By the end of the second quarter of the current fiscal year (mid-January), the average earnings per share (EPS) of Nepal’s commercial banks has increased to Rs 16.30. This marks an improvement of nearly Rs 1.90 compared to the same period of the previous fiscal year, when the average EPS stood at Rs 14.40. The rise reflects an overall increase in banking sector profits during the review period.

During the first half of the fiscal year, commercial banks recorded a profit growth of around 11.5 percent. By mid-January, 20 commercial banks together earned a total profit of Rs 30.52 billion, up from Rs 27.36 billion in the corresponding period last year. The improvement suggests a gradual recovery in the banking sector after a prolonged period of pressure caused by weak credit demand and rising non-performing loans.

Among the 20 commercial banks currently in operation, all except one have reported positive EPS figures. Laxmi Sunrise Bank remains the only bank with negative EPS, as it continued to incur losses until mid-January. EPS, calculated by dividing total profit by the number of outstanding shares, is considered a key indicator in stock market analysis as it reflects a bank’s profit-generating capacity.

Nabil Bank has emerged as the strongest performer in terms of EPS during the second quarter. The bank posted an EPS of Rs 34.04, an increase of Rs 10.99 compared to the same period last year, when its EPS stood at Rs 24.05. Nabil Bank also leads in absolute profit figures, indicating sustained strength in its earnings capacity and overall financial performance.

Everest Bank ranks second in terms of EPS, recording Rs 30.86 per share. However, this represents a decline of Rs 1.20 from last year’s EPS of Rs 32.06. Similarly, Standard Chartered Bank reported an EPS of Rs 27.35, down by Rs 5.40 from Rs 32.70 in the corresponding period of the previous fiscal year, reflecting pressure on profitability despite maintaining relatively high earnings.

State-owned Rastriya Banijya Bank has shown notable improvement. Its EPS rose to Rs 22.64, a sharp increase of Rs 12.88 from Rs 9.76 last year. Analysts attribute this growth to structural reforms, improved governance, and stronger profit recovery in government-owned banks in recent years.

Among mid-performing banks, Kumari Bank posted an EPS of Rs 20.74, while Sanima Bank recorded Rs 20.54. Prime Commercial, Nepal SBI, Siddhartha, Nepal Bank, NMB Bank, Global IME Bank, Machhapuchchhre Bank, and Himalayan Bank reported EPS figures ranging between Rs 11 and Rs 20. Meanwhile, Agricultural Development Bank, Nepal Investment Mega Bank, Prabhu Bank, and Citizens Bank posted EPS figures below Rs 10.

NIC Asia Bank recorded the lowest positive EPS during the review period, at just Rs 1.77. The figure highlights mounting pressure from high operating expenses, provisioning requirements, and squeezed profit margins, raising concerns about the bank’s short-term earnings strength.

The most concerning performance, however, was observed at Laxmi Sunrise Bank. Due to continued losses until mid-January, the bank’s EPS stood at a negative Rs 2.04. Analysts point to post-merger integration challenges, rising non-performing loans, and heavy provisioning pressure as key factors behind the bank’s weak financial results.

Overall, while the banking sector’s average profit and EPS are on an upward trajectory, the improvement remains concentrated among a limited number of banks. Rising bad loans, challenges in loan recovery, and sustained provisioning pressure suggest that not all banks will be able to maintain high profit growth in the coming quarters.

For investors, analysts caution that EPS alone should not be the sole basis for decision-making. Greater emphasis needs to be placed on profit sustainability, asset quality, capital adequacy, and risk management. Recent data indicate that opportunities and risks in the banking sector are increasing in parallel, making careful evaluation more critical than ever.