The bank, which started its operation in December 2004 as category ´B´ financial institution, has said its main focus has been and will continue to be on credit risk management, which the chief of the bank referred to as mother of all the risks confronting financial institutions.[break]
“To minimize its impact, we have already resorted to careful lending, portfolio diversification and prudent capital management,” Kumar Lamsal, CEO of Sanima Bank, told an event organized on the day to commemorate its upgradation to a commercial bank.
This is reflected through the bank´s negligible proportion of bad debts, little exposure to real estate sector and high capital adequacy ratio, Lamsal said. “We will continue to focus on these aspects in the days to come as well so as not to let down our clients and shareholders.”
Currently, the banking sector has also realized that unorganized deposit portfolio can also induce harm on banks and financial institutions, as there have been instances of institutions moving to the brink of bankruptcy due to withdrawal of huge amount by institutional depositors.
“Keeping this in regard, the ratio of institutional deposit to retail deposit at our institution hovers at 70:30 level. Moreover, the largest institutional depositor at the bank has parked only Rs 70 million,” Lamsal said.
The bank has so far mobilized deposits of Rs 7.7 billion of which Rs 2 billion belongs to institutional depositors. “This proportion also shows we are not vulnerable to risks that can be created by institutional depositors,” Lamsal said.
Jiba Lamichhane, chairman of the bank, said: “The bank has always pursued prudent management practices as bank´s shareholders and promoters regard themselves as mere custodians of deposits parked by our customers. The board members and our staff are pretty clear about this philosophy.”
Sanima, which is promoted by non-resident Nepalis, currently operates with a network of 21 branches. It has plans to expand its reach to various parts of the country.
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