What it is
A bank is only as good as its loans. Punji's scorecard starts here.
The pillar shows four figures from the quarterly report: gross NPL (how much is overdue), net NPL (how much is still uncovered after provisions), provision cover (how much has been set aside relative to bad loans) and the impairment charge (what bad loans cost this period).
The verdict under the headline is a fact, not an opinion: where the bank's gross NPL sits among its sector peers for the same quarter, and whether it is up or down on a year earlier. Punji never says 'good bank' or 'bad bank'.
How it is calculated
Not a formula. Headline = ratio.npl_gross; supporting = ratio.npl_net, ratio.provision_to_npl, is.impairment_charge. Peer ranking: lower is better for NPL, higher is better for cover.
Worked on Nabil Bank Limited, FY 2082/83 Q4
NABIL, FY 2082/83 Q4: gross NPL 4.20%, net NPL 0.58%, provision cover 119.73%, impairment charge Rs 267.72 crore.
What good looks like
Gross NPL below the sector median and not rising; cover above 100%; impairment charge steady as a share of loans.
Watch out
- This is a Punji grouping for reading convenience; NRB does not publish a 'pillar' score.
- A single quarter's NPL can jump on one large borrower; look at the trend.
- Fast loan growth hides NPL for a while.
In Nepal
All four figures come from NRB's prescribed quarterly ratio schedule and income statement; definitions follow NRB Unified Directive No. 2 on loan classification.
Questions
No. It is how Punji arranges the bank's own published figures so a beginner can read them in order.
Gross NPL shows the full size of the problem before provisions. Net NPL and cover then show how much has already been paid for.