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Owing to the increasing cost
of funds and squeeze in the
spread rate, commercial
banks saw profit slowing
down in the first quarter of
the current fiscal year. The
banks’ net profit shrank to
Rs 3.46 billion in the first
three months of the current
fiscal year from Rs 3.80
billion in the same period
last year.
Of the 26 banks, seven saw
decline in their profits.
Three banks—Commerze and
Trust, Janata and Mega—have
no records of last year’s
profits, as they are the
newly established banks.
Nepal Bank Limited saw the
biggest decline in profits
from Rs794 million last year
to Rs 197 billion this year.
The Bank, however, has
maintained that the net
profit slumped due to the
provisioning of Rs 750
million it made for its
employees’ future benefits.
Deposit and credit growth
are essential for banks to
earn profits because they
make profit mainly with the
spread rate and volume of
lending. They were making
excessive lending during the
same period last year and
had earned good profit.
But, the situation has
changed this year. Lending
grew slightly to Rs 481
billion in the first quarter
this year from Rs 462
billion in the fourth
quarter of the last fiscal
year. Deposits declined
since the beginning of the
new fiscal year despite the
addition of new commercial
banks. The deposits came
down to Rs 620 billion in
the first quarter from Rs
631 billion in the end of
the last fiscal year ........
Read more about the decline
in profits of Nepali banks
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Siddhartha Bank opens
new branch (29-01-2010)
NMB Bank rejects near to
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shares of the Sunrise
Bank (10-07-2009)
Change in Board of
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ltd (09-04-2009)
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