The average earnings per share (EPS) of commercial banks have decreased by Rs 5.37 over the past five years. A study of the financial statements of 20 commercial banks shows that the average EPS of commercial banks fell to Rs 14.71 in mid-Jan 2025, compared to Rs 20.08 in mid-July 2021.

 EPS is an important indicator for evaluating a company’s profitability. It is calculated by dividing the company’s net profit by the number of shares. A drop in EPS indicates declining profitability for banks. With non-performing loan (NPL) levels rising, banks are forced to set aside a substantial portion of their profits for provisioning, which has impacted their net profit.

The average EPS of Class ‘A’ banks, which was Rs 20.08 in mid-Jan 2020, increased to Rs 23.28 in mid-Jan 2021. Since then, the average EPS of banks has declined continuously. It fell to Rs 20.14 in the second quarter of 2022, Rs 16.78 in 2023 and Rs 14.71 in 2024.

The average EPS of commercial banks has fallen by Rs 2.07 over the past year. Data shows that the average EPS of commercial banks dropped to Rs 14.71 in the second quarter of 2024/25, compared to Rs 16.78 in the same quarter of 2023/24.

NIC Asia Bank has seen the biggest drop in EPS during the review period. Data shows that the EPS of NIC Asia fell to Rs 2.04 in the second quarter of 2024/25, down from Rs 25.59 in the same quarter of 2023/24. Next is Rastriya Banijya Bank Ltd, which saw its EPS fall from Rs 25.78 in the second quarter of the previous fiscal year to Rs 9.76 in the same quarter of the current fiscal year.

Siddhartha Bank Ltd, Asian Development Bank Ltd, Kumari Bank Ltd, Standard Chartered Bank Ltd, Prime Commercial Bank Ltd, Citizens Bank International Ltd, and Nepal Bank Ltd have also seen declines in EPS during the review period.

Eleven commercial banks managed to increase their EPS over the past year. NMB Bank reported the biggest growth of Rs 6.84 in EPS among the 20 commercial banks in the country. Next was Nepal Investment Bank Ltd, with EPS rising by Rs 6.04.

Standard Chartered Bank Nepal Ltd reported the highest EPS of Rs 32.67 in the second quarter of 2024/25. Everest Bank Ltd, Nabil Bank and NMB Bank Ltd followed, with EPS of Rs 32.06, Rs 25.05 and Rs 21.82, respectively.

NIC Asia Bank reported the lowest EPS of Rs 2.04 in the second quarter.