Minimal profit growth for banks in first 9-months amid economic slowdown
According to data, 20 commercial banks earned a total profit of Rs 41.24 billion during this period, marking a modest year-on-year increase of just 1.4 percent.
KATHMANDU: The profit growth of commercial banks in Nepal remained sluggish during the first nine months of the current fiscal year, reflecting the ongoing economic slowdown that has dampened private sector activities.
Despite the challenging economic environment, some positive signs have emerged, thanks to the Nepal Rastra Bank’s (NRB) flexible monetary policies.
According to data, 20 commercial banks earned a total profit of Rs 41.24 billion during this period, marking a modest year-on-year increase of just 1.4 percent.
Analysts credit NRB’s restructuring and rescheduling policies—particularly the relaxed lending provisions for the construction sector—for this limited but crucial growth.
Nepal Bank recorded the highest surge in profit growth, skyrocketing by 2032.8 percent to reach Rs 2.78 billion.
Meanwhile, in terms of total profit, Nabil Bank led the sector by earning Rs 5.05 billion, with a growth rate of 8.2 percent.
Among the gainers were Nepal Bank, Nabil Bank, Nepal Investment Mega Bank, Nepal SBI Bank, Everest Bank, Machhapuchchhre Bank, Laxmi Bank, Global IME Bank, NMB Bank, and Sanima Bank—all of which reported profit growth compared to the same period last year.
However, nine commercial banks saw their profits decline year-on-year.
These include Rastriya Banijya Bank, Standard Chartered Bank, Himalayan Bank, NIC Asia Bank, Kumari Bank, Siddhartha Bank, Agricultural Development Bank, Citizens Bank, and Prime Commercial Bank.
Bankers point out that while investment demand and economic momentum have remained weaker than expected, NRB’s policy flexibility helped banks maintain profitability.
A key policy move—reducing the loan loss provision from 1.10 percent to 1 percent—also played a significant role in maintaining balance sheets.
