Not only that economic growth rate that plunged to lower ebb and the inflation rate that crossed the crucial double-digit mark, the liquidity crisis that chocked much-crucial additional extension of credits in the second half of the last fiscal year obstructed much-needed economic revival. [break]
Despite the lengthening gloom and squeezing economic activities, the banking sector continued to remain one of the few sectors to enjoy yet another healthy growth rate in their profits.
According to unaudited financial reports of big five private commercial banks, Nepal Investment Bank (NIBL) emerged as the biggest profit generating commercial banks in 2009/10 followed by Nabil Bank and Standard Chartered Bank.
NIBL managed to earn Rs 1.26 billion of net profit during the period, up from Rs 900.6 million in the previous year. The profit and loss accounts of the bank revealed that the bank managed to earn a healthy operating profit of Rs 2.73 billion last year and it also lowered loan loss provision to Rs 93 million from Rs 166.2 million.
Nabil Bank also enjoyed a profit of Rs 1.14 billion, 11 percent more than what the bank earned in the same period last year. However, the real growth in profits turned out to be marginal when it is compared with the inflation rate of 10.5 percent recorded last year.
Propelled by an impressive net interest income of almost 27 percent, the operating profit of the bank rose by over 24 percent. Unlike other banks, Nabil Bank probably was the only bank witnessing a decline in its staff expenses in the review period, as many of its senior staffers including the chief executive officer left the bank to join a new Mega Bank.
Similarly, Standard Chartered Bank, which has been an icon of excellent banking governance in Nepal, saw it profit increase by only around 6 percent to Rs 1.08 billion. In the like manner, the operating profit of the bank also witnessed a slow growth of 7 percent to Rs 1.6 billion. The bank also managed to increase its capital adequacy ratio to 17.78 percent from last year´s 14.7 percent.
In terms of profit volume, once financially-troubled Nepal Bangladesh Bank stood in the fourth position followed by Everest Bank. During the last fiscal year, Nepal Bangladesh Bank managed to generate a net profit of Rs 1.01 billion, while the Everest Bank enjoyed profits of Rs 831 million in 2009/10.
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