Nepal Banks Profits Q2: Soaring Earnings, Insurance Investment Growth, EPF Dip
10th April 2025, Kathmandu
As of the second quarter of the current fiscal year, banks and financial institutions in Nepal have earned a staggering 48.3 billion Nepali Rupees in profits. This marks a significant increase compared to the previous month’s profit of 39.79 billion Rupees.
Nepal Banks Profits Q2
The rising profits reflect a positive trend in the country’s banking sector, which is buoyed by steady economic activities and expanding financial services.
Notably, commercial banks have made a major contribution to these profits, amassing 43.49 billion Rupees in total profits. This is a notable increase from the 36.06 billion Rupees reported until mid-January of the same fiscal year. Development banks have also witnessed growth, with profits of 960 million Rupees recorded in February. This figure is slightly higher than the 942 million Rupees in profits reported at the end of January.
Finance companies, which have also benefited from the economic growth, reported 479 million Rupees in profits by February.
Insurance Sector’s Investment in Fixed Deposits Increases
In another notable development, insurance companies in Nepal have made substantial investments in fixed deposits held by commercial banks. According to data released by Nepal Rastra Bank, insurance companies have invested over 644.1 billion Rupees in fixed deposits as of the end of February. This is a 7.2% increase compared to the 601.35 billion Rupees invested by the end of the previous fiscal year in June.
This surge in investments is indicative of the growth and stability of the insurance sector, which is now contributing significantly to the overall financial system of Nepal. Insurance companies, including life, non-life, and reinsurance sectors, are expected to continue expanding their investment portfolios as the demand for insurance services grows in the country.
Decline in Employee Provident Fund’s Fixed Deposit Investments
On the other hand, the Employee Provident Fund (EPF) saw a decline in its investments in fixed deposits, dropping by 5.5% to 177.3 billion Rupees by the end of February. This is a decrease from 187.4 billion Rupees recorded by the end of June. The reduction in EPF’s investments in fixed deposits may be a result of a shift in investment strategy or changing economic conditions.
Rise in Citizen Investment Fund’s Deposits
The Citizen Investment Fund (CIF) has seen an impressive 12.5% increase in its investments in bank fixed deposits, bringing the total to 140.7 billion Rupees as of February. This increase from the previous figure of 124.4 billion Rupees in June reflects a growing confidence in the financial stability of Nepal’s banking system.
Growth in Personal Deposits
Personal savings in Nepal’s banks have also grown significantly, with a 5.5% increase recorded in February. The total value of individual deposits in commercial banks reached 426.2 billion Rupees, up from 403.9 billion Rupees in June. This increase in personal deposits shows a growing trend of financial inclusion and improved public confidence in the country’s banking sector.
Conclusion
Nepal’s banking and financial sectors are displaying positive growth, evidenced by rising profits, investments, and personal savings. The insurance sector is also playing a crucial role in stabilizing and expanding the financial market, while investments from institutional bodies such as the Employee Provident Fund and Citizen Investment Fund indicate the increasing role of long-term financial planning in the country. The upward trends in these key areas reflect the resilience of Nepal’s financial institutions in the face of economic challenges.
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