CYC Nepal Laghubitta Shows Robust Financial Performance in Q3 of FY 2081

CYC Nepal Laghubitta Bittiya Sanstha has posted a strong performance in the third quarter of the fiscal year 2081, demonstrating remarkable growth across several financial indicators. As per the unaudited report published for the period ending 31st Chaitra 2081, the microfinance institution has exhibited substantial improvement in profitability, income generation, and shareholder value compared to the same period last year.

One of the key highlights of the report is the sharp rise in Net Interest Income, which surged by 40.94% to NPR 292.2 million from NPR 207.3 million in Chaitra 2080. This growth underscores an improvement in the core lending business of the company. More impressively, the Net Fee and Commission Income skyrocketed by 433.35%, reaching NPR 334.6 million, a substantial leap from NPR 62.7 million last year, reflecting an increase in ancillary service income.

The Total Operating Income also grew by 23.90% to NPR 334.6 million. Despite this, the company faced increased impairment charges, which jumped 226.33% to NPR 17.9 million, possibly due to higher provisioning for non-performing loans. Nevertheless, the Operating Profit more than doubled, increasing by 123.99% to NPR 76.3 million from NPR 34 million in the same quarter of the previous year.

The bottom line also witnessed significant growth, with Profit for the Period reaching NPR 55.9 million—an impressive 99.46% increase from NPR 28 million. Consequently, the Earnings Per Share (EPS) doubled to NPR 27.96 from NPR 14.02. The Net Worth per Share rose to NPR 268.51, up from NPR 216.40, indicating strengthened shareholder equity. However, the Price to Earnings (PE) ratio declined from 123.05 to 56.99, potentially making the stock more attractive to value investors.

The distributable profit stood at NPR 43.3 million, and the Distributable EPS was NPR 21.67. Meanwhile, the Non-Performing Loan (NPL) ratio increased from 4.74% to 8.49%, signaling a rise in credit risk, which could be a concern going forward. In line with market dynamics, the Cost of Fund dropped from 9.41% to 7.06%, while the Base Rate also decreased from 17.77% to 13.06%. The Interest Rate Spread improved to 7.88% from 5.57%, reflecting better margin management.

On the balance sheet side, the Share Capital remained unchanged at NPR 266.42 million. Retained Earnings jumped to NPR 66.67 million from NPR 23.38 million, and Reserves rose to NPR 382.28 million, pushing the total Reserve and Surplus up by 23.93% to NPR 448.95 million. Loans and Advances saw a slight decline of 0.28%, settling at NPR 5.94 billion, while Deposits and Borrowings stayed steady around NPR 5.31 billion.

Overall, CYC Nepal Laghubitta has delivered a stellar third-quarter performance in FY 2081, driven by higher income, efficient cost management, and increased profitability. However, the rising NPL ratio remains a point of concern that the institution may need to address to sustain this growth trajectory. Investors and stakeholders can take encouragement from the improved fundamentals, although close monitoring of asset quality will be key in the upcoming quarters.