For most banks, loans are the largest and most obvious source of credit risk; however, other sources of credit risk exist throughout the activities of a bank, including in the banking book and the trading book, and both on and off the balance sheet. Banks increasingly face credit risk in various financial instruments other than loans, including acceptances, interbank transactions, trade financing, foreign exchange transactions, and in the extension of commitments and guarantees and the settlement of transactions.

NIBL has developed methodologies to assess the credit risk involved in exposures to individual borrowers or counterparties as well as at the portfolio level. The credit review assessment of capital adequacy, at a minimum, covers risk rating systems, portfolio analysis/ aggregation, large exposures and risk concentrations. Internal risk ratings are an important tool in monitoring credit risk and supporting the identification and measurement of risk from all credit exposures, and are integrated into our overall analysis of credit risk and capital adequacy.

The ratings system provides detailed ratings for all assets, not only for problem assets. Our various branches are the business units of our bank. Each branch forwards business proposals to the head of credit division, Head Office. The credit division critically analyzes the proposal from different perspectives in line with statutory, regulatory and internal guidelines. Thereafter, if the business proposal is found to be credit worthy, it is placed in the credit committee. The Credit Committee is comprised of seasoned bankers who evaluate credit proposals.

The committee analyzes in depth financial as well as non financial information regarding the borrower such as business history, market situation, future prospects of the market, managerial capabilities, cash flow and then declines or recommends approval of the designated credit authorities. To ensure proper and adequate risk analysis and timely customer service, our credit policy and procedures guide (CPPG) provides various layers in the credit approval process. The CPPG has conferred specific discretion ranging from the General Managers to the Executive Credit Committee, the penultimate credit authority of the Bank. Adoption of international standards via our inhouse Credit Policy and Procedures Guide. • Formation of Credit Quality Control (CQC) unit for monitoring the quality of credit, both at the account level and portfolio level. • Regular review of the credit portfolio by the senior Management with periodic reporting to the Board of Directors. • Separate independent audit and inspection of borrowers by internal auditors in addition to audit and inspection by statutory auditors. • Strict adherence to the guidelines of the Central Bank on Loan Classification, Interest Recognition, Asset

Classification, Single Obligor Limit, Sectoral Exposure etc. • Establishing suitable exposure limits for borrowers and sectors and monitoring the limits on a regular basis. • Risk mitigation steps with a special emphasis on collateral. 21 21 Annual Report 2008-2009 • • • 22 22 • Nepal Investment Bank Limited • • • Setting counterparty limits based on their financial strength. Training of lending and legal officers on documentation and professional valuations. Developing skills and expertise of lending officers to scientifically assess project viability and customer integrity.

Educating the staff on provisions in the Banks and Financial Institution Act and other relevant statues and the regulatory guidelines of the Central Bank. Seeking external legal opinion and advice. Identifying Early Warning Signals (EWS) and taking prompt action thereon. Constant posts sanction monitoring with special independent team for verification of current assets. adequacy of capital using internal models for the measurement of market risk. Important Risk Management measures of the Bank to address Market Risk includes: • A pro-active Asset Liability Management Committee (ALCO) that meets on a weekly basis. Review of ALCO decisions by top Management and Board of Directors. • Conduction of gap analysis, timely re-pricing of products and hedging of exposures. • Risk management via forward contracts, swaps and currency options. • Daily monitoring of Credit to Deposit (CD) ratio. • Maintaining the Liquid Assets Ratio with a contingency buffer. • Constant monitoring of dealer, broker, counterparty, transaction, product and currency exposure limits. • Regular monitoring of competitor behavior and building competitor intelligence. • Maintaining strong relationships with correspondent banks. Enhancing fee based income to reduce dependence on fund based income. • Non-engagement in large scale transactions on a speculative basis. • Separation of front and back offices at the Treasury department. Market Risk Management Market risk is defined as the risk of losses in onbalance sheet and off-balance sheet positions arising from adverse movements in market prices. The major constituents of market risks are: a. The risks pertaining to interest rate related instruments. b. Foreign exchange risk (including gold positions) throughout the Bank. c.

The risks pertaining to investment in equities and commodities. Market risk is also the uncertainty in the future value of the Bank’s on-balance sheet and offbalance sheet financial items resulting from interest rates, foreign currency, equity, and commodity risks. The Asset Liability Management Committee (ALCO) serves as the primary oversight and decision making body that provides strategic directions for the Bank’s management of market risk. The key elements in the market risk management framework are principles and policies, risk limits and risk measures.

The prescribed approach for the computation of capital charge for market risk is very simple and thus may not be directly aligned with the magnitude of risk. Likewise, the approach only incorporates risks arising out of adverse movements in exchange rates while ignoring other forms of risks like interest rate risk and equity risks. NIBL has taken measures to address these various forms of risk and at the same time perform stress tests to evaluate the Foreign Exchange Risk Management Foreign Exchange rate risk arises from exchange rate movements which affect the profit of the Bank from its foreign exchange open positions.

Because of a bank’s exposure to foreign currency, foreign exchange risk management is a fundamental component in market risk management of the Bank. It involves prudent management of foreign currency positions in order to control, within set parameters, the impact of changes in exchange rates on the financial position of the Bank. The frequency and direction of rate changes, the extent of the foreign currency exposure and the ability of counterparties to honor their obligations to the Bank are significant factors in foreign exchange risk management.

This risk is managed by setting pre-determined limits on open foreign positions, the monitoring of the open positions against these limits and the setting and monitoring of our stoploss mechanism. In order to manage the foreign exchange risk and protect the Bank’s financial position, the Bank follows the following procedures: • Establish and implement sound and prudent foreign exchange risk management policies. • Develop and implement appropriate and effective foreign exchange risk management and control procedures.

Liquidity Risk Management Liquidity is crucial to the ongoing viability of any financial institution. The capital positions can have a telling effect on an institution’s ability to obtain liquidity, especially in a crisis. NIBL has adequate systems for measuring, monitoring and controlling liquidity risk. We evaluate the adequacy of capital given their own liquidity profile and the liquidity of the markets in which they operate. We also make use of stress testing to determine their liquidity needs and the adequacy of capital.

The objective of liquidity management is to ensure that the bank has sufficient funds to meet its contractual and regulatory financial obligations at all times. Liquidity risk is the probability of loss arising from a situation where (1) there will not be enough cash and/or cash equivalents to meet the needs of depositors and borrowers, (2) sale of illiquid assets will yield less than their fair value, or (3) illiquid assets will not be sold at the desired time due to a lack of buyers.

Liquidity risk relates to the ability of the Bank to maintain sufficient liquid assets at a reasonable cost to meet its financial obligations as and when they fall due. Liquidity risk arises from situations in which a party interested in trading an asset cannot do it because nobody in the market wants to trade that asset. Liquidity risk becomes particularly important to parties who are about to hold or currently hold an asset, since it affects their ability to trade.

The Bank’s liquidity policy is to ensure that all contractual commitments can be met by readily available sources of funding. In addition, liquid assets are maintained in relation to cash flows to provide further sources of funding in the event of a crisis. The Bank also has excellent access to financial markets to ensure the availability of funds. assessing how the Bank’s changing risk profile affects the need for capital. The Bank’s senior management or board of directors receives on a regular basis reports on the Bank’s risk profile and capital needs.

These reports allow senior management to: • Evaluate the level and trend of material risks and their effect on capital levels; • Evaluate the sensitivity and reasonableness of key assumptions used in the capital assessment measurement system; • Determine that the Bank holds sufficient capital against the various risks and is in compliance with established capital adequacy goals; and • Assess its future capital requirements based on the Bank’s reported risk profile and make necessary adjustments to the Bank’s strategic plan accordingly.

NIBL conducts periodic reviews of its risk management process to ensure its integrity, accuracy, and reasonableness. Key areas that are reviewed include: • Appropriateness of the Bank’s capital assessment process given the nature, scope and complexity of its activities. • Identification of large exposures and risk concentrations. • Accuracy and completeness of data inputs into the Bank’s assessment process. • Reasonableness and validity of scenarios used in the assessment process. • Stress testing and analysis of assumptions and inputs. 3 23 Annual Report 2008-2009 SUPErviSOrY rEviEW: Nepal Rastra Bank regularly reviews the process by which a bank assesses its capital adequacy, risk positions, resulting capital levels and quality of capital held by NIBL. Supervisors also evaluate the degree to which NIBL has in place a sound internal process to assess capital adequacy. The emphasis of the review is on the quality of the Bank’s risk management and controls. The periodic review can involve any or a combination of: • On-site examinations or inspections. • Off-site review. Discussions with bank management. • Review of work done by external auditors (provided it is adequately focused on the necessary capital issues). • Periodic reporting. Monitoring and reporting The Bank has established an adequate system for monitoring and reporting risk exposures and 24 Nepal Investment Bank Limited Board of directors 25 Annual Report 2008-2009 Board of directors 26 26 Nepal Investment Bank Limited Prithivi B Pande Chairman & CED Mr. Pande has over 20 years experience in the field of banking in Nepal with both the public and private sectors.

After obtaining a degree in Chartered Accountancy from India in 1978, he worked at various departments of the departments of the Nepal Rastra Bank (Central Bank of Nepal) till 1990, during which he was seconded to the IMF head-office in Washington for two years. He was appointed in 1990 as the general manager of Rastriya Banijya Bank – the largest commercial bank in Nepal. After financial liberalization started in 1991, Mr. Pande established ‘Himalayan Bank’, the first private sector commercial bank in Nepal and a jointventure with Habib Bank.

He served as a Stakeholder and Executive Director for a period of 10 years propelling it to the top tier of Nepali banks. In 2001 leading a diverse private equity group he took on management responsibilities from the Credit Agricole Group of Nepal Indosuez Bank to manage Nepal Investment Bank which has resulted in the Bank’s phenomenal growth in capital, assets, liabilities and profits. deepak Man Sherchan Director Mr. Deepak Man Sherchan is an architect by profession. He holds a B. Tech Architecture degree from I. I.

T Kharagpur, West Bengal, India and has also received a diploma in real estate development from Harvard Design School, USA. Mr. Sherchan is the Managing Director and Chief Architect of C. B. C. (P) Ltd. He is also actively involved in the field of education and local development. He is the Chairman of Malpi International School, Malpi International College, Tukuche Village Development Committee and is associated with many professional and educational institutions. Prajanya Rajbhandari Director Mr. Prajanya Rajbhandari is an industrialist and holds an engineering degree from Punjab University.

He has held directorships at National Structures, Everest Poultry and Enviroplast. Mr. Rajbhandari has actively served in organizations like Nepal Jaycees, ROTARY and FNCCI in various capacities. 27 27 Annual Report 2008-2009 Mr. Krishna Prasad Sharma Director Mr. Krishna Prasad Sharma, Deputy General Manager of Rastriya Banijya Bank has extensive experience of working in the banking sector for over 24 years. Mr Sharma holds a Master Degree in Management and Social Science and also a BSc in Agriculture Science.

He holds the position of Chairman of NLG Insurance Company and RBB Retirement Fund, and the position of director at National Life Insurance Company. He has also served as a director in the Credit Information Centre, Purbanchal Grameen Bikas Bank, Paschimanchal Grameen Bikas Bank, and Sudur Paschimanchal Grameen Bikas Bank. damodar Prasad Sharma Pandey Director Mr. Damodar Prasad Sharma Pandey has 23 years of experience in various departments within the Nepal Rastra Bank; serving as an Executive Director in the Department of Mint.

Furthermore, he has significant experience working in Bank Supervision, Economic Research, Banking Operations, Finance and in the Credit Information Bureau. Mr. Pandey has a B. A. from the University of Southampton, U. K. and an M. Sc. in mathematical statistics from Lucknow, India. He has also served as the Chairman of Paschimanchal Grameen Bikash Bank, Director at the Deposit Insurance and Credit Guarantee Corporation and a director of the National Productivity and Economic Development Centre. Surendra Bahadur Singh Director Public Shareholders Mr.

Surendra Bahadur Singh has a Diploma in Hotel Management from the Institute of Tourism & Hotel Management, Klessheim, Salzburg, Austria and specialized in Hotel Management from the International School of Tourism, Rome, Italy and completed his MBA degree from Tribhuvan University, Nepal. He started his career at Rastriya Banijya Bank. He has also worked at Malla Travels & Tours and at Nabil Bank. Mr. Singh has 2 decades of work experience in the tourism industry and has served as the General Manager of Himalaya Hotel and the Grand Hotel. dr. Shiva hari Shrestha Director Dr.

Shiva Hari Shrestha is the General Manager of Rastriya Beema Sansthan. He previously worked for over 20 years in various capacities at Nepal Industrial Development Corporation (NIDC). He holds a Ph. D. in Economics and has been involved in various training programs in Nepal Rastra Bank, Management Association of Nepal (MAN) and the World Bank. Dr. Shiva Hari Shrestha has an M. P. A in Public Administration from Tribhuvan University and also an M. A in Economics from Tribhuvan University, Nepal. 28 “We have supported the hotel and Tourism sectors through debt Financing and Corporate Restructuring. ”

Nepal Investment Bank Limited 29 Annual Report 2008-2009 Senior Management Team 30 30 Jyoti P Pandey General Manager After completing his M. B. A in India, Mr. Pandey joined Nepal Indosuez Bank in 1988 and became Head of the International Banking Department. In 1992, he joined Himalayan Bank and worked as the Head of Marketing, Branch Manager and Head of the Credit Department over a period of 9 years. In 2002, Mr. Pandey joined Nepal Investment Bank as its Deputy General Manager and now handles general bank operations comprising of Human Resources, Administration, Client Relations, Retail, Trade Finance and Corporate Banking.

Nepal Investment Bank Limited Mr. Bijendra Suwal Assistant General Manager Mr. Suwal has comprehensive and extensive experience in banking technology software and hardware. After completing his degree in Bachelor of Science, he started his professional career as a programer at Data Systems International (DSI), a pioneer software company in Nepal. Mr. Suwal started his banking career by joining NABIL Bank in 1992 as a programer rising to Department Head in 3 years. He joined Nepal Indosuez Bank in 2000 as IT Manager.

Now, he is working as an Assistant General Manager and heading the Information Technology Department. Rajan Amatya Assistant General Manager Having completed a degree in Management, Mr. Amatya started his career with Nepal Bank Limited, the largest commercial bank in Nepal rising to Assistant Branch Manager over a period of 11 years. He then joined Nepal Indosuez Bank in 1986 and has worked in the Cash Department, International Trade Finance Department. Presently he is the head of Retail Banking. Management Team 31 31 Annual Report 2008-2009 Head-Corporate Banking Anuj Timilsina

Head- Trade Finance deepak K. Shrestha Head – Legal deepak Shrestha Head – Operation rabin Sijapati Head – Branch Co-ordination Cell Shreechandra Bhatta Head-Cards & Remittance Bikash Thapa Head – Accounts and Budgeting Sachin Tibrewal Head – Cash & Transfer Sanjeev Karki Head- Reconciliation Tul Jung Pandey Head- Human Resources Prabir SJB Rana Head- Credit Administration Sammit Bhattarai Head – Research & Development Shivanth Bahadur Pande Head- Internal Audit and Compliance Binod Upadhyaya 32 32 Nepal Investment Bank Limited Branch Manager Birgunj Ratna Kumar Limbu

Branch Manager Pokhara dhiraj Thapa Branch Manager Seepadole Uttam Bdr. K. C. Branch Manager Butwal ajay K. Kafle Branch Manager Janakpur Sajan Shah Branch Manager Biratnagar Bishal Thapa Branch Manager Bhairawaha Gokarna P. duwadi Branch Manager Kalimati Bhaskar n. Joshi Branch Manager New Baneshwor Sujan Ranjit Branch Manager Tulsipur dhiraj Singh Branch Manager Narayangarh Prakash dhungana Branch Manager Banepa Kumar Thapa Branch Manager Nepalgunj Mantri Lal Gupta Branch Manager Thamel Ramraj Upadhyay Branch Manager Birtamod Sanjit Pokhrel Branch Manager Battisputali Bandana Thapa 3 33 Branch Manager Dhangadi Subin Sijapati Branch Manager Gongabu Purshottam Chalise Branch Manager Surkhet Sanket dhungel Branch Manager Jumla Eka Raj Mahat Annual Report 2008-2009 Branch Manager Boudha Shobha Shrestha Branch Manager Hetauda Shekhar Singh Branch Manager Palpa Baburam Kandel Branch Manager Lukla Keshab Mainali Branch Manager Tripureshwore Lok ram Bhattarai Branch Manager Dhumbarahi Radhika Singh Branch Manager Damauli naresh J Pandey Branch Manager Bhotahity Mahesh L. Shrestha Branch Manager Putalisadak Manju Basnet Branch Manager Pulchowk Barun Shrestha

Branch Manager New Road nikita Maskey 34 Nepal Investment Bank Limited “We believe that Energy and Water Resources are the key to rapid economic growth in the future; we are among the leading banks in financing local Power Projects in nepal. ” 35 Annual Report 2008-2009 domestic network 36 Nepal Investment Bank Limited KATH

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