Nepal Bank Reports 183% Profit Growth, Significant Decline in Impairment Charges

Nepal Bank Limited has reported a significant increase in profit for the second quarter of the current fiscal year, primarily due to a substantial reduction in impairment charges. The bank earned a net profit of NPR 1.30 billion in the first six months, marking a 183% increase compared to the same period last year.

In the previous fiscal year, the bank had earned NPR 461 million in net profit during the same period. The sharp improvement in net profit is mainly attributed to the significant reduction in impairment charges.

Impairment charges, which stood at NPR 2.53 billion in the first six months of the previous fiscal year, dropped to NPR 479 million in the same period of the current fiscal year.

Despite a decrease in both interest and non-interest income, the bank's profit has shown significant growth, driven by the sharp reduction in loan loss provisions (impairment charges).

During the review period, the bank's interest income decreased by 3.97%, amounting to NPR 4.44 billion, while fee and commission income also dropped by 17.16% to NPR 448 million.

As a result, the bank's operating profit surged by 394.64%, reaching NPR 2.06 billion. However, total operating income decreased by 1.59%, coming to NPR 5.35 billion.

With the profit increase, the bank's earnings per share (EPS) grew by NPR 11.49, reaching NPR 17.76. However, the distributable profit stood at a negative NPR 914.9 million, which suggests limited immediate potential for dividend distribution.

As of the end of December, the bank's net worth per share was NPR 262.43, and the price-to-earnings (P/E) ratio remained at 13.57 times.

The bank's paid-up capital stands at NPR 14.69 billion, and its reserve fund has increased by 4.12% to NPR 23.87 billion. During the review period, the bank's deposits grew by 9.87% to NPR 3.65 trillion, while loans and advances increased by 4.44% to over NPR 2.36 trillion.