Kathmandu: Global IME Bank Limited has reported a net profit of Rs 6.20 billion for the fiscal year 2081/82, up slightly from Rs 6.14 billion a year earlier, despite a sharp decline in interest income.
The bank’s interest income fell 14.9% to Rs 43.96 billion from Rs 51.68 billion in the previous fiscal year, reflecting either reduced lending volumes, lower interest rates, or a shift in loan portfolio mix. Interest expenses also declined by 21.8% to Rs 27.25 billion, cushioning the impact. As a result, net interest income remained broadly stable at Rs 16.71 billion, just 0.85% lower than last year’s Rs 16.85 billion.
Diversified Income Sources Supporting Stability
Fee-based revenues continued to grow, with net fees and commission income jumping 20.1% to Rs 3.22 billion, supported by higher transaction volumes and service charges. Net trading income rose sharply by 57.8% to Rs 916.89 million, while other operating income slipped 20.4% to Rs 425.21 million. Overall, total operating income increased 3.02% to Rs 21.27 billion, reflecting improved diversification away from interest income alone.
Loan Loss Provisions and Operating Efficiency
The bank booked Rs 4.31 billion in impairment charges for loans and other losses, a 19.0% rise from the prior year, indicating cautious provisioning amid credit risk considerations. Even with higher provisions, net operating income stood at Rs 16.97 billion, almost unchanged from last year.
Operating costs increased moderately, with personnel expenses up 1.68% to Rs 4.86 billion and other operating expenses rising 10.26% to Rs 2.48 billion. Depreciation and amortization expenses fell 13% to Rs 862.70 million. The combined effect kept operating profit at Rs 8.77 billion, just 2.75% lower than last year’s Rs 9.02 billion.
Bottom-Line Performance
Profit before tax slipped marginally by 0.94% to Rs 8.78 billion. After accounting for income tax expenses — including a deferred tax credit of Rs 41.27 million — net profit reached Rs 6.20 billion, marking a small year-on-year gain of 1.1%.
Improves Capital Position, Cuts Funding Costs Despite NPL Uptick
Global IME Bank Limited has strengthened its capital base and reduced funding costs in fiscal year 2081/82, even as non-performing loans (NPLs) edged higher.
According to financial ratios published under Nepal Rastra Bank directives, the bank’s Capital Fund to Risk-Weighted Assets rose to 13.39% from 12.39% a year earlier, reflecting a stronger buffer against credit and market risks. Tier 1 Capital and Common Equity Tier 1 (CET 1) ratios also improved to 10.66%, up from 10.32%, indicating higher core capital adequacy.
The bank’s Quarterly Average Cost of Funds fell sharply to 4.30% from 6.21%, while the Base Rate dropped to 5.76% from 8.09%. This reduction in funding and lending benchmarks points to improved balance sheet efficiency and a more favorable interest rate environment. However, the Average Interest Rate Spread narrowed to 3.63%, down from 3.99%, suggesting pressure on lending margins.
Asset quality presented a mixed picture. Gross NPLs increased to 4.87% from 4.17%, signaling a rise in overdue loans. Yet, net NPLs improved slightly to 1.23% from 1.34%, and Loan Loss Provision coverage remained strong at 102.76%, ensuring full coverage of bad loans.
The Credit-to-Deposit Ratio stood at 76.07%, broadly stable from last year’s 75.87%, reflecting steady lending activity relative to deposit growth.
Profitability ratios saw a modest decline, with Return on Equity (ROE) easing to 9.61% from 10.19% and Return on Assets (ROA) slipping to 0.96% from 1.08%.
Overall, the data suggest that while Global IME Bank strengthened its capital base and improved cost efficiency in FY 2081/82, asset quality pressures and narrower lending spreads tempered profitability growth.
