NEPAL
Despite gloomy economic outlook, commercial banks have done exceedingly well during the third quarter of fiscal year 2069/70, recording a rise in profit of 42.26 percent over the same quarter last year. The double digit growth is well beyond investors’ expectations and has been attributed to aggressive lending strategy adopted by banks, especially, among smaller consumable loans section.
The increasing gap between the interest charged on loans and advances and interest paid to depositors have fuelled banks’ income. The net spread rate of banks has increased in this quarter compared to the corresponding period a year back, underscoring the increasing gap between deposit and lending rates at banks.
The total Net Profit of the overall banking sector stood at NPR 12.90 billion for the third quarter of fiscal year 2069/70 compared to NPR 9.07 billion the previous year.
It is the first times in history that the profits of three commercial banks -- Nabil Bank, Nepal Investment Bank and Everest Bank -- have surged past the billion rupee threshold.
During the review period, Nabil Bank Limited had the highest net profit among all the commercial banks. Nabil topped the table with a whopping profit of NPR 1.54 billion.
Meanwhile, the market share of the top five commercial banks is 45.71 percent, which is a fall from 48.02 percent in the second quarter, indicating that new commercial banks have been chipping away at the market share of the large banks.
During the review period, Machhapuchchhre Bank Limited was able to increase its net profit by 1370 percent, whereas Century Commercial Bank showed a worst performance as its profit decreased by a massive 166.20 percent compared to the same period of the last fiscal year.
Kist Bank Limited and Century Commercial Bank showed a dismal performance with negative growth rate in terms of net profit.
Source: ShareSansar, 2nd June 2013
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