Commercial Banks' Profit Increases by 11.51%, Laxmi Sunrise and Agricultural Development Bank Report Losses

Nepal's commercial banks have released their unaudited financial statements for the first six months of the current fiscal year. During this period, the overall profit has increased by 11.51%. However, due to rising non-performing loans, economic slowdown, and high operating costs, profits have not increased as expected.

In the previous fiscal year, banks reported a net profit of NPR 27.43 billion by the end of December, while in the current fiscal year, they have reported a net profit of NPR 30.59 billion for the same period, reflecting an 11.51% increase in profit. Among 20 banks, 11 reported profit growth, contributing to an overall increase of 11.5%.

Notably, Nabil Bank, Global IME Bank, and Kumari Bank have emerged as the top performers. Nabil Bank earned the highest profit, reporting NPR 4.75 billion, which is a 46.71% increase compared to last year. Similarly, Global IME Bank reported NPR 3.25 billion in profit, and Kumari Bank reported NPR 2.72 billion in profit.

However, Laxmi Sunrise Bank has reported a loss of NPR 273.6 million. The bank's profit has decreased by 123.55% compared to the same period last year. Agricultural Development Bank also saw a significant drop in profit by 99.93%, with its profit shrinking to NPR 707,400.

On the positive side, Nepal Bank, Siddhartha Bank, and Rastriya Banijya Bank have all seen considerable profit growth. Nepal Bank’s profit grew by 183.04%, Siddhartha Bank's profit rose by 150.20%, and Rastriya Banijya Bank's profit increased by 132.04%.

The current economic slowdown, political unrest, competitive interest rates, and rising bad loans have put pressure on the banking sector. As a result, challenges in loan collection have hindered profit growth. Banks are expected to focus on cost management, improving loan recovery, and expanding digital services to support profit growth in the coming days.

Additionally, the analysis suggests that the economic slowdown, high operating expenses, and rising bad loans have caused profits to decline for some banks.