Saptakoshi Development Bank Analysis of Financial Performance Q2 2082/83
30th January 2026, Kathmandu
Saptakoshi Development Bank Limited (SAPDBL) has navigated a challenging first half of the fiscal year 2082/83 by focusing on cost management and digital banking expansion. As a regional development bank with its head office in Morang, the institution is currently prioritizing the recovery of bad loans to stabilize its bottom line.
Saptakoshi Development Bank Analysis
For the first quarter ending in Ashwin 2082, the bank reported a net loss of 1.21 million rupees, indicating that legacy asset quality issues continue to put pressure on overall profitability. This initial loss set a cautious tone for the second quarter as the management redirected resources toward more aggressive loan settlement initiatives.
Revenue Dynamics and Interest Rate Trends
The core revenue for Saptakoshi Development Bank is driven by its net interest income, which has been impacted by the shifting monetary landscape in Nepal. The base rate for the institution has shown a steady downward trajectory, falling from 6.47 percent in Ashad 2082 to 6.33 percent by Ashwin 2082. This decline in the base rate reflects a lower cost of funds for the bank, which reached 6.47 percent by mid July 2025.
Interest Spread: The bank maintained an interest spread rate of 3.78 percent in Ashwin 2082, slightly down from the 4.03 percent recorded earlier in the year.
Total Revenue: For the first quarter of 2082 2083, the total revenue was recorded at 143.46 million rupees.
Gross Profit: The company achieved a gross profit of 65.00 million rupees during the same period.
Funding Strategy: The bank continues to offer competitive interest rates on its saving products, such as the Future Saving and Recurring Fixed Deposit accounts, to maintain a stable retail deposit base.
Asset Quality and Risk Management
Maintaining the health of the loan portfolio remains the most significant hurdle for Saptakoshi Development Bank in 2082. By mid October 2025, the non performing loan (NPL) ratio for the bank was reported at 11.5 percent, which is significantly higher than the industry average for development banks. This double digit NPL level is a result of the prolonged economic slowdown and its impact on small and medium enterprises in the eastern region of Nepal.
To mitigate these risks, the bank has intensified its recovery efforts. In late January 2026 (Magh 2082), the bank published multiple legal notices for loan settlement and property auctions in various locations, including Morang, Sunsari, and Itahari. These 15 day auction notices and 35 day loan call back papers indicate a more rigorous approach to clearing bad debts and improving the capital adequacy position.
Balance Sheet and Capital Strength
The financial position of the bank remains supported by its core capital despite the recent quarterly losses. As of mid July 2025, the total assets of Saptakoshi Development Bank stood at approximately 7.59 billion rupees.
Paid up Capital: The bank has a paid up capital of 834.33 million rupees.
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Deposits and Loans: Total deposits were recorded at 7.58 billion rupees, while the total loan and advance portfolio stood at 5.99 billion rupees.
CD Ratio: The credit to deposit ratio was healthy at 80.68 percent, ensuring compliance with the Nepal Rastra Bank regulatory ceiling of 90 percent.
Capital Adequacy: The total capital fund to total risk weighted exposures (CAR) stood at 9.06 percent, which is slightly below the regulatory threshold of 11 percent, necessitating the ongoing focus on capital preservation and loan recovery.
Investor Metrics and Market Position
On the Nepal Stock Exchange (NEPSE), Saptakoshi Development Bank (SAPDBL) has seen significant volatility in its share price during the second quarter. By late January 2026, the share price was trading around 970 rupees, having reached a 24 hour high of 1,025 rupees on some trading days.
Earnings Per Share: The annualized basic earnings per share (EPS) for the first quarter was a negative 0.58 rupees.
Book Value: The net worth per share or book value per share (BVPS) remains a key metric for value investors, reflecting the bank’s intrinsic equity value after accounting for its total liabilities.
Market Capitalization: The company’s market capitalization remains over 129 million rupees based on the latest traded volumes and prices.
Dividend History: The bank has a history of providing bonus shares, such as the 11 percent bonus distributed in 2072/73, although current profit pressures have made cash dividends less frequent in recent years.
Management and Future Strategy
The executive leadership, headed by CEO Dinesh Kumar Pokhrel, is currently focused on enhancing digital service delivery to reduce operating costs. The bank offers a variety of electronic services including mobile banking, locker facilities, and specialized loan products like the Home Loan and Business Loan. By modernizing its branch network in the Morang and Sunsari districts, the bank aims to attract lower cost deposits and improve its net interest margin.
In summary, the Saptakoshi Development Bank financial results for the first half of 2082/83 reflect a transitional period. While the net loss and high NPL ratio are immediate concerns, the bank’s successful reduction of its base rate and aggressive loan recovery actions provide a path toward stabilization. For investors, the focus for the remainder of the fiscal year will be on whether the bank can successfully bring its NPL ratio back into the single digits and meet the minimum capital adequacy requirements.
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