21st January 2025, Kathmandu
Garima Bikas Bank Limited (GBBL) has reported a net profit of NPR 55.58 million for the first half of the current fiscal year 2025 (FY 2024/25).
Garima Bikas Bank Q2 FY2024/25
This marks a 7.16% increase from the NPR 51.25 million profit earned during the same period last year. The rise in profit is primarily due to higher interest income and a reduction in impairment charges.
Improved Interest Income and Lower Impairment Charges
In the first six months of the fiscal year, Garima Development Bank saw a 2.19% growth in interest income, which reached NPR 184.46 million. This was a positive indicator for the bank’s financial performance. At the same time, the bank successfully reduced impairment charges by 18.18%, bringing the amount down to NPR 44.19 million. The decline in impairment charges helped boost the bank’s net profit, reflecting its improved credit risk management.
Growth in Operating Income and Distributable Profit
The bank’s operating income also increased by 7.28%, reaching NPR 78.50 million during the review period. Along with this, Garima Development Bank reported a distributable profit of NPR 14.76 million. This strong performance highlights the bank’s ability to enhance its income while controlling its operating expenses.
Steady Growth in Deposits and Loans
Garima Development Bank has seen consistent growth in both its deposit collection and loan disbursement. By the end of the period, the bank had collected NPR 87.33 billion in deposits and provided NPR 67.66 billion in loans. These figures reflect the bank’s continued ability to attract new deposits and expand its lending activities, which is essential for long-term growth.
Strong Capital Position and Reserves
The bank maintains a solid financial position with a paid-up capital of NPR 5.68 billion and reserves totaling NPR 2.70 billion. These financial buffers ensure the bank’s stability and provide it with the necessary resources to absorb potential risks. Additionally, Garima Development Bank’s net worth per share stands at NPR 150.16, with earnings per share (EPS) at NPR 19.34, signaling positive returns for shareholders.
Rising Non-Performing Loans
Despite the overall positive results, the bank has experienced an increase in non-performing loans (NPLs). The NPL ratio now stands at 4.72%, which is higher than previous periods. While this increase in bad loans is concerning, the bank has worked to reduce impairment charges, suggesting its proactive approach to managing risk.
Investor Confidence Reflected in Market Valuation
The bank’s Price-to-Earnings (P/E) ratio is currently 20.12, indicating that investors have a strong outlook for the bank’s future growth. This higher valuation suggests that the market believes Garima Development Bank can continue its upward trajectory despite challenges like rising NPLs.
In conclusion, Garima Development Bank’s performance for the first half of FY 2025 reflects a strong financial foundation. The increase in net profit, growth in interest income, and effective cost management are positive signs for the bank’s future.
While the rise in non-performing loans presents a challenge, the bank’s solid capital base and risk management practices position it well for continued success in the coming months.
For more: Garima Bikas Bank Q2 FY2024/25
