Citizens Bank EPS falls by 24% with decline in profit

October 25, 2019 | Investopaper

Citizens Bank International has reported a decline in profitability in the first quarter (Q1) of the fiscal year 2075/76. The Bank’s earning per share (EPS) fell sharply by 23.80 percent in the first quarter. With the decline in profit by 18.50 percent as compared to the corresponding quarter of the previous year, the EPS has also reduced to Rs. 16.20. In the Q1 of last fiscal year, the bank EPS stood at Rs. 21.26.

The reason for the fall in the profit is due to the less net interest income earned in this period. The net interest income has dropped from Rs. 75 crores last year to Rs. 70.83 crores this year. The distributable profit is a mere 21 crores.

The capital has grown by 3 percent to Rs. 8.62 Arba. However, the reserve and surplus has fallen by 22 percent due to the distribution of the dividend. The bank has a deposit collection of Rs. 72.44 Arba, a growth of 2.74 percent in a 3 months period. Likewise, the loans have increased by 7.38 percent to Rs. 67.55 Arba.

The Non-Performing Loan (NPL) and base rate have fallen to 0.98 percent and 10.75 percent respectively.

Citizens Bank has a net worth of Rs 137 until the first quarter of this fiscal year. At the market price of Rs. 194, the P/E ratio is almost 12. This indicates the stock is reasonably priced. However, the fall in the profit should be taken into consideration while purchasing the stock.

The first-quarter (Q1) report of Citizens Bank is summarized in the table below:

Citizens Bank First quarter report summary, 2076/77

HEADINGS	1st QTR, 2076/77	4th QTR, 2075/76	PERCENT CHANGE
PAID-UP CAPITAL (Rs. In Arba)	8.62	8.37	2.99
RESERVE & SURPLUS (Rs. In Arba)	3.21	4.12	-22.09
DEPOSITS (Rs. In Arba)	72.44	70.51	2.74
LOANS (Rs. In Arba)	67.55	62.91	7.38

HEADINGS	1st QTR, 2076/77	1st QTR, 2075/76	PERCENT CHANGE
NET INTEREST INCOME (Rs. In Arba)	0.71	0.75	-5.33
PROFIT (Rs. In Arba)	0.35	0.43	-18.60
DISTRIBUTABLE PROFIT (Rs. In Arba)	0.21	–
NON PERFORMING LOANS, NPL (%)	0.98	1.23	-20.33
BASE RATE(%)	10.75	11.47	-6.28
EARNINGS PER SHARE, EPS (Rs.)	16.2
NETWORTH PER SHARE (Rs.)	137.18
MARKET PRICE PER SHARE (Rs.) [Ashwin 30, 2076]	194
P/E RATIO	11.97