KATHMANDU: Nepal’s commercial banking sector reported a strong rebound in profitability in FY 2081/82, with 20 commercial banks collectively earning Rs 71.51 billion in net profit — a growth of 43.39 percent compared to the previous fiscal year’s Rs 49.87 billion. The profit jump signals recovery in interest spreads, improved fee-based income, and cost adjustments across most banks despite persistent challenges of liquidity pressure and rising non-performing assets (NPLs).

The sector’s profitability expansion was largely broad-based, with 16 out of 20 banks posting higher earnings year-on-year. Only four banks — Standard Chartered Nepal, Nepal SBI Bank, Citizens Bank, and NIC Asia Bank — recorded declines in net profit. The data reflect both operational recovery and divergent performance depending on credit portfolio quality, exposure to high-risk lending, and treasury income.

 Nabil Bank's Net Profit Rs 7.12 billion
Nabil Bank retained its position as Nepal’s most profitable commercial bank, booking Rs 7.12 billion in net profit, up 15 percent from Rs 6.19 billion in FY 2080/81. Continued strong interest spread, robust non-interest income, and cost discipline contributed to the performance, maintaining Nabil’s dominance in the sector.

Nepal Investment Mega Bank (NIMB) emerged as the second-most profitable institution, with a profit surge of 64.43 percent to Rs 6.75 billion. The increase is attributed to gains post-merger and consolidated operational efficiency, alongside stable fee income.

Global IME Bank earned Rs 6.20 billion, a modest 1.09 percent increase from last year. Although its earnings barely grew, the bank maintained third place in absolute profit volume.

Prabhu Bank witnessed one of the most dramatic jumps in the entire sector, with net profit rising by 965.4 percent to Rs 5.44 billion. This drastic rise came from a low base the previous year and reflects recovery in interest income, income from merger adjustments, and cost control.

Everest Bank, Agricultural Development Bank, Laxmi Sunrise, Prime Bank, and Rastriya Banijya Bank also delivered robust profit growth ranging from 30 to 50 percent. Agricultural Development Bank (ADB) recorded Rs 4.15 billion in profit (up 43.38%) — reflecting revival of interest income and lower provisioning compared to the previous year. Laxmi Sunrise (merged entity) reported Rs 4.11 billion profit, up 41 percent, driven by post-merger synergies and deposit growth.

Similarly, Rastriya Banijya Bank reported a 49.53 percent jump in net profit to Rs 3.81 billion, reflecting stable government deposit inflow and cost reductions. Prime Bank earned Rs 4.02 billion (up 14.72 percent).

Nepal Bank posted a remarkable turnaround, with net profit soaring by over 13,000 percent to Rs 3.77 billion, compared to only Rs 28.4 million last year. The previous year’s profit had been depressed by high provisioning for bad loans, which were partly reversed in 2081/82 following NPA recovery and risk asset restructuring.

Kumari Bank registered the highest percentage growth in the sector — an astonishing 45,829 percent increase — from a mere Rs 4.6 million in FY 2080/81 to Rs 2.11 billion in FY 2081/82. Machhapuchchhre Bank also nearly doubled its profit to Rs 2.01 billion (up 92.44 percent) amid loan portfolio expansion and increased fee income.

Sanima Bank, Himalayan Bank, Siddhartha Bank, and NMB Bank also recorded healthy double-digit profit growth due to interest rate stabilization and better recoveries on loan provisioning.

 Standard Chartered Bank Nepal posted Rs 3.02 billion profit, down 7.5 percent. The bank faced moderation in foreign exchange income and treasury income, and growth in corporate lending did not offset the decline in other segments.

Nepal SBI Bank reported Rs 1.80 billion profit, down 9.86 percent. USS spreads have narrowed, FX income softened, and provisioning costs remained elevated.

Citizens Bank recorded a marginal 2 percent drop to Rs 1.29 billion, mainly due to increased provisioning and comparatively slower growth in the loan portfolio.

NIC Asia Bank faced the steepest decline among the four, with profit plummeting 76.96 percent to Rs 160 million from Rs 701 million the previous year. NIC Asia’s decline is attributed to aggressive loan provisioning due to rising NPL levels after aggressive expansion during the preceding years.