Commercial banks earn profits of Rs 28.36 billion in current FY

Published On: January 15, 2024 08:30 AM NPT By: Republica | @RepublicaNepal

KATHMANDU, Jan 15: Commercial banks of Nepal earned profits of Rs 28.36 billion in the first five months of the current fiscal year.

The records with Nepal Rastra Bank (NRB) show that 20 commercial banks earned the aforementioned amount of profits as of mid-December this year. The banks’ profits grew by Rs 7.63 billion in one month during mid-November and mid-December.

Out of the total profits of the ‘A’ class financial institutions, around 29 percent was secured by three banks. Fourteen banks stood with profits worth more than Rs 1 billion.

In the review period, Nabil Bank secured the largest profits of Rs 2.73 billion. Similarly, Global IME Bank earned profits of Rs 2.69 billion and Nepal Investment Mega Bank earned profits of Rs 2.60 billion.

Prime Commercial Bank secured Rs 1.92 billion, NIC Asia made profits of Rs 1.85 billion and Himalayan Bank earned profits of Rs 1.80 billion. Out of the three state-owned commercial banks, Rastriya Banijya Bank had its profits of Rs 1.403 billion and Nepal Bank Limited earned Rs 1.213 billion. Agriculture Development Bank earned the lowest profits of Rs 125.02 million during the period.

Banks have posted a notable amount of profits at a time when the private sector has been blaming the banks and financial institutions for charging high interest rates just to secure a high amount of profits. Commercial banks have collected deposits of Rs 5.385 trillion, while they have provided loans of Rs 4.457 trillion. Despite having excess liquidity with them, banks have nominally reduced their lending rate till date.

Meanwhile, commercial banks have announced to reduce interest rates on their deposits from Monday. They are reported to be reducing the interest rates by 0.82 percent from 8.99 percent during mid-December and mid-January.

The interest rate will come to as low as 7.26 percent in the fixed deposit, while the highest rate will be 9.15 percent for the next one month. NMB Bank and Everest Bank will be keeping their interest rates constant for the review period. Despite reducing the interest rate on deposits, the banks are silent over the interest rates on loans.