नारायणी डेभलपमेन्ट बैंकको प्रथम त्रैमासिक वित्तीय विवरणNarayani Development Bank First Quarter Financial Results

Condensed Consolidated Statement of Financial Position

As on Quarter ended 31st Ashoj 2083

(Amount in NPR)

Particulars Group	This Quarter Ending Group	Immediate Previous Year Ending (Unaudited) Bank	This Quarter Ending Bank	Immediate Previous Year Ending
Assets
Cash and Cash Equivalent	365,476,825	395,026,869	365,476,825	-
Due from Nepal Rastra Bank	63,779,416	64,401,495	63,779,416	-
Placement with Banks and FIs	-	-	-	-
Derivative Financial Instruments	-	-	-	-
Other Trading Assets	-	-	-	-
Loans and Advances to Banks and FIs	-	-	-	-
Loans and Advances to Customers	165,112,186	153,741,530	165,112,186	-
Investment Securities	33,520,159	33,520,159	33,520,159	-
Current Tax Assets	11,346,962	11,345,250	11,346,962	-
Investment in Subsidiaries	-	-	-	-
Investment in Associates	-	-	-	-
Investment Property	47,524,087	36,132,137	47,524,087	-
Property and Equipment	25,891,082	25,133,965	25,891,082	-
Goodwill and Intangible Assets	3,987,982	3,987,982	3,987,982	-
Deferred Tax Assets	13,929,844	13,929,844	13,929,844	-
Other Assets	48,817,858	36,330,042	48,817,858	-
Total Assets	779,386,402	773,549,274	779,386,402	-
Liabilities
Due to Banks and FIS	-	-	-	-
Due to Nepal Rastra Bank	-	-	-	-
Derivative Financial Instruments	-	-	-	-
Deposit from Customers	576,971,736	580,393,938	576,971,736	-
Borrowings	-	-	-	-
Current Tax Liabilities	-	-	-	-
Provisions	-	-	-	-
Deferred Tax Liabilities	-	-	-	-
Other Liabilities	45,569,575	38,436,095	45,569,575	-
Debt Securities Issued	-	-	-	-
Subordinated Liabilities	-	-	-	-
Total Liabilities	622,541,311	618,830,034	622,541,311	-
Equity
Share Capital	524,993,055	524,993,055	524,993,055	-
Share Premium	30,852,977	30,852,977	30,852,977	-
Retained Earnings	(520,214,253)	(522,340,105)	(520,214,253)	-
Reserves	121,213,313	121,213,313	121,213,313	-
Total Equity Attributable to Equity Holders	156,845,092	154,719,240	156,845,092	-
Non Controlling Interest	-	-	-	-
Total Equity	156,845,092	154,719,240	156,845,092	-
Total Liabilities and Equity	779,386,402	773,549,274	779,386,402	-

Condensed Consolidated Statement of Profit and Loss

As on Quarter ended 31st Ashoj 2083

(Amount in NPR)

Particulars Group Current Year This Quarter Group Current Year Upto this Quarter (YTD) Group Previous Year Corresponding This Quarter Group Previous Year Corresponding Upto this Quarter (YTD) Bank Current Year This Quarter Bank Current Year Upto this Quarter (YTD) Bank Previous Year Corresponding This Quarter

Interest income	6,491,464	6,491,464	5,043,515	5,043,515	6,491,464	6,491,464	5,043,515
Interest expense	7,157,849	7,157,849	6,273,669	6,273,669	7,157,849	7,157,849	6,273,669

Statement of Distributable Profit or Loss

As on Quarter ended 31st Ashoj 2083 Amount in full figure

Particulars Amount

Net Profit for the period end Ashoj, 2083 2,996,609

Net profit or (loss) as per statement of profit or loss -

Appropriations:

a. General reserve -

b. Foreign exchange fluctuation fund -

c. Capital redemption reserve -

d. Corporate social responsibility fund -

e. Employees' training fund -

f. Other -

Profit or (loss) before regulatory adjustment 2,996,609

Regulatory adjustment (if any) -

Distributable profit or (loss) 2,996,609

Ratio as per NRB Directives First Quarter

As on Quarter ended 31st Ashoj 2083

Particulars Group Current Year This Quarter 30.61% Upto this Quarter (YTD) 30.61% Group Previous Year Corresponding This Quarter 10.35% Upto this Quarter (YTD) 10.35% Bank Current Year This Quarter 30.61% Upto this Quarter (YTD) 30.61% Bank Previous Year Corresponding This Quarter 10.35% Upto this Quarter (YTD) 10.35%

Capital Fund To RWA 30.61% 30.61% 10.35% 10.35% 30.61% 30.61% 10.35% 10.35%

Non Performing Loan (NPL) To Total Loan 49.01% 49.01% 57.04% 57.04% 49.01% 49.01% 57.04% 57.04%

Total Loan Loss provision To Total NPL 86.58% 86.58% 79.50% 79.50% 86.58% 86.58% 79.50% 79.50%

Total Loan Loss provision To Total Loan 42.43% 42.43% 45.35% 45.35% 42.43% 42.43% 45.35% 45.35%

Cost of Fund 4.85% 4.85% 7.93% 7.93% 4.85% 4.85% 7.93% 7.93%

Credit To Deposit Ratio 50.53% 50.53% 78.97% 78.97% 50.53% 50.53% 78.97% 78.97%

Base Rate 19.04% 19.04% 19.17% 19.17% 19.04% 19.04% 19.17% 19.17%

Interest Spread 1.40% 1.40% 4.48% 4.48% 1.40% 1.40% 4.48% 4.48%

Notes to NFRS Compliant Financial Statement

• The above financial statement has been prepared in accordance with Nepal Financial Reporting standards (NFRS) and in the format prescribed by Nepal Rastra Bank.

• Recognition of Impairment Charges on Loans and Advances

The Bank, following regulatory backstop as mentioned in Clause 16 of "NFRS 9- Expected Credit Loss Related Guidelines, 2024" has recognized impairment on credit exposures as the HIGHER of total ECL calculated as per NFRS 9 and existing regulatory provisions as mentioned in Unified NRB Directives No. 2.

Following is the details of impairment under both methods:

Particulars Amount

Total Impairment as per NRB 123,705,416.50

Total Impairment as per ECL 78,546,456.23

The higher of two above, i.e. Rs 123,705,416.50 has been taken in account for impairment loss on loan and advances for the reporting period.

• Provision for gratuity and leave has been provided based on estimation by management and hence actuarial gain/loss has not been separately disclosed and will change as per actuary report.

• The above figures are subject to change upon otherwise instruction from statutory auditors and/or regulatory authorities.

• Detailed Financial Report is uploaded in the website of the bank (www.ndbl.com.np).

• Previous period figures have been regrouped / rearranged/ restated wherever necessary.

Related to Schedule 14, Rule 26, Sub-rule (1) of Securities Registration and Issue Regulations, 2073

First Quarter Report of F.Y. 2083/84

1. Financial Statements:

(a) The Balance Sheet and Profit and Loss Statement for the quarterly period are attached herewith.

(b) Key Financial Ratios:

Earnings Per Share : Rs 0.66 Price Earnings Ratio : Rs 1052.85 Net Worth Per Share : Rs 34.60

Total Assets Value Per Share : Rs 217.72 Liquidity Ratio : 75.09% Capital Fund Ratio : 30.61%

2. Management Analysis:

• During the review period, due to the slowdown in the country's economic activities and business transactions, decrease in business confidence, etc., new credit disbursement growth could not be achieved qualitatively. However, quality loans are gradually increasing.

Fee and commission income	365,426	365,426	109,259	109,259	365,426	365,426	109,259
Fee and commission expense	-	-	-	-	-	-	-
Net fee and commission income	365,426	365,426	109,259	109,259	365,426	365,426	109,259
Net interest, fee and commission income	(300,959)	(300,959)	(1,120,895)	(1,120,895)	(300,959)	(300,959)	(1,120,895)
Net trading income	(300,959)	(300,959)	-	-	(300,959)	(300,959)	-
Other operating income	76,090	76,090	2,215,422	2,215,422	76,090	76,090	2,215,422
Total operating income	(224,869)	(224,869)	1,094,527	1,094,527	(224,869)	(224,869)	1,094,527
Impairment charge/(reversal) for loans and other losses	(15,808,439)	(15,808,439)	(176,276)	(176,276)	(15,808,439)	(15,808,439)	(176,276)
Net operating income	15,583,570	15,583,570	1,270,803	1,270,803	15,583,570	15,583,570	1,270,803
Operating expense	-	-	-	-	-	-	-
Personnel expenses	6,319,476	6,319,476	5,434,324	5,434,324	6,319,476	6,319,476	5,434,324
Other operating expenses	5,257,402	5,257,402	4,044,890	4,044,890	5,257,402	5,257,402	4,044,890
Depreciation & Amortization	1,071,783	1,071,783	1,523,757	1,523,757	1,071,783	1,071,783	1,523,757
Operating Profit	2,934,909	2,934,909	(9,732,168)	(9,732,168)	2,934,909	2,934,909	(9,732,168)
Non operating income	61,700	61,700	-	-	61,700	61,700	-
Non operating expense	-	-	12,374,860	12,374,860	-	-	12,374,860
Profit before income tax	2,996,609	2,996,609	(22,107,028)	(22,107,028)	2,996,609	2,996,609	(22,107,028)
Income tax expense	-	-	-	-	-	-	-
Current Tax	-	-	-	-	-	-	-
Deferred Tax	-	-	-	-	-	-	-
Profit for the period	2,996,609	2,996,609	(22,107,028)	(22,107,028)	2,996,609	2,996,609	(22,107,028)

Condensed Consolidated Statement of Other comprehensive income

As on Quarter ended 31st Ashoj 2083

Particulars Group Bank

Current Year Previous Year Corresponding Current Year Previous Year

This Quarter Upto this Quarter (YTD) This Quarter Upto this Quarter (YTD) This Quarter Upto this Quarter (YTD) This Quarter

Profit or loss for the year 2,996,609 2,996,609 (22,107,028) (22,107,028) 2,996,609 2,996,609 (22,107,028)

Other comprehensive income

a) Items that will not be reclassified to Profit or loss

• Gains/(losses) from Investments in equity instruments measured at fair value	(662,572)	(662,572)	1,629,063	1,629,063	(662,572)	(662,572)	1,629,063
• Gains/(losses) on revaluation	-	-	-	-	-	-	-
• Actuarial gains/(losses) on defined benefit plans	-	-	-	-	-	-	-
• Income tax relating to above items	-	-	488,719	488,719	-	-	488,719
Net other comprehensive income that will not be reclassified to profit or loss	(662,572)	(662,572)	2,117,782	2,117,782	(662,572)	(662,572)	2,117,782

b) Items that are or may be reclassified to profit or loss

• Gains/(losses) on cash flow hedge	-	-	-	-	-	-	-
• Exchange gains/(losses) (arising from translating financial assets of foreign operation)	-	-	-	-	-	-	-
• Income tax relating to above items	-	-	-	-	-	-	-
• Reclassify to profit or loss	-	-	-	-	-	-	-
Net other comprehensive income that are or may be reclassified to profit or loss	-	-	-	-	-	-	-
c) Share of other comprehensive income of associate accounted as per equited method	-	-	-	-	-	-	-
Other comprehensive income for the period, net of income tax	(662,572)	(662,572)	2,117,782	2,117,782	(662,572)	(662,572)	2,117,782
Total comprehensive income for the period	2,334,037	2,334,037	(19,989,246)	(19,989,246)	2,334,037	2,334,037	(19,989,246)
Basic earning per share	0.66	0.66	(8.42)	(8.42)	0.66	0.66	(8.42)
Diluted earning per share	0.66	0.66	(8.42)	(8.42)	0.66	0.66	(8.42)
Profit attributable to:
Equity holders of the Bank	2,334,037	2,334,037	(42,877,000)	(36,012,486)	2,334,037	2,334,037	(19,989,246)
Non-controlling interest	-	-	-	-	-	-	-
Profit for the period	2,334,037	2,334,037	(42,877,000)	(36,012,486)	2,334,037	2,334,037	(19,989,246)

• In the coming days, the bank will provide reliable and quality banking services along with a business plan for sustainable institutional development, thereby continuing to protect the interests of stakeholders.

• Although non-performing loans have not decreased as expected during the review period, they are gradually decreasing. Despite existing factors such as various anarchic activities, threats, business slowdown in the economy, and difficulties seen in coordination with local bodies, since recovery work has been effectively moved forward, the goal is to gradually reduce non-performing loans through practical and legal procedures in the coming days.

3. Details Regarding Legal Actions:

• Cases pending in the Supreme Court regarding banking offenses against offenders for unauthorized funds transfers by hackers during the trial period of the bank's mobile banking system; cases pending in the Supreme Court regarding the annulment of collateral auctions filed by a borrower against the bank; cases pending in the Debt Recovery Tribunal against various borrowers who failed to repay bank loans; and cases pending in the Supreme Court regarding banking offenses involving embezzlement of funds from the bank's sundry debtors by founders/directors of the bank.

4. Analysis Regarding Securities Trading of the Organized Institution:

• The shares of this institution are listed and traded on the Nepal Stock Exchange. As the market determines share prices and trading, the management of this institution remains neutral towards share price and trading. However, information and details required to be provided to investors and concerned entities as per prevalent law have been provided by the institution.

• The maximum, minimum, closing price, and number of trades of the shares of this development bank during the quarter are as follows:

Month Total Trades Total Turnover Rs. Total Trading Days High Price Low Price Closing Price

Shrawan	3,65,113.00	29,56,99,249.80	21	875.00	750.50	811.00
Bhadra	3,24,247.00	23,86,48,871.60	20	850.00	673.00	745.00
Ashwin	3,40,411.00	25,03,26,856.90	20	865.00	681.00	695.90

5. Problems and Challenges:

A) Internal Problems and Challenges

1. Narrow interest rate spread due to higher operating expenses in proportion to income.

2. Challenge in improving asset quality all at once due to a higher proportion of non-performing loans in total loans.

3. Challenge to grow business by identifying new investment areas.

4. Lower income sources other than interest income.

5. Challenge in competitive business due to lack of skilled and competent manpower.

6. Operational risk management being costly and challenging.

B) External Problems and Challenges

1. Increasing competition, risks and challenges observed in the field of information and technology.

2. Business slowdown observed as business confidence could not increase in the market.

3. Challenges that may be created in the future due to excessive liquidity.

4. Anarchic activities such as threats, attacks, rumors, and propaganda against the financial sector.

5. Challenges including uncooperative attitude and difficulties observed in coordination with local bodies.

6. Strategy:

Being aware of the above-mentioned internal and external challenges, the bank studies the risks that may arise therefrom, formulates necessary strategies under Nepal Rastra Bank's unified directives, circulars issued from time to time, and institutional policies, rules, and procedures, takes necessary steps to maintain balanced interest rates by promoting low-cost sustainable deposits, remains conscious toward minimizing operating expenses, hires skilled manpower while expanding bank business and branch network, provides training to enhance efficiency and deliver quality services, and has adopted appropriate policies to keep employees connected and committed to the bank.

7. Corporate Governance:

In addition to complying with unified directives issued by Nepal Rastra Bank, necessary assessments regarding compliance with corporate governance are carried out by the audit committee. Furthermore, the bank's Board of Directors is committed to strengthening corporate governance based on reports of on-site inspections conducted by Nepal Rastra Bank from time to time, as well as internal and external auditors' reports.

8. Declaration by the Chief Executive Officer Regarding Truth and Facts:

I take personal responsibility for the truthfulness of the information and details mentioned in this report up to today's date. I also declare that to the best of my knowledge and understanding, the details mentioned in this report are true, factual, and complete, and no details, notices, or information necessary for investors to make informed decisions have been concealed.