Agriculture Development Bank (ADBL) announced a 43.38% increase in net profit

10th August 2025, Kathmandu

Agriculture Development Bank Limited (ADBL) has released its fourth-quarter financial statement for the last fiscal year, painting a compelling picture of a bank on a significant growth trajectory. The report highlights a remarkable 43.38% increase in net profit, a testament to the bank’s operational efficiency and strategic financial management.

ADBL Announces Profit Increase  

Surpassing a net profit of NPR 4.15 billion, up from NPR 2.89 billion in the previous fiscal year, ADBL has demonstrated its resilience and ability to thrive in a dynamic economic environment. This strong performance is not just a win for the bank but also signals a positive outlook for its shareholders and the broader financial sector in Nepal.

The bank’s success can be attributed to several key factors, including a sharp rise in operating profit and a strategic focus on expanding its loan and deposit portfolios. While some challenges, such as a decline in net interest income, were noted, the bank’s overall performance indicates a well-diversified approach to revenue generation. This detailed analysis will delve into the key financial indicators, providing a comprehensive overview of ADBL’s performance and its position in the Nepalese banking landscape.

Financial Performance: Profit, Operating Income, and Interest Trends

The headline figure from the financial statement is the massive leap in net profit, which grew by over 43%. This impressive growth is a direct result of a significant increase in the bank’s operating profit, which rose by 41.29% to a solid NPR 5.84 billion. Operating profit is a crucial metric, as it reflects the earnings from a company’s core business operations before taxes and interest, and ADBL’s performance in this area underscores its effective cost management and revenue-generating capabilities.

However, a deeper look into the financial statements reveals a nuanced picture. The bank’s net interest income saw a decline, dropping from NPR 10.55 billion to NPR 9.82 billion. Net interest income, which is the difference between what a bank earns from its loans and what it pays out on deposits, is often considered a primary indicator of a bank’s profitability. The slight drop in this area, along with a minor fall in total operating income, suggests that the bank faced some headwinds in its core lending activities. Despite this, the substantial rise in overall profit indicates that ADBL successfully leveraged other income sources, such as fees, commissions, and foreign exchange gains, to more than compensate for the dip in net interest income. This adaptability and diversification of revenue streams are key strengths for the bank.

A Boost for Shareholders: EPS and Dividend Capacity Soar

The strong financial performance translates into excellent news for shareholders. The bank’s Earnings Per Share (EPS), a vital metric for investors, grew from NPR 18.56 to an impressive NPR 27.63. This significant jump in EPS demonstrates the bank’s increased profitability on a per-share basis, making its stock more attractive to investors. Furthermore, the bank’s net worth per share reached NPR 241.04, reflecting a robust financial foundation and a strong intrinsic value for the company.

Perhaps most importantly, the bank’s distributable profit, which represents the amount available for dividend payments, saw a remarkable increase of 34.73%. This figure surged from NPR 2.13 billion to a healthy NPR 2.87 billion. This substantial growth in dividend capacity signals that the bank is well-positioned to offer a generous return to its shareholders, reinforcing their confidence and loyalty. The ability to consistently provide strong dividends is a key factor that differentiates top-tier banks in the market and solidifies ADBL’s reputation as a reliable investment.

Strengthening the Balance Sheet: Capital, Reserves, and Asset Quality

A closer look at ADBL’s balance sheet reveals a solid financial foundation. The bank’s paid-up capital stands at NPR 19.28 billion, a strong base for its operations. This is further bolstered by a robust reserve fund of NPR 16.90 billion. This healthy reserve position provides the bank with a financial cushion to manage unforeseen risks, explore new strategic investments, and withstand economic fluctuations. A strong capital and reserve base is essential for a bank’s stability and long-term sustainability.

In terms of market activity, the bank saw significant growth in both its deposit and loan portfolios. It successfully disbursed loans totaling NPR 213.14 billion and collected deposits worth NPR 293.57 billion. This expansion reflects the bank’s growing customer trust and its efforts to support various sectors of the Nepalese economy. Moreover, the bank’s commitment to sound financial management is evident in its improved asset quality. The ratio of Non-Performing Loans (NPLs) dropped from 3.91% to a more manageable 3.26%. This decrease indicates better risk management practices and a healthier loan portfolio, which is crucial for the bank’s long-term financial health.

Conclusion: A Bright Outlook for Agriculture Development Bank

The financial statement for the last fiscal year paints a picture of a dynamic and resilient institution. Agriculture Development Bank’s impressive growth in net profit and operating profit, coupled with a significant increase in dividend capacity, positions it as a strong contender in Nepal’s banking industry. While the decline in net interest income presents a minor challenge, the bank’s ability to compensate through other income streams demonstrates its adaptability and strategic vision. With a solid capital base, growing loan and deposit portfolios, and improving asset quality, ADBL is well-equipped to navigate the future and continue its trajectory of sustainable growth, delivering value to both its customers and shareholders.

For More: ADBL Announces Profit Increase