ICFC Finance Financial Results After Second Quarter
29th January 2026, Kathmandu
The operating landscape for national level finance companies in Nepal has become increasingly rigorous as they navigate a combination of high regulatory compliance and an evolving credit environment. According to the unaudited financial statements for the second quarter of the fiscal year 2082 2083 ICFC Finance Limited has reported a net profit of 32.03 million rupees for the period ending in Poush 2082.
ICFC Finance Financial Results
This figure represents a sharp 70.65 percent decline from the 109.13 million rupees recorded in the same period of the previous fiscal year. The latest ICFC Finance Financial Results underscore a cautious phase for the institution as it balances the need for portfolio growth with the rising costs of operation and credit risk management.
Interest Income and Revenue Dynamics
The primary source of revenue for the company continues to be its core lending activities. During the first six months of the current fiscal year gross interest income reached 912.85 million rupees with 433.10 million rupees generated in the second quarter. On the other side of the ledger interest expenses for the cumulative period stood at 611.46 million rupees. This resulted in a net interest income of 301.38 million rupees for the half year period compared to 142.02 million rupees specifically for the second quarter. The narrowing of net interest margins is a reflection of the systemic pressure on funding costs and a more competitive lending environment which has capped interest rate spreads for Class C finance companies at 4.6 percent.
To supplement its interest based earnings ICFC Finance reported a net fee and commission income of 40.77 million rupees year to date. While non interest income serves as a secondary revenue stream its contribution remains relatively modest. The company is currently working to enhance its service based income by expanding its digital footprint and transaction based offerings but for now the reliance on traditional lending spreads remains high.
Operating Expenses and Profitability Pressures
A significant factor weighing on the bottom line is the rising cost of operations. Total operating expenses for the second quarter reached 62.33 million rupees bringing the year to date total to 126.86 million rupees. Personnel expenses were a major component of this cost structure standing at 25.38 million rupees for the quarter as the company continues to invest in skilled human resources and branch maintenance. These rising overheads have directly impacted the operating profit which fell to a cumulative 46.61 million rupees compared to much higher levels in previous years.
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Credit Risk and Asset Quality
Maintaining asset quality is perhaps the most critical challenge for the institution in the current economic climate. The non performing loan ratio for ICFC Finance was reported at 3.51 percent for the second quarter. While this level is manageable and remains competitive within the finance company sector it has led to a significant increase in impairment charges. For the first half of the year the company set aside 139.89 million rupees for potential loan losses with 73.03 million rupees allocated in the second quarter alone. These heavy provisions are a proactive step to ensure the long term health of the balance sheet but they have acted as a major drag on the current years net profitability.
Balance Sheet and Capital Strength
Despite the dip in quarterly profit the balance sheet of ICFC Finance remains stable and well capitalized. As of mid January 2026 the total assets of the company stood at 25.25 billion rupees. The deposit base reached 21.46 billion rupees indicating that the company continues to maintain strong depositor confidence. On the asset side loans and advances to customers were recorded at 16.70 billion rupees reflecting a steady approach to credit deployment. The credit to deposit ratio of 80.06 percent suggests an aggressive but regulated lending stance as the company seeks to maximize its yield within the NRB guidelines.
The capital adequacy ratio of ICFC Finance stands at 12.21 percent which is comfortably above the minimum regulatory requirement of 11 percent for national level finance companies. The paid up capital remains at 1.18 billion rupees and the total equity attributable to holders is 2.01 billion rupees. However the retained earnings have turned negative by 28.30 million rupees due to the combined impact of high provisioning and lower current year earnings. This deficit in retained earnings currently limits the banks ability to propose dividends to its shareholders in the short term.
Shareholder Metrics and Outlook
The financial results have also impacted key shareholder indicators. The annualized earnings per share for the period declined to 5.41 rupees from 18.44 rupees in the previous year. The net worth per share stands at 170.19 rupees providing a solid book value. While the short term profit outlook remains cautious the management is focused on recovering non performing assets and improving operational efficiency. If the economy continues its gradual recovery and the bank can successfully write back even a portion of its impairment charges the profit trajectory could shift upward in the coming quarters.
In conclusion the ICFC Finance Financial Results for the second quarter of 2082 2083 reflect a bank navigating through a tough economic cycle. While the net profit has taken a hit the institutions strong liquidity, stable deposit base, and adequate capital buffer provide a foundation for future recovery. The focus for the remainder of the fiscal year will clearly be on improving the cost to income ratio and reclaiming stressed assets to restore shareholder value.
For More: ICFC Finance Financial Results
