KATHMANDU, April 30: Commercial banks of Nepal were able to increase their net profit by 19.30 percent in nine months of the current Fiscal Year (FY) due to the flexible policies adopted by Nepal Rastra Bank (NRB).
As per the financial report unveiled by 20 commercial banks, they secured profits of Rs 49.21 billion as of the third quarter of the current FY. The amount was Rs 41.25 billion in the same period of FY 2024/25.
The NRB had permitted banks to restructure their loans citing poor financial performance of the banks. With the policy in effect, banks have been able to reduce their risk weightage of loans and are less obliged to keep excessive funds in their reserves under different regulatory provisions.
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The banks’ financial reports show that their loan loss provision declined during mid-July 2025 and mid-April 2026, following the lenient policy adopted by the NRB. The central bank has reduced the loan loss provision on good loans to one percent, while it has also allowed banks not to include the credit under the bad loan if the banks have started the process to take related collateral into auction sale.
As of mid-April this year, banks maintained a loan loss amount of Rs 35.65 billion. The amount was nominally less by Rs 230 million, compared to the amount in the same period last FY.
Nabil Bank secured the largest amount of net profits worth Rs 6.76 billion during the review period, a growth of 33.92 percent compared to last year. Global IME Bank and Kumari Bank stood second and third with their earnings of Rs 4.40 billion and Rs 4.17 billion, respectively.
Bankers said that the improved revenue earnings from commission and banking fees also contributed to the banks’ profit earnings. In addition, the decline in spread rate had also helped them improve their financial positions.
Despite a rise in net profit amount, the banks’ distributable profits declined in the review period. The banks are yet to recover interest amount of Rs 8.49 billion from their clients. Overall, the commercial banks have distributable profits of only Rs 11.63 billion, which they can distribute among their shareholders.
The banks’ cumulative loss stands at Rs 10.19 billion, which shows that the banks are yet to recover from their piled up losses of previous years. As per the regulatory provision of the NRB, the banks cannot distribute their profits until they completely recover from the cumulative loss.
