Kathmandu: Recently, the effect of capital increase has started to be clearly seen in the earnings per share and share price of banks. Due to not being able to increase the business according to the paid-up capital, the market price has also fallen significantly along with their earnings per share.

  Last year, Nepal Rastra Bank had instructed to go for merger because of the large number of commercial banks. After this directive, banks started looking for partners to merge or merge. Now most of the banks have completed the merger process and have started integrated business. The number of 28 commercial banks has now reduced to 21.

The National Bank has adopted a policy of merger so that banks become stronger and stronger. But the banks have not been able to increase their business in the capital growth ratio. Looking at most of the merged banks, the capital size is very large, but on that basis, other major indicators are weak. Profit, EPS, net worth and other indicators are not very attractive. But their bad loan ratio (NPL) has increased dramatically in recent times.

The share price of most of the banks established after merger or acquisition is seen below 200 rupees or around. Among the companies listed in NEPSE, most of the cheapest companies are also commercial banks. Kumari, Prabhu, Global IME and Nepal Investment Mega Bank can be purchased in the market for less than Rupees 200.