The banks' annual profit is 64 billion, up 10 and down 10 from the previous year.

Profits rose at Nepal Investment Mega Bank, Nabil, Nepal SBI, Kumari, Prime, Himalayan, Lakshmi Sunrise, Krishi Vikas, Everest, and Prabhu.
Machhapuchhre, Citizens, NIC Asia, Nepal Bank, NMB, Sanima, Siddharth, Standard Chartered, Global IME, and Rashtriya Commercial Bank were among the banks whose profits decreased in the previous fiscal year.

Notwithstanding the fact that barely half of the target credit was given out that year due to low market demand brought on by a sluggish economy, commercial banks nonetheless managed to earn a profit of 64 billion 15 million rupees. This represents the net profit that twenty commercial banks made in the 080/81 fiscal year.

The unprocessed financial accounts of the last financial year, released by the banks on Monday, show that the profit of the banks climbed by an average of 13.40 percent in comparison to the previous financial year. Bank profits over the same time of the previous fiscal year totaled 56.57 billion rupees.

Banks have not been able to offer loans as requested since the start of the previous fiscal year. The banks were forced to endure an overabundance of liquidity for the entire month. The cost will rise since deposits will only rise and loans won't, which will have an impact on banks' profitability. Even if banks wanted to, they could not make money since economic activity could not be sustained. On the other hand, the bank experienced difficulties in loan recovery as a result of the borrower's inability to pay, and the number of bad loans also climbed. Bad loans rose, but because of the stringent regulatory environment, interest income did not rise as anticipated. According to experts, bank profits are directly impacted by the economic slowdown.

The National Bank set a target of 11.5 percent loan expansion for the previous fiscal year, but it looks like just approximately 7 percent of that will be accomplished. Additionally, the interest rate is steadily declining. However, the bankers claim that the lack of the anticipated boost in loan demand is what has hurt the earnings.

The previous year was very difficult for the banking industry; just roughly 6% of loans were extended, we had to deal with increased liquidity all year long, and the number of bad loans kept rising. According to Sunil KC, President of the Nepal Bankers Association, "there was pressure from all sides. Even in this situation, bank estimates of bad loans did not increase as predicted in the fourth quarter." The net profit of banks has climbed by 12.5 percent on average. It ought to be seen favorably.

According to KC, ten banks had a growth in profits last year, despite the fact that the profits of ten other banks fell. Banks can typically offer dividends of more than ten percent. The amount that needed to be set aside for the bad loan loss arrangement dropped from 46 billion to 36 billion last year. He stated, "Six months ago, the distributable profit situation was not good. The distributable profit of 16 banks is positive."

Among the banks that had a decline in profit during the previous fiscal year were Machhapuchhre, Citizens, NIC Asia, Nepal Bank, NMAB, Sanima, Siddharth, Standard Chartered, Global IME, and National Commercial Bank. Profits have improved for Nepal Investment Mega Bank, Himalayan, Lakshmi Sunrise, Krishi Bikas, Everest, Prabhu, Nepal SBI, Kumari, and Nepal Investment Mega Bank.

The bank that made the most money last year was thought to be Nabil Bank. Nabil Bank made 7.6 billion rupees in net profit in the most recent fiscal year. Nabil has made a ten percent rise in profit over the previous year. Machhapuchhre was the bank with the lowest profit margin during that time. This bank has a net profit of one billion and twenty-five crore rupees. In the last year, this bank's profit dropped by twenty-three percent. When examining the specifics of each bank, it becomes clear that very few of them operate profitably. Some appear to have lowered their profit and loss system (because of debt collection). The profitability of banks that have not been able to recover quality loans has not shown the anticipated improvement.

According to banking analyst Parshuram Kunwar Chhetri, despite predictions that the bank's financial statement would be extremely poor given the challenging circumstances—such as a decline in overall economic demand and an inability to distribute credit—the results have been rather positive. Overall, banks' loss provision dropped by 26.45 percent in the previous year. According to him, operating costs have gone up by 15%, but non-banking income—or income from fees—has climbed by 15.52 percent. Kunwar claims that as a result of stringent regulations, net interest income has dropped by an average of 3.26 percent.

The inability of revenue and capital spending to rise indicates a dismal state of government finances overall. This explains why there hasn't been a rise in market demand. There isn't much loan expansion because there isn't much demand. We have to be content that the bank's financial statement hasn't gotten too bad, even in this kind of intricate scenario," he stated. "The outcome exceeds expectations. I had anticipated something worse than this.

Even though the banks' ability to pay dividends has improved, the majority of them appear to have inadequate dividend ability. The bank has the capacity to distribute dividends in the range of 1% to 29%. Banks and other financial institutions now have the option to add interest to their financial statements for the month of June until the end of July, according to the National Bank. According to experts, banks released their unrevised financial results in mid-July, so the time to boost rates has almost arrived.

The impact of the recent economic slowdown, according to former president of the Nepal Bankers Association Bhuwan Dahal, is evident in bank financial accounts. "In the fourth quarter of last year, banks' profits, bad loans and non-banking assets have increased, while the return on assets has decreased," he stated.

He claimed that even though the state of financial banks is not excellent, political stability would be upheld, economic activity will rise, and the financial sector will also get better with the election of a new government. "Since the signs of political stability have been seen, the private sector has also started saying that their confidence has increased," he stated.

The net interest income from the banks' primary operations improved overall, while some banks' profits increased when the amount set aside for losses dropped by 26%. Banks' net interest income rose to one trillion 92 billion rupees, a 3.25 percent gain. One trillion eighty-five billion rupees was this type of earning previously. The percentage of bank problematic loans has climbed on average from 2.97 to 3.43 percent. There has been some improvement in the number of bad loans at the end of the year compared to the third quarter of the previous fiscal year.