How much Bad loan in commercial Banks of Nepal ? Kumari Bank, Himalayan, NIMB, Prime and Prabhu Bank has Highly increased

Aug Tue 2023 05:12:28

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How much Bad loan in commercial Banks of Nepal ? Kumari Bank, Himalayan, NIMB, Prime and Prabhu Bank has Highly increased

Kathmandu. The details show that the condition of big banks is even worse. Basically, their rate of bad loans has increased and their potential risk bearing resources (provisions against credit risk) are also weak.

After the merger with NCC Bank, Kumari, which emerged as a very large bank, now has the largest amount of non-performing loans. The size of non-performing loans of Kumari Bank has reached 4.77 percent of total loans. Himalayan, Nepal Investment Mega, Prime, Prabhu and Nabil Bank are also carrying large amount of non-performing loans. In the past, the ratio of non-performing loans of commercial banks was less than 2 percent of the total loans. But now, on average, 2.8 percent of the loans have reached a non-performing status.

According to the National Bank, commercial banks have invested 42 trillion 94 billion in loans till last week. If we calculate it at the average rate, it seems that more than 1 trillion 20 billion has reached "bad loans". In addition, this number will naturally increase as the loans of banks that have mobilized large amounts of loans are seen as more at risk.

Which bank has more loans at risk?

Based on the monthly statement of banks published by the National Bank up to the end of May, it seems that 1 trillion 28 billion 27 billion rupees of loans have gone to the 'non-performing' list. In this, the loan added in June has not been calculated. Looking at this basis, it seems that Nepal Investment Mega Bank has the largest amount of non-performing loans.

The financial report has published that 4.35 percent of the total loans of this bank are in 'non-performing' condition. On that basis, nearly 14 billion loan of this bank has gone to risk. Kumari Bank, which has the highest proportion of 'bad loans' in total loans, has more than 13.8 billion non-performing loans. Global IME Bank is also not regularly paying more than 11.5 billion loans.

It seems that Himalayan Bank, which comes second in the ratio of non-performing loans (4.57 percent), has more than 11.25 billion bad loans. Nabil, who bought Nepal Bangladesh Bank a while ago, still has about 11 billion in non-performing loans. Prabhu Bank has more than 10 billion, Lakshmi Sunrise Bank has more than 7 billion and Rashtriya Banijya Bank has more than 7 billion in non-performing loans.

With the lowest non-performing loan, Sanders Chartered has only around 1 billion in this type of loan. Everest, Sanima, NIC Asia, Machhapuchhre and Nepal SBI Bank also have less non-performing loans than many other banks.

If we measure the ratio of non-performing loans to total loans, Everest Bank appears to be the strongest. NIC Asia Bank has also reduced the size of bad loans almost to the extent of Everest. These two banks have only 0.8 percent of total loans. The non-performing loans of Standard Chartered and Sanima Bank are also less than 2 percent of the total loan amount.