Siddhartha Fin Ltd's profit squeezed due to Imperial's bad loans, NPL at 6.15%

ShareSansar, August 24:

Profit growth of Siddhartha Finance Ltd has slowed down by 31 percent in the fourth quarter of the last fiscal year 2070/71.

Publishing the unaudited financial results today, the Bhairahawa based finance company stated that it earned Rs 2.09 crore of net profit in the last fiscal year, down from Rs 3.04 crore in the corresponding period of the previous fiscal year.

The finance company attributed the slowdown in the profit to the classification of some loans as the non-performing loans (NPL) of the Imperial Finance Ltd with whom it has gone for the merger in the last fiscal year. The two finance companies have started the joint operation in Baisakh 2071 following the successful merger.
The merger led to the provisioning of Rs 3.94 crore for the possible loss due to the heavy amount of default loans of Imperial Finance.

In its financial disclosure, Siddhartha Finance has said that its new management team has already started working on the full swing to recover the bad loans. “The impact on the profit is just for the limited period. The new management team has already started the action to recover the bad loans. Like earlier year, in this current fiscal year also we will be able to provide returns to our shareholders,” claimed the company in its statement.

The company’s net interest income jumped to Rs 9.29 crore in the last year from Rs 6.36 from the previous year.

NPL of the finance company rose to 6.15 percent from 0.55 percent in the previous year.

Its EPL stands at Rs 6.45, P/E ratio 17.22 times and net worth per share Rs 132.02.