More than Half of Finance Companies Post Losses in First Quarter

More than half of Nepal’s finance companies that have published their financial statements for the first quarter of the current fiscal year have reported net losses, mainly due to a sharp rise in impairment charges.

Out of 15 finance companies that disclosed their first-quarter reports, eight recorded net losses, while the remaining seven posted profits, data show. Even among the profitable companies, net earnings declined compared to the same period last year.

The companies that remained in profit during the review period include Manjushree Finance, Goodwill Finance, ICFC Finance, Central Finance, Multipurpose Finance, Shree Investment Finance, and Janaki Finance.

Among these, Janaki Finance returned to profit after posting a net loss of more than Rs 23 million in the same quarter of the previous fiscal year. The other six companies remained profitable but all reported lower earnings year-on-year.

The companies that posted net losses include Samriddhi Finance, Guheshwori Merchant Banking and Finance, Progressive Finance, Gorkhaz Finance, Best Finance, Nepal Finance, Pokhara Finance, and Reliance Finance. The reports stated that trading losses and higher impairment charges pushed these firms into the red.

Two companies—Progressive Finance and Gorkhaz Finance—had reported profits in the same period last year but slipped into losses this year as their impairment charges increased sharply.

According to Sunil Pant, chairperson of the Nepal Financial Institutions Association, the finance sector suffered after the Gen Z protest in early September, which disrupted overall economic activity.

“The protests weakened cash flow, reduced demand for loans and affected the entire financial system, including finance companies,” Pant said.

Among the profitable firms, Manjushree Finance posted the highest net profit of over Rs 46.3 million in the first quarter. However, this represented a 50.76 percent decline from its profit of more than Rs 94.2 million in the same period last year.

On the loss side, Reliance Finance recorded the highest net loss. The company’s net loss surged by 186.38 percent from over Rs 57.5 million in the first quarter of last year.