Nabil Bank Profits Surge 46% to NPR 4.75 Billion: Strategic Recovery Drives Growth
Author
NEPSE TRADING
KATHMANDU – Nabil Bank Limited (NABIL), a pioneer in Nepal’s private banking sector, has delivered a stellar performance for the second quarter (Q2) of the current fiscal year. Defying the broader economic slowdown, the bank reported a massive 46.71% increase in net profit, reaching a staggering NPR 4.75 billion.
This is a significant jump from the NPR 3.24 billion earned during the same period last fiscal year, cementing Nabil’s position as a dominant force in the financial landscape.
The "Write-Back" Miracle The primary driver behind this nearly 47% surge in profit is the reversal of impairment charges. While many banks are currently struggling with rising bad loans, Nabil successfully recovered previously provisioned funds, leading to a write-back of NPR 48.8 million.
This recovery directly boosted the operating profit by 26.95%. While core business metrics—Net Interest Income (up 2.42%) and Fee/Commission Income (up 6.61%)—showed steady growth, it was the efficiency in loan recovery that acted as the ultimate catalyst for the bottom-line explosion.
Shareholder Value and Returns The bank’s financial health translates into impressive metrics for its investors:
Earnings Per Share (EPS): Skyrocketed by NPR 11.06, reaching a robust NPR 35.04.
Distributable Profit: The bank holds NPR 3.27 billion in distributable profit, resulting in a Distributable EPS of NPR 22.50. This suggests that Nabil is on track to provide one of the most attractive dividend payouts in the industry this year.
Valuation: The stock currently trades at a Price-to-Earnings (P/E) ratio of 13.91, which is considered highly attractive given the bank’s high growth rate and blue-chip status.
Capital Strength and Scale Following the issuance of NPR 5 billion in 8% Non-Cumulative Perpetual Non-Convertible Preference Shares, Nabil’s paid-up capital has reached NPR 32.05 billion. Its reserve fund stands at a massive NPR 36.70 billion, providing the bank with an enormous buffer against any future economic shocks.
On the business front, Nabil’s scale remains unmatched, with NPR 566.05 billion in deposits and NPR 434.73 billion in credit disbursement.
Detailed Interpretation: Why this matters
Nabil’s Q2 report is a masterclass in "Asset Quality Management." In a market where peers like Laxmi Sunrise are reeling under massive provisions, Nabil has managed to turn its "bad debts" back into "good cash."
Efficiency over Expansion: The modest 2.42% growth in interest income shows that Nabil isn't just chasing new loans in a risky market; instead, it is focusing on getting paid for the loans it already gave. This "quality over quantity" approach is what led to the high EPS.
Dividend Security: With a net worth per share of NPR 235.64, Nabil is currently the safest and most profitable "Value Stock" for long-term investors.
Market Sentiment: The PE ratio of 13.91 implies that the market may still be undervaluing Nabil’s recovery speed. As the news of the 46% profit hike spreads, we may see a significant upward adjustment in its stock price.
