January 27: The net profit of twenty seven commercial banks has increased by an average of 10.10 percent until the second quarter of the current fiscal year (FY 2021/22). Compared to the second quarter of the last fiscal year 2020/21, the profit of commercial banks increased by 10.10 percent to Rs 34.21 billion. Until the second quarter of the last year, the total profit of these commercial banks was Rs 31.07 billion.
The profit of sixteen commercial banks is over one billion rupees while the profit of other three banks has reached over two billion rupees. Global IME Bank has earned the highest profit of Rs 2.66 billion - an increase from Rs 2.31 billion in the corresponding period of last year.
Similarly, NIC Asia is in second position and Nabil Bank is third in the list. NIC Asia has raised Rs 2.40 billion and Nabil Bank has earned a profit of Rs 2.18 billion. Experts consider the rise in profit of commercial banks as unreasonable at a time when the business of industries and factories is collapsing due to the Covid-19 pandemic.
According to the banks, their earnings on the basis of return on equity is very low. Nara Bahadur Thapa, former deputy director of Nepal Rastra Bank, said that banks have not emphasized on production which is having a negative impact on the economy. Thapa said due to the lack of appropriate government policies, microfinance and finance companies investing in the productive sector are on the verge of extinction.
Of all the commercial banks, Civil Bank Limited has made the lowest profit of Rs 504 million. However it has made improvement compared to the same period of last year. It has witnessed a rise in the profit by 148.42 percent.
Similarly, Siddhartha Bank and Century Commercial Bank follow Civil Bank in the list in terms of making an increase in the profit. Siddhartha Bank has seen a rise in profit by 71.68 percent compared to the same period of the last fiscal year while Century Commercial Bank's profit has increased by 54.77 percent.
Six commercial banks namely Prime, Prabhu, Kumari, Everest, Nepal Bangladesh and Sunrise Bank have seen a decline in the profit until the second quarter of the current fiscal year. Kumari Bank leads the list as it witnessed a decline in profit by 21.77 percent. It had made a profit of Rs 1.21 billion in the corresponding period of the last fiscal year which declined to Rs 951 million this year.
Similarly, Prime Commercial Bank, Prabhu Bank, Everest Bank, Nepal Bangladesh Bank and Sunrise Bank saw a decline in the profit by 7.43 percent, 16.90 percent, 12.79 percent, 13.82 percent, 21.47 percent respectively until the second quarter of the current fiscal year.