Sindhu Bikash Bank Loss Hits Rs 1.54 Crore in the Current Fiscal Year
27th January 2026, Kathmandu
Sindhu Bikash Bank Limited has recently released its unaudited financial statements for the second quarter (Q2) of the fiscal year 2082/83, ending in Poush 2082 (mid-January 2026). The report highlights a significant shift in the bank’s profitability, transitioning from a net profit of Rs 4.87 crore in the same period last year to a net loss of Rs 1.54 crore this year. This downturn comes despite a marginal increase in core interest income, pointing toward rising operational pressures and a challenging macroeconomic environment for regional development banks in Nepal.
Sindhu Bikash Bank Loss
The bank’s financial health currently reflects a complex struggle to balance revenue growth with escalating costs. While certain credit indicators show improvement, the bottom-line performance has raised caution among investors and stakeholders regarding the bank’s short-term recovery trajectory.
Revenue Streams and Interest Income Growth
Despite the overall loss, the core banking operations of Sindhu Bikash Bank have shown slight growth. The bank’s net interest income rose from Rs 5.66 crore to Rs 5.88 crore during the review period. This is a critical metric, as it represents the difference between the interest earned from loans and the interest paid to depositors.
Additionally, the total operating income—which includes fees, commissions, and other service charges—increased from Rs 6.48 crore to Rs 6.99 crore. The fact that revenue is moving in a positive direction suggests that the bank’s market presence remains intact and its ability to generate business from its 25+ branches across Sindhupalchowk, Kavre, and other districts is still functional.
Operational Expenses and the Shift to Loss
The primary driver for the net loss appears to be the surge in operational and non-operating expenditures. According to the Q2 statement, operating expenses climbed from Rs 8.14 crore to Rs 8.36 crore. While the increase seems minor in isolation, when weighed against a total operating income of Rs 6.99 crore, it resulted in a net negative operating income of Rs 1.55 crore.
Furthermore, the bank reported an Earnings Per Share (EPS) of negative Rs 5.50. This negative EPS is a direct consequence of the net loss and serves as a red flag for the stock market, where Sindhu Bikash Bank (SINDU) is traded. A negative EPS typically dampens investor sentiment and can lead to a decline in the stock’s market valuation.
Improvement in Asset Quality: The NPL Silver Lining
One of the few positive highlights in the Q2 report is the significant improvement in the bank’s asset quality. The Non-Performing Loan (NPL) ratio, which stood at a high of 9.06% in the previous year, has been successfully reduced to 6.39%. This reduction indicates that the management, under the leadership of CEO Suresh Devkota, has been proactive in recovering bad debts and tightening credit appraisal standards.
A lower NPL ratio reduces the amount of capital the bank must set aside for loan loss provisioning, which should theoretically improve profitability in future quarters. However, for the current period, the benefits of better recovery were overshadowed by the sheer volume of operating costs.
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Capital Structure and Deposit Mobilization
Sindhu Bikash Bank maintains a stable paid-up capital of Rs 55.74 crore. However, its internal reserves and funds show signs of strain. While the statutory general reserve stands at Rs 1.96 crore, the bank’s contingency fund has slipped into a negative balance of Rs 22.85 lakh.
On the business front, the bank demonstrated healthy mobilization:
Total Deposits: Rs 5.66 billion
Total Loans and Advances: Rs 3.25 billion
The Credit-to-Deposit (CD) ratio remains well within the regulatory limits set by Nepal Rastra Bank, suggesting that the bank has ample liquidity to meet its obligations and continue its lending operations.
Conclusion and Future Outlook
The Q2 financial report of Sindhu Bikash Bank Limited serves as a reminder of the delicate balance required in the development banking sector. While the bank is successfully collecting deposits and improving its loan recovery processes, the high cost of operations continues to erode its capital base.
To restore profitability, the bank must focus on cost-optimization strategies and further diversify its non-funded income streams. For investors, the next two quarters will be crucial in determining whether the improvement in NPL ratios can finally translate into a positive bottom line.
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