Mero Microfinance Laghubitta Bittiya Sanstha (MERO), a leading Nepali microfinance institution, has released its third-quarter report for the current fiscal year, unveiling a remarkable surge in its net profit. The company’s financial performance has left investors and analysts alike impressed, as it recorded a staggering 846.30% increase in net profit compared to the corresponding period of the previous fiscal year.
According to the report, MERO’s net profit soared to an impressive Rs 123.8 million, a significant jump from the Rs 13 million recorded during the same period last year. This exceptional growth can be attributed to a combination of factors, including a minimal increase in net interest income and a substantial decrease in impairment charges.
During the review period, MERO witnessed a 15.55% increase in net interest income and a 16.34% rise in net fee and commission income. Furthermore, the company’s total operating income grew by 15.67%, while its operating profit skyrocketed by an impressive 1186.92%, reflecting its operational efficiency and robust financial performance.
One of the key contributors to MERO’s remarkable net profit growth was the substantial reduction in impairment charges. In the review period, the company’s impairment charges decreased from Rs 134.9 million to Rs 38.8 million, indicating improved asset quality and risk management practices. Additionally, the company’s bad debt ratio declined to a healthy 1.49%, further solidifying its financial stability.
MERO’s impressive financial results have translated into attractive returns for its shareholders. The company reported an Earnings per Share (EPS) of Rs 12.51, a net worth per share of Rs 153.72, and a Price-to-Earnings (P/E) ratio of 49.32 times, reflecting the company’s strong profitability and growth potential.
With a paid-up capital of Rs 1.32 billion and a robust reserve fund of Rs 709.1 million, MERO’s financial position remains solid. The company’s deposit base grew to Rs 11.69 billion, while its loan portfolio expanded to Rs 13.99 billion, indicating its commitment to supporting the growth of micro-enterprises and fostering financial inclusion in Nepal.
MERO’s exceptional performance in the third quarter of the current fiscal year has positioned it as a frontrunner in the Nepali microfinance sector. As the company continues to focus on sustainable growth, prudent risk management, and innovative financial solutions, it is poised to play a pivotal role in driving economic development and promoting financial inclusion across the nation.
