Nepal Investment Mega Bank's Financial Performance: Significant Profit Growth
Author
NEPSE trading
Nepal Investment Mega Bank Limited has published its unaudited financial report for the second quarter of the fiscal year 2081/82. The report highlights remarkable improvements in profitability compared to the same period last year.
Net Profit Increases by 57%
As of Poush 2081, the bank has recorded a net profit of NPR 2.83 billion, marking a 57.18% increase compared to NPR 1.80 billion in the same period last year. This growth is primarily driven by a reduction in impairment charges, which decreased from NPR 2.87 billion to NPR 1.77 billion.
Key Income Indicators
The bank's net interest income has slightly declined by 2.37% to NPR 7.36 billion. However, net fee and commission income surged by 32.80%, reaching NPR 1.01 billion. Additionally, total operating income grew by 1.87%, reflecting the bank's ability to manage revenue streams effectively.
Improved Operating Profit
The bank's operating profit increased by 33.69% to NPR 4.04 billion during the review period. This improvement is attributed to effective cost management and a reduction in impairment charges, despite the slight decline in interest income.
Progress in Financial Metrics
The bank's Earnings Per Share (EPS) rose significantly from NPR 10.56 to NPR 16.60, indicating improved profitability. Similarly, the net worth per share increased to NPR 185.00. The Price-to-Earnings (PE) ratio stands at 12.71 times, reflecting a reasonable valuation for investors.
Deposit and Loan Management
As of Poush 2081, the bank has mobilized deposits amounting to NPR 440.88 billion, a 9.29% increase compared to last year. Loans and advances to customers have grown by 7.63%, reaching NPR 328.79 billion.
Base Rate and Credit-to-Deposit Ratio
The bank's base rate has decreased from 9.41% to 6.58%, indicating lower borrowing costs for customers. Meanwhile, the credit-to-deposit ratio is at 78.87%, which reflects prudent liquidity management.
Nepal Investment Mega Bank has demonstrated strong operational efficiency and profitability growth in the second quarter. The increase in net profit and EPS is a positive signal for investors. However, the decline in net interest income suggests that the bank may need to explore new avenues to sustain revenue growth in the long term.
The reduction in impairment charges and cost control measures have been the bank's significant achievements. Going forward, the bank should focus on increasing its interest income by tapping into new lending sectors and expanding its customer base.
