16th October 2025, Kathmandu
NMB Bank Limited stands as a beacon of responsible and forward-thinking banking in Nepal, consistently demonstrating that robust financial performance can be harmoniously aligned with a deep commitment to environmental, social, and governance (ESG) principles.
NMB Bank’s Trust and Purpose
The bank’s journey is defined by its strong foundations, diversified ownership, leading corporate governance standards, and pioneering efforts in sustainable finance, which together fuel its mission to build a more prosperous, greener, and inclusive Nepal. This deep-dive explores the core pillars of NMB Bank’s success, highlighting its strategic value to the nation and its regional recognition as a leader in sustainable banking.
The Strategic Role of FMO, The Netherlands
The bank’s strategic direction and commitment to sustainable practices are significantly bolstered by its joint venture with the Netherlands Development Finance Company (FMO). FMO, a Dutch development bank, is a crucial institutional partner and the largest shareholder of NMB Bank, holding a significant 13.69% stake.
FMO’s role extends far beyond a simple equity investment; it acts as a catalyst for sustainable development and high-level corporate governance. The alliance, established through a joint venture agreement, has positioned NMB Bank as a market leader in managing environmental and social risks in Nepal. FMO’s involvement provides:
- Expert Guidance: FMO supports NMB in refining its strategy, offering guidance on challenging integration processes following mergers, and assisting in the implementation of a proper and strengthened corporate governance structure.
- Sustainable Focus: This partnership has solidified NMB Bank’s commitment to becoming a leading player in renewable energy (especially hydropower, solar, and e-mobility) and agribusiness financing. FMO’s funding objective includes supporting the growth of NMB’s green portfolio, which directly aligns with Nepal’s climate goals, such as achieving Net Zero emissions by 2045.
- International Financing Access: FMO helps NMB Bank attract international financing. For instance, FMO has recently supported the bank in growing its Micro, Small, and Medium Enterprises (MSME) and green portfolio, emphasizing economic growth, job creation, and reducing CO2 emissions in the country. This foreign investment and technical support are vital for introducing global best practices in risk management and sustainability to the Nepali financial sector.
Earning the Title: Bank of the Year, Asia (2021)
NMB Bank’s momentous win of the “Bank of the Year Asia 2021” award from The Banker magazine (a publication of The Financial Times, London) was a historic achievement—the first for a Nepali bank. This recognition was the result of a multifaceted strategy focusing on stability, innovation, and unwavering adherence to responsible banking principles. The judging criteria for the global awards assess factors like growth and performance, strategic initiatives, leveraging technology, novel products, sustainable activities, and resilience in the face of negative externalities.
NMB Bank triumphed over major Asian banks from giants like China, India, Japan, and South Korea, primarily due to three distinguishing factors:
- Relentless Focus on Sustainable Banking: The bank was recognized for prioritizing investments in the real economy sectors such as Agriculture, Energy (Hydro and Solar), and Tourism. Its pioneering efforts, like issuing the country’s first-ever local currency Energy bond and joining organizations like the Global Alliance for Banking on Values (GABV) and the Partnership for Carbon Accounting Financials, showcased a deep, operational commitment to sustainability that impressed international observers.
- Commitment to Digital Transformation: NMB successfully leveraged technology to enhance customer experience, particularly in maintaining uninterrupted services during challenging times like the COVID-19 pandemic. Innovations like the introduction of Omni-Channel banking and Video KYC set new industry standards in Nepal.
- High Corporate Governance Standards: Maintaining robust corporate governance and demonstrating a high degree of organizational strength and stability proved instrumental. The bank’s ability to manage its operations transparently and responsibly provided a clear testament to its long-term resilience and professional management. The consistent quality and performance are also reflected in its repeated success as “Bank of the Year Nepal,” which it has won four times in five years.
Sustainable Finance Initiatives in 2024 and Beyond
In 2024, NMB Bank has significantly deepened its commitment to a greener future, aligning its operations with Nepal’s national and international climate goals, including achieving Net Zero emissions by 2045. These initiatives are embedded within its comprehensive 5-year strategic plan, emphasizing Environmental, Social, and Governance (ESG) principles across the organization.
Key highlights of its 2024 sustainability efforts include:
- Green Portfolio Growth: The bank achieved a year-on-year growth in its Renewable Energy (including Hydropower) and Tourism portfolios, while actively reducing exposure to high-carbon-intensive manufacturing sectors like Cement and Iron & Steel.
- Targeted Green Financing: NMB is strategically expanding financing for low-carbon development, moving beyond hydropower to actively support solar energy, e-mobility (Electric Vehicles financing), e-cooking, and green housing solutions. These efforts directly contribute to reducing the country’s dependence on fossil fuels.
- ESG Integration and Risk Management: The bank continues to strengthen its Environmental and Social Management System aligned with International Finance Corporation (IFC) principles, integrating climate risk assessments into its lending and risk management framework. Furthermore, NMB became an industry advocate by officially signing the Fossil Fuel Non-Proliferation Treaty Initiative.
- Attracting Development Finance: NMB maintained its leading position in attracting Foreign Currency (FCY) funding to Nepal, securing a significant amount from various Development Financial Institutions, which is explicitly earmarked for climate and sustainable development projects.
Corporate Governance: The Foundation of Trust
NMB Bank’s success is intrinsically linked to its adherence to high corporate governance standards, which ensure accountability, transparency, and the protection of shareholder interests. The governance structure is designed to be stable, professional, and forward-looking.
- Board Structure and Oversight: The bank is governed by a Board of Directors, which is ultimately responsible for ensuring effective corporate governance, strategic direction, and operational control. The presence of key institutional investors like FMO (the largest shareholder) and the Employee Provident Fund contributes a significant degree of institutional governance and professional oversight. The Board utilizes specialized committees, such as the Audit Committee and the Risk Management Committee, to provide rigorous, independent supervisory oversight of internal controls, risk management systems, and financial integrity.
- Shareholding for Stability: The unique shareholding structure, with FMO as the single largest foreign shareholder and the remainder diversified among promoter groups, institutional investors, and a very broad base of general public and smaller shareholders (with 76.56% of shares held by entities/individuals with less than 2% ownership), promotes accountability and prevents undue concentration of power. This broad-based ownership is crucial for long-term resilience and sustainable growth.
Commitment to Social and Internal Governance: Beyond external financial integrity, the bank focuses on internal social governance, including efforts toward being a Gender-Inclusive Workplace, as recognized by its Special Mention Award at the UN Women Asia-Pacific WEPs Awards in 2024. The bank actively manages its workforce to be diverse, with a notable presence of women in various positions, demonstrating its commitment to progressive social governance within its own operations.
NMB Bank’s commitment to these robust governance and sustainable finance practices is not just about compliance; it is a fundamental part of its business model that drives innovation and long-term value creation for all stakeholders, solidifying its reputation as a trusted financial partner in Nepal and a leader in Asia.
For More: NMB Bank’s Trust and Purpose