Grand Bank minimizes its loss in Q2 of current fiscal year

ShareSansar, February 19:

For the holders of 2 crore unit of shares of Grand Bank, who have been eagerly waiting to hear some good news about the company, the net loss of Rs 13.83 crore the bank posted for the second quarter of fiscal year 2071/72 must have come as a great relief.

It was no mean feat for the bank, which had posted a net loss of Rs 28.06 crore in the previous quarter, managed to reduce the loss by more than half in the second quarter.
It is noteworthy that in the second quarter of last fiscal year, the bank had earned a net profit of Rs 9.43 crore.

Although the bank’s cash to deposit ratio (CD ratio) is still lower than prescribed by NRB, by the end of Asoj it improved to reach 7.76. As per NRB, for a bank to be considered healthy it has to have a CD ratio of 10 percent. In the first quarter of the ongoing fiscal year, the bank’s CD ratio was at 2.55 percent.

By the end of second quarter of the current fiscal year the bank collected deposits of Rs 12.74 arba and floated loans of Rs 11.85 arba.Its net interest income by the end of Poush stood at Rs 13 crore 71 lakh. The bank earned Rs 1 crore 15 lakh from fee and commission. The net interest income by the end of Poush last year was Rs 25 crore 60 lakh.

In the first quarter of current fiscal year, the bank’s operating cost grew to Rs 6 crore 2 lakh from Rs 5 crore 98 lakh in the corresponding quarter last year. The bank’s non-performing loans (NPL) in the period increased to 26.61 percent from 4.29 percent in the corresponding period last year.

In Bhadra of this year, Grand Bank was ordered by Nepal Rastra Bank to immediately fix its surging bad loans. Grand had faced regulatory action from NRB on account of its soaring bad loans. Earlier, Prabhu Bank Limited (PRVU) has signed an agreement with an ailing Grand Bank to acquire all its shares at an approx swap ratio of Rs 67 per share. The whole acquisition process may take months of time to complete.