KATHMANDU, Oct 18: Nepal’s commercial banks earned net profits of Rs 16.64 billion in the first two months of the current fiscal year.
The profit is 3.34 percent more than the profit made in the same period last year. During mid-July and mid-September in fiscal year 2022/23, commercial banks earned a profit of Rs 16.11 billion.
Out of 20 commercial banks, five posted profits worth more than Rs 1 billion. These banks had gone into merger last year.
Global IME Bank earned a profit of Rs 1.755 billion and topped the position. Likewise, Nabil Bank earned a profit of Rs 1.564 billion, followed by Nepal Investment Mega Bank with Rs 1.486 billion, Himalayan Bank with Rs 1.232 billion and Kumari Bank Rs 1.145 billion. Nepal SBI Bank with a profit of Rs 273 million stood lowest in the row.
Three government-owned banks also earned profits less than Rs 1 billion. Of them, Rastriya Banijya Bank earned the largest of Rs 870.5 million. Nepal Bank Limited and Agriculture Development Bank earned profits of Rs 707.1 million and Rs 615.6 million, respectively.
Banks are often blamed for imposing high interest rates to secure huge profits just to please their shareholders. Despite having excess liquidity with them, banks are still not willing to reduce interest rates on their loans.
As of last week, commercial banks had collected a total deposit of Rs 5.165 trillion with them. According to Nepal Rastra Bank records, the class ‘A’ banks provided loans of Rs 4.384 trillion.
With an increase in liquidity position, the average credit-deposit ratio of the commercial banks has gone down to 81.81 percent, against the mandatory rule of 90 percent imposed by the regulator. However, their base interest rate is still as high as 10.94 percent.