Rising non-performing loans push BFIs’ non-banking assets up
Summary
Non-banking assets of Nepalese banks and financial institutions increased by 42.36 percent in FY 2024/25 due to rising non-performing loans and loan defaults, raising concerns over financial stability.
Key Points
- Non-banking assets of banks and financial institutions rose by 42.36 percent in FY 2024/25, increasing from Rs 35.50 billion to Rs 50.55 billion.
- Commercial banks saw a 41.75 percent rise in non-banking assets, with Global IME Bank having the largest amount at Rs 6.05 billion.
- The average non-performing loan ratio increased to 4.62 percent from 3.86 percent amid economic slowdown and loan recovery difficulties.
- The International Monetary Fund expressed serious concerns over rising NPLs and urged prompt measures to protect banks' financial health and economic stability.
