Financial Performance of NIC Asia Bank Declined in FY 2024/25
18th August 2025, Kathmandu
Based on its unaudited financial report for the fourth quarter of fiscal year 2081/82, NIC Asia Bank’s financial health weakened, primarily due to a sharp decline in profit
NIC Asia Experiences Loss
Based on its unaudited financial report for the fourth quarter of fiscal year 2024/25, NIC Asia Bank’s financial health weakened, primarily due to a sharp decline in profit, which dropped by over 77% compared to the previous fiscal year. This decline was driven by increased provisioning for loan losses, a rise in non-performing loans, and a slight reduction in net interest income.
Profitability and Revenue
NIC Asia Bank’s net profit for FY 2024/25 was just Rs 161.57 million, a significant fall from Rs 701.4 million in FY 2080/81. This marks a decrease of approximately 77%. Despite this, the bank’s core business of lending remained relatively stable, with net interest income at Rs 10.25 billion, a slight dip from Rs 10.76 billion in the previous year. The key reason for the profit collapse, however, was the substantial increase in loan loss provisioning. When a bank’s loan portfolio deteriorates, it must set aside a portion of its earnings to cover potential losses, which directly impacts the bottom line.
Non-Performing Loans and Distributable Profit
The bank’s financial report highlights a notable increase in its Non-Performing Loans (NPLs). The bad loan ratio rose from 3.45% in FY 2023/24 to 6.28% in FY 2024/25, indicating that a larger percentage of the bank’s loans are at risk of default. This rise necessitated the higher provisioning, which in turn resulted in a negative distributable profit of Rs 5.21 billion. This negative figure means that the bank will be unable to distribute dividends to its shareholders in the short term, as all available profits have been allocated to cover potential loan losses and meet regulatory requirements.
Key Financial Indicators
The negative trends in profit and asset quality are clearly reflected in the bank’s key financial indicators. Earnings Per Share (EPS), a crucial metric for investors, fell drastically from Rs 4.70 in FY 2023/24 to a mere Rs 1.08 in FY 2024/25. This sharp decline signals a significant reduction in the bank’s profitability on a per-share basis. Despite these challenges, the bank’s net worth per share remains stable at Rs 127.30, which suggests a robust underlying capital base, providing a foundation for future recovery.
Outlook and Challenges
NIC Asia Bank’s performance in FY 2024/25 highlights the difficulties it faces in a challenging economic environment. While the bank’s digital innovation and strong customer base provide a solid long-term foundation, the immediate focus will be on managing non-performing assets and improving credit quality. The bank must prioritize a strategy to control its rising NPLs and streamline its operations to restore profitability and deliver value to its shareholders in the coming years.
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