KATHMANDU, March 18: Loan issuance of Nepali banks improved last month, with the commercial banks providing lending worth Rs 22.74 billion during the period between mid-February and mid-March.
The records with the Nepal Bankers’ Association (NBA) show that 20 commercial banks provided additional loans worth Rs 279.68 billion in the first eight months of the current fiscal year. The banks’ loan portfolio surged to Rs 4.85 trillion as of mid-March, an increase from Rs 4.57 trillion in mid-July, 2024.
Bankers said the increased lendings on imports and margin loans have helped banks improve their business in recent days. “Banks invested huge amounts in loans to import raw materials of edible oils that have been giving the country huge earnings from their exports,” said a banker.
According to the NBA, the lending of commercial banks have been escalating mainly in the past four months. The loan issuance of the banks lost Rs 2 billion in mid-October and mid-November. However, they increased their lending by Rs 42 billion, Rs 94 billion and Rs 12 billion in consecutive three months.
In the first eight months of FY 2024/25, Global IME Bank stood at the topmost level of providing loans. The bank’s lending increased by 10 percent to Rs 429.83 billion in the review period. On the other hand, NIC Asia had its lendings declined by Rs 35.43 billion.
Likewise, the commercial banks collected deposits worth over Rs 6.03 trillion as of mid-March, with an additional deposit collection of Rs 282.27 billion in the review period. Last month alone, the banks collected additional deposits of more than Rs 39.99 billion.
Nepal Investment Mega Bank, by adding 11.36 percent (Rs 45.84 billion) in its deposit portfolio, led in the segment. In the review period, deposits at the bank stood at Rs 309.98 billion, up from Rs 278.37 billion. The deposit collection of NIC Asia Bank dropped Rs 61.86 billion to Rs 298.68 billion.
Meanwhile, the non-performing loans (NPLs) of commercial banks reached 4.73 percent as of mid-February this year. Amid increasing cases of non recovery of loans, banks’ NPLs inclined from 3.36 percent in the review month last year.
As a result of soaring NPLs, the non-banking assets also gained 79.89 percent to Rs 35.82 billion. In mid-February last year, the commercial banks owned this type of assets worth Rs 19.91 billion.