Prabhu Bank's NPL Ratio Increases, Profit Declines

Prabhu Bank Limited's non-performing loan (NPL) ratio has risen to nearly 8%, further increasing the bank's financial pressure. The NPL ratio has increased from 5.06% to 7.94%, leading to a decline in both operating profit and net profit.

For the second quarter of the current fiscal year, Prabhu Bank has earned a net profit of NPR 1.14 billion. This is a decrease of 24.08% compared to the same period last year, when the bank earned NPR 1.336 billion.

While the bank's interest income rose by 2.38% and fee and commission income increased by 4.59%, the increase in non-performing loans and impairment charges led to a decrease in both operating profit and net profit.

The bank's interest income has reached NPR 4.984 billion, compared to NPR 4.867 billion in the previous year. However, due to the increase in non-performing loans, the impairment charge has risen from NPR 814.2 million to NPR 1.45 billion.

As a result, the bank's operating profit has decreased from NPR 2.522 billion to NPR 1.968 billion.

As of the end of December, the bank’s distributable profit is negative, amounting to NPR 3.356 billion, which creates challenges for dividend distribution.

For the review period, the bank's earnings per share (EPS) stood at NPR 8.62, net worth at NPR 146.17, price-to-earnings (P/E) ratio at 21.27x, and liquidity ratio at 39.31%.

The bank's paid-up capital is NPR 23.542 billion, and its reserve fund has decreased by 42.86%. Deposits have increased to NPR 340 billion, while loans have reached NPR 227 billion.