Banks’ NPL deepens despite improvement in profit earnings
Summary
Despite increased profits in the last fiscal year, Nepal's commercial banks faced a rise in non-performing loans, with 13 out of 20 banks seeing higher bad debts. However, relaxed monetary policies helped reduce provisioning requirements and boost dividends.
Key Points
- Average non-performing loans (NPL) of commercial banks rose to 4.22% in July 2025 from 3.73% a year earlier.
- Thirteen out of twenty commercial banks experienced an increase in bad debts, while seven reduced their NPLs.
- Nepal Rastra Bank's monetary policy easing helped reduce loan loss provisions to Rs 28.50 billion from Rs 55.98 billion.
- Commercial banks' cumulative profits increased by 43% to Rs 71.22 billion, enabling higher dividend distributions to shareholders.
