Investment Opportunity in “10.30% Standard Chartered Bank Nepal Limited Debenture”
Standard Chartered Bank is offering 24,00,000 units of a bond called “10.30% Standard Chartered Bank Nepal Limited Debenture” to both public and institutional investors from Magh 26th, 2079. This bond has a coupon rate of 10.3% and a five-year term, with a face value of NRs. 1,000. This means that investors are entitled to receive an annual interest payment of NRs. 103.
Of the 20 lakh units, 14.4 lakh will be allocated for private placement, while the remaining 9.6 lakh will be available for public issuance. 48,000 of the public issuance bonds will also be allocated to mutual funds. Applications for the bond can be submitted from Magh 26th to Falgun 1st, 2079, with the possibility of an extension to Falgun 11th, 2079 if the issue is not fully subscribed within the initial four-day window. Investors can apply for a minimum of 25 shares, up to a maximum of 100,000 units.
NIBL ACE Capital Ltd. is responsible for managing the allocation process for the bond. The main objective of the bond is to raise funds for investment in the company’s business and for maintaining liquidity.
Issue Summary
| Name | “10.30% Standard Chartered Bank Nepal Limited Debenture |
| Issue Manager | NIBL ACE Capital Limited |
| Face Value | NRs 1000 |
| Minimum Application | 25 |
| Maximum Application | 100000 |
| Issue open date | Magh 26, 2079 |
| Issue close date | Falgun 1, 2079 |
| Coupon Rate | 10.3% |
| Tax on Coupon Rate | 5% on Individual Investment 15% on Company Investment |
| Convertible to Ordinary Stocks | No |
| ICRA Rating | [ICRANP-IR] AAA (triple A) |
About the Bank
Standard Chartered Bank Nepal Limited is the second foreign joint venture in the Nepalese financial sector, established in January 1987 as Nepal Grindlays Bank Limited before being renamed in July 2001 following the acquisition of its parent, ANZ Grindlays Bank, by Standard Chartered Bank. As a subsidiary of one of the largest international banking brands with a global presence, SCBNL is owned 70.21% by Standard Chartered PLC in the UK, with the rest of the shares held by the general public. The bank benefits from a TSA with SCB-UK, which provides management support through an expatriate CEO and additional management support. SCBNL’s shares are listed on the Nepal Stock Exchange and its registered and corporate office is located in New Baneshwor, Kathmandu.
Key Strengths of SCB
- Experienced and expert management team and bank has foreign Investment
- Loans are only provided after analyzing the risks and rewards.
- Providing financial services via a computerized system from the inception of the bank.
- One of the fastest-growing banks in Nepal.
Financial Summary
SCB has been pioneer in Nepali Banks. It’s past, current and predicted financial status are listed in below tables.
Past and Current
| Details | 2076/77 | 2077/78 | 2078/79 | 2079/80 |
| Net Worth | 188.51 | 189.24 | 192.32 | 195.73 |
| EPS | 24.81 | 14.83 | 23.92 | 37.19 |
| Retained Earnings in (‘000) | 1515920 | 1776752 | 2197903 | 2394735 |
Predicted
| Details | 2079/80 | 2080/81 | 2081/82 |
| Net Worth | 202.77 | 217.89 | 234.52 |
| EPS | 27.02 | 30.56 | 34.76 |
| Retained Earnings in (‘000) | 2039636 | 2259846 | 2522971 |
ICRA Rating
ICRA Nepal has confirmed the issuer rating of [ICRANP-IR] AAA (triple A) for Standard Chartered Bank Nepal Limited (SCBNL). This rating indicates the highest level of safety in terms of timely payment of financial obligations and represents the lowest credit risk among issuers. It’s important to note that the issuer rating is a general assessment of the entity’s creditworthiness and does not apply to any specific debt instrument.
Key Rating Strengths
- Strong promoter group and experienced board/management; proven track record
- Robust asset quality
- Superior deposits profile with highest low-cost deposits, resulting in lowest cost of funds
- Strong capitalization profile
- Adequate profitability
Key Rating Weaknesses
- Increased pace of credit growth
- High credit concentration
Form Collection and Submission
Forms can be collected via NIBL Ace Capital, All branches of SCB and SEBON. And it can be submitted to any financial institution recognized by SEBON. The application can also be submitted online via the Mero-Share Application as well.
