Everest Bank's Profit Improves, but Impairment Charges Limit Growth

Everest Bank Limited has reported a moderate increase in net profit for the second quarter of the current fiscal year, driven by improvements in interest and fee income. However, the rise in impairment charges has limited the growth rate of the profit.

As of the end of December, the bank recorded a net profit of NPR 2.11 billion, marking a 2.04% increase compared to NPR 2.07 billion during the same period last year.

The improvement in interest income, which increased by 5.96%, has supported the growth in profits. The bank’s interest income rose to NPR 4.57 billion, compared to NPR 4.31 billion in the previous fiscal year.

Similarly, fee and commission income showed a significant increase. The income from fees and commissions rose by 20.38%, from NPR 765 million in the previous year to NPR 920.9 million, contributing to a 9.73% increase in total operating income.

However, the rise in impairment charges has limited the overall profit growth rate. During the review period, the bank's impairment charge increased from NPR 349.5 million to NPR 562.7 million.

The distributable profit of the bank increased by 23.04%, reaching NPR 3.34 billion, and the dividend payout capacity also improved, rising from 30.58% to 31.93%, which strengthens the possibility of future dividend distributions.

Despite the growth in profit, the bank's earnings per share (EPS) decreased by NPR 1.20, falling to NPR 30.86.

In terms of financial indicators, the bank's non-performing loan (NPL) ratio stands at 0.68%, the cost of funds at 3.45%, and the return on equity (ROE) at 13.19%, all of which are considered satisfactory.

The bank's paid-up capital is NPR 13.72 billion, and it holds a reserve fund of NPR 18.52 billion. As of the end of December, the bank has collected deposits totaling NPR 3.04 trillion and made loans of NPR 2.36 trillion.