Kathmandu. When Suman Sharma, who has made an image of celebrity CEO in Nepal’s banking sector, took over the reins of Prabhu Bank, investors thought that the bank’s days would change. Sharma, who had run banks like Machhapuchchhre and Sunrise at a time when the bank’s image was tarnished and the bank’s image was tarnished, was brought in as a troubleshooter. However, after 6 months of taking the helm, the results have been reversed. <\/p>\n
After Sharma’s arrival, instead of taking the path of reform, the bank has dug an even more severe financial gap. This has pushed Prabhu Bank to the weakest point in its history. <\/p>\n
The fiscal year 2082 was released last Friday. The unrefined financial statement of 83 has painted an ugly picture of Prabhu Bank. The bank had posted a net profit of Rs 87.23 crore in the previous fiscal year and now it has a net loss of Rs 24.12 crore. <\/p>\n
The fact that the banks, which were once aggressive in business, are now directly entering the loss tunnel from profits, which has raised serious questions about the vision and working style of the new leadership. It has come as a sad surprise for the banking sector that the bank has accumulated a loss of Rs 6.31 billion instead of progressing under the leadership of an experienced CEO. <\/p>\n
The most frightening scenario is seen in the non-performing loans (NPLs) of banks. It is the height of managerial helplessness that the non-performing loan has more than doubled to 15.55 percent from 7.01 percent in the previous year. In the history of commercial banks, having non-performing loans above 15 percent is like reaching the bank on a ventilator. <\/p>\n
This mountain of non-performing loans has forced the bank to provisioning around Rs 5 billion. This has not only eaten the profit of the bank but has also reduced the earnings per share (EPS) of the investors to negative by Rs 1.02. <\/p>\n
Now the question has arisen \u2013 where is the so-called experienced CEO Sharma? According to a source at the bank, Sharma is now more involved in turning over old files and policing rather than expanding the bank’s business and recovering bad loans. Terrified by the CIB investigation into the outgoing CEO, Sharma is wasting his time on the administrative process and internal strife instead of taking risks. The role of the bank’s bureaucracy has plummeted and the bank’s reputation in the market has plummeted as he has been more of an auditor than a manager. The stagnation of loans and the shrinking of the CD ratio to 67 per cent proves that the bank is not able to do new business and the CEO is only on the defensive of ‘wait and see’. <\/p>\n
The bank’s capital fund ratio has come down to 11.83 percent and primary capital ratio of 8.83 percent. Forget about the dividend received by the investors, the net worth per share of the bank is also falling. 6 months is enough for any competent leadership to show signs of improvement. However, the deteriorating health of the bank during Sharma’s tenure proves that his banking magic has completely failed in Prabhu Bank. If the non-performing loans continue to increase at this pace and the leadership continues to be mute spectators, then the future of Prabhu Bank is sure to be more precarious. <\/p>\n
The main reason for the bank’s lack of improvement is the pile of bad loans left behind by the old management and the overly defensive attitude of the current leadership. The legal crisis over the outgoing leadership and the psychological panic created in the bank after the CIB’s activism have demoralized the bureaucracy. As a result, aggressive efforts to recover loans are almost nil. <\/p>\n
Sharma, the new CEO of the bank, instead of going out into the market and making breakthroughs in business expansion and passive loan management, limited himself to the maze of internal cleaning and technical provisioning. The failure of the leadership to take risks and the wait-and-see strategy of carrying the burden of past mistakes has pushed the bank to the weakest and most challenging point in its history by crossing the 15 percent threshold.<\/p>\n","protected":false},"excerpt":{"rendered":"
Kathmandu. When Suman Sharma, who has made an image of celebrity CEO in Nepal’s banking sector, took over the reins of Prabhu Bank, investors thought that the bank’s days would change. Sharma, who had run banks like Machhapuchchhre and Sunrise at a time when the bank’s image was tarnished and the bank’s image was tarnished, […]<\/p>\n","protected":false},"author":16,"featured_media":311582,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[45117,45031,45159],"tags":[],"class_list":["post-311591","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-bank-finance-en","category-banner-news-en","category-news-en"],"acf":[],"_links":{"self":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/311591","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/users\/16"}],"replies":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/comments?post=311591"}],"version-history":[{"count":1,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/311591\/revisions"}],"predecessor-version":[{"id":311592,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/posts\/311591\/revisions\/311592"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media\/311582"}],"wp:attachment":[{"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/media?parent=311591"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/categories?post=311591"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/insurancekhabar.com\/ikbrapi\/wp\/v2\/tags?post=311591"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}