Kamana Sewa Bikas Bank Limited announced a 33.51% rise in its net profit for the last fiscal year’s fourth quarter, driven by business growth and a sharp decrease in impairment charges, despite a fall in distributable earnings per share.
Kamana Sewa Bikas Bank Limited has unveiled its unaudited financial results for the fourth quarter of the last fiscal year. The bank’s net profit showed a strong increase of 33.51 percent, reaching Rs. 89 crore 41 lakh. This is a noticeable jump from the Rs. 66 crore 97 lakh net profit reported in the same period of the previous fiscal year.
Reasons Behind the Profit Growth
The improvement in profit comes from the bank expanding its business operations and a remarkable reduction in impairment charges. During the review period, impairment charges fell sharply from Rs. 42 crore to just Rs. 14 crore. This reduction looks to have significantly contribute to an increase in operating profit for the bank.
By the end of the fourth quarter, the bank’s net interest income grew by 3.98 percent to reach Rs. 2 arba 41 crore. Total operating income also saw an increase of 5.12 percent, amounting to Rs. 2 arba 84 crore. Meanwhile, operating profit climbed from Rs. 1 arba 4 crore to Rs. 1 arba 38 crore, which suggests a healthy improvement in income from the bank’s core business activities.
Challenges and Key Financial Figures
However, despite the overall increase in profit, the bank’s non-performing loan (NPL) ratio rose. The NPL ratio, which was 3.49 percent last year, increased by 0.28 percentage points to 3.77 percent. Bank management explained that challenges in recovering loans are evident due to the current economic slowdown.
During the review period, Kamana Sewa Bikas Bank collected deposits totaling Rs. 66 arba 18 crore and disbursed loans worth Rs. 54 arba 21 crore. Compared to the previous year, deposits grew by 5.32 percent and loans by 8.25 percent, indicating the bank’s continued efforts in business expansion.
The bank’s paid-up capital has reached Rs. 4 arba 21 crore. It recorded a distributable profit of Rs. 60 crore, with reserves accumulating to Rs. 2 arba 14 crore. Earnings per share (EPS) improved from Rs. 19.08 to Rs. 22.75, and the net worth per share stood at Rs. 171.01.
On the other hand, the distributable earnings per share (distributable EPS) actually decreased, falling from Rs. 16.74 to Rs. 15.16. This means that while the bank’s accounting profit saw a big increase, the portion of profit available to distributing dividends did not grow at the same rate.
In this period, the bank’s Capital Adequacy Ratio (CAR) improved from 12.58 percent to 14.16 percent. The Credit-Deposit (CD) Ratio was 86.34 percent, and the Base Rate decreased from 7.07 percent to 5.53 percent. The Interest Spread also narrowed from 4.27 percent to 3.98 percent.
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