Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: First Microfinance Laghubitta Bittiya Sanstha has reported a strong increase in net profit in the second quarter of the current fiscal year, even as provisioning requirements and asset quality pressures continued to rise.
According to the unaudited financial statement up to mid-January (end of Poush), the microfinance institution’s net profit increased by 34.63 percent to Rs 70.4 million. In the same period of the previous fiscal year, the company had posted a net profit of Rs 52.3 million.
The profit growth was supported primarily by an increase in operating income, which offset a decline in interest income. Interest income fell by 12.54 percent to Rs 97.4 million during the review period, down from Rs 111.4 million recorded in the corresponding period last year.
Provisioning pressures, however, have intensified. By mid-January, the institution recorded Rs 30.4 million as loan loss write-back, reflecting ongoing stress in its credit portfolio. Non-performing loans (NPLs) have increased to 4.52 percent, up from 4.44 percent a year earlier, indicating a gradual deterioration in asset quality.
Earnings per share (EPS) stood at Rs 10.47, while net worth per share was reported at Rs 128.21. Distributable profit reached Rs 47.5 million by mid-January, compared to Rs 39.4 million in the same six-month period of the previous fiscal year.
The latest results highlight a mixed financial picture for First Microfinance, with profitability improving on the back of operational performance, while rising provisioning needs and weakening credit quality continue to pose challenges for sustainability in a tightening microfinance environment.
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