KATHMANDU: Sanima Bank has reported a significant increase in net profit in the first quarter of the current financial year 2083-84. According to the bank’s unrevised financial statements, the bank’s net profit has increased by 131.13 percent to Rs 1.05 billion in the first quarter of the current financial year.

In the first quarter of the last financial year, the bank had earned a net profit of Rs 45.49 crore. This year, the bank’s profit has improved significantly due to the decrease in the amount of loan loss management, net interest income and service charge and commission income.

The bank had allocated Rs 95.67 crore for potential credit risk management (impairment) charge in the first quarter of the last FY, which was reduced to Rs 33.09 crore in the same period of the current FY.

Similarly, the net interest income of the bank has also increased. The bank has increased its net interest income from Rs 1.68 billion in the first quarter of the last fiscal year to Rs 1.84 billion in the same period of the current financial year.

The bank’s service charge and commission income has also improved significantly. During the review period, such income increased by 46.86 percent to Rs 44.78 crore. In the first quarter of the last financial year, the bank had earned Rs 30.49 crore under this head.

Sanima Bank has continued to expand its deposits and loans during the review period. Customer deposits increased by 2.08 per cent to Rs 254.10 billion in mid-September of the current fiscal year from Rs 248.92 billion in the corresponding period of the previous fiscal.

Similarly, the credit flow of the bank has also increased by 1.78 percent. The credit flow has increased from Rs 195.88 billion in mid-July to Rs 199.36 billion in mid-October.

The bank has also made progress in improving the quality of assets. The non-performing loan ratio of the bank has come down to 2.86 percent from 3.91 percent in the first quarter of the previous financial year.

Similarly, the net non-performing loan ratio has also decreased from 1.58 per cent to 1.08 per cent. The provision coverage has increased from 105.46 per cent to 136.71 per cent of the total non-performing loans.

With the change in the interest rate, the base rate of the bank and the cost of deposits have also come down. The base rate of the bank has come down from 5.59 percent in the first quarter of the last financial year to 4.60 percent in the same period of the current financial year.

The cost of deposits has come down from 4.32 per cent to 3.35 per cent. The spread rate of the bank has also come down from 3.65 per cent to 3.17 per cent. The bank’s loan-deposit ratio (CD ratio) stood at 79.23 per cent during the review period.

With the increase in profit, the bank’s earnings per share (EPS) has also improved significantly. Earnings per share increased from Rs 13.15 in the first quarter of the previous financial year to Rs 29.17 in the same period of the current financial year.

The bank has a paid-up capital of Rs 15.58 billion and has a reserve fund of Rs 9.58 billion. The bank has a net worth per share of Rs 185.54 and a price-to-earnings ratio of 13. It is 47 times, according to the financial statements.

The capital adequacy ratio of the bank has been maintained at 12.37 percent and primary capital fund ratio has been maintained at 9.70 percent. During this period, the distributable profit of the bank was Rs 1.99 billion.