Hulas Finserv Hire Purchase Limited (HFL) has reported a sharp improvement in its financial performance for the fiscal year 2082/83 (2025/26), with net profit rising 84.45% year-on-year to Rs 398.72 million.

The company had posted a net profit of Rs 216.17 million in the previous fiscal year. The strong growth in profitability was accompanied by a significant expansion in the company’s lending business, improvement in asset quality and a decline in the cost of funds.

Hulas Finserv’s total loan portfolio grew 52.25% to Rs 12.22 billion during the year, with automobile financing serving as a key driver of the expansion.

At the same time, the company substantially improved its asset quality. Its non-performing loan (NPL) ratio declined to 1.87% from 3.40% a year earlier, indicating stronger underwriting standards and recovery efforts.

The company’s balance sheet also expanded considerably. Total assets increased to Rs 12.64 billion from Rs 8.43 billion, while total equity rose to Rs 1.89 billion from Rs 1.49 billion.

Strong growth in core income

Hulas Finserv’s net interest income more than doubled during the review period, reaching Rs 484.65 million compared with Rs 221.01 million in the previous fiscal year.

Operating profit also climbed to Rs 614.68 million from Rs 335.28 million, reflecting stronger core operating performance.

The improvement in profitability was further reflected in shareholder returns. Annualised return on equity (ROE) increased to 21.12% from 14.52%, while annualised basic earnings per share (EPS) rose to Rs 48.04 from Rs 26.04.

The company also reported improvement in funding and lending spreads. Its cost of funds declined to 5.77% from 6.40%, while the interest-rate spread widened to 3.39% from 1.98%.

Loan-loss provision coverage stood at 92.34%, indicating continued focus on managing credit risk.

Focus on sustainable growth

The company said the financial performance came despite a challenging operating environment marked by subdued private-sector credit growth and asset-quality pressures across Nepal’s financial sector.

According to the company, business expansion, operational efficiency, disciplined risk management and focused recovery initiatives were the key factors supporting its performance during the year.

Hulas Finserv said it plans to maintain a focus on sustainable portfolio growth while further strengthening asset quality and recovery mechanisms.

The company also plans to diversify its loan portfolio and strengthen risk management practices, with the objective of protecting long-term stakeholder value.

The latest results position Hulas Finserv among the financial institutions that have managed to combine rapid portfolio expansion with a notable improvement in asset quality during a challenging credit environment.