Nepal SBI Bank Limited has reported a net profit of Rs. 1.20 billion in the third quarter of the current fiscal year 2081/82. This marks a 3.36% increase compared to the same period of the previous fiscal year, when the bank had earned a net profit of Rs. 1.16 billion.

Key Reason Behind Profit Growth

The improvement in net profit is primarily due to a reduction in impairment charges, which fell from Rs. 800 million to Rs. 725.8 million, showing a 9.28% decrease. This decrease positively impacted the bank’s operating and net profit figures.

Slight Dip in Net Interest Income

Despite the profit increase, the Net Interest Income slightly declined by 1.09%, from Rs. 3.57 billion in Q3 2080/81 to Rs. 3.53 billion in Q3 2081/82.

Other Key Financial Highlights

Total Operating Income grew by 2.15%, reaching Rs. 4.64 billion.
Net Operating Income increased by 4.60% to Rs. 3.91 billion.
Operating Profit surged by 8.92%, totaling Rs. 1.79 billion.

Capital, Reserve & Distributable Profit

Nepal SBI Bank’s paid-up capital now stands at Rs. 10.89 billion, a 3.80% rise from the previous year-end.
Reserves increased to Rs. 8 billion, up by 1.91%.
Distributable profit surged to Rs. 1.05 billion, up by 26.03%, compared to Rs. 834.3 million in the previous year. Based on this, the bank may be in a position to distribute around 11.10% in dividends.

Deposits and Lending Growth

Customer deposits increased by 5.88%, reaching Rs. 185.83 billion.
Loans and advances to customers rose by 7.36%, totaling Rs. 135.25 billion.

Additional Financial Ratios and Indicators

Earnings Per Share (EPS): Rs. 14.72
Net Worth Per Share: Rs. 183.08
Non-Performing Loan (NPL) Ratio: 4.06% (up from 1.98% last year)
Cost of Funds: 5.35% (down from 7.50%)
Base Rate: 6.73% (down from 8.95%)

Nepal SBI Bank has shown steady financial performance in the third quarter of FY 2081/82. The reduction in impairment charges and a rise in operating profit have contributed positively. The significant increase in distributable profit raises expectations of a decent dividend payout. However, the rise in NPLs (non-performing loans) is a concern that the bank will need to address in the coming quarters.