Kathmandu, November 9 Profit growth of commercial banks in the first quarter of this fiscal year slowed down heavily compared to the corresponding period of the previous fiscal. Commercial banks achieved profit growth of 3.06 per cent in the review period compared to around 45 per cent in the first quarter of the previous fiscal. Commercial banks had generated attractive profit in the first quarter of previous fiscal as the banks were following an aggressive lending policy along with the regulatory introduced by the central bank to raise paid-up capital by the end of last fiscal. However, the banking industry faced a crisis of loanable funds due to aggressive lending policy by the middle of last fiscal, which ultimately exerted pressure on them to maintain the credit cum core capital to deposit  (CCD) ratio. Banks started collecting deposits at a higher interest rate to maintain CCD as well as for loan expansion. However, they had to slow down their lending as the cost of deposits shot up. On the other hand, demand for loans also came down due to the high interest rates of the banks, which ultimately hurt the profit of the commercial banks, according to bankers. The profit generated by banks plunged heavily when Nepal Rastra Bank (NRB) raised the paid-up capital requirement of the banks from Rs two billion to Rs eight billion. By expanding the capital base of the banks, the central bank had expected that the resilience of the banks would be strengthened and their lending capacity would also improve. “However, the limited sources of deposits have crippled the lending capacity of the banks,” a CEO of a bank told The Himalayan Times, requesting anonymity. As per the Q1 (first quarter) financial statements of 28 commercial banks in operation, Nepal Bank, Nepal Investment Bank, Nabil Bank, Rastriya Banijya Bank and Everest Bank were the top five profit makers in the first quarter of this fiscal. In terms of profit growth, Civil Bank topped the list with profit growth of 679 per cent, followed by Century Bank, Rastriya Banijya Bank, Standard Chartered Bank and Prime Bank. Civil Bank’s profit surged exponentially after the write back of a large chunk of loan that was provisioned some years back. Century Bank, Rastriya Banijya Bank, Standard Chartered Bank and Prime Bank had profit growth of 42 per cent, 41 per cent, 38 per cent and 36 per cent, respectively. Out of the 28 banks in operation, 12 banks recorded negative profit growth namely, Mega Bank, Siddhartha Bank, Nepal Bangladesh Bank, Nepal Bank, Kumari Bank, Global IME Bank, Agricultural Development Bank, Himalayan Bank, Citizens Bank, Prabhu Bank, Bank of Kathmandu and Sunrise Bank. Profit growth of Mega Bank declined by 44 per cent followed by Siddhartha Bank (39 per cent), Nepal Bangladesh Bank (31 per cent), Nepal Bank (20 per cent) and Kumari Bank (18 per cent), as per financial statements published by the respective commercial banks. Similarly, profit of Janata Bank, Mega Bank, Century Bank, Kumari Bank and Civil Bank was the lowest among the 28 commercial banks. Comparative figures Top five Nepal Bank Rs 920 million Nepal Investment Bank Rs 895 million Nabil Bank Rs 851 million Rastriya Banijya Bank Rs 709 million Everest Bank Rs 531 million Bottom five Civil Bank Rs 113.37 million Kumari Bank Rs 112 million Century Bank Rs 105.78 million Mega Bank Rs 81.19 million Janata Bank Rs 64.82 million Based on profit amount. (Source: Unaudited Q1 report of commercial banks)