The 20 commercial banks operating till the second quarter of the current fiscal year have earned a total net profit of Rs 30.59 billion. This is the profit earned by the banks from Shrawan to Poush of the current fiscal year.

This is about 11.5 percent more than in the second quarter of the last fiscal year. In the second quarter of the last fiscal year, the net profit of these banks was Rs 27.43 billion. In the same period of this year, compared to the second quarter of the last fiscal year, the profit of 9 banks has decreased. 10 have increased, while the profit of one bank is negative. However, on average, the profit of commercial banks in the second quarter seems to have increased by 11.5 percent.

Like in the previous two fiscal years, this year too, banks and financial institutions have been hoarding investable funds. The demand for loans has not increased as expected during that period. The Genji movement of 23 Bhadra and the protests of 24 have reduced the demand for loans, which had just started to improve. Loans are not being recovered even from old borrowers. Moreover, in recent months, incidents of vandalism, theft, robbery and assault on employees have been taking place in banks. Even in such a situation, the profit of banks seems to have increased on average. However, bankers say that the profit has decreased this year compared to the past.

Financial sector expert Bhuvan Dahal said that the financial condition of banks was mixed in the second quarter. According to him, some banks' provisions for bad loans increased and some's decreased. Even though some banks' provisions for bad loans increased, profits increased. 'There is a different trend from bank to bank in the last 6 months. Some have increased their provisions for bad loans, so profits have decreased. But some have increased their provisions for bad loans,' Dahal said, 'This confirms that the banking business is not in the same direction.' Most banks' non-interest income has increased. He said that the increase in non-interest income is a sign of increased economic activity in the market. 

The profits of nine banks that reported a decline in profits in the second quarter of this year compared to last year have decreased. Their profits have decreased by 13 to 50 percent, according to the raw financial statements published by the banks.

Laxmi Sunrise Bank incurred a loss in the second quarter. This bank's profit is negative by Rs 270 million compared to the same period of the previous year. This year, the bank's loss provision for bad loans has increased by more than 100 percent compared to last year, so the bank's profit has become negative.

Citizens Bank's profit is limited to 350 million. This bank's profit seems to have decreased by about 47 percent compared to last year. This bank's loss provision has increased, so the profit seems to have decreased a lot.

Nabil Bank is at the forefront in terms of profit amount. Nabil's profit is the highest at 4.75 billion rupees. Kumari Bank's profit seems to have increased the most in terms of percentage. This bank's previous loss provision has reduced, so the profit growth rate has been high.

The main reason for the decline in the profits of many banks in the second quarter is also the increase in bad loans. As a result of the increase in bad loans, the loss provision to be made for them has affected the profits of banks. As of last December, the average non-performing loans of banks was 5.09 percent. In the second quarter of last year, such a ratio was 4.51 percent. Himalayan Bank has the highest bad loans in the last 5 months. The bad loans of this bank have reached 7.96 percent. Prabhu Bank has 7.94, Nepal Investment Mega Bank has 7.90 and NIC Asia Bank has 7.47 percent bad loans.

Kumari Bank's bad loans have reached 6.92, Citizens Bank International has 6.86, Prime Commercial Bank has 6.38, Laxmi Sunrise Bank has 5.50 and Nepal Bank has 5.34 percent. Global IME Bank has 4.91, Krishi Bikas Bank has 4.65, NMB Bank has 4.56, Rastriya Banijya Bank has 4.36, Nabil Bank has 4.25 and Machhapuchhre Bank has 4.25 percent, according to the financial statement.

Out of the 20 banks in operation, 8 banks have succeeded in reducing bad loans. The provision for bad loans has also increased. While banks made a provision for bad loans of Rs 26.49 billion last year, this provision has reached Rs 28.74 billion this year.

By the second quarter of this year, the net interest income of banks has increased by only 4 percent. During that period, the total interest income of banks has reached Rs 95.97 billion. Last year, such income was Rs 92.50 billion. Kumari Bank's net interest income has increased by 28 percent to Rs 6.78 billion. However, the net interest income of Nepal Investment, Global IME, NIC Asia, Standard Chartered, Himalayan and Nepal Bank has decreased.

Of this, the net interest income of NIC Asia and Nepal Investment Mega Bank has decreased by more than 10 percent. If the current situation continues to make profits, it seems that banks can distribute dividends ranging from three percent to 35 percent.

According to the National Bank, deposits of banks and financial institutions have increased by 3.9 percent (281.89 billion) as of last Mangsir. With this, the total deposits have reached Rs 754.77 billion. Such deposits had increased by 2.7 percent to Rs 172.32 billion in the same period last year. On an annualized basis, deposits in banks and financial institutions have increased by 13.9 percent as of mid-Mansir 2082.