Kathmandu. Due to the decline in net interest income and a significant increase in the impairment charge , the profit of Krishi Vikas Bank Limited has decreased. The bank has earned a net profit of Rs. 2.63 billion in the fourth quarter of the financial year 2082/83 , which is down by 29.52% compared to the corresponding period of the previous FY.

The bank had posted a net profit of Rs. 3.73 billion in the fourth quarter of the previous FY.In the review period, the bank’s net interest income decreased by 3.45 percent to Rs 9.12 billion. The bank has a net operating income of Rs. 10.04 billion and an operating profit of Rs. 3.94 billion.

The increase in the impairment charge is one of the major reasons for putting pressure on the bank’s profits. During the review period, the bank has set aside a charge of Rs. 1.17 billion for the management of potential credit risk of Rs. 1..}. Such amount was only Rs 63 crore in the same period of the previous fiscal year.

The bank’s deposit and credit expansion has been positive despite the decline in profit. The bank’s total deposit has increased from Rs 293 billion to Rs 34 7 billion in a year.Similarly, credit flow has increased from Rs 212 billion to Rs 247 billion. However , the bank’s bad loan ratio (NPL) has increased. The NPA ratio stood at 3.4 4 percent in the fourth quarter of the previous fiscal year which was 4.07 percent in the review period. With the increase in bad loans, it seems that the bank has to make additional arrangements for the management of the loan loss of .

The bank’s distributable profit has also declined significantly. In the fourth quarter of the previous fiscal year, the distributable profit of decreased to Rs 1.26 billion from Rs 2.81 billion. This has also had a direct impact on the bank’s ability to distribute dividends to .

Due to the decline in both net profit and distributable profit, the bank‘s dividend capacity has decreased from 17.98 percent to 6.54 percent.During the review period, the bank’s earnings per sharedeclined by 8.48 paise to 16.11. The total asset value of the bank is Rs. 2,000 893.61 and the liquidity ratio of 37.45 is .