(MSLB) Mahuli Laghubitta's Net Profit Up by 25.63% in Q3; Loan Expansion and Interest Income Drive Financial Improvement

Mahuli Laghubitta Bittiya Sanstha Ltd. has reported a solid financial performance for the third quarter of fiscal year 2081/82, posting a net profit of NPR 40.56 million, which is a 25.63% increase compared to NPR 32.29 million in the same period last year. This growth in profitability is largely attributed to a rise in net interest income and the expansion of the loan portfolio.

The company's paid-up capital has increased by 14.75%, reaching NPR 369.92 million. Retained earnings saw a sharp 71.37% rise, climbing to NPR 45.36 million, indicating stronger internal financial retention and potential for future dividend distribution. Likewise, the reserve fund grew by 6.44% to NPR 304.26 million, contributing to the overall financial stability of the institution.

In terms of deposit mobilization and credit disbursement, Mahuli Laghubitta recorded a 6.79% increase in total deposits, totaling NPR 1.75 billion. Loans and advances to customers reached NPR 4.92 billion, reflecting a 7.40% growth. Borrowings also surged by 17.81%, indicating the company is leveraging more funds to support its loan expansion activities.

Net interest income jumped by 33.13%, reaching NPR 258.28 million. This significant increase positively influenced the operating profit, which stood at NPR 57.94 million. Personnel expenses rose slightly by 3.47% to NPR 131.25 million. However, impairment charges—representing provisioning for possible bad loans—escalated by 77%, reaching NPR 60.41 million, indicating increased caution over loan quality.

Non-performing loans (NPL) edged up slightly from 4.90% to 4.96%, reflecting a marginal deterioration in asset quality. The capital adequacy ratio declined from 11.68% to 9.81%, slightly narrowing the regulatory buffer. On the bright side, the cost of fund dropped significantly by 19.72%, from 9.13% to 7.33%, helping improve profitability margins.

The company's earnings per share (EPS) improved from NPR 13.35 to NPR 14.62, while the net worth per share slightly decreased by 1.20% to NPR 194.51. Despite this, the quarter-end market price per share reached NPR 1,240.58, indicating strong investor confidence. The PE ratio stood at 84.86 times, which might signal an optimistic valuation.

Overall, Mahuli Laghubitta’s Q3 performance highlights robust revenue generation, controlled expenses, and moderate credit growth. However, the rise in impairment and slight drop in capital adequacy calls for prudent risk management in upcoming quarters to maintain long-term sustainability