The banker focus into 'balance sheet management'

Kathmandu. Banks and financial institutions, which were once aggressive in business expansion, are now engaged in balance sheet management. As bad loans are increasing every month, the bankers are taking up balance sheet management. Now the bankers are worried that the ratio of bad loans will increase and the financial statement itself will deteriorate.

Bankers say that the third quarter of the bank will not be encouraging because the economy is not running and there is no recovery. The bankers who are busy preparing the financial statements for the third quarter of the current financial year say that they are emphasizing on recovery by stopping business expansion.

Although the interest rates of banks and financial institutions have been decreasing recently, the bankers are complaining that the business has not expanded in the third quarter because the lending is almost zero.

According to the data till January, the average bad loan of commercial banks is 3 and a half percent. Bad loans of most banks are more than 4 percent. Some bankers are still saying that the bank's bad loans will increase.

A banker said that now most of the banks are focusing on balance sheet management rather than business expansion as the ratio of bad loans has increased. "The third quarter is like the second quarter, recovery is still not possible, bad loans are increasing." 

Currently, banks are under pressure to reduce expenses by increasing income, while they are emphasizing on facilitating capital funds by collecting loans. Banks are also facing the strict policy of the regulator Nepal Rastra Bank.