Kamana Sewa Bank Reports 13% Growth in Net Profit in Q1 FY 2025/26
2nd November 2025, Kathmandu
Kamana Sewa Bikas Bank Limited (KSBBL) has commenced the fiscal year 2025/26 on a high note, successfully reporting robust financial performance for the first quarter.
Kamana Sewa’s Net Profit Grows
The bank announced an unaudited net profit of NPR 19.76 crore, marking a commendable 12.92% increase compared to the NPR 17.50 crore net profit achieved during the same period in the previous fiscal year. This sustained growth in profitability, despite persistent economic challenges and tight market liquidity conditions, underscores the effectiveness of the bank’s disciplined financial management, strong core revenue generation, and proactive digital expansion strategies.
Core Financial Health and Profit Drivers
The remarkable surge in net profit is primarily attributable to a significant increase in the bank’s core operating income, demonstrating the capacity to grow its business and efficiently manage its operational metrics.
Surge in Interest and Operating Income
The bank’s Interest Income witnessed a substantial leap, rising to NPR 6.18 billion from NPR 5.19 billion recorded in the first quarter of the prior fiscal year. This impressive growth reflects the bank’s ability to strategically deploy its assets into high-yielding loan products and optimize its overall interest rate spread. The higher interest income drove a proportionate increase in Operating Profit, which rose to NPR 2.85 billion. This indicator is crucial as it represents the bank’s income before tax and non-operating adjustments, affirming its fundamental operational efficiency. Furthermore, the bank’s non-interest income stream remained strong, with Fee and Commission Income totaling NPR 844.21 million, adding another pillar of support to the bank’s overall profitability.
Balance Sheet and Capital Structure
As of the end of the first quarter, KSBBL’s total assets stood at a sizable NPR 71.63 billion, reflecting a steady and controlled expansion of its balance sheet. The bank’s capitalization remains solid, providing a strong foundation for future growth and expansion:
Paid-up Capital: NPR 3.86 billion
Reserves: NPR 1.88 billion
These figures highlight the bank’s commitment to capital adequacy, ensuring it has sufficient buffers against potential risks and can support its growth trajectory in compliance with the Nepal Rastra Bank’s (NRB) regulatory requirements.
Key Performance Indicators (KPIs) and Asset Quality
While KSBBL demonstrates strong growth and profitability, an analysis of its key performance indicators (KPIs) provides a detailed look at its market position and the quality of its loan portfolio.
Growth in Business Volume
The bank’s core business volumes showed healthy expansion during the quarter, reflecting continued customer confidence and market outreach:
Total Deposits: NPR 63.04 billion
Loans Disbursed: NPR 51.44 billion
The resulting Loan-to-Deposit (LDR) ratio of 86.35% indicates a well-balanced strategy for asset utilization, keeping the bank comfortably within the NRB’s mandated regulatory limit. An LDR in this range suggests that the bank is effectively leveraging its deposited funds to generate interest-earning assets while maintaining adequate liquidity.
Earning Metrics and Asset Quality
The strong net profit translates directly into attractive metrics for shareholders:
Earnings Per Share (EPS): The annualized EPS stands at a healthy NPR 20.46, representing the portion of the bank’s profit allocated to each outstanding ordinary share.
Net Worth Per Share: This key metric is valued at NPR 152.31, which provides a book value reference for investors.
However, in line with prevailing sector-wide trends, the bank has experienced an uptick in its Non-Performing Loans (NPLs), which stood at 4.41%. While this ratio has increased compared to the previous year, KSBBL’s diligent provisioning and recovery efforts remain critical to mitigate the risk associated with this figure and safeguard the bank’s asset quality over time.
Digital Expansion and Shareholder Returns
Beyond the financial statements, Kamana Sewa Bikas Bank has been strategically investing in future growth through digital innovation and consistent shareholder returns.
Commitment to Digital Banking
The bank recently marked a pioneering step in Nepal’s banking history with the launch of its Doorstep Banking service. This innovative product is designed to bring digital banking facilities directly to the customers’ homes, significantly enhancing convenience, particularly for elderly customers or those with limited mobility. The service promotes financial inclusion and is a concrete example of the bank’s stated plan to expand digital services further in the coming years. The focus on digital channels is expected to reduce operational costs, increase efficiency, and cater to the changing preferences of a technologically savvy customer base.
Rewarding Shareholders
The bank’s financial health and accumulated profits allow it to continue rewarding its shareholders. The recent 19th Annual General Meeting (AGM) for the preceding fiscal year (FY 2081/82) approved and distributed a substantial 15.7895% dividend from its accumulated profits. The bank’s solid Q1 performance, highlighted by the strong EPS and growth in operating profit, bodes well for the prospects of further attractive returns in the current fiscal year.
In summary, Kamana Sewa Bikas Bank’s Q1 FY 2025/26 results paint a picture of resilience and strategic strength. The bank is successfully leveraging its operational efficiencies and digital focus to drive profitability, effectively managing its balance sheet, and continuing its commitment to both customer service and shareholder value.
For More: Kamana Sewa’s Net Profit Grows
