NMB Bank has published its un-audited fourth-quarter financial report, showing a strong increase in net profit despite facing challenges from rising non-performing loans.
According to the un-audited financial report of NMB Bank for the fourth quarter of the last fiscal year, net profit has increased by 40.60 percent. The bank earned Rs 4 arba 1 crore in net profit, which is a big jump compared to Rs 2 arba 85 crore earned in the same period of the previous year.
The rise in profit is mainly because of good growth in net interest income, fee and commission income, and overall operating income. Even though bank had to separate more money for impairment charge, which is the money kept aside for bad loans, strong income from core business helped to keeping the net profit positive.
Growth in Key Income and Rising Expenses
By the end of the fourth quarter, net interest income of NMB Bank increased by 17.52 percent to reach Rs 9 arba 43 crore. Similarly, operating income went up by 19.66 percent to Rs 13 arba 2 crore. However, impairment charge also increased from Rs 1 arba 64 crore to Rs 2 arba 35 crore.
The Non-Performing Loan ratio, which is also called bad loans, increased by 0.80 percentage points and reached 4.91 percent. This shows that the bank is facing hard time in recovering loans due to slow economic activities in the market.
Deposits, Loans, and Capital Status
During this period, NMB Bank collected Rs 3 kharba 15 arba 12 crore in deposits and mobilized Rs 2 kharba 49 arba 76 crore in loans. Compared to the previous year, deposit collection increased by 12.17 percent and loan investment grew by 9.33 percent.
The paid-up capital of the bank increased by 21.33 percent to Rs 22 arba 29 crore. The bank has Rs 1 arba 75 crore as distributable profit and Rs 15 arba 77 crore in reserve and surplus.
Decrease in Distributable Profit and Dividend Capacity
Even though overall net profit increased, distributable profit has decreased by 7.91 percent compared to previous year. This means the bank capacity to distribute dividend to its shareholders has shrunk slightly.
The Earnings Per Share of NMB Bank increased by Rs 5.38 to reach Rs 20.18. However, distributable EPS has decreased to Rs 9.08. The net worth per share of bank stands at Rs 181.15, while the Price to Earnings ratio is 11.87 times.
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