KATHMANDU, Mar 6: Despite an encouraging average increment of over 20 percent in net interest income of big four banks -- Standard Chartered Bank, Nabil Bank, Himalayan Bank and Nepal Investment Bank, their average net profits during the first half of the current fiscal year grew by just 13 percent due mainly to rise in provision of possible losses and operating expenses.
According to unaudited financial results of the four banks, the net interest income of Nabil recorded a robust growth of almost 39 percent to Rs 998 million followed by Nepal Investment Bank that managed an impressive growth of 27 percent in net interest income to Rs 937 million. Likewise, Standard Chartered Bank recorded a rise of 13 percent. [break]
But such growth in income for Himalayan Bank, which is the third largest depositors among private banks, was just 3 percent. It is because of a whopping 52 percent rise - the highest among the four big banks -- in interest expenses mainly fueled by recent rise in deposit interest rates.
Similarly, Nabil Bank has also managed to mobilize the highest growth in profit earnings followed by Nepal Investment Bank and Standard Chartered. During the period, Nabil enjoyed a net profit of Rs 633 million, up 47 percent than the profits that the bank earned during the same period last year. Nepal Investment Bank also managed to increase its net profit by over 40 percent during the period to Rs 594 million followed by Standard Chartered that generated a net profit of Rs 513 million. The amount was 5.77 percent more than last year´s figure.
However, the net profit of Himalayan Bank tumbled by an alarmingly 41.27 percent during the second quarter as compared to same period last year though the growth in loan and advances of the bank rose by a whopping 44 percent during the period. According to the published financial report, the net profit that the bank earned during the period came down to Rs 222 million from last year´s Rs 378 billion.
The provision of possible loss that mainly deals with problematic loans extended by the banks has also gone up by multifold to Rs 253 million whereas it was just Rs 17 million during same period last year.
Except Standard Chartered Bank, all the three banks posted healthy growth in mobilizing additional deposits. A decline of 15 percent in foreign currency deposits despite a marginal growth of 3.4 percent in local currency is the reason for decline in overall volume of deposits of Standard Chartered Bank.
Of the four banks, Nabil recorded the highest growth of 30 percent in deposits followed by Nepal Investment Bank and Himalayan Bank. However, Nepal Investment Bank also saw a decline of 15 percent in foreign currency deposits though it enjoyed a healthy 20 percent growth in local currency deposits.