Nerude Mirmire Laghubitta Reports Loss in Revised Third Quarter Financial Results

10th June 2026, Kathmandu

Nerude Mirmire Laghubitta Bittiya Sanstha Limited has published its revised unaudited interim financial statements for the third quarter of the fiscal year 2081/82, which ended in Chaitra 2082.

Nerude Mirmire Net Loss

The comprehensive financial report reveals a notable contraction in earnings and significant downward adjustments across key balance sheet and capital cushion metrics. Company executives attribute this shift primarily to sharp increases in mandatory loan impairment provisions and a rise in non-performing credit lines during the review period.

Tracking the Shift From Net Profit to Substantial Third Quarter Losses

The microfinance institution witnessed a major shift in its core bottom-line profitability during the first nine months of the active fiscal year.

Higher credit defaults required the company to divert significant revenue into impairment reserves, impacting its standard earnings capacity.

The primary income and expense metrics highlighted in the third-quarter report show:

• The company recorded a net loss of NPR 746.51 million for the nine months ending Chaitra 2082, shifting from a net profit of NPR 120.61 million in the same period of the prior year.
• Earnings per share experienced a downward adjustment, turning negative at NPR 71.21 from a positive position of NPR 5.52 twelve months earlier.
• Net worth per share declined to NPR 123.56, compared to a previous value of NPR 177.05 in the corresponding prior period.
• Interest income dropped to NPR 1.78 billion, down from a previous mark of NPR 2.07 billion.
• Net interest income contracted to NPR 898.30 million, down from NPR 1.02 billion in the previous fiscal year.
• Total operating income reached NPR 1.05 billion, while regular administrative operating expenses rose to NPR 759.83 million.
• The institution booked a substantial loan impairment charge of NPR 1.09 billion, increasing significantly from the NPR 329.62 million recorded last year.

These profitability pressures confirm that high impairment costs have put a strain on the current revenue generation lines of the firm.

As a result, the institution reported an annualized distributable loss of NPR 949.27 million, with the distributable loss per share standing at NPR 67.91, indicating that there is currently no basis for dividend distributions.

Evaluating Balance Sheet Movements and Changing Loan to Deposit Ratios

Despite the earnings contraction, the institution continues to manage a multi-billion rupee credit portfolio across its regional branch network.

The balance sheet shows a slight reduction in total assets alongside a steady increase in retail customer deposits.

Advertisement

The primary balance sheet positions recorded at the end of Chaitra 2082 feature:

Total assets adjusted slightly downward to NPR 20.22 billion, compared to NPR 21.14 billion in the prior fiscal year.

• Total outstanding loans and advances extended to microfinance clients amounted to NPR 18.36 billion.
• Customer savings and deposits grew to NPR 7.51 billion, up from a previous baseline of NPR 6.46 billion.
• Wholesale borrowings from larger commercial banking partners stood at NPR 10.27 billion.
• Total institutional equity capital decreased to NPR 1.73 billion, down from a previous level of NPR 2.47 billion.
• The increase in customer deposits indicates that the firm retains solid local savings collection capabilities despite credit collection challenges.

However, heavy reliance on external wholesale bank borrowings highlights the ongoing funding costs the company manages to support its active loan portfolio.

Sharp Rises in Non Performing Loans and Regulatory Capital Pressures

The most significant operational pressures are evident within the prudential indicators and asset quality ratios of the microfinance provider.

Rising default rates have pushed key metrics close to regulatory thresholds, requiring close managerial oversight.

The core prudential ratios and asset quality metrics include:

• Non-Performing Loan Ratio: Rose to 24.49 percent, increasing from the 14.81 percent recorded in the corresponding period of the previous year.
• Loan Loss Provision Coverage: The total loan loss provision to total NPL ratio stood at 52.41 percent at the end of the quarter.
• Cost of Funds: Institutional funding costs were recorded at 9.05 percent during the review window.
• Credit to Deposit and Borrowing Ratio: Reached 103.29 percent, reflecting high credit deployment relative to integrated funding resources.
• Capital Adequacy Ratio: The capital fund to risk-weighted assets ratio declined to 4.80 percent, down from 8.45 percent in the prior year.
• Interest Rate Spread: The net interest rate spread between borrowing and lending rates stood at 5.67 percent.

The shareholding structure of the firm remains balanced, with promoters holding a controlling 51 percent stake and the general public owning the remaining 49 percent of the equity.

Management notes that these updated figures have been prepared in strict accordance with Nepal Financial Reporting Standards. Moving forward, the primary operational focus of the company centers on strengthening loan recovery mechanisms, optimizing risk-weighted asset distribution, and rebuilding its regulatory capital foundations.

For More: Nerude Mirmire Net Loss