Kathmandu. In the first quarter of the fiscal year 2083/84, although the profits of most commercial banks increased, the asset quality is mixed. According to the raw financial statements of the banks, the non-performing loan (NPL) ratio of 10 out of 20 commercial banks has increased by more than 0.10 percentage points compared to the same period of the previous fiscal year. The NPL ratio of 6 banks has improved, while the ratio of 4 banks has seen a slight fluctuation.

The average NPL ratio of 20 commercial banks has increased from 4.86 percent in the first quarter of the previous year to 5.64 percent in the same period of the current fiscal year. Accordingly, the average non-performing loan ratio of the banking sector has increased by 0.78 percentage points. This shows that despite the increase in profits of most banks, pressure on loan quality remains.

Which bank has the highest bad loans?

The bank that has seen the fastest increase in bad loans is Prabhu Bank. The bank's total non-performing loan (NPL) ratio has increased from 5.78 percent to 14.80 percent. This is an increase of 9.02 percentage points, which is about 156 percent more in relative terms. Similarly, the net non-performing loan ratio has increased from 1.59 percent to 5.02 percent. The ratio of loan loss provisions made by the bank to bad loans has also decreased from 115.71 percent to 76.13 percent. This indicates that the bank does not have sufficient loan loss provisions to cover 100 percent of its bad loans.

Along with this, the bank's capital fund ratio has decreased from 13.60 percent to 11.83 percent and the core capital ratio has decreased from 9.86 percent to 8.18 percent. The bank's distributable loss has reached Rs 6,787.7 million, while customer credit flow has also decreased by 1.59 percent compared to mid-Ashar. These indicators show that the pressure on the bank's asset quality, capital adequacy and credit flow is increasing.

NIC Asia Bank's total non-performing loan (NPL) ratio has increased from 6.99 percent to 9.81 percent. This is an increase of 2.82 percentage points. However, the net non-performing loan ratio has decreased from 1.74 percent to 0.36 percent. Similarly, the ratio of loan loss provision to bad loans has increased from 94.83 percent to 114.84 percent, which indicates that there is a provision for more than bad loans.

However, the bank's capital fund ratio has decreased from 14.03 percent to 11.12 percent and the tier 1 capital ratio has decreased from 9.03 percent to 6.27 percent. The bank's total distributable loss is Rs 1,539.69 crore.

Nepal Investment Mega Bank (NIMB) has increased its total non-performing loan (NPL) ratio from 6.63 percent to 8.87 percent. This is an increase of 2.24 percentage points. However, the net non-performing loan ratio has decreased from 1.46 percent to 1.37 percent. The bank's loan loss provision to bad loans ratio is 101.60 percent. The bank's loan loss provision amount has decreased by 60.8 percent during this period, but the reason for this is not disclosed in the financial report.

Kumari Bank's total non-performing loan ratio has increased from 6.98 percent to 8.72 percent. This is an increase of 1.74 percentage points. However, despite the increase in non-performing loans, the bank's loan loss provision amount has decreased by 64.40 percent.

Prime Commercial Bank's total non-performing loan ratio has increased from 5.86 percent to 7.15 percent. This is an increase of 1.29 percentage points. The ratio of loan loss provision to bad loans of the bank has also decreased from 90.42 percent to 85.26 percent. However, among these banks, Prime Commercial Bank is the only bank that has increased its loan loss provision amount by 28.3 percent along with the increase in non-performing loans. This shows that the bank has allocated additional funds in loss provision to address the increasing credit risk.

Himalayan Bank's gross non-performing loan (NPL) ratio has increased from 7.39 percent to 7.98 percent. This is an increase of 0.59 percentage points. However, the bank's provision for loan losses has increased from 108.37 percent to 121.31 percent, indicating that it has more provision than bad loans.

NMB Bank's NPL ratio has increased from 4.58 percent to 4.92 percent. However, the net non-performing loan ratio has decreased from 1.86 percent to 1.60 percent. Nepal SBI Bank's NPL ratio has increased from 3.01 percent to 3.19 percent and Lakshmi Sunrise Bank's from 5.42 percent to 5.58 percent. Lakshmi Sunrise Bank's net NPL has decreased from 1.57 percent to 1.33 percent. Although the bank's provision for loan losses has increased from 97.38 percent to 98.23 percent, it is still below 100 percent. This indicates that the full amount of bad loans has yet to be provisioned.

Standard Chartered Bank's NPL ratio has increased modestly from 1.71 percent to 1.83 percent. While these banks have seen a modest increase in their NPL ratios overall, the net NPL and loan loss provisioning situation shows that the risk management situation varies across banks.

Which bank has reduced non-performing loans?

The biggest improvement in non-performing loan control has been seen in Sanima Bank. The bank's total non-performing loan (NPL) ratio has decreased from 3.91 percent to 2.86 percent. This is an improvement of 1.05 percentage points. Similarly, Nepal Bank's NPL ratio has decreased from 5.49 percent to 4.61 percent.

The bank's loan loss provision ratio has also increased from 98.03 percent to 103.09 percent, which shows that there is a provision for more than bad loans. Nabil Bank's NPL ratio has decreased from 4.31 percent to 4.06 percent. The bank's net NPL ratio has decreased from 0.97 percent to 0.63 percent, while the loan loss provision ratio has increased from 108.71 percent to 120.56 percent.

Everest Bank's NPL ratio has decreased from 0.74 percent to 0.50 percent. The bank's loan loss provision ratio has increased from 210.80 percent to 295.46 percent. According to the available data, Everest Bank has the lowest NPL ratio and the highest loan loss provision ratio among the 20 commercial banks.

Global IME Bank's NPL ratio has decreased from 4.98 percent to 4.79 percent. The bank's net NPL ratio has decreased from 0.95 percent to 0.60 percent, while the loan loss provision ratio has increased from 109.63 percent to 120.17 percent.

Machhapuchhre Bank's NPL ratio has also decreased from 4.13 percent to 3.97 percent. The bank's net NPL ratio has decreased from 1.23 percent to 1.04 percent and the loan loss provision ratio has increased from 100.87 percent to 106.43 percent. Overall, the NPL ratio of these banks has decreased, while the loan loss provision ratio has also increased.

Banks of Nepal NPL Ratio

Siddharth, Rastriya Banijya, Krishi Bikas and Citizens Bank have seen minor fluctuations in their non-performing loan (NPL) ratios. Siddharth Bank's NPL ratio has decreased from 3.80 percent to 3.70 percent, while Rastriya Banijya Bank's has increased moderately from 3.83 percent to 3.89 percent. Similarly, Krishi Bikas Bank's ratio has increased from 4.78 percent to 4.79 percent and Citizens Bank's has decreased from 6.84 percent to 6.80 percent.