Chhimek Laghubitta Q4 Results: Strong Revenue Growth, Healthy Profit, and Improved Asset Quality

Chhimek Laghubitta Bikas Bank Ltd. (CBBL) has published its audited financial results for the fourth quarter of FY 2024/25, showing strong revenue expansion, solid profitability, and continued improvement in loan quality indicators.

The company reported a total revenue of Rs. 6.12 billion in Q4, reflecting a 3.33% year-on-year growth compared to Rs. 5.94 billion in Q4 of FY 2023/24. Sequentially, revenue grew steadily from Rs. 4.49 billion in Q3, continuing its upward momentum across the fiscal year.

The gross profit stood at Rs. 2.82 billion, translating into a gross margin of 46.05%, nearly the same as last year (47.46%) and consistent with recent quarters, highlighting CBBL’s strong operational efficiency.

Net profitability remained robust. The company posted a net income of Rs. 1.21 billion in Q4, up from Rs. 1.00 billion in Q4 last year and Rs. 853.55 million in Q3. The net profit margin rose to 19.81%, compared to 16.84% in the same period last year, indicating improved cost management and higher earnings capacity.

Return ratios stayed strong. Return on Assets (ROA) was at 2.48%, stable compared to 2.28% in Q4 of last year. Return on Equity (ROE) came in at 15.58%, slightly higher than 14.24% a year earlier, confirming efficient capital use and sustained profitability.

On a per-share basis, EPS (annualized) surged to Rs. 37.72, up from Rs. 33.62 last year and Rs. 35.39 in Q3. The reported PE ratio stood at 27.46, showing the stock is valued at a moderate multiple given its earnings strength.

From a balance sheet perspective, the book value per share rose to Rs. 257.54, while the market value per share traded at Rs. 1,035.98, about four times the book value, underscoring strong investor confidence in CBBL’s long-term prospects.

Financial Sector Indicators

• Capital Fund to RWA stood at 17.51%, well above regulatory minimums, reflecting strong capitalization.

• NPL ratio declined to 2.55%, from 3.00% last year, showing improved credit quality.

• Loan loss provision coverage improved to 149.39%, compared to 135.41% a year ago, highlighting conservative provisioning.

• Cost of funds eased slightly to 8.21%, from 8.57% last year, while the base rate dropped to 11.46% from 12.43%, easing lending costs.

• Net interest spread improved to 6.40%, up from 6.01% last year, supporting stronger profitability.

• Net liquid assets stood at 23.03%, slightly lower than 25.11% last year, but still indicating a comfortable liquidity position.

Dividend for FY 2024/25 has not yet been declared. Last year, CBBL distributed Rs. 15 per share, and investors will be closely monitoring for this year’s payout announcement.