NMB Bank Reports 46% Surge in Net Profit for FY 2081/82, Boosted by Lower Impairment Charges

NMB Bank Limited (NMB) has published its unaudited financial results for the fourth quarter of fiscal year 2081/82, showing a significant improvement in profitability compared to the previous year. The bank posted a net profit of NPR 3.28 billion, up from NPR 2.24 billion in the same period last year, marking a robust 46.22% growth.

The strong bottom-line performance is largely attributed to reduced impairment charges, which dropped sharply from NPR 2.03 billion last year to just NPR 958 million this year. While net interest income (NII) and fee-based income also saw healthy growth, the decline in loan loss provisioning was a major driver for the jump in operating profit and net earnings.

Net interest income increased by 11.14% to NPR 8.02 billion, reflecting an expansion in the bank’s interest-earning assets. Net fee and commission income rose by 21.62% to NPR 2.18 billion, indicating improved income generation from non-interest services such as transaction fees, service charges, and commission-based products. As a result, total operating income reached NPR 10.88 billion, up 14.34% from last year.

Operating profit experienced a sharp 64.46% growth, rising from NPR 3.25 billion to NPR 5.35 billion. The bank’s cost efficiency improved significantly due to the lower impairment charges, resulting in a strong operating leverage effect on profitability.

In terms of balance sheet growth, customer deposits expanded by 25.45% to NPR 280.92 billion, while loans and advances grew by 17.92% to NPR 229.12 billion. The bank’s reserve and surplus increased by 35% to NPR 14.31 billion, reflecting stronger retained earnings and a more robust capital position.

Earnings per share (EPS) increased by NPR 5.66 to NPR 17.90, further enhancing shareholder value. Distributable EPS stood at NPR 10.41, indicating the bank’s strong potential for dividend payouts. The bank’s net worth per share rose to NPR 180.68 from NPR 160.99 a year earlier, underscoring improved financial strength.

However, some metrics showed marginal declines. The capital adequacy ratio (Capital Fund to RWA) fell slightly to 12.03% from 12.84%, suggesting modest capital consumption to support asset growth. The base rate dropped to 6.22% from 8.42%, which could support competitive lending rates but may compress future margins. Interest rate spread decreased slightly to 3.82% from 3.99%, reflecting mild pressure on the lending-to-deposit rate differential.

The non-performing loan (NPL) ratio improved marginally to 3.72% from 3.40%, which is still manageable but indicates the need for continued credit quality monitoring in a growing loan book.

NMB Bank’s FY 2081/82 performance reflects a healthy mix of income growth and improved risk management. The significant drop in impairment charges highlights better loan portfolio performance or more aggressive recovery measures. While net interest income growth is moderate, the sharp rise in fee income shows diversification in revenue streams. The expansion in deposits and loans demonstrates strong customer acquisition and market presence, while the rise in reserves and net worth indicates strengthened capital buffers.

Going forward, sustaining this level of profitability will depend on maintaining asset quality, managing interest margins amid a lower base rate, and balancing growth with adequate capital ratios. Investors can be optimistic about dividend prospects given the solid distributable earnings and improved EPS, but should also monitor lending spreads and capital adequacy trends.

If you want, I can now prepare a performance interpretation chart to visually present NMB Bank’s growth and risk trends for this quarter vs last year. This will make the news article more data-rich and appealing.