Nepal Investment Bank Q4 Results: Strong Profitability Amid Revenue Decline

Nepal Investment Bank (NIMB) has released its audited financial results for Q4 FY 2024/25, reflecting a mixed performance with declining revenues but strong profitability, improved margins, and stable financial strength.

The bank posted a total revenue of Rs. 36.10 billion, down 11.22% YoY from Rs. 43.06 billion in the same quarter last year. Sequentially, revenue also fell by 22.89% in Q3 and 16.15% in Q2, highlighting a challenging environment for income growth.

Despite the revenue decline, gross profit reached Rs. 14.12 billion, maintaining a healthy margin of 39.13%, up from 34.87% a year earlier. This indicates effective cost management and stronger operating efficiency.

Net income stood at Rs. 6.75 billion, a 29.9% YoY increase from Rs. 5.19 billion in Q4 of FY 2023/24. The net profit margin expanded to 18.72%, compared to 12.07% last year, signaling significant bottom-line improvement even under revenue pressure.

Key profitability ratios remained steady. ROA (Return on Assets) was reported at 1.27%, while ROE (Return on Equity) stood at 10.57%, both slightly stronger than last year. EPS (Annualized) climbed to Rs. 19.80, up from Rs. 15.23 a year ago, while the PE ratio stood at 11.67, showing an attractive valuation relative to earnings.

The book value per share increased to Rs. 197.38, while the market value per share reached Rs. 231.02, higher than Rs. 175.10 in Q4 last year, reflecting stronger investor sentiment. Dividend details are yet to be announced.

Financial Sector Indicators

• Capital Fund to RWA: 13.73%, stable compared to 13.67% last year.

• NPL ratio: Rose slightly to 5.85% vs. 4.95% last year, showing moderate asset quality stress.

• Loan loss provision coverage: Improved to 108.87%, up from 102.64% in Q3.

• Cost of funds declined to 4.25%, easing from 5.87% in Q4 last year, benefiting profitability.

• Base rate moderated to 5.78% vs. 7.69% last year, while Net Interest Spread narrowed slightly to 3.01% from 4.00%, indicating competitive lending conditions.

• Liquidity remained strong with a Net Liquid Asset ratio of 37.36%, higher than last year’s 32.64%.