Nabil Bank Limited (NABIL) has reported a net profit of Rs. 1.75 arba for the first quarter of the fiscal year 2082/83, reflecting a 14.57% decline compared to Rs. 2.05 arba earned in the same quarter last year. The dip in profitability was primarily driven by lower net interest income and a sharp increase in impairment charges.
Key Performance Overview
During the review period, net interest income dropped by 5.77%, reaching Rs. 39.01 arba, compared to Rs. 41.40 arba a year earlier. Similarly, operating profit fell by 10.84% to Rs. 25.79 arba. The bank witnessed a 41.40% surge in impairment charges, climbing to Rs. 6.47 arba, indicating higher provisioning requirements.
Personnel expenses also saw a moderate rise of 3.41%, amounting to Rs. 14.78 arba.
Balance Sheet Growth
Despite profit pressure, Nabil Bank maintained solid growth in its core business operations:
- Deposits grew by 6.10% to Rs. 5.56 kharba
- Loans and advances increased by 1.99% to Rs. 4.21 kharba
- Reserves rose by 1.66% to Rs. 32.44 arba
- Retained earnings surged by 18.06% to Rs. 5.63 arba
Financial Ratios & Capital Position
Nabil’s capital adequacy ratio stood at 12.67%, slightly higher than 12.64% in the same period last year, reflecting strong capitalization. The cost of funds declined sharply by 22.22%, reaching 4.13%, signaling improved cost efficiency.
However, the earnings per share (EPS) declined to Rs. 25.97, down from Rs. 30.40, while the net worth per share remained stable at Rs. 240.72.
The bank’s distributable profit after regulatory adjustments rose by 13.13% to Rs. 5.63 arba, highlighting sustained profitability at the operational level despite a dip in headline profit.
Market Snapshot
At the end of the first quarter, Nabil Bank’s shares traded at Rs. 509, giving it a price-to-earnings (P/E) ratio of 19.60 times. The stock performance reflects investor confidence in the bank’s long-term growth potential, even amid temporary profit declines.
Summary of Major Financial Indicators (in Rs. ‘000)
| Particulars | Q1 2082/83 | Q1 2081/82 | % Change |
|---|---|---|---|
| Paid Up Capital | 27,056,997 | 27,056,997 | 0.00% |
| Retained Earnings | 5,635,298 | 4,773,059 | +18.06% |
| Reserves | 32,439,874 | 31,909,517 | +1.66% |
| Deposits | 556,618,505 | 524,625,959 | +6.10% |
| Loans & Advances | 421,026,606 | 412,795,547 | +1.99% |
| Net Interest Income | 3,901,260 | 4,140,285 | -5.77% |
| Personnel Expenses | 1,478,551 | 1,429,834 | +3.41% |
| Impairment Charges | 647,227 | 457,727 | +41.40% |
| Operating Profit | 2,579,886 | 2,893,459 | -10.84% |
| Net Profit | 1,756,991 | 2,056,590 | -14.57% |
| Distributable Profit | 5,635,298 | 4,981,236 | +13.13% |
| Capital Adequacy Ratio | 12.67% | 12.64% | +0.24% |
| Cost of Fund | 4.13% | 5.31% | -22.22% |
| EPS (Rs.) | 25.97 | 30.40 | -14.57% |
| Net Worth per Share (Rs.) | 240.72 | 235.58 | +2.18% |
| Qtr End P/E Ratio | 19.60 | — | — |
| Qtr End Market Price (Rs.) | 509 | — | — |
Conclusion
While Nabil Bank faced a temporary contraction in profit margins due to rising impairment costs and lower net interest income, the overall financial fundamentals remain strong. With growing deposits, stable capital ratios, and improving cost efficiency, the bank continues to demonstrate resilience and strong operational footing in Nepal’s competitive banking sector.