Rabi Chandra Gurung, the Chief Executive Officer (CEO) of Pokhara Finance, has been relieved of his duties, effective February 5. The decision was made during a board meeting held on the same day.
In the same meeting, the board appointed Raju Mohan Bhattarai, the former Deputy CEO, as the acting CEO.
Read: Pokhara Finance Heading Towards Financial Crisis
The leadership change comes amid Pokhara Finance’s deteriorating financial situation. The company has been grappling with a rising non-performing loan (NPL) ratio and a capital adequacy ratio that has fallen below regulatory requirements. These issues have prompted Nepal Rastra Bank (NRB) to consider immediate corrective measures to stabilize the institution’s financial health.
Board members’ growing dissatisfaction with Gurung’s leadership became apparent as the company’s financial performance worsened. Although appointed for a four-year term starting June 24, 2022, Gurung was dismissed before the completion of his tenure.
As of the second quarter of the current fiscal year, Pokhara Finance’s NPL ratio has surged to 10.50%, a sharp rise from 1.58% during the same period last fiscal year. The increase in bad loans forced the company to allocate over Rs 10 million in impairment charges, contributing to a net loss of more than Rs 637.9 million in the second quarter. In contrast, the company had posted a net profit of over Rs 29 million during the same period last fiscal year.
Currently, the company’s per-share loss stands at Rs 58.93. Its paid-up capital is Rs 1.08 billion, with reserves exceeding Rs 1.05 billion. The company's distributable profit, however, has been negative by more than Rs 1.55 billion during this period. The company’s net worth per share is Rs 53.97.
This news has been updated.
