PCBL
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By Sandeep Chaudhary

Prime Commercial Bank Q4 Results: Strong Profitability Despite Revenue Slowdown

Prime Commercial Bank Q4 Results: Strong Profitability Despite Revenue Slowdown

Prime Commercial Bank (PCBL) has published its Q4 audited results for FY 2024/25, reflecting a moderate decline in revenues but a strong improvement in profitability and margins.

The bank posted a total revenue of Rs. 23.53 billion, a 9.21% YoY decline compared to Rs. 25.85 billion in Q4 FY 2023/24. Revenue growth has been under pressure, with quarterly contractions of 8.13% in Q3 and 13.05% in Q2.

Despite weaker revenue, gross profit rose to Rs. 8.82 billion, up from Rs. 8.00 billion last year, maintaining a gross margin of 37.49%, which is significantly higher than last year’s 30.98%.

Net income surged to Rs. 4.02 billion, up from Rs. 3.77 billion in Q4 FY 2023/24. The net profit margin improved to 17.10%, showing efficiency gains and stronger bottom-line performance despite top-line weakness.

Profitability ratios remained healthy. Return on Assets (ROA) was recorded at 1.39%, broadly stable compared to 1.50% last year. Return on Equity (ROE) stood at 12.55%, slightly higher than 12.74% a year ago. Earnings per share (EPS, annualized) improved to Rs. 20.74, up from Rs. 19.45 last year. The PE ratio remained attractive at 13.32, highlighting favorable market valuation compared to earnings.

The book value per share climbed to Rs. 173.72 from Rs. 159.41 a year earlier, while the market value per shareincreased to Rs. 276.31 from Rs. 221.80. The bank has not declared any dividend yet for the period.

Financial Sector Indicators

  • Capital Adequacy (Capital Fund to RWA): 11.74%, broadly steady compared to 11.90% last year.

  • NPL ratio: 5.56%, higher than 4.67% last year, suggesting some stress in asset quality.

  • Loan Loss Provision Coverage: 93.09%, slightly weaker than 108.49% in the same period last year.

  • Cost of funds: Reduced to 5.21% from 7.03% last year, easing financing pressure.

  • Base rate: Declined to 6.49% from 8.49% last year, indicating more competitive lending conditions.

  • Net Interest Spread: Stable at 3.69%, close to last year’s 3.98%.

  • Liquidity: Net liquid asset ratio improved to 30.36% from 27.51% last year.

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