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Agriculture Development Bank reduces non-performing loans

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News item 8-6-2007

Agricultural Development Bank Ltd (ADBL) has claimed that it will reduce its non-performing loans (NPL) to 23 per cent by the end of this fiscal year from the current level of 25.6 per cent. The reform and restructuring programme at the country’s largest bank in terms of loan portfolio, branch network and paid-up capital is on the right track, claimed Yogeswor Pant, general manager at ADBL. A significant reduction in NPL from 36 per cent in 2002 to the current level as well as manpower by more than 1,200 employees are testament that the reform is satisfactory, he said. In the meantime, the bank’s business also rose by 64 per cent during the same period, while ADBL made an operating profit of Rs 726.4 million during the first nine months of the current fiscal year alone, Pant said. The government had carried out the ADBL’s financial performance review in 2002 with technical assistance of the Asian Development Bank (ADB), which had reported the bank’s NPL at 36 per cent. The bank has been implementing restructuring plans since 2004 for strengthening technical areas including credit management, training, finance and accounting, internal audit and risk management, Manohar Shrestha, director at ADBL said. Since November 2006, ADBL has been implementing the restructuring programme under the ADB-funded Rural Finance Sector Development Cluster Programme-I with an assistance of $65.2 million, including $9.2 million grant. Shrestha informed that the bank’s liquidity is also in a good position, as equity of more than two billion rupees is scheduled to be injected by October 2007 and an additional one billion rupees by the end of this year. Moreover, the Rural Finance Sector Programme Cluster-II of $35 million is in the pipeline for 2010-2011, he said. The bank is in the process of issuing five per cent ordinary shares to its shareholders and then ADBL will undertake the issuance of 30 per cent shares to the public, Shrestha added.

 

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