As per the financial tool, Lets see which are the best and worst bank in the market

Beta Calculation

Beta is a tool that analyzes ups and down and compare market price and real price of any company's stock. In other words, beta shows total changes in the market price of other companies when NEPSE index fluctuate by 1%. Beta of primary market is always 1. If a company has beta more than 1%, such company's market price of share fluctuated more than 1%. Similarly, if a company has beta less than 1% then such company's market price of share fluctuate less than 1%.

Primarily, beta measures risks, fluctuations and return of the companies. Companies havin more than 1% beta bears more risks and also expected more return. Similarly, companies having less than 1% beta have less risk, these stock fluctuate less and returns are also notably less. Companies having 1% beta are often called aggressive stock and those having less than 1% beta are called defensive stock.

Based on the one year data on NEPSE and commercial bank group's market price, Citizen bank Ltd has highest beta of 1.65β and Century bank has lowest beta of 0.05β. Among the total commercial banks, 25 commercial banks have more than 1β.

Price to book value ratio or market price and book value

While analyzing performance of the bank, market price to book value ratio or market price and book value of the share are considered important. Market price to book value shows while investing in a stock, how many times more has been invested than book value of the share. Book value indicates the amount of asset one unit of share carries if the company goes for insolvency. In general, P/B ratio is derived when market value is divided by book value.

As per the book value of first quarter of current FY and final market price traded on last Tuesday, Standard Chartered Bank and Nabil Bank has highest P/B ratio of 8.69. which means investors  of Standard Chartered and Nabil bank have paid 8 times more price than previous transaction. Shares of these banks were traded in Rs. 2600 and Rs. 1853 respectively during last Tuesday's trading hour. Civil bank has the lowest P/B ratio among all the commercial banks with 2.16 ratio. .

Book of value and market value

As per the book value, Everest bank has the highest book value of Rs. 345.60 and Grand bank has lowest of Rs. 26. On the basis of last traded market price, Standard Chartered bank has highest market price of Rs. 2600 and Grand bank has the lowest market price of Rs. 184.

Price earnings ratio or P/E ratio

Price earnings ratio reflects the relationship between stock price and earnings per share. Mainly investors make the decision of buying or selling in order to earn certain profit. Price earning ratio is calculated by dividing share price of the company by earning per share. This ratio shows how many times an investor have to investment in order to earn one rupee of the company.

As per the financial report of first quarter of current FY, Grand bank ltd has highest P/E ratio of 55 times, followed by Standard charter bank, Everest bank and Himalayan bank. Nepal Bank ltd that is selling property in large scale in recent times, has the lowest P/E ratio of 9.67 times. Earlier, Nepal bank had invited sealed bids to sell its real state worth of Rs. 540 million.

Earning per share and networth per share

Earning per share shows earning earn by one unit of share of any company. As per the financial report of first three months, Everest bank has the highest EPS of Rs. 72 and Grand bank has the lowest EPS of Rs. 3. Civil bank has EPS of Rs. 8. Net worth per share can be considered as book value. Net worth per share is calculated by dividing value occurred after deducting total liabilities from total assets from total no of shares. According to the first quarter, Standard chartered bank is in first position while Grand bank is in bottom position followed by Nepal Bank.

Net profit and Reserve fund

According to the first quarter, Nabil bank having Rs. 4 billion 750 million paid up capital earned highest net profit of Rs. 650 million. Nabil bank has the highest reserve fund also with Rs. 5 billion 380 million. Grand bank earned the least net profit by Rs. 16.6 million followed by Kumari bank with Rs. 48.6 million. Nepal bank has negative balance of reserve fund of Rs. 2 billion 140 million