Anuj Mani Timilsina has been acting as Chief Executive Officer (CEO) of Century Bank for the last few months. Prior to joining this commercial bank, he was affiliated with Nepal Investment Bank. Timilsina has, indeed, a proven track record in terms of his professional career. The Weekly Mirror talked to him about the bank’s current financial situation, its plans and new developments in the banking sector.
Tell us about the latest financial performance of the Century.
The bank has a total deposit of Rs 22.12 billion and it has lent a total of Rs 18.98 billion. During the first quarter, the bank earned net profit of Rs 35.56 million.
Many banks are now found to be heading toward merger and acquisition to increase the capital base. What’s the plan of your bank in this regard?
We have been talking with some financial institutions outside the Kathmandu valley for possible merger. The bank will reach to conclusion on the matter as soon as possible. We have also formed a merger committee to initiate merger process. We are open to merger with development banks and financial institutions having good capital base.
Why the merger has been so much important?
The Nepali finance market is overcrowded with banks and financial institutions (BFIs). The number of them is so excessive that it is not in proportion to as small economy as Nepal. In this light, merger is important not only to streamline the banking sector but also to positively support the country’s financial system. Moreover, merger helps the BFIs increase their capital base and make investment at bigger scale for good earnings.
The Century floated its shares for public recently. When will the bank start providing dividends to them?
Following the initial public offering (IPO), our paid up capital has reached Rs 2 billion. We also have Rs 270 million in reserve. We will go on improving our financial status and the shareholders will also get dividends.
The banks are required to increase their lending to the agriculture and hydropower sector to 12 percent by the end of the current fiscal. How serious is your bank in this regard?
We have already approved loans worth Rs 2 billion for hydropower sector while Rs 1 billion has already been released. The bank has also augmented the flow of credits to the tourism sector, particularly hotels. We also have plans to expand lending to the agriculture sector as well. Specifically speaking, the Century will give credits to the farmers involved in producing raw materials related to food, cooking oil and pulse mills.
Banks usually invest in the hydel projects by forming a consortium. Has there been any such investment via the consortium led by Century?
We have not so far led any consortium of banks for any kind of lending in hydropower. But, we are going to lead a consortium of about half a dozen banks for funnelling funds into a manufacturing industry. Once this agro-based project comes into operation, it will contribute to create massive job opportunities the country.
The banks have been opening their branches outside Nepal. Is there any plan from Century towards that direction?
Our main philosophy is about performing well in the Nepali market itself at first. Despite not having its presence abroad, the Century is one of the banks bringing higher volume of remittances in the country. We will go for opening liaison office abroad too in near future.
Recently, the Nepal Rastra Bank (NRB) issued a directive on remittance transactions which invited ire from many bankers, particularly for its provision that payment of remittance be made only through bank account. What’s your view vis-a-vis this directive?
The money sent by Nepali migrant works should reach their families through a secured way. Illegal way of bringing remittance like through Hundi should be immediately stopped. Banks are obviously more secure and safe medium to bring remittance and they should not be discouraged from the businesses.
In the investment portfolio of the Century, what space does the real estate sector occupy?
The Century does not have big exposure to the realty. The central bank’s policy of curbing excessive lending to the sector a few years back prevented many banks from facing disaster. The NRB has told us to invest up to 60 percent of fair market value of the real estate.
I think the banks should not shy away from providing personal credit to individuals looking to construct a house or buy a piece of land. While giving loans for big real estate projects, the banks should study thoroughly about the viability of the project and the market situation.
Lately, the incidents of committing fraudulence through bank cards have increased. What are the measures the Century has taken to reduce such threats?
We are adopting chip based technology by replacing the magnate-based security system. This will definitely help to reduce the threat of illicit use of bank cards.