Kathmandu-Nabil Bank Limited has released its unaudited financial statements for the second quarter of the current fiscal year, showing a strong improvement in profitability and key financial indicators.

The bank reported a net profit of Rs 4.75 billion by mid-January, up 46.71 percent from Rs 3.24 billion in the same period last year. The rise reflects better earnings quality and tighter cost and risk control.

Since Manoj Gyawali took charge as Chief Executive Officer in June , the bank has focused on strengthening operations, risk management, and financial discipline.

Governance changes after the 41st Annual General Meeting also supported this trend. Anil Keshary Shah was elected unopposed as a promoter director, while Nirvana Chaudhary was appointed Chairman. Under the new leadership and management team, financial indicators have expected to improve in coming days. 

Profit growth was driven mainly by a rise in core income and the reversal of impairment charges. Net interest income increased by 2.42 percent to Rs 8.08 billion, while fee and commission income grew by 6.61 percent to Rs 1.61 billion. Total operating income reached Rs 10.63 billion, up 5.58 percent.

The reversal of impairment charges amounting to Rs 48.8 million pushed operating profit up by 26.95 percent to Rs 6.57 billion.

Distributable profit rose sharply to Rs 3.27 billion, a 73 percent increase year on year. Distributable earnings per share stood at Rs 22.50, while overall earnings per share climbed to Rs 35.04. Net worth per share reached Rs 235.64, and the price to earnings ratio stood at 13.91 times.

On the balance sheet side, the bank issued Rs 5 billion worth of 8 percent irredeemable non-cumulative preference shares, raising paid up capital to Rs 32.05 billion. Reserves totaled Rs 36.70 billion.

Deposits stood at Rs 566.05 billion, with loans and advances at Rs 434.73 billion. The credit to deposit ratio declined to 78.12 percent. The non-performing loan ratio improved to 4.25 percent from 4.93 percent last year. The capital adequacy ratio reached 12.77 percent, indicating a stronger capital position.

The bank has approved a 12.50 percent cash dividend for shareholders.

Continued improvement in performance and risk management is expected to support stability and returns going forward.