KATHMANDU, April 20: The inability to expand business due to economic slowdown has had an impact on the balance sheets of commercial banks.
In the first nine months of the current fiscal year, commercial banks have seen a profit of just 1.4 percent compared to the same period last year. This growth became possible due to the flexible policies implemented by the central bank regarding loan loss provisions.
The profit growth of banks has also been supported by the central bank's restructuring and rescheduling of loans in the construction sector. In the first nine months, 20 banks have earned a total profit of Rs 41.24 billion. While 11 banks enjoyed an increase in profits, nine banks suffered a decline.
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In terms of profit growth rate, Nepal Bank leads, while Nabil Bank has the highest overall profit. Nepal Bank’s profit has increased by 2032.8 percent, reaching Rs 2.78 billion.
Similarly, Nabil Bank earned a profit of Rs 5.5 billion, with a profit growth rate of 8.2 percent.
According to bankers, although loan demand has not been as expected, the relief came from the central bank's provision allowing the restructuring and rescheduling of loans in the construction sector. Additionally, the reduction of the loan loss provision from 1.10 percent to 1 percent has also contributed to the increase in profits.
However, the profits of National Commercial, Standard Chartered, Himalayan, NIC Asia, Kumari, Siddhartha, Agricultural, Citizens, and Prime Banks have shrunk.
