Kathmandu – The profit of 10 banks has decreased significantly due to an increase in ‘provisioning.’ Out of the 20 commercial banks in operation, 10 have seen a profit increase, while the other 10 have experienced a decrease compared to the previous year. This decline in profit is attributed to the higher provisioning requirements for banks.

The monetary policy has stipulated provisioning of 0.2 to 0.1 percent, but this is only applicable from the current financial year. There was no such arrangement in the last fiscal year. As a result, even banks that earned significant profits in the previous financial year saw a decrease in their profit in 2080/81.

In the last financial year 2080/81, the 20 commercial banks collectively earned a total profit of Rs 64 billion 15 crore. This marks a 13.39 percent increase, or Rs 7.58 billion, compared to the previous year, when they earned a total of Rs 56 billion 57 crore in net profit.

Nabil Bank was the highest profit earner in the last year, with a net profit of Rs 7.6 billion. Global IME Bank followed as the second highest, earning a net profit of Rs 6.162 billion. Nepal Investment Mega Bank ranked third, earning a net profit of Rs 5.198 billion, up from Rs 3.72 billion the previous year.

Prabhu Bank also showed strong profit growth, earning Rs 4.488 billion last year compared to Rs 2.8 billion the previous year. Kumari Bank’s net profit increased by 345.66 percent to Rs 2.382 billion, up from Rs 51 crore.

Prime Commercial Bank’s profit rose by 267.18 percent to Rs 3.7743 billion, up from Rs 1.2 billion. Agricultural Development Bank’s net profit increased by 167.23 percent to Rs 3.6556 billion, from Rs 1.32 billion the previous year. Everest Bank earned Rs 3.706 billion, up from Rs 3.36 billion the previous year.

The profit of the National Commercial Bank slightly declined, earning Rs 3.398 billion last year compared to Rs 3.59 billion the previous year. Standard Chartered earned Rs 3.389 billion, down from Rs 3.46 billion the previous year.

Lakshmi Sunrise Bank earned Rs 3.345 billion last year, up from Rs 2.28 billion the previous year. Siddharth Bank earned Rs 3.1155 billion, down from Rs 3.16 billion the previous year. Himalayan Bank earned Rs 2.838 billion last year, down from Rs 3.156 billion the previous year. Sanima Bank earned Rs 2.3819 billion, down from Rs 2.6 billion the previous year.

NMB Bank earned Rs 2.3365 billion last year, down from Rs 3.22 billion the previous year. Nepal SBI Bank earned Rs 2.137 billion, up from Rs 1.96 billion the previous year. Nepal Bank earned Rs 1.6568 billion, down from Rs 3.43 billion the previous year. NIC Asia Bank earned Rs 1.3818 billion, down from Rs 4.44 billion the previous year. Citizens Bank earned Rs 1.3424 billion, down from Rs 1.86 billion the previous year.

Machhapuchhre Bank continued to be among the low profit earners, earning Rs 1.25 billion last year compared to Rs 1.62 billion the previous year. Banking expert Analraj Bhattarai noted that the decline in profits is due to the increased provisioning of banks.

He explained that although the monetary policy stipulated provisioning of 0.2 to 0.1 percent, this is only applicable from the current year, so the reports for the last year reflect the previous provisioning requirements. Bhattarai also mentioned that since banks have 10 more days to collect the interest on loans, the interest income is likely to increase. He added that Nepal Rastra Bank has not implemented this system since this year to bolster capital for the next year.