Commercial banks post 32 percent profit surge despite weak credit demand
Summary
Nepal’s commercial banks posted a 32 percent rise in net profit to Rs69.78 billion in the last fiscal year, even as weak credit demand and excess liquidity continued to weigh on the economy. Gains were driven mainly by loan recoveries and lower provisioning, while asset quality deteriorated and lending remained sluggish.
Key Points
- Nepal’s 20 commercial banks reported a combined net profit of Rs69.78 billion in the last fiscal year, up 32 percent year-on-year.
- Profit growth was largely driven by stronger loan recoveries and reduced provisioning, not by meaningful credit expansion.
- The average non-performing loan ratio rose to 5.35 percent, even as provisioning for bad loans fell to Rs37.30 billion.
- Nearly Rs1.5 trillion in excess liquidity remained in the banking system amid weak private-sector loan demand.
