Rating of Bank Using LACE Model

Project Title: Rating of Bank Using LACE Model

Problem: The client bank is one of the major private sector banks having steady growth and profitability. In the light of the increasing competition, the management wanted to benchmark themselves with their competitors.

Solution: It involved the following-

  • Development of a rating model using parameters covering bank’s Liquidity, Asset quality, Capital adequacy and Earnings (profitability)
  • Scoring six major banks in Nepal using the LACE model
  • Identification of strengths and weaknesses of client Bank using the risk rating parameters and bench marking with other banks from the group
  • Strategies for improving Bank’s rating

Client: Himalayan Bank Ltd., Nepal
Year: 2007