Nepal Investment Mega Bank Releases Third Quarter Financial Report for FY 2081/82: Detailed Analysis

Nepal Investment Mega Bank Limited (NIMB) has published its unaudited financial statement for the third quarter of the current fiscal year 2081/82 (as of Chaitra 31, 2081, or mid-April 2025). The report highlights significant improvements in the bank’s financial performance, particularly a 38.61% increase in net profit compared to the same period in the previous fiscal year.

Net Profit and Key Drivers

In the first nine months of the current fiscal year, the bank earned a net profit of NPR 4.54 billion. This marks an increase of NPR 1.27 billion compared to the NPR 3.27 billion net profit recorded in the same period of the previous fiscal year (2080/81).

The primary drivers behind this profit growth include a substantial reduction in impairment charges. During the review period, impairment charges dropped by 61.39%, from NPR 3.04 billion in the previous year to NPR 1.19 billion this year. Additionally, net fee and commission income surged by 33.24%, rising from NPR 1.14 billion to NPR 1.52 billion.

However, net interest income declined by 6.50%, falling from NPR 11.03 billion to NPR 10.31 billion. Total operating income also decreased by 1.65%, from NPR 13.10 billion to NPR 12.79 billion. Despite this, operating profit saw a 22.26% increase, growing from NPR 5.40 billion to NPR 6.51 billion.

Earnings Per Share (EPS) and Distributable Profit

The bank’s earnings per share (EPS) improved during the period, increasing by NPR 4.94 from NPR 12.80 to NPR 17.74. However, distributable profit remains negative at NPR 1.10 billion, though this is an improvement compared to the NPR 5.69 billion negative distributable profit in the same period last year.

The price-to-earnings (PE) ratio stands at 11.92 times, slightly down from 12.21 times last year. Meanwhile, the net worth per share has increased to NPR 190, up from NPR 173 in the previous year.

Capital Structure and Reserves

The bank’s paid-up capital remains unchanged at NPR 34.12 billion. Reserves and surplus have grown by 18.45%, from NPR 26.43 billion to NPR 30.84 billion. Retained earnings have also improved but are still negative at NPR 1.10 billion, compared to a negative NPR 5.69 billion last year.

Deposits and Loan Disbursement

As of the end of Chaitra, the bank collected deposits worth NPR 455.89 billion, a 13.01% increase from NPR 403.41 billion in the previous year. Loan disbursement reached NPR 327.82 billion, up by 7.31% from NPR 305.49 billion in the same period last year.

Other Financial Indicators

• Capital Fund to Risk-Weighted Assets (RWA): 13.33% (up from 13.27%)

• Non-Performing Loans (NPL): 1.53% (up from 1.12%)

• Credit to Deposit Ratio (CD Ratio): 76.76% (down from 79.74%)

• Base Rate: 6.10% (down from 8.52%)

• Interest Rate Spread: 3.45% (down from 4.00%)

Nepal Investment Mega Bank has shown notable progress in strengthening its financial position during this quarter. The significant reduction in impairment charges and the increase in net fee and commission income have positively impacted profit growth. However, the decline in net interest income and the negative distributable profit highlight areas that require further improvement. The growth in deposits and loans, along with improved reserves, indicates positive signs for the bank’s long-term stability. Nevertheless, the reduction in the base rate and interest rate spread suggests a need for better interest rate management in the future.