Central Finance Financial Performance Analysis Second Quarter 2082/83
29th January 2026, Kathmandu
The national level finance sector in Nepal continues to face structural headwinds and the latest financial report from Central Finance Limited for the second quarter of the fiscal year 2082 2083 highlights these ongoing challenges. According to the unaudited financial statements for the period ending in Poush 2082 the institution reported a net profit of 33.74 million rupees for the quarter.
Central Finance Financial Performance
While the company achieved a quarterly profit its cumulative half year net profit stood at 51.10 million rupees. This represents a significant recovery in bottom line performance compared to the same period in the previous fiscal year when the company had recorded a cumulative net loss of 40.69 million rupees. The transition back into profitability is a key indicator of the institutions efforts to stabilize its operations amid a fluctuating interest rate environment.
Revenue Generation and Interest Dynamics
The primary driver of the Central Finance Limited financial stability this quarter was its net interest income. For the half year ending in Poush 2082 the company earned a total interest income of 310.24 million rupees. After accounting for interest expenses of 190.15 million rupees the net interest income reached 120.09 million rupees representing an 11.45 percent increase from the previous years cumulative figure of 107.76 million rupees. This growth suggests that the company has effectively managed its cost of funds which stood at 5.28 percent for the review period.
Non interest income segments also provided a stable secondary revenue stream. Net fee and commission income contributed 12.16 million rupees cumulatively. Total operating income for the first six months reached 131.63 million rupees demonstrating the institutions ability to generate revenue from its core banking services despite the cautious economic climate.
Operating Expenses and Provisioning
Operational discipline remains a priority as the company works to protect its margins. Personnel expenses for the first half of the year totaled 62.19 million rupees with other operating expenses reaching 28.53 million rupees. Despite these rising costs the company reported an operating profit of 40.16 million rupees for the quarter and a cumulative half year operating profit of 62.42 million rupees. This is a sharp reversal from the previous years half year operating loss of 56.41 million rupees and signals a much healthier operational trajectory.
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The improvement in profitability occurred despite a higher allocation for impairment charges. For the half year the company set aside 11.27 million rupees for potential loan losses. This proactive provisioning is necessary given the current credit environment although the non performing loan ratio surged significantly from 11.94 percent to 14.18 percent over the last year. Managing this rising non performing asset base will be the most critical task for the management in the remaining quarters of the fiscal year.
Balance Sheet and Capital Strength
The total assets of Central Finance Limited stood at 9.64 billion rupees as of the end of Poush 2082. The institutions deposit base reached 7.91 billion rupees while loans and advances to customers were recorded at 4.53 billion rupees. With a credit to deposit ratio of 55.60 percent the company maintains a high level of liquidity reflecting a conservative lending stance in the current market.
The capital position of the company remains strong and well above regulatory requirements. The paid up capital is 948.87 million rupees and the total equity attributable to holders is 1.07 billion rupees. The capital adequacy ratio stands at 13.77 percent providing a stable buffer to absorb potential financial shocks. However retained earnings remained in a deficit of 226.54 million rupees as of mid January 2026 reflecting the impact of historical losses.
Shareholder Indicators and Future Outlook
Shareholder metrics have improved alongside the net profit recovery. Annualized earnings per share for the period were reported at 10.77 rupees compared to a negative figure in the previous year. The net worth per share of the institution currently stands at 113.65 rupees. While the current negative retained earnings prohibit the distribution of dividends the positive trend in earnings is an encouraging sign for long term investors.
In summary the Central Finance Limited financial results for the second quarter of 2082 2083 present a story of a successful return to profitability. While the high non performing loan ratio and negative retained earnings are significant hurdles the institutions strong capital base and improving net interest income provide a foundation for further growth. The coming quarters will test the managements ability to aggressively recover non performing loans to sustain this newfound profitability.
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