First Microfinance Posts Profit Growth in Q2
First Microfinance posted a sharp rise in second-quarter profit, helped by impairment reversals, even as interest income and operating revenue declined.
First Microfinance Laghubitta Bittiya Sanstha Ltd. reported a strong increase in net profit for the second quarter of the current fiscal year, supported by impairment charge reversals despite weaker core income performance.
According to the unaudited financial statement published through mid-January, the microfinance company earned a net profit of Rs 70.4 million in the first six months of the fiscal year. This marks a 34.64% increase compared with Rs 52.3 million recorded in the same period last year.
The profit growth came even as net interest income declined by 12.54% year-on-year. Fee and commission income also remained under pressure, posting a negative balance of Rs 740,000 during the review period. As a result, total operating income fell by 13.78%.
Despite the drop in operating income, operating profit rose by 34.64%, largely due to the reversal of impairment charges, which eased pressure on the bottom line.
As of the end of the second quarter, distributable profit stood at Rs 47.5 million, translating into distributable earnings per share of Rs 7.07. Overall earnings per share increased by Rs 2.69 to Rs 10.47 during the period.
The company’s net worth per share reached Rs 128.31, while the price-to-earnings ratio stood at 76.51 times. With a paid-up capital of Rs 1.34 billion, First Microfinance has accumulated Rs 380.7 million in its reserve fund.
During the first six months of the fiscal year, the microfinance institution mobilized borrowings of Rs 4.07 billion and expanded its loan portfolio to Rs 4.67 billion, reflecting continued credit growth despite income-side pressures.