2018-19 Annual Report Contents Integrated Report NMB at Glance ................................................................................................................................................................................................................................................................ 5 Introduction ........................................................................................................................................................................................................................................................................... 6 Subsidiaries .......................................................................................................................................................................................................................................................................... 8 Key Highlights ................................................................................................................................................................................................................................................................. 9 Reminiscing the Journey ......................................................................................................................................................................................................................... 10 Milestones ............................................................................................................................................................................................................................................................................... 12 Vision, Mission and Values ................................................................................................................................................................................................................... 13 Strategic Objectives ............................................................................................................................................................................................................................................. 14 Business Ethics ............................................................................................................................................................................................................................................................ 15 Board of Directors ................................................................................................................................................................................................................................................... 18 Chairman’s Statements .............................................................................................................................................................................................................................. 20 Management Team .............................................................................................................................................................................................................................................. 22 CEO’s Message .............................................................................................................................................................................................................................................................. 24 Head of Departments ...................................................................................................................................................................................................................................... 26 Organization Structure .................................................................................................................................................................................................................................. 27 Risk Management .................................................................................................................................................................................................................................................. 28 Corporate Governance .................................................................................................................................................................................................................................. 35 Investor’s Information .................................................................................................................................................................................................................................... 49 Human Capital ................................................................................................................................................................................................................................................................ 53 Corporate Social Responsibility ................................................................................................................................................................................................. 58 Sustainable Banking .......................................................................................................................................................................................................................................... 61 Deposit and Loan Products and Services ............................................................................................................................................................. 62 Credit Rating Report ........................................................................................................................................................................................................................................... 74 Value added statement ................................................................................................................................................................................................................................ 78 Horizontal and Vertical Analysis ............................................................................................................................................................................................... 80 Du Pont Analysis ....................................................................................................................................................................................................................................................... 84 Market Share Information ..................................................................................................................................................................................................................... 85 Graphical Presentation – Trend Analysis ............................................................................................................................................................... 87 Statutory Reports and Disclosures Director’s Report ........................................................................................................................................................................................................................................................ 96 Annex 15 of Securities Registration and Issue Regulation, 2016 ....................................................................... 114 Amendments to MoA and AoA ................................................................................................................................................................................................... 116 Notice of 24th AGM Minute .................................................................................................................................................................................................................. 117 Financial Statements Independent Auditor’s Report ........................................................................................................................................................................................................ 122 Financial Statements ....................................................................................................................................................................................................................................... 124 Significant Accounting Policies to Consolidated Financial Statements ................................................. 187 Additional Disclosures to Consolidated Financial Statements ................................................................................. 200 Disclosures under New Capital Adequacy Framework .......................................................................................................... 235 Branch and ATM Network ................................................................................................................................................................................................................ 241 Integrated Report NMB at a Glance NPR 138.68 Billion NPR 3.25 Billion Consolidated Total Assets Core Operating Profit* 15.43% 34.43% Total Capital Adequacy Ratio CASA Ratio 3.58% 48.18% Total Net Interest Margin (YTD)* Retail and SME Loans as a portion of Total Loans 0.82% 9.86% Non-Performing Loan Base Rate (Last