As of January 20, 2025, Nepal's 20 commercial banks reported a total profit of NPR 27.43 billion for the first six months of the fiscal year 2081/82, reflecting a 4.62% decline compared to the same period last year.
The banks released their unaudited financial statements, revealing that 11 banks experienced profit increases, with Prabhu Bank leading at an 85% rise. Other notable performers included NIMB, Global IME, and NMB.
Conversely, NIC Asia Bank saw a dramatic 92% profit drop due to a significant rise in loan loss provisions. Kumari, National Commercial, and Siddhartha banks also reported substantial profit declines.
The primary reasons for the overall profit decrease include a drop in net interest income, which fell from NPR 96.29 billion in the previous year to NPR 92.21 billion this year. The banks are struggling to manage rising costs associated with deposits and insufficient loan disbursements, evidenced by a loan-to-deposit ratio of 79.4%.
Additionally, the central bank's measures to tighten liquidity have adversely affected net interest income. Banks are also facing challenges in recovering loans, leading to increased provisions for bad debts. As of the end of January, the average non-performing loan ratio among banks reached 4.35%, up from 3.38% a year earlier.