KATHMANDU, Nov 5: The net profits of almost half of the commercial banks who have published their financial results have gone up in the first quarter of the current Fiscal Year 2017/18.  

Nine commercial banks have observed rise in their net profits in the first quarter out of 16 commercial banks who have already published their quarterly financial results, if compared to what they earned as net profits in the corresponding period of last Fiscal Year 2016/17. 

However, net profits of the remaining seven commercial banks have dropped in the first quarter, according to unaudited financial results compiled by Nepal Bankers' Association (NBA). 

Twelve commercial banks are yet to publish their financial results even after 120 days of the first quarter coming to an end. 

Himalayan Bank Ltd, Global IME Bank Ltd, Citizens Bank International Ltd, and Mega Bank Ltd have reported drops in their net profits compared to the net profits they earned in the corresponding period of the last fiscal year. 

Siddhartha Bank Ltd, Bank of Kathmandu  Ltd, and Sunrise Bank Ltd are other commercial banks whose net profit remained lower than that of the first quarter in the last Fiscal Year 2016/17. 

Nepal Investment Bank Ltd remained at the top of the list in terms of highest profit earning. The bank earned a total of Rs 895 million in net profit in the first quarter compared to Rs 740.88 million in the corresponding quarter of the last fiscal year.
Nabil Bank Ltd followed the suit with a net profit of Rs 851.41 million. 

Everest Bank Ltd also registered a growth in its net profit. The joint venture bank's net profit rose to Rs 531.47 million in the first fiscal year from Rs 513.42 million in the same period of the last year.  

NMB Bank Ltd, Nepal SBI Bank Ltd, Sanima Bank Ltd, and Prime Commercial Bank Ltd have registered growths in their net profit in the first quarter. Similarly, NIC Asia Bank Ltd and Janata Bank Ltd have also earned higher net profits than in the first quarter of the last fiscal year. 

Bankers attribute the drop in the net profits of the banks to the high-interest expenses they had to bear to lure depositors in the latter half of the last fiscal year. 
“The drop in the net profit is the impact of the liquidity pressure the banking sector faced in the third and fourth quarters of the last fiscal year,” Shovan Dev Pant, the CEO of Bank of Kathmandu, told Republica. 

“Since most of the commercial banks were competing with each other to offer higher interest rates to lure deposits in the wake of crunch of lendable fund, the interest expenses have gone up significantly in this quarter too,” added Pant, explaining the reason behind the drop in the net profit of the banking industry including the commercial bank he manages. 

As banks rely on the interest earning for their income, the rise in interest rates, particularly against their deposits, hit their profit. 

 
• net
 
• profit
 
• majority
 
• commercial
 
• banks
 
• increases