Kathmandu. Kumari Bank Limited has earned a net profit of more than Rs 1.07 billion in the first quarter of the current fiscal year 2083/84. According to the bank’s unrevised financial statements, the bank’s net profit increased by 1.70 percent compared to the same period of the previous financial year.

The bank has earned a net profit of Rs 1.07 billion till the end of the current financial year. In the first quarter of the last fiscal year 2082-83, the bank had earned a net profit of Rs 1.05 billion.

Although the net interest income of the bank has fallen significantly, the reduction in the amount to be set aside for loan loss management and improvement in fees, commission and other operating income have helped to increase the profit.

During the review period, the bank’s operating profit increased by 32.40 percent to Rs 1.88 billion. In the first quarter of the last financial year, the bank’s impairment charge was Rs 1.26 billion, which decreased to Rs 44.99 crore in the same period of the current fiscal year.

With this, the impairment charge has come down by 64.40 percent. The reduction in the amount allocated for loan loss management has played an important role in increasing the operating profit of the bank.

The net interest income, which is the main source of income of the bank, has decreased by 28.19 percent. The net interest income has decreased to Rs 2.91 billion from Rs 2.91 billion in the first quarter of the last financial year.

During the period, the interest income of the bank decreased from Rs 7.33 billion to Rs 6.18 billion. Similarly, interest expense also decreased from Rs 4.42 billion to Rs 4.09 billion.

On the other hand, net charge and commission income increased by 3.90 percent to Rs 88.23 crore. In the first quarter of the last financial year, such income was Rs 84.91 crore. The bank’s net trading income was Rs 25.71 crore and other operating income was Rs 44.11 crore.

The bank’s business expansion has also seen a positive growth. The bank’s customer deposits increased by 6.36 percent in the first three months of the current fiscal year compared to the corresponding period of the previous financial year. Customer deposits increased from Rs 402.73 billion in mid-July to Rs 428.34 billion in mid-October.

Similarly, the credit flow of the bank has also increased by 7.68 percent. The credit flow has increased from Rs 272.20 billion in mid-July to Rs 293.09 billion in mid-October.

Similarly, the bank’s total non-performing loan ratio (NPL) increased to 8.72 per cent from 6.98 per cent in the first quarter of the previous financial year. The bank’s net non-performing loan ratio also increased to 2.17 per cent from 1.56 per cent.

With the decline in interest rates in the market, the bank’s cost of funds, base rate and spread rate have also come down. The bank’s cost of funds has come down from 4.29 percent to 3.43 percent. Similarly, the base rate has come down from 5.82 percent to 4.80 percent.

The average interest rate (spread rate) of the bank has also come down to 3.03 percent from 3.53 percent in the previous financial year. The bank’s loan-to-deposit ratio (CD ratio) stood at 71.71 percent during the review period.

With the general increase in profit, the bank’s annual earnings per share (EPS) has also increased. EPS has increased to Rs 16.39 in the same period of the current fiscal from Rs 16.11 in the first quarter of the previous financial year.

Kumari Bank has a price-to-earnings ratio (P/E) of 14.55 times compared to Rs 238.40 per share in the market. The bank has a paid-up capital of Rs 26.22 billion. The net worth per share is Rs 172.31, capital adequacy ratio is 12.67 per cent and liquidity ratio is 35.49 per cent.

In the first quarter of the current FY, the bank’s distributable profit stood at Rs. 14.71 crores.