Comparative Analysis: Unraveling Net Profit and Distributable Profit Per Share Among Commercial Banks

According to the binding financial provision, commercial banks, development banks, and other financial institutions are obligated to unveil their respective fourth-quarter reports by Shrawan 21.

In line with the same, all 20 commercial banks have publicized their fourth quarter report for the recently wrapped financial year 2079-80.

Among the 20 commercial banks only two including Kumari Bank Limited (KBL) and Prime Commercial Bank Limited (PCBL) have witnessed negative growth in their Net Profits as of FY 2079-80’s end in comparison to the corresponding quarter of the previous financial year 2078-79.

Kumari Bank has recorded the worst negative difference in its Net Profit by 24.12 percent as the institution has managed to earn only Rs. 1.99 Arba as of FY 2079-80 end as opposed to Rs. 2.57 Arba that it had accumulated in profits until the corresponding quarter of the financial year 2078-79. The same fate lies with Prime Commercial Bank, with it reporting an 18.60 percent comparative negative growth in its profit margin.

On the other hand, Nabil Bank Limited (NABIL) has seen significant positive growth in its Net profits of 76.94 percent, totaling Rs. 7.52 Arba, which is the most among all commercial banks, both in terms of the amount as well as the highest positive difference.

Similarly, Global IME Bank Limited (GBIME) too has unveiled impressive numbers with it making a whopping Rs. 7.25 Arba as of the last quarter of FY 2079-80, which in comparison is 46.17 percent more than what it had earned up to the corresponding quarter of the financial year 2078-79.

Likewise, Standard Chartered Bank Nepal Limited (SCB), which had made only Rs. 2.25 Arba as of FY 2078-79’s end after recording a sharp increase of 56.44 percent, has earned Rs. 3.52 Arba until the last quarter of the financial year 2079-80.

Everest Bank Limited (EBL), Himalayan Bank Limited (HBL), Agricultural Bank Limited, Prabhu Bank Limited, and Nepal SBI Bank Limited (SBI), have all booked more than a 30 percent increase in their respective Net Profits as of the end of the fiscal year 2079-80 compared to the corresponding quarter of the financial year 2078-79. The Banks have made Rs. 3.39 Arba, 3.26 Arba, 3.10 Arba, Rs. 2.82, and Rs. 2.24 Arba, respectively as of Q4 of FY 2079-80.

The recently merged entity, Laxmi Sunrise Bank Limited (LSBL) has made public its fourth-quarter report for the past financial year 2079-80, with Rs. 2.26 Arba in Net profits.

READ ALSO: Recently Merged Laxmi Sunrise Bank Publicizes Q4 Report; Earns Rs. 2.26 Arba in Net Profits; Distributable Profit at Rs. 1.92 Arba

Machhapuchchhre Bank Limited (MBL) has turned the least amount in Net profits amounting to Rs. 1.85 Arba until Ashad, 31, 2080, however, has recorded a stable 10.12 percent increase compared to the last quarter of FY 2078-79.

The combined Net profits of all 20 commercial banks too have surged by Rs. 14.04 Arba as of the last quarter of the recently concluded FY 2079-80. The commercial banks have collectively profited Rs. 70.12 Arba as of FY 2079-80 as opposed to the collective wealth of Rs. 56.08 created by the banks up to the corresponding quarter of FY 2078-79.

In the same manner, an average difference of 25.03 percent in growth of Net profits between the same periods can be seen.

Net profits for commercial banks are undoubtedly crucial indicators of their financial health and performance. However, it is equally important to ensure that these profits translate into tangible value for the investors and shareholders. One significant aspect to consider, in addition to the overall net profits of the banks, is the distributable profits per share. This metric provides valuable insights into the dividend prospects for shareholders, indicating how much profit they may expect to receive on a per-share basis. 

As of the end of the last quarter of the fiscal year 2079-80, only two commercial banks, namely--Kumari Bank Limited (KBL) and Himalayan Bank Limited (HBL), have reported negative distributable profits per share of Rs. -3.23 and Rs. -3.28, respectively.

Moreover, other two banking institutions, including Prabhu Bank Limited (PRVU) and Nepal Investment Mega Bank Limited (NIMB) have recorded poor distributable profits per share, each less than Rs. 1, while Prime Commercial Bank Limited’s (PCBL) distributable profits per share just surpass Rs 1, as of the end of the last quarter of FY 2079-80.

On the other hand, Everest Bank Limited (EBL) and NIC Asia Bank Limited (NICA) have unveiled their distributable profit per share to be over Rs. 30. For the former, it is Rs. 40.05 which is the highest among all commercial banks, while for the latter it stands at Rs. 32.

Standard Chartered Bank Nepal Limited (SCB) too has unveiled its distributable profit per share at Rs. 28.99, which has risen from only Rs. 23.31 until the corresponding quarter of the previous fiscal year 2078-79.

Similarly, the distributable profit per share of Agricultural Bank Limited (ADBL) and Sanima Bank Limited (SANIMA) comes close to Rs 20 each, with it Rs. 19.89 and Rs. 17.73, respectively, as of the end of the last quarter of the recently concluded financial year.