Sanima Bank Limited (NEPSE: SANIMA) — Company Deep Dive

The Setup

Sanima Bank Limited (NEPSE: SANIMA) closed FY2082/83 (fiscal year ended mid-July 2026) with audited net profit of NPR 3,550 million, up 38.0% year-on-year, and basic EPS of NPR 25.75 — and, notably, the audited figure matched the bank's own unaudited fourth-quarter print to the rupee (Source: SANIMA Annual Report FY2082/83, Note 5.11, unaudited-vs-audited comparative — Primary). That zero-variance confirmation is unusual in Nepal's banking sector; other large Nepali banks have seen audited profit figures cut by double digits versus their provisional prints in recent years.

At NPR 368.0 (NEPSE close, September 24, 2026), Sanima trades at approximately 14.3× trailing earnings (FY2082/83 audited EPS of NPR 25.75) and approximately 1.95× book value (FY2082/83 NAVPS of NPR 188.42). The headline credit-quality metric improved: gross non-performing loans (NPL) fell from 3.01% to 2.87% year-on-year. But the audited annual report's detailed loan-classification and IFRS 9 disclosures — not visible in the headline summary tables most investors see — show a simultaneous and much larger deterioration in the pipeline of loans just behind the non-performing line. This profile works through both halves of that story.

Business Overview

Sanima Bank Limited is a Class A commercial bank licensed by Nepal Rastra Bank (NRB), headquartered in Kathmandu, operating 106 branches and employing 1,204 permanent staff at FY2082/83 year-end (Source: SANIMA Annual Report FY2082/83, Principal Indicators — Primary). The bank commenced operations in 2004 as a national-level development bank and was upgraded to commercial-bank status in February 2012.

Sanima was promoted by a group of Non-Resident Nepali businesspeople; the bank's own filings state in every annual report that "the Bank does not have an identifiable parent of its own" (Source: SANIMA Annual Report FY2082/83, Note 5.7.1 — Primary). Ownership is split 51.0% promoter / 49.0% public, by share count, unchanged for three years. The bank operates two wholly owned subsidiaries, Sanima Capital Limited (merchant banking and asset management) and Sanima Securities Limited (stock brokerage), with combined paid-up capital of NPR 450 million.

The economic engine, in plain terms: Sanima gathers deposits — as of FY2082/83, 60.9% of them in current and savings accounts paying little or no interest — and lends at a base rate of 4.91%, earning a regulator-disclosed weighted-average spread of 3.39%. Four business segments contributed to FY2082/83 profit: Banking (NPR 2,194 million, +39.8%), Treasury (NPR 1,060 million, +30.2%), Digital Banking (NPR 279 million, +63.3%), and Remittance (NPR 17 million) (Source: SANIMA Annual Report FY2082/83, segment note — Primary). Revenue is concentrated: 78.1% comes from Bagmati Province (the FY2081/82 figure, the most recent year this split was disclosed). Notably, Sanima has completed zero mergers or acquisitions in the six fiscal years for which data is available on record — a point of differentiation from several larger Nepali banks built substantially through consolidation.

Financial Performance

All figures Bank standalone, NPR millions, unless noted.

Source: SANIMA Annual Reports FY2077/78–FY2082/83 — Primary, audited.

The audited FY2082/83 CAR is 12.83%, not the 13.10% shown in the earlier unaudited fourth-quarter print — a 27-basis-point difference. Audited net NPL is 0.98% (versus 1.02% unaudited), and audited cost of funds on a full-year basis is 3.85% (Source: SANIMA Annual Report FY2082/83, Principal Indicators — Primary). Interest income has fallen for three consecutive years (from a peak of NPR 21,607 million in FY2079/80 to NPR 16,604 million in FY2082/83, a 23.2% decline), even as net interest income rose to an all-time high — the bank earned more on a shrinking revenue line because its funding costs fell faster than its loan yields did, particularly in the most recent year.

Quarterly Snapshot — FY2082/83

All figures Bank standalone, NPR millions (Source: SANIMA Q1–Q4 FY2082/83 Quarterly Reports and FY2082/83 Annual Report — Primary).

Full-year credit cost was 57.9 basis points of average loans (down from 112 basis points in FY2081/82). The audited annual report clarifies a dynamic the quarterly filings alone did not show: the full-year impairment charge of NPR 1,077.8 million was within approximately NPR 7 million of the full-year increase required under NRB's own prescriptive provisioning schedule (NPR 7,876.1 million at FY2082/83 year-end versus NPR 6,805.4 million the prior year) — meaning the fourth-quarter provision reversal reported in the unaudited print was intra-year phasing against earlier over-accrual, not a release manufacturing extra profit (Source: SANIMA Annual Report FY2082/83, NFRS 9/NRB provisioning comparative — Primary).

Market Position & Competitive Landscape

A major funding-mix shift occurred in FY2082/83 that is not visible in the bank's standard summary tables. Per the audited deposit note, individual term deposits fell 41.0% (from NPR 67,743 million to NPR 39,946 million, a decline of roughly NPR 27.8 billion) while individual savings deposits rose 54.4% (from NPR 81,733 million to NPR 126,227 million, an increase of roughly NPR 44.5 billion), and institutional current deposits rose 80.0% (Source: SANIMA Annual Report FY2082/83, Note 4.20 — Primary). As a result, the bank's CASA (current and savings account) ratio rose from 43.1% to 60.9% in a single year — the highest among the large Nepali commercial banks for which comparable figures are available (Nabil Bank 44.35%, NMB Bank 45.37%, both for FY2081/82). This shift is the principal driver behind cost of funds falling from 5.14% to 3.85% and the base rate falling from 6.12% to 4.91% over the same period.

Peer comparison (each figure from the respective company's own latest disclosed period):

Source: each company's audited annual report or most recent quarterly filing — Primary. A structural reason underlies Sanima's favorable headline comparison: Nabil Bank, NMB Bank, and Global IME Bank have all grown substantially through mergers, which can import a legacy loan book's credit problems; Sanima has completed no mergers in the period reviewed, so its regulatory NPL ratio reflects only loans it originated itself.

The comparison narrows considerably on an IFRS 9 basis. Sanima's regulatory gross NPL of 2.87% compares with an IFRS 9 Stage 3 (credit-impaired) gross carrying amount of approximately NPR 13,002 million, or 6.09% of the NPR 213,665 million customer-loan carrying amount — roughly 2.1 times the regulatory NPL figure — with Stage 3 ECL coverage of only 22.75%, compared with regulatory provision coverage of 132.86% against the narrower 2.87% NPL figure (Source: SANIMA Annual Report FY2082/83, NFRS 9 disclosures — Primary). Peer banks' comparable IFRS 9 Stage 3 disclosures were not available for this profile, so this gap cannot currently be benchmarked against the sector, but it indicates that Sanima's economic asset-quality picture, measured on an accounting-standard basis, is materially weaker than its regulatory NPL ratio alone suggests.

The loan-quality pipeline deteriorated even as the headline NPL ratio improved. Watchlist loans (performing loans showing early signs of stress) rose 60.0% to NPR 13,917 million, or 6.74% of gross loans, up from 4.68% a year earlier; loss-category loans rose 34.8%; and restructured/rescheduled loans classified as non-performing rose nearly eightfold, to NPR 487,972 thousand (Source: SANIMA Annual Report FY2082/83, Note 5.12, loan classification — Primary). Combined watchlist-plus-NPL exposure rose to 9.61% of loans, from 7.69% the prior year.

Regulatory & Macro Context

Under Nepal's NFRS 9 Expected Credit Loss framework, a bank must provision the higher of its own ECL model calculation or NRB's prescriptive provisioning schedule (Pass 1%, Watchlist 5%, Substandard 25%, Doubtful 50%, Loss 100%). Sanima's own ECL model calculated NPR 5,256 million; the NRB schedule required NPR 7,876 million, and the bank carries the higher figure (Source: SANIMA Annual Report FY2082/83, NFRS 9/NRB provisioning comparative — Primary). This means management has limited discretion over the provisioning line as long as the regulatory figure binds, which it has in both years for which this comparison is disclosed — and it also means the resulting NPR 2,620 million cushion (NRB-required provision above the bank's own ECL estimate, up 49.6% year-on-year) is a real, regulator-enforced buffer that management cannot release to flatter reported earnings.

Capital is the more binding regulatory constraint for this bank. NRB requires a minimum total capital adequacy ratio of 11% (including a 2.5% conservation buffer) and a minimum Common Equity Tier 1 (CET1) ratio of 8.5%. Sanima's total capital fund has fallen every year since FY2079/80 — from 14.42% to 12.83% — leaving approximately 183 basis points of headroom, while CET1 stood at 9.32%, approximately 82 basis points above the floor (Source: SANIMA Annual Report FY2082/83, Principal Indicators — Primary). A NPR 2 billion issuance of 8.25% perpetual non-cumulative preference shares during FY2082/83 counts as Additional Tier 1 capital, not CET1, so it did not address the binding constraint; risk-weighted assets grew 17.3% against loan growth of 11.0% over the same period, indicating rising risk density in the book. NRB's Circular No. 3 for 2083/84 (issued September 24, 2026) confirmed the countercyclical capital buffer at 0% for the coming fiscal year — a modest reprieve given the thin CET1 cushion.

Governance & Capital Allocation

Board and management. Chairman Tuk Prasad Paudel has held the role continuously since FY2078/79. CEO Nischal Raj Pandey has served since February 2022, an internal promotion from Deputy CEO, having previously served as the bank's Chief Risk Officer and Chief Lending Officer — meaning the executive who oversaw credit risk while gross NPL rose from 0.33% to 3.01% between FY2078/79 and FY2081/82 is the same executive now reporting the subsequent improvement (Source: SANIMA Annual Report, Directors' Report; ShareSansar, December 2021 — Primary/Secondary).

The one adverse regulatory finding on record. Nepal Rastra Bank issued a formal caution to Sanima Bank (enforcement notice published February 8, 2023) for providing additional facilities to the bank's then-CEO contrary to Section 29(7) of BAFIA 2073 (Source: Annapurna Express, 2023 — Secondary). It was a caution rather than a monetary penalty, concerned a CEO who has since left the bank, and no subsequent NRB enforcement action against Sanima has been identified in the sources reviewed for this profile.

Related-party transactions run toward the bank, not away from it. Across six years of disclosed data, Sanima's subsidiaries pay the bank modest service fees and the bank pays small amounts back; loans to key management personnel and their close family fell 9.3% in a year the overall loan book grew 11.0%; key management compensation grew 12.0% against profit growth of 38.0%; and directors' sitting fees actually fell year-on-year (Source: SANIMA Annual Report FY2082/83, Note 5.7 — Primary). No related-party transaction of any size with a promoter-affiliated entity outside the bank's own subsidiaries has been disclosed in any of the six years reviewed.

One capital-allocation item worth noting: the bank sponsors four of its own mutual funds with balance-sheet capital, totaling roughly NPR 620 million or more in seed investment across the Sanima Large Cap, Growth, Flexi, and Equity Fund 2 vehicles (Source: SANIMA Annual Report FY2082/83, Note 5.7.9 — Primary). This builds fee-generating assets under management for the bank's subsidiary but also converts bank equity into direct NEPSE market exposure.

Dividend record. Sanima paid cash dividends (as a percentage of paid-up ordinary capital) of 0.89% (FY2077/78), 0.98% (FY2078/79), 5.70% (FY2079/80), 5.26% (FY2080/81), 7.37% (FY2081/82), and 10.0% (FY2082/83) — all-cash for three consecutive years, with the bonus-share practice discontinued after FY2080/81, leaving the ordinary share count flat at 135,815,254 for three years (Source: SANIMA Annual Reports — Primary). Over the five years FY2078/79–FY2082/83, cumulative net profit was approximately NPR 13,219 million against cumulative cash dividends paid of approximately NPR 2,624 million, implying approximately NPR 10,595 million retained; ordinary book value (equity net of the preference-share layer) rose by approximately NPR 8,679 million over the same period — meaning roughly NPR 0.82 of ordinary book value was created per rupee retained, on a strict book-value basis.

What Is Not Disclosed

1. The text of the independent auditor's opinion has not been readable in any of the six years of annual reports reviewed, including FY2082/83 — the opinion pages are embedded as scanned images in every filing, and searches for standard opinion-related terms return no matches. An unqualified opinion cannot be independently confirmed, though no qualification has been identified either.
2. Peer banks' IFRS 9 Stage 3 loan classifications are not available for this profile, so Sanima's 6.09% Stage 3 ratio cannot currently be benchmarked against comparable disclosures at other Nepali commercial banks.
3. Sector-wise loan concentration (including any hydropower lending) is not disclosed in the annual report sections reviewed. Given that Sanima's promoter group also founded a hydropower development company, and given repeated references to a "hydro and deprived sector" lending priority in chairman's statements over several years, the absence of a sector-wise loan breakdown is a notable information gap.
4. Market share within Nepal's commercial banking sector is not disclosed in any filing reviewed.
5. Whether two further tranches of preference-share capital (reported in a prior rating agency release) are confirmed and scheduled could not be verified in the audited annual report text extracted for this profile.

Analytical Perspectives

The case for the franchise. Sanima's FY2082/83 audited profit matched its unaudited interim print exactly — a notably clean outcome relative to Nepali banking-sector norms, where provisional-to-audited profit cuts of 10% or more have occurred at other large banks. The bank's CASA ratio reached 60.9%, the highest among comparable disclosed Nepali commercial banks, driving a meaningful reduction in funding costs. Operating leverage improved: total operating income grew 13.1% against operating expenses growing 11.2%, achieved on a shrinking headcount and a branch network frozen at 106 locations for two years. The bank has completed no mergers in six years, carries no undisclosed restatements in its balance sheet or cash flow statements over five years, and its related-party transaction record shows no promoter extraction.

The case for caution. The regulatory NPL ratio of 2.87% understates the bank's own IFRS 9 view of credit impairment, which stands at 6.09% of the loan book with materially lower provision coverage (22.75% versus the 132.86% headline coverage figure most investors would see). Watchlist loans — performing loans showing early stress signs — grew 60.0% in a single year. Capital adequacy has declined for four consecutive years, with the Common Equity Tier 1 ratio sitting only 82 basis points above the regulatory minimum; the capital raised in FY2082/83 was Additional Tier 1 capital and did not address this binding constraint. The CASA improvement that drove this year's funding-cost decline coincided with historically low deposit rates across Nepal's banking system; whether the shift from term deposits to savings accounts persists if deposit rates normalize upward is, by its nature, untested over a full rate cycle, since it represents only one year of data.

Valuation Context

At the NEPSE closing price of NPR 368.0 (reference date September 24, 2026) and 135,815,254 ordinary shares outstanding, Sanima's market capitalization was approximately NPR 49.98 billion. Trailing P/E on the audited FY2082/83 EPS of NPR 25.75 was approximately 14.3×; price-to-book was approximately 1.95× on the FY2082/83 NAVPS of NPR 188.42.

Reverse-engineering the market price against the bank's delivered return on equity, using standard price-to-book, return-on-equity, and growth relationships, implies a sustainable return on equity in a range depending on the discount-rate assumption used — from approximately 11.6% (under a discount rate close to what the broader Nepali equity market currently implies) to approximately 20.2% (under a higher, more conservative through-cycle discount rate), against Sanima's delivered FY2082/83 return on equity of 14.39% and a best-ever historical return on equity of 16.71%. Because the implied sustainable return on equity varies so widely depending on the discount rate assumed, and because Sanima's own IFRS 9 disclosures suggest meaningfully higher credit impairment than its regulatory NPL ratio shows, readers should treat any single-point valuation of Sanima as highly sensitive to both the cost-of-equity assumption used and the assumption made about how the watchlist loan pool resolves.

What We're Watching

1. Whether the watchlist loan pool (6.74% of gross loans, up from 4.68%) converts into non-performing loans over the coming fiscal year, or proves to be a one-year reclassification wave. This is the single most consequential asset-quality signal for Sanima, since it sits well ahead of the regulatory NPL ratio in the credit-deterioration sequence.
2. Whether the CASA ratio (60.9%) holds through a period of rising deposit rates, if Nepal's current low-rate environment normalizes. A meaningful reversion of the term-to-savings deposit migration that drove this year's funding-cost improvement would remove the primary driver of FY2082/83's earnings recovery.
3. The trajectory of the Common Equity Tier 1 ratio (9.32%, 82 basis points above the regulatory floor). Given this thin cushion, any combination of loan growth and watchlist-pool conversion into non-performing status would test whether the bank can avoid a dilutive capital raise or a reduction in its dividend payout.

References

1. Sanima Bank Limited, Annual Report FY2082/83 (22nd Annual Report) — audited financial statements, accessible via SEBON/company website. Primary.
2. Sanima Bank Limited, Annual Reports FY2077/78 through FY2081/82 — audited financial statements, accessible via SEBON/company website. Primary.
3. Sanima Bank Limited, Q1–Q4 FY2082/83 Quarterly Reports (unaudited, company-filed) — accessible via SEBON/company website. Primary.
4. Nabil Bank Limited, NMB Bank Limited, and Global IME Bank Limited — audited annual reports and quarterly filings, used for peer comparison, accessible via SEBON/company website. Primary.
5. Nepal Rastra Bank, Circular No. 3, 2083/84 (countercyclical capital buffer; minimum holding period for listed securities), September 24, 2026. Primary. nrb.org.np.
6. CARE Ratings Nepal Limited, Issuer Rating Press Release for Sanima Bank Limited, March 11, 2026. Secondary.
7. ShareSansar, "ICRA Nepal Withdraws Sanima Bank Rating Amid Negative Watch," March 22, 2026. Secondary.
8. ShareSansar, "Sanima Bank Appoints Mr. Nischal Raj Pandey as New CEO," December 21, 2021. Secondary.
9. The Annapurna Express, "NRB slaps fines on four banks for non-compliance with AML rules," February 2023. Secondary.
10. NEPSE market data — Sanima Bank share price and 52-week range, accessed September 2026. Secondary.

Last updated: September 27, 2026.