Kathmandu: Machhapuchchhre Bank has reported a significant rise in its net profit for the fiscal year 2024/25, driven by expansion in core business operations and a sharp decline in loan loss provisioning.
According to the bank’s financial disclosures, it earned a net profit of Rs 2.01 billion in FY 2024/25, marking a 92.45 percent increase compared to Rs 1.04 billion in the previous fiscal year 2023/24. This impressive growth in profitability is attributed to a surge in operating income and a substantial reduction in provisioning for possible loan losses.
The bank’s total deposit base grew by 16.09 percent to Rs 114.18 billion, while loans and advances increased by 11.74 percent to Rs 141.64 billion. As a result of the business expansion, net interest income rose by 15.41 percent to Rs 5.75 billion. Similarly, the bank’s fee and commission income surged by 18.16 percent, reaching Rs 1.28 billion.
In contrast to the previous year, Machhapuchchhre Bank allocated only Rs 353.8 million for loan loss provisioning, a significant drop from Rs 1.39 billion in FY 2023/24. This lower provisioning contributed directly to a spike in operating profit, which rose by an astonishing 99.91 percent to Rs 3.33 billion.
However, net profit did not grow at the same rate as operating profit due to non-operating expenses amounting to Rs 478.3 million.
The bank has a paid-up capital of Rs 11.62 billion and reported a retained earning of Rs 1.07 billion. Its general reserve fund has now reached Rs 6.31 billion. With net profit rising while paid-up capital remained unchanged, the bank’s earnings per share (EPS) increased from Rs 8.99 to Rs 17.30.
Non-performing loans (NPLs) saw a slight improvement, dropping from 3.86 percent to 3.83 percent. The bank’s net NPL ratio stands at 1.19 percent.
Outstanding interest receivables are recorded at Rs 2.02 billion, and total provisioning for loan losses reached Rs 4.46 billion. Thanks to higher profits and growing reserves, the bank’s core capital adequacy ratio has risen to 9.41 percent, and return on equity (RoE) hit 11.13 percent.
The bank’s base interest rate fell to 6.30 percent, while the cost-to-income ratio stood at 14.99 percent, and its net worth per share reached Rs 163.08. Its dividend-paying capacity now stands at 9.23 percent.
Despite posting a distributable profit of Rs 1.44 billion in the last fiscal year, the bank’s past accumulated losses limited its current distributable profit to Rs 1.07 billion. Additionally, Machhapuchchhre Bank transferred Rs 461.4 million from its regulatory reserves by selling non-banking assets, and recovered overdue interest amounting to Rs 2.91 billion, which was transferred from the impairment reserve to retained earnings.
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