I’ve been analyzing KBL recently. It has a decent number of customer deposits, reserves, profits, and very less borrowings but after merging with NCCB its NPL(non-performing loans) spiked up to 3.97% which eventually decreased its net profit in Q3.
Here’s my theory: if KBL can effectively lower its non-performing loans and focus on growth from now on, it has the potential to generate substantial profits in the future. It’s close to the book value and I think it’s undervalued at its current trading price. I am inclined to think it could be a good buy opportunity.
I would appreciate hearing your thoughts on this matter. Let’s discuss it! 💬
View on r/NepalStock by Thisiskshitiz
Good under valued ta ho.. good for long term… low risk medium gains hola vanchu..
added 500 @163 recently
Buy & hold for long term
Broker 58 sanga ramrai KBL ko stocks accumulate gareko chha. Monthly herda 1 lakh 72 thousand and weekly basis ma herda 72k. Banking ma rally aaunai baki chha… May be a good buy with less risk….
>if KBL can effectively lower its non-performing loans and focus on growth from now on, it has the potential to generate substantial profits in the future. It’s close to the book value and I think it’s undervalued at its current trading price. I am inclined to think it could be a good buy opportunity.
This hypothetical analysis can be applied to literally every commercial bank
Easto jhatre analysis ho vane tw boru NBL nai kine vai halo ni
NPL is major issue in banking industry. Which has hugely reduced dividend capacity. With merger of NCCB, KBL too a negative hit.
many banks are definitely in undervalued zone. The market price is very close to book value.
GBIME PE – 11 , SRBL – 11 , LBL – 12, KBL 18, NIMB – 15 , GBIME, SRBL is undervalue if PE is to be considered.
However, we also have to see regulatory equirement, DEPS, Capital adequacy in bank to determine buy decision.
I don’t expect much dividend from banking sector this FY. however after ashar many will go through restructuring, rescheduling which will drastically reduce NPL. NICA likely to give dividend this year, probably 20-25% or more.