National-Level Development Banks in Nepal Earn Over NPR 56 Billion Profit

17th August 2025, Kathmandu 

Nepal’s national-level development banks have delivered a robust financial performance for the fiscal year 2024/25, collectively posting a net profit exceeding NPR 5.60 billion.

Development Banks Report Profit

This remarkable outcome, based on their unaudited financial reports, reflects a resilient and growing sector. The figures showcase not only impressive profit growth but also shed light on a crucial metric for investors: dividend-paying capacity. For stakeholders, this data provides a clear picture of the health and potential of these financial institutions, highlighting a competitive landscape where some are thriving while others face significant challenges.

Total Profit Rises by Over 22 Percent

The aggregate net profit for the eight national-level development banks reached NPR 5.607 billion in FY 2024/25. This represents a substantial 22.01 percent increase from the previous fiscal year, when the combined profit was NPR 4.596 billion. This growth is a testament to the sector’s ability to navigate a dynamic economic environment and capitalize on opportunities. The overall positive trajectory is particularly noteworthy as it follows a period of economic fluctuation, demonstrating the sector’s resilience and strategic financial management.

Among the eight banks, six were successful in increasing their profits, while only two experienced a decline. This uneven performance underscores the importance of individual bank strategies and their varying abilities to manage costs, credit risk, and market conditions. For investors, this data is a powerful tool for distinguishing between top performers and those that require closer scrutiny.

Muktinath and Garima Lead the Way

Muktinath Development Bank continued its dominance, solidifying its position as the sector’s top earner. The bank’s profit surged to NPR 1.537 billion, a significant 30.70 percent increase from the previous year’s NPR 1.176 billion. This consistent growth points to Muktinath’s strong market position, efficient operations, and a loyal customer base.

However, the most dramatic story comes from Garima Development Bank. The bank’s profitability exploded by a staggering 201.97 percent, with its net profit rising from NPR 439.3 million to NPR 1.310 billion. This phenomenal growth rate is the highest among all national-level development banks and positions Garima as a major contender in the market. This remarkable turnaround or accelerated growth could be the result of effective loan recovery, a surge in new business, or a significant reduction in operational expenses.

Shine Resunga Development Bank also performed well, securing the third position with a profit of NPR 686.6 million, a marginal increase of 0.48 percent from the previous year. While the growth percentage is small, the bank’s ability to maintain a strong profit base is a positive indicator.

A Look at the Rest of the Sector

The performance of the remaining development banks was varied, reflecting the diverse challenges and opportunities within the sector.

• Kumari Bank saw a healthy profit increase of 9.19 percent, reaching NPR 635.2 million.
• Sangrila Development Bank posted a profit of NPR 537 million, a growth of 6.51 percent.
• Mahalaxmi Development Bank recorded a slight profit increase of 1.26 percent to NPR 506.6 million.
• Lumbini Development Bank experienced a notable decline, with its profit falling by 30.13 percent to NPR 379.8 million.
• Jyoti Development Bank faced the most significant setback, with its profit plummeting by 92.14 percent to a mere NPR 12.3 million. This substantial decline signals deep-rooted challenges in its operations, potentially related to credit management or rising costs.

Dividend Capacity: A Key Indicator for Investors

For shareholders, a bank’s ability to distribute dividends is just as important as its profit. The financial reports provide a clear picture of this capacity, with some banks demonstrating a strong potential for attractive shareholder returns.

Muktinath Development Bank leads the way with the highest dividend-paying capacity, an impressive 20.75 percent, a direct result of its high profitability. Kamana Sewa Development Bank follows closely, with a capacity to distribute up to 17.30 percent dividends.

Other banks with solid dividend potential include:

• Shine Resunga Development Bank: 13.96 percent
• Garima Development Bank: 12.59 percent
• Sangrila Development Bank: 11.64 percent
• Mahalaxmi Development Bank: 11.51 percent
• Lumbini Development Bank: 8.13 percent

In a sharp contrast, Jyoti Development Bank’s struggles are further highlighted by its inability to declare a dividend. With a negative distributable profit of NPR 780.4 million, it will be unable to provide any returns to its shareholders this year. This serves as a stark warning to investors about the risks associated with underperforming institutions.

Conclusion and Outlook

The unaudited financial reports for FY 2081/82 paint a picture of a national-level development banking sector that is, on the whole, healthy and growing. The collective profit growth of 22.01 percent is a strong positive signal. The stellar performances of Muktinath and Garima demonstrate that strategic management and market responsiveness can lead to exceptional results. These institutions are not only generating high profits but also building a strong foundation for future shareholder returns.

However, the struggles of banks like Jyoti and Lumbini underscore the competitive pressures and operational challenges that exist. This financial disparity highlights the need for continuous improvement in risk management and operational efficiency. Moving forward, the performance of these banks will be influenced by a range of factors, including regulatory changes from Nepal Rastra Bank, shifts in market liquidity, and their ability to innovate and expand their customer base. For investors and the public alike, these reports are an essential tool for understanding the financial health of the institutions that are so crucial to Nepal’s economic development.

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