Prime Commercial Bank Limited (PCBL) has reported a 28.49% increase in net profit to Rs. 4.11 arba in the fourth quarter of fiscal year 2082/83, compared with Rs. 3.20 arba in the same period a year earlier.

The bank’s earnings growth was supported by a sharp decline in impairment charges and stronger operating profit. Impairment charges fell 36.06% to Rs. 1.74 arba from Rs. 2.72 arba, helping offset the relatively modest 3.30% increase in net interest income, which reached Rs. 9.21 arba.

Prime Commercial’s operating profit increased 26.94% to Rs. 6.83 arba from Rs. 5.38 arba. Personnel expenses, however, also increased 6.80% to Rs. 2.45 arba, indicating continued growth in the bank’s operating cost base.

The bank expanded its balance sheet during the year, although deposit growth remained relatively moderate. Deposits increased 5.46% to Rs. 2.78 kharba, while loans and advances grew 8.29% to Rs. 2.26 kharba. The faster growth in lending compared with deposits points to a greater expansion in the bank’s credit book during the period.

Funding conditions improved significantly. Prime Commercial Bank’s cost of funds declined 26.87% to 3.81%, down from 5.21% a year earlier. This reduction, together with lower impairment charges, provided meaningful support to profitability despite only modest growth in net interest income.

The bank’s capital position also strengthened. Paid-up capital increased 8% to Rs. 20.95 arba, while reserves rose 18.90% to Rs. 13.98 arba. The capital adequacy ratio improved from 11.33% to 12.87%, giving the bank a stronger regulatory capital position.

Asset quality, however, moved in the opposite direction. Prime Commercial Bank’s NPL ratio increased to 6.69% from 5.81%, indicating that the improvement in impairment charges has not been accompanied by a decline in reported non-performing loans. The increase in NPLs remains an important factor to monitor as the bank continues to expand its loan portfolio.

Earnings per share increased 18.97% to Rs. 19.63, up from Rs. 16.50, while net worth per share rose 3.71% to Rs. 175.80. Distributable profit after profit/loss appropriation and regulatory adjustments stood at Rs. 1.91 arba, compared with Rs. 1.73 arba a year earlier.

At the end of the review quarter, Prime Commercial Bank’s share price stood at Rs. 239.90, with a reported P/E ratio of 12.22 times.

Overall, PCBL’s results show a stronger earnings profile, driven particularly by lower impairment costs, cheaper funding and higher operating profit. However, the rising NPL ratio remains a key risk, making asset quality an important metric to watch alongside the bank’s continued loan growth.