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Nepal Infrastructure Bank's (NIFRA) Financial Performance: Decline in Profit

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NEPSE trading

 Nepal Infrastructure Bank's (NIFRA) Financial Performance: Decline in Profit

Nepal Infrastructure Bank Limited (NIFRA) has published its unaudited financial report for the fourth quarter of the fiscal year 2081. According to the report, both the bank's income and net profit have declined compared to the same period of the previous fiscal year.

Financial Performance Summary:

- Net Profit: By the end of the fiscal year, the bank earned a net profit of NPR 1.33 billion, which is a decrease of 5.98% compared to the same period of the previous fiscal year. In the previous fiscal year, this profit was NPR 1.41 billion.

- Net Interest Income: The bank's net interest income decreased by 6.47% to NPR 254.9 million.

- Net Fee and Commission Income: This income decreased significantly by 54.26% to NPR 10.41 million.

- Total Operating Income: Total operating income decreased by 6.86% to NPR 256 million.

- Operating Profit: Operating profit declined by 5.87% to NPR 191 million, directly affecting the bank's net profit.

- Earnings Per Share (EPS): EPS decreased by NPR 0.39 to NPR 6.16.

- Net Worth Per Share: Net worth per share reached NPR 113.70.

- Price-to-Earnings (PE) Ratio: The PE ratio stood at 37.01 times.

- Distributable Profit: Distributable profit was NPR 707.2 million.

- Distributable Earnings Per Share: Distributable EPS was NPR 3.27.

- Paid-up Capital: The bank's paid-up capital was NPR 21.60 billion.

- Reserve Fund: The reserve fund stood at NPR 2.96 billion.

- Deposits: Deposits decreased by 6.93% to NPR 8.30 billion.

- Loans: Loans increased by 4% to NPR 20.86 billion.

Interpretation:

The primary reasons for the decline in Nepal Infrastructure Bank's financial performance are the significant decreases in net interest income and net fee and commission income. The 54.26% drop in fee and commission income is particularly concerning for the bank.

The decrease in profit has raised concerns among investors. The decline in EPS also negatively affects investor returns.

In this situation, the bank needs to improve its income structure and strategies in the coming quarters. By addressing interest rate fluctuations, loan distribution policies, and improving the fee and commission structure, the bank can potentially enhance its financial performance.

Despite the decline in distributable profit and EPS, the bank's capital structure remains strong. This provides a solid foundation for future financial improvement efforts.

Such financial reports provide essential information for the bank's investors and stakeholders to formulate future strategies. The bank should identify key areas requiring improvement and strive to enhance its performance in the upcoming quarters.

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