NIFRA Quarterly Financial Performance Declines
21st January 2026, Kathmandu
Nepal Infrastructure Bank (NIFRA) has released its unaudited financial report for the second quarter of the current fiscal year 2082/83, covering the period up to mid-January 2026. The results reveal a challenging six months for the first infrastructure-focused bank of the country, with a significant decline across nearly all major financial indicators compared to the same period in the previous fiscal year.
NIFRA Quarterly Financial Performance
According to the disclosed statements, NIFRA earned a net profit of 40.99 crore rupees during the first half of the year. This represents a 36.15 percent decline from the 64.19 crore rupees net profit recorded during the corresponding period of the 2081/82 fiscal year. The contraction in the bottom line reflects the struggle of the bank to maintain profitability in a landscape of shifting interest rates and liquidity conditions.
Sharp Decline in Core Operating Profit and Income
The operating profit of NIFRA also fell sharply, dropping from 91.71 crore rupees in the previous year to 58.65 crore rupees in the current review period. This 36.04 percent reduction is a direct mirror of the lower income generated from the core activities of the bank.
A primary driver of this decline was the fall in interest income. For the first half of the fiscal year, NIFRA reported a net interest income of 74.07 crore rupees. This figure is 29.09 percent lower than the 1.04 arba (104.45 crore) earned in the same period last year. Such a significant drop suggests tighter interest margins or a strategic slowdown in high-yield lending as the bank navigates the infrastructure project pipeline.
Balance Sheet Stability: Capital and Reserves
Despite the pressure on profits, the capital base of NIFRA remains stable. The paid-up capital of the bank stands at 21.60 billion rupees. However, the reserves and surplus have seen a contraction, totaling 3.18 billion rupees compared to 4.31 billion rupees reported at the same time last year. This 26 percent reduction in reserves underlines the impact that lower profitability and potential dividend payouts have had on the overall financial strength of the institution.
In terms of business mobilization:
Deposits: NIFRA collected 8.11 billion rupees in deposits, a slight increase from 7.51 billion in the previous year.
Loans and Advances: The bank extended loans totaling 27.41 billion rupees, up from 23.26 billion.
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While loan disbursement has increased by approximately 17.8 percent, the income generated from these loans has not kept pace, likely due to lower base rates or a shift toward lower-interest infrastructure bonds and government-backed projects.
Impact on Shareholder Value and Market Indicators
The weak financial performance has directly affected the key ratios for investors. The annualized earnings per share (EPS) of NIFRA has decreased significantly, falling from 5.94 rupees to 3.80 rupees. This reduction in the earnings capability of the share has pushed the price-to-earnings (P/E) ratio to a high of 68.46 times, based on current market prices.
The net worth per share of the bank currently stands at 114.75 rupees. While the bank maintains a healthy capital adequacy ratio of 72.49 percent, this is a decrease from the 80.18 percent recorded a year ago. Although these levels are still well above regulatory requirements for a specialized infrastructure bank, the downward trend is a point of observation for stakeholders.
Operational Challenges and Recovery Strategies
The quarterly results of NIFRA reflect a period of slower growth and weaker returns. The bank faces the dual challenge of boosting its profitability through high-impact infrastructure projects while managing operational costs in a high-inflation environment. Interestingly, personnel expenses for the bank actually declined by 24.77 percent to 10.11 crore rupees, suggesting that the bank is already attempting to rein in costs to protect its margins.
The distributable profit of the bank for this period stands at 34.78 crore rupees, which is a 33.37 percent decrease from the previous year. This suggests that unless performance improves in the final two quarters, shareholders might see a more modest dividend proposal for the current fiscal year.
Conclusion: Navigating Future Growth
Overall, the NIFRA financial report for the second quarter of 2082/83 highlights the need for prudent financial management and a more aggressive business strategy to align with industry benchmarks. The ability of the bank to capitalize on upcoming large-scale energy and urban development projects will be critical in restoring market confidence and ensuring long-term financial stability.
Investors and depositors will be closely monitoring the third-quarter results to see if the bank can reverse the decline in interest income and stabilize its earnings. As the first and only infrastructure bank in Nepal, the success of NIFRA is often viewed as a bellwether for the health of private-sector investment in the development of the nation.
For More: NIFRA Quarterly Financial Performance
