Kathmandu. KATHMANDU: The National Cooperative Bank Limited (NCB) on Wednesday made public the unrevised financial details for the fourth quarter of the fiscal year 2082/83. Notably, the Capital Adequacy Ratio of the bank reached 11.66 percent, well above the minimum threshold of 8 percent, indicating a significant improvement in the bank’s financial stability and risk tolerance.
The bank’s capital adequacy ratio improved from 4.42 per cent in the previous quarter to 11.66 per cent in a short span of time. This indicates that the bank has made remarkable progress in consolidating its capital base over the past challenges.
According to the financial report, the bank has earned a net profit of Rs 49 crore in the fourth quarter. The bank, which had made a loss in the previous fiscal year, has returned to profit in the current fiscal year. Net interest income has also increased significantly to more than Rs 87 crore, indicating improvement in the Bank’s core business activities.
The bank’s operating income and operating profit have also seen positive growth. According to the management of the bank, the overall performance of the bank has improved due to the strengthening of financial base.
Accumulated losses, which were a major challenge for the bank in the past, have also come down significantly. The profit of the current year has contributed significantly to the reduction of accumulated losses. However, as the accumulated loss has not been completely eliminated, there is a need to further reduce it through profit in the coming period as well.
Although all the indicators are moving in a positive direction, non-performing loans are still a major challenge for the bank. As of the fourth quarter, the non-performing loan ratio stood at 32.26 percent, which is considered to be the highest by banking standards. This indicates that debt recovery, risk management and credit quality improvement should be made the main agenda of the coming days.
The bank has adopted strategies to control bad loans, make loan recovery more effective, strengthen risk management system and institutionalize good governance.
Bank’s Chief Executive Officer Badri Kumar Guragain said that return in profit, reduction in accumulated loss and being able to raise capital adequacy ratio above the minimum threshold of NRB are the major achievements of the NRB journey. He said that high priority would be given to reducing the non-performing loan, further consolidating the capital base and sustaining financial stability in the days ahead.
The current financial statements indicate that the National Cooperative Bank is moving towards stability after going through the phase of reform and restructuring. However, the long-term success of the bank still needs to control bad loans, fully manage accumulated losses and strengthen corporate governance.
