Nepal Bank Limited earned Rs 30.63 per share over the trailing twelve months and closed on September 30 at Rs 294.70. That is a price-to-earnings ratio of 9.54, an earnings yield of 10.48%, and a price-to-book ratio of 1.02 on a book value of Rs 287.70 per share. The median commercial bank on NEPSE trades at 20.55 times earnings and 2.04 times book. On earnings NBL is priced at less than half the sector; on book value, at almost exactly half, the deepest value reading among large banks in our Q4 FY 2082/83 screen.
And yet the market still will not pay more than book value for it. From late September 2025 to late September 2026, NBL returned 17.11%, climbing to sit near its 52-week closing high of Rs 297.00, but the entire rally only carried the price back to its accounting book value, never above it. That tension, between what the filings say the bank earns and the multiple the market will pay for those earnings, is the whole story here.
The cheapest large bank on the board
Start with the multiples, because they are unusually clean. NBL's trailing P/E of 9.54 sits against a banking sector median of 20.55, computed across the 26 profitable banks scored in our screen from the same Q4 FY 2082/83 filings. Its price-to-book of 1.02 sits against a sector median of 2.04. The earnings yield, simply the inverse of the P/E, is 10.48%: every Rs 100 of share price buys Rs 10.48 of trailing annual earnings. Return on equity for the trailing twelve months is 10.65%, a respectable figure for a bank priced as though its equity earns nothing above its cost.
One peer deserves an honest mention. Kumari Bank (KBL) trades at an even lower P/E of 7.91, but at 1.31 times book it is priced further above its net worth than NBL. For completeness, Nepal Investment Mega Bank (NIMB) trades below book at 0.97 times, but earns only a 4.07% return on equity with a 4.2% earnings yield, which is why our screen scores it just 62.0. A price below book value is not a bargain when the book earns little. NBL is the only large bank changing hands essentially at its accounting book value while earning a double-digit return on that book. In our sector-aware value screen, which ranks banks only against banks on earnings yield and price-to-book, NBL scores 96.0 out of 100, the highest in the banking sector.
These figures come from the Q4 FY 2082/83 published filings as compiled in our fundamentals dataset, with the September 30 closing price of Rs 294.70 from the Nepse Decode market snapshot. Quarterly filings are unaudited and subject to restatement, which is worth keeping in mind before treating any single quarter's multiple as permanent.
What the filings actually say
The income statement behind the multiple is solid rather than spectacular. Net profit for the trailing twelve months is Rs 4.50 billion on operating revenue of Rs 21.95 billion, with operating profit of Rs 7.19 billion. Earnings per share of Rs 30.63 is the figure the 9.54 P/E rests on. The balance sheet is large and conservatively funded: deposits of Rs 415.18 billion against loans of Rs 255.46 billion, a credit-to-deposit ratio of 62.85%, and total assets of Rs 484.45 billion. Paid-up capital stands at Rs 14.69 billion with reserves of Rs 27.58 billion, which is where the Rs 287.70 book value per share comes from.
Asset quality is the line to watch. Non-performing loans sit at 4.18% of the loan book, and the net interest spread is 3.54%. Neither figure is alarming for a Nepali commercial bank in the current credit cycle, but the NPL ratio is the variable that would most quickly rewrite the earnings story if it deteriorated. The low credit-to-deposit ratio cuts both ways: it leaves ample room to grow the loan book, or it reflects weak credit demand and cautious lending, depending on which side of the cycle you think the bank is on.
The state-ownership discount
NBL is not a normal private bank. Founded in 1937 as Nepal's first commercial bank, with the government holding 60% of its initial shares according to the bank's own history page at nepalbank.com.np, it remains majority state-owned today: bank management puts the current government holding at 51% in an interview with New Business Age. State ownership is the most plausible explanation for most of the discount. Government banks everywhere trade below private peers: slower decision-making, political interference risk in lending, and governance discounts that markets apply almost mechanically.
The price history shows exactly how persistent that discount is. NBL is up 12.60% over two years and 17.67% over three, and the past year's 17.11% rally carried it from Rs 251.90 to Rs 295.00, yet the price still sits essentially at book value. Anyone who bought five years ago is still down 41.12% on a raw, unadjusted basis. The stock spent the last year between Rs 235.60 and Rs 297.00 on a closing basis and could not convert Rs 30.63 of annual earnings into a price above book. Markets are rarely wrong about the direction of a discount for this long without a reason; the question is whether the reason is fully priced or overdone.
What the brokers did
The public floorsheets for the September 22 to September 30 sessions show mixed institutional flow rather than a stampede in either direction. Shree Krishna Securities was the largest net buyer of NBL over those sessions, accumulating a net Rs 73.12 million, while Sundhara Securities was the largest net seller at Rs 113.67 million net sold. That is transaction flow, the net of buys and sells passing through each broker, not verified shareholding, and it reads as two-sided positioning rather than accumulation. Nothing in the broker data contradicts the valuation case, but nothing confirms a smart-money bid either.
Risks that would break the thesis
A value thesis is only as good as its failure conditions, so here they are. First, asset quality: if the 4.18% NPL ratio climbs materially, the Rs 30.63 EPS that the whole multiple rests on gets rewritten downward and the 9.54 P/E was never real. Second, governance: state ownership means lending and strategy decisions can serve non-commercial objectives, and that risk does not show up in any ratio until it does. Third, the earnings base itself: bank earnings in Nepal are cyclical, and a 10.48% trailing earnings yield is a rear-view mirror, not a forecast. Fourth, what is missing: company disclosures compiled in our records show NBL last paid a dividend for FY 2078/79, a 2% bonus plus 10% cash, and has declared none in the three fiscal years since, so no dividend yield enters this analysis, and the quarterly filings behind these figures are unaudited.
The unresolved question
Strip the analysis down and one fact remains: the market will pay roughly book value for a bank earning 10.65% on equity, and it has held that line for a year. Either the state-ownership discount is the correct price for the governance and asset-quality risk, in which case NBL is fairly valued as a utility-like holding, or the market is overcharging for that risk and NBL is the cheapest large-bank earnings stream on NEPSE. The Q4 FY 2082/83 filings give you the numbers with unusual clarity. They do not tell you which story is right. That is for the next few quarters of asset quality and earnings to settle.
A note on what is verified here. Every figure above comes from a named source: NBL's Q4 FY 2082/83 published quarterly filings as compiled in the Nepse Decode fundamentals dataset (EPS Rs 30.63, net profit Rs 4.50 billion, NPL 4.18%, and all balance-sheet figures), the Nepse Decode market snapshot for September 30, 2026 (LTP Rs 294.70, market cap Rs 43.30 arba), daily NEPSE trading sessions for the price history and 52-week range, and public NEPSE floorsheets aggregated by broker for the September 22 to 30 flow figures. Sector medians are computed from the same filings across the 26 profitable banks scored in the screen. The bank's founding history is from its official site, and the current 51% government holding is per bank management in a New Business Age interview. Dividend history is drawn from compiled company disclosures, which show no dividend declared since FY 2078/79. No discounted cash flow, no price target, and no buy, sell, or hold call appears here by design.
This article is published for research and education purposes only. It is not investment advice, and nothing here should be read as a recommendation to buy, sell, or hold any security. Figures reflect publicly reported information at the time of writing; quarterly figures are unaudited and annual figures may be restated. Valuation sketches are illustrative. Always read the company's own filings and consult a licensed advisor before investing.
Frequently asked questions
What is NBL's P/E ratio?
On Q4 FY 2082/83 trailing-twelve-month earnings of Rs 30.63 per share and the September 30, 2026 close of Rs 294.70, NBL's P/E is 9.54. The median P/E across the 26 profitable banks in our screen is 20.55.
What is NBL's book value per share?
Rs 287.70, computed from paid-up capital of Rs 14.69 billion plus reserves of Rs 27.58 billion. At Rs 294.70, the price-to-book ratio is 1.02, against a banking sector median of 2.04.
Is Nepal Bank Limited government-owned?
Yes. Founded in 1937 with the government holding 60% of its initial shares, NBL remains majority state-owned; bank management puts the current government holding at 51%. State ownership is the most plausible reason markets apply a discount to its multiples versus private peers.
What are NBL's NPL and spread figures?
Non-performing loans were 4.18% of the loan book and the net interest spread was 3.54% in the Q4 FY 2082/83 filings. The credit-to-deposit ratio was 62.85%.
Does NBL pay dividends?
Company disclosures compiled in our records show NBL last paid a dividend for FY 2078/79 (2% bonus plus 10% cash) and has declared none since, so no dividend yield is stated in this analysis. Check the company's official announcements on NEPSE for the declared record.
Why is NBL ranked first in the value screen?
Our sector-aware screen ranks banks only against banks, 50% on earnings yield and 50% on price-to-book. NBL's 10.48% earnings yield and 1.02x price-to-book give it the highest combined score, 96.0 out of 100, in the banking sector. The screen is a research starting point, not a recommendation.