Nabil Bank Limited SWOT and PESTLE Analysis

Strength

1. Robust financial positions and capital ratios: The COVID-19 pandemic was a situation of volatility and uncertainty. The socio-politico-economic scenario changed rapidly with the development of the pandemic. Banks witnessed increased demand for lending. However, Nabil Bank continued to showcase industry leading performance even during the troubling times. In FY20, Nabil Bank earned a net profit of NPR 3.6 billion. Deposits and loans grew by 17.44% and 15.49% respectively as compared to FY19. Nabil Bank also proposed a high stock dividend of 35.26% including 1.76% cash dividend. This made Nabil Bank the highest dividend paying commercial bank of Nepal. Regulatory requirements put down a Capital Adequacy Ratio of 11% for banks and financial institutions. Nabil Bank maintained a CAR of 13.07% which is well above the regulatory requirement. Owing to reduced imports and higher exports, deposits of BFI (Banks and Financial Institutions) grew by 21.18% in FY20.

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Weakness

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Opportunity

1. Extending credit facilities to weaker sections of society: The Government of Nepal laid down the objective of opening bank accounts for all citizens. Banks and other financial institutions are tasked with the execution of this plan. Nabil Bank introduced a program called “Nabil Sahuliyat Khata” which is a special banking scheme to help provide financial access to the weaker and unbanked population of the country. They also have a “Nari Bachat” scheme which is exclusively for women and has no requirement for a minimum account balance. This is a good step towards promoting financial independence among women. This is a good opportunity for Nabil Bank to start a lending program exclusively for women entrepreneurs in villages who wish to attain financial independence but often lack the means to start the business.

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Threat

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Political

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Economic

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Social

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Technological

1. Blockchain technology will help banks easily detect frauds: A blockchain is used to record transactions made with cryptocurrencies but now it has evolved even further and has many applications, especially in the banking sector. Blockchains are used to manage and store data across a network of computers connected on that blockchain. This means that it is almost impossible for hackers to access the data and make changes or steal information. The security aspect of blockchain networks is what makes them so attractive to financial institutions who often deal with sensitive financial data and are very prone to cyber-attacks. Many banks pay a lot of money each year to safely store their financial data using third-party systems but blockchain technology is a cheap alternative because it enables banks to store their data efficiently and with maximum security, ensuring that no data is manipulated or modified, and it also doesn’t require third-party involvement. Moreover, implementing blockchain technology also leads to higher transaction speeds.

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Legal

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Environmental

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