KATHMANDU, Jan 30: Commercial banks in Nepal posted an 11.51 percent rise in net profits in the first half of the current fiscal year, buoyed by improved loan recovery, despite a sharp increase in provisions against non-performing loans (NPLs).
According to financial statements released by 20 commercial banks, the sector earned a combined net profit of Rs 30.59 billion between mid-July 2025 and mid-January 2026, up from Rs 27.43 billion in the same period of the previous fiscal year. This marks an increase of Rs 3.16 billion.
Bankers attributed the growth mainly to higher net interest income and commission earnings. Nepal Bankers’ Association President Santosh Koirala said loan recovery improved notably in the second quarter of the current fiscal year, helping banks offset the impact of higher provisioning.
Lending slows as banks focus on recovery of loans at fiscal yea...
Of the 20 commercial banks, 12 recorded higher profits, while seven saw a decline in earnings. Laxmi Sunrise Bank posted a net loss of Rs 273.61 million during the review period.
Nabil Bank reported the highest profit of Rs 4.75 billion, followed by Global IME Bank with Rs 3.25 billion. Kumari Bank registered the strongest growth, with profits surging 886.50 percent, while Everest Bank posted the lowest growth at 2.04 percent.
Despite the rise in profits, banks continue to grapple with mounting NPLs. Provisions set aside against bad loans increased by 16.84 percent during the review period. As of mid-January, banks maintained total provisions of Rs 28.75 billion, up from Rs 24.67 billion a year earlier.
Fourteen banks set aside more than Rs 1 billion each to meet regulatory provisioning requirements. In percentage terms, Himalayan Bank saw the sharpest rise, with its provisioning jumping 462.95 percent to Rs 1.03 billion.
Meanwhile, banks have been struggling with excess liquidity amid weak credit demand. Lending rates have fallen to a three-year low of 5.36 percent, down from 6.81 percent a year ago.
