Nepal Investment Bank

• To develop a customer oriented service culture with special emphasis on customer care and convenience. • To increase our market share by following a disciplined growth strategy. • To leverage our technology platform and pen scalable systems to achieve cost-effective operations, efficient Management Information Systems, improved delivery capability and high service standards. • To develop innovative products and services that attract our targeted customers and market segments. • To continue to develop products and services that reduce our cost of funds.

• To maintain a high quality assets portfolio to achieve strong and sustainable returns and to continuously build shareholders’ value. • To explore new avenues for growth and profitability. Core Values and Ethical Principles Our core values tell us, our customers and the communities we serve, who we really are; what we are about; and the principles by which we pledge to conduct business. In essence, we believe that success can only be achieved by being true to our core values and principles: • Customer Focus: At NIBL, our prime focus is to perfect our customer service.

Customers are our first priority and driving force. We wish to gain customer confidence and be their trusted partner. • Quality: We believe a quality service experience is paramount to our customers and we are strongly committed to fulfilling this ideal. • Honesty and Integrity: We ensure the highest level of integrity to our customers by creating an ongoing relationship of trust and confidence. We treat our customers with honesty, fairness and respect. • Belief in our people: We recognize that employees are our most valuable asset and our competitive strength.

We respect the worth and dignity of individual employees who devote their careers for the progress of the Bank. • Teamwork: We are a firm believer in teamwork and feel that loyal and motivated teams can produce extraordinary results. We are driven by a performance culture where recognition and rewards are based on individual merit and demonstrated track record. • Good Corporate Governance: Effective Corporate Governance procedures are essential towards achieving and maintaining public trust and confidence in any company, more so in a bank.

At NIBL, we are committed to following practices which result in good corporate governance. • Corporate Social Responsibility: As a responsible corporate citizen, we consider it important to act in a responsible manner towards the environment and society. Our commitment has always been to behave ethically and contribute towards the improvement of the quality of life of our people, the community and society at large, of which we are an integral part. Annual Report 2008-2009 Chairman's Statement 6 “Nepal Investment Bank Limited attained a substantial market share Nepal Investment Bank Limited of 8.

9%, 10. 2% and 8. 1% in terms of Deposits, Loans and Total Bank Assets. ” — PriThivi B. Pande 7 Dear Shareholders, Your bank has delivered another solid performance during the financial year 2008/09 despite all the continuing political uncertainty and increased competition. Your bank has continued its long term vision to consolidate itself as the leading bank in the country by pursuing a strategy of growth and consolidation while delivering quality services and shareholder returns. Your bank has achieved remarkable growth in all areas, be it in deposits, lending, profit, products, services etc.

Because of your Bank’s stellar performance, The Banker Magazine awarded your Bank “The Bank of the Year” award for 2008 for the 3rd time since 2003. In the fiscal year 2008/09, number of commercial banks rose to 26 from 25 in the previous year. However, despite intense competition among the Banks and challenging economic atmosphere and political uncertainty, Nepal Investment Bank Limited attained a substantial market share of 8. 9%, 10. 2% and 8. 1% in terms of deposits, loans and total bank assets. This year we have proposed a 20% cash dividend from the profit of fiscal year 2007-08.

In order to consolidate the Bank’s existing customer base as well as attract potential clients, your Bank has been active in launching new products and revising existing products and schemes. In FY 2008-09, the Bank added a total of 11 new branches making a total of 30 branches all over Nepal. Among the 11 new branches 5 were opened within Kathmandu valley and 6 in other areas outside Kathmandu. The Bank’s target is to open up to 50 branches by 2010 all over Nepal. We now have 766 staff operating among all 30 branches out of which 327 are female staffs and

71 staff members have completed more than 10 years of service in the institution. NIBL has pioneered adopting new technology to streamline banking operations and facilitate services to our esteemed customers. In the FY 2008/09, the Bank deployed an additional 23 ATM’s in and outside Kathmandu valley during the year, totaling 57 ATM’s in our consortium. The Bank also leads in card issuance as it issued over 220,000 cards and altogether there are now 320,000 card holders in our network now. We are also in the process of adding MasterCard services in addition to our existing Visa brand.

The Bank also implemented the Finacle Core Banking and E-banking Solution from Infosys during FY 2008-09. The system change-over commenced in July 2008 and was completed in November 2008. Going forward, I believe that these technological adoptions will pay off in the future in terms of lower cost and a better bottom line. With a strategy to strengthen the Bank’s position in the worker’s remittance market, the Bank appointed 45 new remittance disbursement agents during the year raising the total number of remittance disbursement locations to 200 in order to facilitate banking services to Nepali workers overseas.

The operating profit of the Bank grew in Rs. 1310 million from Rs. 1013 million recorded the previous year, an increase of Rs 287 million. Provisions for Tax were Rs 397. 98 million, making our Bank one of the top ten tax payers in Nepal, with a resulting after tax profit growth of 29. 26%. The Bank has registered a record increase in net profit to Rs. 900. 6 million from Rs. 696. 7 million, one of the highest net profit increments of any bank in Nepal.