Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s commercial banks have achieved remarkable financial success, reporting hefty profits of over Rs 67.23 billion in the first 11 months of the last fiscal year, despite the country’s economic challenges.
The banking industry had expressed concerns over liquidity crises and increased bad debts, but the latest figures demonstrate their ability to secure substantial returns. However, critics argue that these profits come at the expense of high interest rates charged on loans throughout the period, putting a burden on borrowers.
Data from Nepal Rastra Bank (NRB) reveals that commercial bank profits during the review period of the last fiscal year increased by Rs 2.28 billion compared to the same period in the previous fiscal year (2021/22). The total profits of the country’s ‘A’ class banks stood at Rs 64.95 billion between mid-July 2021 and mid-June 2022.
Notably, in the period between mid-May and mid-June, commercial banks experienced a substantial 17.59 percent increase in profits. From mid-July 2022 to mid-May 2023, the profit amounted to Rs 57.17 billion.
Critics have often raised concerns about high interest rates being a major driver of banks’ profitability, as the spread rate remains a significant source of their earnings. Even with excess liquidity in recent months, banks have been reluctant to reduce interest rates for their clients.
Given the economic recession and the underperformance of production and commercial sectors, the surge in banks’ profits has raised questions among stakeholders, including members of the Confederation of Nepalese Industries.
Among individual banks, Nabil Bank emerged as the top performer, recording the highest profit of Rs 7.11 billion during the review period.
Global IME Bank secured the second spot with earnings of Rs 6.50 billion, while Nepal Investment Mega Bank and NIC Asia Bank earned profits of Rs 4.76 billion and Rs 4.63 billion, respectively.
The state-owned banks also contributed significantly to the impressive financial landscape. Rastriya Banijya Bank recorded profits of Rs 4.47 billion, Nepal Bank Limited earned Rs 3.07 billion, and Agriculture Development Bank reported a profit of Rs 1.56 billion, which was the lowest among the state-owned banks.
Among the 21 commercial banks, five entities earned profits of less than Rs 2 billion, including Laxmi Bank, Machhapuchchhre Bank, Citizens Bank International, Sunrise Bank, and Agriculture Development Bank.
It’s worth mentioning that Laxmi Bank and Sunrise Bank have recently merged and have begun joint operations as a unified entity.
Top 10 profit-making banks in the first 11 months of FY 2022/23:
Banks Profit
Nabil Bank Rs 7.11 billion
Global IME Bank Rs 6.50 billion
Nepal Investment Mega Bank Rs 4.76 billion
NIC Asia Bank Rs 4.63 billion
Rastriya Banijya Bank Rs 4.47 billion
NMB Bank Rs 3.32 billion
Himalayan Bank Rs 3.29 billion
Prime Commercial Bank Rs 3.21 billion
Standard Chartered Bank Rs 3.11 billion
Nepal Bank Limited Rs 3.07 billion
Your email address will not be published. Required fields are marked *
Comment *
Name *
Email *
Website
Save my name, email, and website in this browser for the next time I comment.
