KATHMANDU, JUNE 21

The total net profit of commercial banks increased by 5.89 percent and reached Rs 66.25 billion in fiscal year 2021-22 from Rs 62.56 billion in fiscal year 2020-21, as per the Bank Supervision Report 2021-22 released by the Nepal Rastra Bank (NRB) today.

The net profit of state-owned banks decreased by 4.75 percent, while that of non-state-owned banks increased by 7.90 percent in the review period. The total interest income, which is the largest component of total gross income, showed a growth of 34.01 percent. The total net interest income rose by 15 percent, whereas the operating profit increased by 5.02 percent in the review period.

Meanwhile, the total assets of the commercial banks increased by 10.88 percent to Rs 5,791.58 billion in the fiscal year 2021-22 compared to a growth of 23.59 percent in FY 2020-21. In the review year, the total assets increased by 10.78 percent in state-owned banks and by 10.90 percent in the non-state-owned banks. The major contribution in the increment in total assets of the commercial banks was from the increment in the total loan portfolio.

The net interest spread of the commercial banks decreased from 3.61 percent to 2.76 percent in fiscal year 2021-22. The net interest spread of state-owned banks and non-state-owned banks were 3.02 percent and 2.72 percent, respectively, in the review period.

Total deposits of the commercial banks increased by 8.72 percent to reach Rs 4,442.42 billion in the review year compared to a growth of 17.10 percent in the previous fiscal year.

Fixed and saving deposits are the major components in the deposits of the commercial banks. In the review year, the fixed deposits increased with the highest rate by 28.92 percent to Rs 2,404.55 billion followed by other deposits which increased by 2.90 percent to Rs 383.50 billion. Across all the three years presented, fixed deposits have covered the highest portion of commercial banks' total deposits.

The total volume of non-performing loans (NPL) of the commercial banks decreased by 3.91 percent in the fiscal year 2021-22 and reached Rs 50.14 billion. NPL of state-owned banks decreased by 6.95 percent to Rs 11.03 billion and that of non-state-owned banks decreased by 3.02 percent to Rs 39.11 billion during the review period, according to the report. The NPL ratio of commercial banks decreased to 1.20 percent from 1.41 percent during the review period.

A version of this article appears in the print on June 22, 2023, of The Himalayan Times.