Machhapuchchhre Bank's Profit Nearly Doubles: Dividend Capacity Analyzed

Kathmandu – Machhapuchchhre Bank has reported nearly doubled profits in the current fiscal year (FY 2081/82), with a net profit of Rs 2.01 billion, up from Rs 1.04 billion in the previous year—a 93% increase.

Key Growth Drivers

The surge in profitability is attributed to business expansion, service improvements, and better management of non-performing loans (NPLs). The bank’s net interest income rose to Rs 5.75 billion (from Rs 4.98 billion last year), while fee and commission income increased to Rs 1.28 billion (from Rs 1.08 billion). A significant reduction in impairment charges (from Rs 1.39 billion to Rs 35 crore) also contributed to the profit boost.

Financial Position & Performance

• Paid-up Capital: Rs 11.62 billion

• Deposits: Rs 184.17 billion

• Loan Disbursement: Rs 141 billion

• Reserve Fund: Rs 6.31 billion

• Net Worth per Share: Rs 163.80

• Capital Adequacy: 13.32% (well above regulatory requirements)

• NPL Ratio: Improved to 3.83%

• CD Ratio: 80.62%

• Base Rate: 3.79%

• Return on Equity (ROE): 11.13%

Dividend Outlook

Despite strong profits, the distributable profit remains modest at Rs 1.07 billion, translating to 9.32% earnings per share (EPS). This raises questions about the bank’s dividend capacity, as regulatory restrictions and reserve requirements may limit shareholder payouts.

The bank’s improved financial health suggests potential for future growth, but investors will closely watch whether higher profits translate into attractive dividends.