Himalayan Bank's Profit Falls by 74.33%, EPS Also Affected

Himalayan Bank Limited has released its financial report for the third quarter of the fiscal year 2081-82 (2024-25). According to the report, the bank's net profit has decreased by 74.33% compared to the same period last year. During this period, the bank earned a net profit of only NPR 500.048 million, down from NPR 1,948.181 million in the same period last year.

Decline in Net Interest Income

During the review period, the bank's net interest income dropped by 8.08%, reaching NPR 7,752.411 million. In the same period last year, this figure stood at NPR 8,433.922 million. Similarly, the total operating income decreased by 4.63%, amounting to NPR 9,109.581 million, compared to NPR 9,552.257 million in the previous year.

Operating Profit Sees Growth

Despite the decline in net profit, the bank's operating profit increased by 8.31%, reaching NPR 3,811.531 million. Last year, the operating profit was NPR 3,518.933 million. Additionally, the net operating income rose by 6.79%, reaching NPR 7,900.063 million.

Rise in Non-Performing Loans and Impairment Charge

The bank's non-performing loans (NPL) increased from 4.96% last year to 7.68%, marking a rise of 2.72%. This increase indicates a negative impact on the bank's overall financial health. Meanwhile, the impairment charge decreased from NPR 2,257.374 million to NPR 1,319.518 million.

Distributable Profit Remains Negative

Himalayan Bank's distributable profit stands at a negative NPR 7,363.459 million. Last year, this figure was negative NPR 5,242.489 million. This situation highlights a significant challenge to the bank's ability to distribute dividends.

Paid-Up Capital and Reserves

The bank's paid-up capital remains steady at NPR 21,656.615 million, unchanged from last year. However, the reserve fund saw a 1.91% increase, reaching NPR 22,835.904 million, up from NPR 22,407.991 million last year.

Deposits and Loans

During the review period, the bank's deposits grew by 2.46%, reaching NPR 301,137.978 million, compared to NPR 293,899.590 million last year. Similarly, loans and advances increased by 1.43%, amounting to NPR 233,534.866 million, up from NPR 230,239.742 million in the previous year.

Key Financial Indicators

• Earnings Per Share (EPS): The EPS dropped by NPR 8.91, from NPR 11.99 last year to NPR 3.08 this year.

• Net Worth Per Share: The net worth per share remains stable at NPR 171.44, consistent with last year.

• Cost of Funds: The cost of funds decreased from 7.53% to 5.03%.

• Base Rate: The base rate fell from 9.84% to 6.80%.

Himalayan Bank's third-quarter financial report reflects a significant decline in net profit and a rise in non-performing loans. However, growth in operating profit and the expansion of deposits and loans provide some positive insights. The bank needs to adopt stronger strategies to manage non-performing loans and enhance profitability moving forward.