There has been a sharp decline in the profits of national-level development banks in the first six months of the current fiscal year 2022/23. According to the unaudited financial reports published by the banks for the second quarter, their net profit has decreased by an average of 20.90 percent. Currently, there are eight national-level development banks operating in Nepal. The second quarter reports of the banks show their profit stood at Rs 2.53 billion in the review period compared to Rs 3.20 billion during the same period of FY 2021/22. The net profit of the banks declined by Rs 669.3 million in this fiscal year which is much higher than that of commercial banks. The profit of 22 commercial banks decreased by 1.34 percent during the first half of the current fiscal. Among the development banks, Jyoti Bikas Bank has the highest profit decline in terms of percentage. The bank saw its profit plunge by 89.91 percent in this fiscal year. Jyoti Bikas earned a profit of Rs 34.7 million in this fiscal compared to Rs 344 million during the same period of the last fiscal.

Similarly, Kamana Sewa Bikas Bank saw its profit decline by 43.01 percent during this period. The bank's profit reduced to 195.8 million in the first half of this fiscal compared to Rs 343.6 million in the same period of the last fiscal.

Sangrila Development Bank's profit decreased by 36.4 percent. The bank's profit plunged to Rs 166.5 million in the first six months of the current fiscal year from Rs 261.8 million in the corresponding period of the last fiscal year. Similarly, the profit of Mahalakshmi Bikas Bank and Lumbini Bikas Bank decreased by 30.73 percent and 25.78 percent respectively. Profits of 3 development banks increase  The second quarter reports show profits of three national-level development banks surged in the first half of the current fiscal year. The net profit of Muktinath Bikas Bank increased by 3.91 percent, Garima Bikas Bank by 1.86 percent and Shine Resunga Development Bank by 23.15 percent. The net profit of Muktinath Bikas Bank stood at Rs 626.2 million in this fiscal compared to Rs 602.4 million in the last fiscal. Similarly, the profit of Garima Bikas Bank increased to Rs 502.1 million in this fiscal from Rs 492.9 million in the last fiscal. The profit of Shine Resunga increased to Rs 429.6 million this fiscal from Rs 348.83 million in the last fiscal. The decline in profits of development banks in the current fiscal year is attributed to the severe liquidity crunch and high-interest rates. As banks struggle to recover loan installments and interest, their profit took a beating. This resulted in an increase in non-performing loans for which development banks had to arrange additional money for loan-loss provisioning.

National-level Development Bank	Net profit FY 2022/23 (First Six Months) (in Rs, in m)	Net profit FY 2021/22 (First Six Months) (in Rs, in m)	Change (in percent)
Muktinath	626.2	602.4	3.91
Garima	502.1	492.9	1.86
Shine Resunga	429.6	348.83	23.15
Mahalaxmi	316	456.2	-30.73
Lumbini	261	351.7	-25.78
Kamana Sewa	195.8	343.6	-43.01
Shangrila	166.5	261.8	-36.40
Jyoti	34.7	344	-89.91