Commercial banks report Rs 9.17 billion net profit in first month of FY 2024-25

KATHMANDU: In the first month of the current fiscal year (mid-July to mid-August 2024/25), Nepal’s commercial banks collectively posted a net profit of Rs 9.17 billion, indicating a robust start to the financial year.

Among the 24 commercial banks, Global IME Bank led the sector, recording the highest net profit of Rs 892.4 million by mid-August. Nabil Bank secured the second spot with a net profit of Rs 803.3 million, while Agriculture Development Bank ranked third, achieving a net profit of Rs 712 million.

Top Performers in Banking Sector

Following Agriculture Development Bank, Himalayan Bank came in fourth with a net profit of Rs 588 million, and Nepal Investment Mega Bank rounded off the top five, posting a net profit of Rs 577.5 million.

In the next tier, Prabhu Bank earned a net profit of Rs 538 million, followed by Prime Commercial Bank with Rs 505.5 million and Kumari Bank with Rs 503.5 million. Laxmi Sunrise Bank posted a net profit of Rs 430.3 million, marking another strong financial performance among mid-sized banks.

Mid-Level Banks’ Performance

Banks like NMB Bank also recorded a healthy net profit of Rs 427.2 million, while Everest Bank Limited earned Rs 422.9 million, and Sanima Bank posted Rs 382.6 million in net profit. Similarly, Rastriya Banijya Bank achieved a profit of Rs 360.6 million, and Siddhartha Bank registered a profit of Rs 348.8 million.

Lower Profit Margins

In terms of profitability, Citizens Bank International earned Rs 342.2 million, while Nepal SBI Bank posted Rs 333.3 million. Standard Chartered Bank earned Rs 311.5 million, NIC Asia Bank posted Rs 266.3 million, and Nepal Bank Limited recorded Rs 223.9 million.

Despite maintaining profitability, Machhapuchhre Bank posted the lowest profit among the banks, earning Rs 202.4 million in the first month of the fiscal year.

Sector Outlook

This strong profit performance indicates that Nepal’s commercial banking sector has started the fiscal year on a solid footing. The sector’s overall financial health is crucial for economic stability, as these banks play a pivotal role in providing credit to the country’s businesses, facilitating trade, and fostering investment in key sectors such as agriculture, infrastructure, and small and medium-sized enterprises (SMEs).

However, despite the strong profit figures, banking officials have highlighted concerns regarding fluctuating interest rates, increased competition, and the potential impact of global economic uncertainty on the sector’s long-term profitability.

In the coming months, market watchers will be closely observing whether the positive trends in profitability can be sustained amidst evolving economic conditions.

This early performance also reflects the banks’ success in optimizing operations and managing risks, while expanding their loan portfolios. For the rest of the fiscal year, commercial banks are expected to remain a crucial pillar of Nepal’s economic growth trajectory.