Siddhartha Bank celebrates 22nd anniversary

Siddhartha Bank has become successful in creating a distinct identity in the banking industry. The bank, which was established 22 years ago as the 17th commercial bank, has entered its 23rd year from today. Siddhartha Bank was established in 2002 with a vision to provide top-notch financial services. During this period, Siddharth Bank has succeeded in creating a different identity in the banking industry of Nepal.

This bank has been moving ahead with a strong capital base, prudent management and focusing on sustainable growth. Siddhartha Bank had a paid-up capital of Rs 350 million when it was established. Over the years, the bank has focused on the efficient utilization of its capital to maximize shareholder returns. To strengthen its capital base, the Bank has issued right shares on the following occasions:

1. [Year 5 i.e FY 2063/64]: 20%
2. [Year 6 i.e FY 2064/65]: 20%
3. [Year 9 i.e FY 2067/68]: 50%
4. [Year 14 i.e FY 2073/74]: 25%
5. [Year 15 i.e 2073/74]: 30%
6. [Year 16 i.e 2074/75]: 10%

The current paid-up capital of the bank stands at Rs 14.09 billion including the right issuance and bonus shares distributed in different years. The total net worth of the bank as on date is Rs 28.07 billion after taking into account different reserves such as statutory general reserves, capital redemption reserve, exchange equalization reserve.

Successful in building trust

Commercial banks have been merging rapidly with each other in recent years. The Rastra Bank introduced a merger policy after there was no significant increase in banking access despite the large number of banks. Accordingly, the policy of merger and acquisition was introduced.  The number of commercial banks dropped to 20 after the concept of merger and acquisition were brought. But Siddharth Bank has proved itself as a successful bank even without merger. Despite the wave of bank mergers creating larger institutions with stronger absolute figures, the bank has managed to maintain its 11 th position on a standalone basis, without any mergers.

Though the bank ranks 11th in terms of business, it is the best in other aspects, Chief Executive Officer of the bank Sundar Prasad Kandel said.

“The bank was ranked fifth out of 26 commercial banks in terms of size before the merger. Now, our bank ranks 11 after the merger. The market share of Siddhartha Bank has not decreased even now. The bank has managed to shine in the financial index,” he said.

From excellent financial services to sponsoring NPL

Siddharth Bank is known as an influential and professional bank of Nepal, which has been moving ahead with the slogan of ‘Sambandha Sadhaibharilai’. It is the product of good relationships with bank customers and clients. This bank has adopted digital banking in most of its operations to ensure convenient access to services.

Customers can access the bank’s services from any place in the world using online banking or the Siddharth Bank Smart App. The bank has constantly been improving the technology to enhance services. This bank has become the most trusted commercial bank in Nepal by earning the trust of its customers through these facilities and fast services.

This bank was also the main sponsor of the recently concluded Nepal Premier League (NPL). The bank will be the main sponsor of the NPL organised by the Cricket Association of Nepal for five years from 2024 -2029. Siddhartha Bank has been doing its best to take Nepali cricket to a greater height.

This bank has been working hard to establish itself as the first digital bank of Nepal. Apart from this, the bank has an objective to establish itself as a women-centric bank. This bank has revived the Siddhartha Nari Savings Account with a specific Nari Debit Card. The bank has also introduced ‘Hamro Ghar Karja’ for women. In which, the home loan interest rate has decreased by 0.5 percent.

The bank has launched a Visa Platinum Credit Card. It is a special card issued by Visa. Customers using this card can use the airport lodge free of cost for two times a year. Customers will get up to 40 percent discount at over 450 UNO merchants by using this card.

This card can be used as a priority banking card and the customers using the card will get priority in banking services. The Platinum Credit Card can be used in Nepal, Bhutan and India. Customers, who apply for the card within the first three months, will be provided a free international travel card.

The bank has also been operating the ‘Siddhartha Rewards’ scheme. Under this scheme, customers can get rewards points based on purchases made using bank cards and top-ups made through mobile banking. The received points can be used while taking various services like air tickets, hotels, shops, gift cards, insurance and internet bill payment etc.

Dividend distributed up to 48.75 percent

In the 22 years of its journey, the bank has also distributed bumper dividends.

The Bank has provided dividends in the form of bonus shares and cash payments over the

years, with highlights as follows:

Year FY Cash

Dividend

Bonus

Share

Total

Dividend

Right

Shares

Year 1 FY 2059/60

Year 2 FY 2060/61

Year 3 FY 2061/62

Year 4 FY 2062/63

Year 5 FY 2063/64 0.79% 15.00% 15.79% 20%

Year 6 FY 2064/65 0.79% 15.00% 15.79% 20%

Year 7 FY 2065/66 0.79% 15.00% 15.79%

Year 8 FY 2066/67 12.00% 0.00% 12.00%

Year 9 FY 2067/68 12.79% 3.06% 15.85% 50%

Year 10 FY 2068/69 8.42% 0.00% 8.42%

Year 11 FY 2069/70 10.11% 12.00% 22.11%

Year 12 FY 2070/71 11.16% 12.00% 23.16%

Year 13 FY 2071/72 1.05% 20.00% 21.05%

Year 14 FY 2072/73 0.00% 48.75% 48.75% 25%

Year 15 FY 2073/74 0.00% 14.00% 14.00% 14%

Year 16 FY 2074/75 8.16% 5.00% 13.16% 10%

Year 17 FY 2075/76 15.26% 10.00% 25.26%

Year 18 FY 2076/77 3.00% 12.00% 15.00%

Year 19 FY 2077/78 0.75% 14.25% 15.00%

Year 20 FY 2078/79 0.66% 12.50% 13.16%

Year 21 FY 2079/80 4.21% 0.00% 4.21%

Year 22

FY 2080/81

(Proposed) 4.00% 0.00% 4.00%

Weighted average bonus shares distributed is 9.10% and cash dividend is 4.36%

totaling dividend of 13.46%. This weighted average is calculated on the basis of share

capital outstanding at respective FY.

Total investment till date:

Particulars No. of Shares Amount

Initial Investment in IPO 1,000 100,000

Additional Investment through Right Shares 6,289 628,902

Total Shares through Investment 7,289 728,902

Shares increased through Bonus Shares 15,413 –

Total Shares with Shareholder 22,702 728,902

Cash Dividend – 765,427

Net Investment Value (36,525)

Current Market Price of per Public Share (90 days average) 336

Current Market Valuation of such IPO holder (Rs.) 7,619,142

Additionally, a shareholder investing Rs. 100,000 with 1,000 no. of shares in IPO has

reached its total no. of shares to 22,702 today.

IPO shareholders market valuation has reached Rs. 76 lakhs today if he has invested Rs.

100,000 in IPO.

Notable Achievements:

The Bank has doubled its net worth per share and reached Rs 201.72. This shows that the bank has created a net worth of the same amount of its paid-up capital, a testament to the Bank’s value creation for its investors.

Reasons behind recent dividend decline

The Bank has strategically utilized debentures as a tool for capital enhancement to meet its growing business needs. However, regulatory requirements necessitate setting aside funds in a Debenture Redemption Fund until maturity of such debentures, which temporarily limits dividend distribution capacity of the bank.

Meanwhile, CEO Sundar Prasad Kandel claimed that the dividend capacity of the bank will increase significantly in the coming days.

Plans afoot to issue preference shares

CEO Kandel said that the bank has been preparing to issue preference shares. He informed that the bank will propose to issue preference shares worth Rs 3.50 billion in the general meeting to be held on January 12.

After the issuance of the preference shares, the bank’s capital has to be increased. That is why, the capital will have to be increased from Rs 16 billion to Rs 20 billion.

According to CEO Kandel, the bank aims to put itself in the forefront in digital innovation by using technology like AI. The bank is also planning to invest in promoting renewable energy and green infrastructure.

“The bank is trying to satisfy the customers through engineering and digital interactions. The bank is committed to the prosperity of stakeholders,” he said.