NIC Asia Bank Q4 Results: Weak Profit Growth Despite Solid Revenue Base

NIC Asia Bank (NICA) has published its Q4 audited financials for FY 2024/25, showing a significant revenue base but weak profitability as income growth failed to translate into strong bottom-line results.

The bank recorded a total revenue of Rs. 28.81 billion, marking a 29.12% decline YoY compared to Rs. 38.37 billion in the same quarter last year. Sequentially, revenue also fell by 23.20% in Q3 and 30.99% in Q2, reflecting continued challenges in maintaining stable top-line growth.

Gross profit stood at Rs. 10.25 billion, down from Rs. 10.61 billion in Q4 FY 2023/24. However, the gross margin improved to 35.59%, compared to 27.67% a year ago, signaling more efficient cost management despite falling revenues.

Net income came in at just Rs. 161.57 million, a sharp decline from Rs. 1.38 billion in Q4 of the previous fiscal year. The net profit margin collapsed to 0.56%, compared to 3.60% last year, highlighting profitability stress.

Performance ratios also weakened. ROA (Return on Assets) was at 0.04%, down from 0.34% last year, while ROE (Return on Equity) dropped to 0.54%, far below the 4.57% seen in Q4 FY 2023/24. EPS (Annualized) fell drastically to Rs. 1.08, compared to Rs. 9.26 a year earlier, while the PE ratio spiked to 387.82, reflecting a mismatch between earnings and market valuation.

The book value per share remained stable at Rs. 197.90, while the market value per share increased to Rs. 420.05, up from Rs. 443.20 last year. No dividend has been declared yet.

Financial Sector Indicators

• Capital Fund to RWA stood at 14.00%, higher than 11.18% a year ago, indicating stronger capital adequacy.

• NPL ratio rose to 6.28%, up from 3.41% last year, showing increased asset quality risks.

• Loan loss provision coverage improved slightly to 92.01%, though still below the ideal 100% buffer.

• Cost of funds decreased to 4.92% from 6.96% last year, easing interest expense pressure.

• Base rate fell to 7.04% from 9.19% last year, making lending more competitive.

• Net Interest Spread remained stable at around 3.99%, unchanged from last year.

• Liquidity improved with Net Liquid Assets at 36.19%, compared to 28.07% a year earlier.