(NMBMF) NMB Laghubitta Posts Strong Recovery in Q3 with Rs. 27.52 Million Profit

KATHMANDU, May 10 – NMB Laghubitta Bittiya Sanstha Limited has made a remarkable financial turnaround in the third quarter of fiscal year 2081/82, reporting a net profit of Rs. 27.52 million, compared to a net loss of Rs. 74.93 millionduring the same period last year. This sharp recovery is largely driven by substantial growth in net interest income and a significant drop in impairment charges.

The company’s net interest income surged by 58.88% to Rs. 278.63 million, up from Rs. 175.37 million in Q3 2080/81. This improvement indicates better earnings from core lending activities. Moreover, impairment charges plunged by 90.62%, reducing to just Rs. 2.10 million, which contributed heavily to the reversal in profitability. The decline in provisioning suggests improved asset quality or successful recovery of previously non-performing assets.

Despite this improvement, personnel expenses rose by 12.17%, reaching Rs. 198.29 million, reflecting either expansion in staff or increased salary obligations. Nevertheless, the company’s operating profit rebounded to Rs. 27.48 million, from a massive operating loss of Rs. 75.01 million last year.

On the balance sheet front, total borrowings grew by 16.68% to nearly Rs. 3.96 billion, and customer deposits rose by 9.31% to Rs. 1.46 billion. These increases indicate stronger financial intermediation and growing customer trust in the institution. More notably, loans and advances rose by 17.95%, reaching Rs. 6.26 billion, which shows aggressive credit expansion during the review period.

While there’s a slight dip of 1.25% in paid-up capital, the company’s reserve fund increased by 4.13%, indicating improvement in internal financial strength. The retained loss has also narrowed from Rs. -50.57 million to Rs. -44.07 million, showing gradual recovery in accumulated earnings.

In terms of financial ratios, NMB Laghubitta’s NPL (Non-Performing Loan) ratio dropped significantly from 8.29% to 5.59%, a 32.57% improvement that indicates better credit quality. Similarly, the cost of fund reduced to 7.45% from 9.75%, reflecting cheaper financing costs. However, the capital adequacy ratio slightly declined from 15.84% to 13.96%, although it still remains above regulatory requirements.

The company’s Earnings Per Share (EPS) stood at Rs. 5.15, a major improvement from the previous negative EPS of Rs. -13.85. The net worth per share increased marginally to Rs. 132.19, and the quarter-end market price stood at Rs. 740.50, placing the Price to Earnings (P/E) ratio at a high 143.75 times, suggesting either high investor optimism or a need for caution due to overvaluation.