The economic slowdown has hampered business expansion, leaving a noticeable impact on the balance sheets of Nepal’s commercial banks.
In the first nine months of the current fiscal year, commercial banks recorded a marginal profit growth of just 1.4% compared to the same period last year. This modest increase is largely attributed to the Nepal Rastra Bank’s flexible policies on loan loss provisions and loan restructuring.
According to financial data, the profit boost was supported by the central bank’s decision to allow the restructuring and rescheduling of loans, particularly in the construction sector. In total, 20 commercial banks earned a combined profit of Rs 41.24 billion during the nine-month period. Of these, 11 banks posted profit increases, while 9 banks reported declines.
Nepal Bank led in profit growth rate, posting a staggering 2032.8% increase to reach Rs 2.78 billion. Meanwhile, Nabil Bank reported the highest overall profit of Rs 5.5 billion, reflecting an 8.2% year-on-year growth.
Bankers cite that while loan demand remained below expectations, central bank policies—such as permitting the restructuring of construction-related loans and reducing the loan loss provision from 1.10% to 1%—offered some relief.
However, not all banks fared well. National Commercial Bank, Standard Chartered, Himalayan, NIC Asia, Kumari, Siddhartha, Agricultural Development Bank, Citizens, and Prime Bank all experienced a drop in profits.
