8 August 2024, Kathmandu
This fiscal year, 2023–24, has been the most prosperous for Nepal’s commercial banks, netting a profit of Rs 64.15 billion. It is a whopping 13.40 percent more than the Rs 56.57 billion earned the previous year. At the forefront was Nabil Bank, netting Rs 7.06 billion, up 10.23 percent from the previous year.
Nepal Commercial Banks Earn
Nabil Bank at the Front
The very strong performance of Nabil Bank could be the outcome of some strategic initiatives and efficient operations that have kept it at the forefront of the Nepal banking scenario all the time. Its ability to hold on to a healthy profit margin amidst economic turmoil reflects its sound business model and good management. This shows the capabilities of the bank through proper financial management and forecasting.
Performances of Other Big Banks
Next in line were Global IME Bank and Nepal Investment Mega Bank, both with very commendable profits, where Global IME Bank garnered Rs 6.01 bln and Nepal Investment Mega Bank earned Rs 5.19 bln. The factors that have kept both banks resilient and adaptive through the waves of change are a wide network and diversified portfolios that have helped them grow further. Despite having competition and challenges in the market trends, and among the competitors, these banks have still managed to adapt.
Banks with Lowest Profits
At the bottom end, Machhapuchchhre Bank was the bank with the smallest net profit, at Rs 1.25 billion. Very close and handing in similar results were Citizens Bank International and NIC Asia Bank, who posted profits of over Rs 1.3 billion each, while Nepal Bank posted Rs 1.65 billion. That just shows the difference it makes in strategies and efficiencies that each bank encompasses.
Astounding Comebacks
Out of these, the most spectacular turnaround was shown by Prabhu Bank, with a whopping 1499.04% increase in net profit. The underlying reason for the growth was largely due to some massive adjustments in the previous year’s financial statements. In addition, Kumari Bank and Prime Commercial Bank increased their profits by 345.67% and 267.19%, respectively, which speaks volumes about their effective management and fiscal adjustments.
Falls in Profit
Not all the banks registered growth; ten commercial banks saw a fall in profits. The maximum plunge was seen in the case of NIC Asia Bank, at 68.91 percent. Nepal Bank’s profits fell by 51.80 percent, and Citizen Bank International recorded a fall of 27.97 percent. These drops were indicative of the fact that some banks had been hit hard by the economic oscillations and market conditions.
Overview of the Sector
The strong performance of Nepal’s commercial banks underlines both the soundness of this sector and its significant contribution towards holding up the country’s economy. Their profitability exemplifies their operational strengths and ability to adapt to changing financial environments.
Looking Ahead
With the commencement of the new fiscal year, these banks will increasingly be turning their focus toward the maintenance of profitability, improving operational efficiencies, and the adoption of new technologies. Challenges and opportunities are rife in the shifting economic landscape that it presents, and how the banking sector responds to these changes will set the tone for Nepal’s financial future.
Conclusion
For FY 2023–24, commercial banks in Nepal achieved good financial performance with a combined net profit of Rs 64.15 bln. The banks led the way, including the strong contributions from Global IME Bank, Nepal Investment Mega Bank, and Nabil Bank. The trend was still toward a bright future for Nepal’s banking industry, even as the profits of a few banks declined.