Laxmi Sunrise Bank Reports Over NPR 4 Billion Net Profit
14th August 2025, Kathmandu
Laxmi Sunrise Bank Limited has released its financial results for the fourth quarter of fiscal year 2024/25, showcasing a remarkable performance that defies initial appearances.
Laxmi Sunrise Announces Profit
Despite facing headwinds in traditional revenue streams, the bank posted a net profit of NPR 4.11 billion, a significant 40.97% increase compared to the previous fiscal year. This impressive growth, which places the bank among the top-tier performers in the Nepali banking sector, was primarily driven by a strategic reduction in impairment charges and a strong performance in non-interest income.
The results provide a compelling narrative of resilience and effective management, particularly in a year marked by a challenging economic environment and the ongoing integration following the merger of Laxmi Bank and Sunrise Bank. The report’s detailed figures paint a picture of a bank that is successfully navigating market pressures while strengthening its financial foundation for long-term growth.
A Deeper Dive into the Profit Surge: The Power of Reduced Impairment Charges
At first glance, some of the bank’s key income figures might seem contradictory to its overall profit growth. The net interest income, a core measure of profitability from a bank’s lending activities, saw a decline of 7.99%, falling to NPR 11.37 billion. Similarly, the total operating income experienced a marginal dip of 1.54% to NPR 14.68 billion.
However, the real story of the bank’s success lies in its effective management of expenses and a sharp improvement in asset quality. This is most evident in the dramatic reduction of impairment charges, which plummeted from a substantial NPR 3.58 billion in the previous year to just NPR 1.18 billion in the current fiscal year.
What are Impairment Charges?
In banking, impairment charges are provisions that a bank sets aside to cover potential losses from loans that may not be fully repaid. When the economy is struggling or credit quality is poor, these charges can be very high, eating into a bank’s profits. Conversely, a significant reduction in these charges, as seen in Laxmi Sunrise Bank’s report, is a major positive indicator. It suggests that the bank has either successfully recovered a large number of previously defaulted loans or that its overall loan portfolio has become much healthier, requiring fewer provisions. This move essentially frees up capital that was previously tied up, directly boosting the bank’s operating and net profits.
The bank’s impressive operating profit of NPR 6.09 billion, which saw a 38.55% increase, is a direct reflection of this improved operational efficiency and reduced cost of doing business. This growth in operating profit, despite a decline in net interest income, highlights the bank’s ability to find alternative avenues for earnings and manage its risks prudently.
Diversifying Income and Strengthening the Balance Sheet
Laxmi Sunrise Bank’s performance was not solely reliant on the reduction of impairment charges. The bank also saw robust growth in its net fee and commission income, which increased by 10.05% to NPR 2.18 billion. This indicates a successful strategy of diversifying its revenue streams beyond traditional lending. Non-interest income from services like card transactions, remittances, and other fee-based services is becoming an increasingly important component of a modern bank’s profitability, and Laxmi Sunrise Bank is clearly capitalizing on this trend.
On the balance sheet front, the bank continues to demonstrate significant strength and stability. With a paid-up capital of NPR 24.34 billion and a reserve fund of NPR 21.09 billion, the bank is well-capitalized to absorb market shocks and fund future growth. Its ability to attract NPR 367 billion in deposits and deploy NPR 275 billion in loans further cements its position as a major player in the Nepalese banking sector. These figures, which reflect the combined strength of the merged entity, showcase the successful integration and enhanced scale of the new Laxmi Sunrise Bank.
Positive Outlook for Shareholders
The financial report also brings excellent news for investors. The bank’s Earnings Per Share (EPS) has jumped to NPR 16.91, a substantial increase of NPR 4.91 from the previous year. A higher EPS is a strong signal of a company’s profitability per share, which is a key metric for investors.
Furthermore, the bank reported a distributable profit of NPR 3.53 billion. This is the amount of profit that can be legally distributed to shareholders as dividends, pending regulatory approval. This high figure, combined with the strong EPS, suggests that Laxmi Sunrise Bank is well-positioned to announce an attractive dividend for its shareholders, enhancing investor confidence and a positive outlook for the bank’s stock.
The Net Worth Per Share stands at NPR 186.63, indicating a strong book value, while a P/E ratio of 14.12 times suggests that the market has a healthy valuation of the company’s stock.
In conclusion, Laxmi Sunrise Bank’s FY 2023/24 financial report is a powerful testament to the bank’s operational efficiency and strategic foresight. By effectively managing its risks and diversifying its income, the bank has not only achieved impressive profit growth but has also built a strong foundation for future success in Nepal’s competitive banking landscape.
For More: Laxmi Sunrise Announces Profit
