Himal Press 
KATHMANDU: Nepal’s 20 commercial banks reported a 45.59% growth in their combined net profit in the first quarter of the current fiscal year.
A study of first-quarter financial statements shows that the net profit of Class ‘A’ banks reached Rs 19.15 billion in the first quarter of the current fiscal year, up from Rs 13.15 billion in the same period of the previous fiscal year.
Sixteen of the 20 banks recorded an increase in net profit, while one bank returned to profitability from a loss and three reported a decline in their net profit.
The sharp rise in profit came despite a modest 0.97% increase in interest income. Net interest income of commercial banks reached Rs 49.67 billion in the review period from Rs 49.2 billion a year earlier.
Commercial banks reported a healthy growth in net profit despite a slow growth in interest income. This suggests that most of their growth came from a decline in impairment charges. Banks, which had made significant provisions for potential loan losses in the previous fiscal year, reduced their provisioning in the review quarter due to the recovery of bad loans.
Data show impairment charges of banks declined by 44.9% in the review quarter. Banks, which had set aside Rs 20.14 billion for provisions in the first quarter of the previous fiscal year, earmarked only Rs 11.09 billion for the purpose in the review quarter.
Nabil Bank recorded the highest net profit of Rs 2.56 billion in the first quarter, up 45.42% from Rs 1.76 billion in the same period last year.
Global IME Bank came second with a net profit of Rs 2.31 billion, up 24.48% from Rs 1.86 billion a year earlier.
State-owned Rastriya Banijya Bank Ltd saw its net profit jump 175.53% to Rs 1.65 billion in the review quarter. Everest Bank and Prime Commercial Bank were next, with net profits of Rs 1.25 billion and Rs 1.19 billion, respectively.
In percentage terms, Nepal Investment Mega Bank (NIMB) and Agricultural Development Bank recorded the sharpest increases in net profit. NIMB reported a 2,519.51% jump in its net profit to Rs 1.18 billion. The bank had posted a net profit of just 45.1 million a year earlier. Agricultural Development Bank’s net profit jumped 1,815.79% to Rs 109.2 million from Rs 5.7 million.
Similarly, Siddhartha Bank’s net profit increased 162.76% to Rs 851.6 million. Sanima Bank recorded a 131.15% rise to Rs 1.05 billion, while Laxmi Sunrise Bank’s profit grew 96.63% to Rs 653.4 million.
Nepal Bank, Machhapuchchhre Bank, NMB Bank, Nepal SBI Bank, Prabhu Bank and NIC Asia Bank also reported growth in net profit.
However, three banks saw their earnings decline. Prime Commercial Bank’s net profit fell 5.62%, Himalayan Bank’s dropped 6.84% and Standard Chartered Bank’s declined 3%.
Citizens Bank International returned to profitability after reporting a loss of Rs 220.4 million in the first quarter of the previous fiscal year. The bank posted a net profit of Rs 107.7 million in the review period.
