Budhathoki, a former employee of the ADBL, was among 18 candidates who had filed the application for the post of CEO. He assumed the responsibility of the top-most post of the bank on Sunday itself.[break]
Budhathoki, who entered the bank around 29 years ago, had retired last year under the voluntary retirement scheme announced by the bank.
The state-controlled ADBL, an ´A´ class bank with a capital of Rs 9.47 billion as of mid-July, earned a net profit of Rs 1.6 billion in the last fiscal year. However, its non-performing loan stood at 8.64 percent till the end of last fiscal year - compared with commercial banks´ average of around 2.3 percent. This was largely because of the bank´s exposure to bad debts till 2003, when its non-performing loans had touched 47 percent of the total lending.
But after the bank underwent the Rural Finance Sector Development Program launched by the Asian Development Bank (ADB) in 2004, its financial health has been improving. Under the program, the ADB injected Rs 8.7 billion into the bank as preference shares and extended technical support by upgrading its IT infrastructure and providing IT related training to the staff.
In return, the Manila-based multinational donor had asked ADBL to completely overhaul its governance practices, management structure, business processes and the way it was delivering services.
The effects of these reform measures were reflected last year when its initial public offering was oversubscribed by 150 percent.
Currently, 51 percent of the bank´s stake is held by the government. Of the remaining 49 percent shares, 30 percent was issued to the public last year, another 14.14 percent was distributed among its debtors in 2007, and 5.86 percent of the shares have been allocated for the bank´s staff which are yet to be distributed.
It is now in the process of divesting 30 percent more shares to strategic partners.
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