In the review period, the profit of commercial banks has declined by two percent in the current fiscal year. The net profits of the banks till mid-May stood at Rs 57.163bn compared to Rs 58.338bn in the corresponding period of the last fiscal year.
The profit of development banks has plummeted by double-digit in the review period. The net profits of the class ‘B’ institutions dipped by 25.59 percent to Rs 4.297bn in the 10 months of the current fiscal year compared to Rs 5.775bn in the same period of the last fiscal year. However, finance companies have managed to post an increase of 14.58 percent in their profits. The net profit of the class ‘C’ institutions rose to Rs 1.146bn by mid-May 2023 compared to Rs 1.001bn a year ago. According to bankers, the rise in non-performing assets (NPAs) and increase in provisioning amount has hit the BFIs’ profit in the current fiscal year. They attribute the decline in profit to the slowing economic activities coupled with higher interest rates, and borrowers’ inability to repay debts. According to them, banks have been focusing more on loan recovery since debt servicing has become difficult of late. With the sharp increase in NPAs, banks have been forced to set aside more money for loan loss provisions. Among the 21 commercial banks, Nabil Bank has topped the chart, earning a net profit of Rs 6.12bn. Global IME Bank is ranked second with Rs 5.34bn followed by NIC Asia Bank with Rs 4.39bn. Muktinath Bikas Bank is way ahead of other development banks in profit earning in this fiscal. Of the 17 development banks in operation in Nepal, Muktinath Bikas Bank has posted a net profit of Rs 957.22m, followed by Garima Bikas Bank with Rs 690.16m and Shine Resunga Development Bank with Rs 618.33m. Among the finance companies, Capital Merchant Finance posted a profit of Rs 475.26m followed by Manjushree Finance with Rs 124.1m and Gorkhas Finance with Rs 105.3m.
