29th January 2025, Kathmandu
Global IME Laghubitta has reported a significant profit increase of 147.57% in the first quarter of the fiscal year. The company earned NPR 11.83 million, a notable rise compared to the same period last year.
Global IME Laghubitta Q1 Earnings
The profit boost came from reduced funding costs, as the interest rates on loans from commercial banks fell. This made funds more affordable and allowed for increased business growth.
Higher Interest Income and Loan Growth
The institution’s loan investments increased from NPR 8.5 billion to NPR 9.43 billion, leading to a rise in interest income. The income grew from NPR 28.64 million to NPR 35.7 million this year. The increase in interest earnings, combined with a growing loan portfolio, helped push profits higher.
Lower Provisions for Loan Losses
Provisions for loan losses dropped significantly. In the previous fiscal year, the provision stood at NPR 105.9 million. This year, it decreased to NPR 27.6 million. This reduction is due to better asset quality and fewer non-performing loans, contributing positively to the overall profit.
Increased Deposits and Borrowings
Global IME Laghubitta saw an increase in customer deposits, rising from NPR 3.07 billion to NPR 3.31 billion. Borrowings from commercial banks also grew from NPR 4.4 billion to NPR 4.93 billion, providing the company with more funds for business expansion.
Reduced Cost of Funds
The Laghubitta institution’s cost of funds decreased to 7.86% from 8.4% last year. This reduction in costs was a significant factor in boosting profitability.
Improved Financial Ratios
The company’s net worth per share is NPR 200.38, and its price-to-earnings (P/E) ratio stands at 30.73. The earnings per share (EPS) reached NPR 38.24, showing a substantial increase from last year’s NPR 15.46.
Positive Outlook for Growth
Global IME Laghubitta continues to show strong growth in both its loan portfolio and deposits. With a declining NPL ratio of 4.10%, the company’s future looks promising in the microfinance sector.
For more: Global IME Laghubitta Q1 Earnings
