StockEducation

Course six · one week

NRB Key Ratios

Every quarter Nepal Rastra Bank publishes a single sheet that tells you more about a Nepali bank than its annual report will. Almost nobody outside the industry reads it. This is 7 days on that sheet — capital adequacy, liquidity, asset quality, pricing and directed lending — ending with a repeatable ten-minute screen you can run on any bank or finance company.

Worked throughout on the Key Financial Indicators release for Chaitra end 2082 (mid-April 2026), covering all 20 commercial banks and 15 finance companies. Every formula is applied to figures NRB actually published, so you can check any calculation in the course against the source.

Taught by Sandeep Kumar Chaudhary · free · physical and online · one week. He also teaches the bank financial statements course, Nepal Tax 2083/84 and Fundamental Analysis on this site.

About the figures — read this first.

The KFI release carries three disclaimers and this course honours all of them. It is provisional, built from unaudited returns the institutions submit themselves. It is prepared on the regulatory reporting format, so the NFRS figures in a bank’s published accounts will differ. Four of the ratios are monthly averages, not period-end snapshots.

Regulatory minimums and ceilings change by circular. Every such figure in the lessons is written [R] — regulation-dependent, verify against the NRB Unified Directives in force for your period. Institutions are named because NRB names them in a public release; nothing here is a recommendation to buy or sell any security, and the resilience screen in Day 7 contains no valuation and no price.

Start at Day 1 →

7 days · 7 lessons · 1h 12m

Want the full statements behind these ratios? Reading a Nepali Bank’s Financial Statements covers every line of the quarterly report; this course covers the one page the supervisor reads first.

Module 1 · Solvency

  • Day 01

    Part 1 — The KFI Table and How to Read It

    What Nepal Rastra Bank publishes every quarter, the three disclaimers printed on it, and the five families of columns.

  • Day 02

    Part 2 — Core Capital and Total Capital Fund

    What is actually inside Tier 1 and Tier 2, and why the gap between the two columns is the most informative number in the solvency family.

  • Day 03

    Part 3 — CCAR, CAR and Negative Capital

    The two percentages everyone quotes, why the gap between them is the point, and what a negative capital ratio really means.

Module 2 · Liquidity and asset quality

Module 3 · Pricing, mandate and the screen

  • Day 06

    Part 6 — Base Rate and Spread

    What a bank charges, what it keeps, and how to read the shape of a distribution that stops abruptly.

  • Day 07

    Part 7 — Directed Lending and the Full Screen

    The mandate columns, then the whole week assembled into a ten-minute screen across every institution.

Questions people actually ask

What is CCAR and how is it different from CAR?
CCAR is core capital divided by total risk-weighted exposures; CAR is total capital fund divided by the same denominator. Because they share a denominator, the gap between them is exactly the Tier 2 contribution. CCAR is the harder number: core capital can only be raised by earning profit or asking shareholders, while CAR can be topped up with a debenture issue.
What is a good CD ratio for a Nepali bank?
The NRB Key Financial Indicators sheet prints a ceiling of 90 percent, measured as a monthly average with adjustments per the Directives. At Chaitra end 2082 the twenty commercial banks ranged from 53.84 to 84.68 percent against a system figure of 72.89, so none was near the ceiling. Verify the current ceiling against the Unified Directives in force.
What does Net NPL tell you that NPL does not?
NPL is bad loans over total loans. Net NPL subtracts the specific provision already held from the numerator while keeping the same denominator, so it measures how much of the bad book is still exposed. The difference between the two, divided by NPL, is provision coverage — the closest thing the sheet has to a measure of how conservatively the losses have been recognised.
Can a bank have a high capital ratio and still be in trouble?
Yes, and the KFI sheet contains the clearest possible example. At Chaitra end 2082 the two finance companies NRB designated as problematic reported CCAR of 42.96 and 69.25 percent — the highest in their class — alongside NPL of 98.48 and 100.00 percent. A capital ratio is a fraction, and it rises when the risk-weighted denominator collapses just as readily as when capital grows.
What is the difference between base rate and spread?
Base rate is the bank's own cost floor — cost of funds, the cost of statutory reserves, operating cost and a prescribed return component — and a bank may not lend below it. Spread is roughly the difference between the average lending rate and the average deposit rate. Spread is gross margin, not profit: operating costs, provisions and tax all come out of it.
Where can I download the NRB Key Financial Indicators?
Nepal Rastra Bank's Bank Supervision Department publishes it quarterly at nrb.org.np, as separate releases for commercial banks and for finance companies. The figures are provisional, based on unaudited returns submitted by the institutions, and prepared on the regulatory reporting format rather than NFRS.

Source: Nepal Rastra Bank, Bank Supervision Department, Key Financial Indicators of Commercial Banks and of Finance Companies, Chaitra end 2082 (mid-April 2026), provisional. Published by NRB at nrb.org.np; figures are quoted here for teaching with attribution. Day and lesson counts on this page are read from the course itself rather than written by hand, so they cannot drift.