Fiscal Nepal
First Business News Portal in English from Nepal
KATHMANDU: Nepal’s commercial banks have aggressively expanded their investment in the capital market, channeling over Rs 121.58 billion into share-backed loans during the first quarter of FY 2082/83—marking a 44.37% jump compared to the same period last fiscal year.
According to the latest data, 20 commercial banks collectively disbursed Rs 1 kharba 21 arba 58 crore 28 lakh in share mortgage loans by the end of Asoj. In contrast, the figure stood at Rs 84.21 billion in Asoj of the previous fiscal year.
Market analysts say the surge comes after Nepal Rastra Bank (NRB) relaxed earlier restrictions on share-backed lending, creating more liquidity flow into the secondary market. However, despite the rise in loan inflow, investor confidence remains subdued, with the stock market failing to gain sustained upward momentum.
Machhapuchchhre and Agricultural Development Bank Record Massive Growth
Among all institutions, Machhapuchchhre Bank posted the most dramatic rise, increasing its share-backed loan portfolio by 292.48%.
Current FY Asoj: Rs 3.53 billion
Last FY Asoj: Rs 900 million
Similarly, Agricultural Development Bank (ADB/N) expanded its share-loan investment by 251.99%, reaching Rs 5.91 billion, up from Rs 1.67 billion a year earlier.
Other Banks Showing Strong Expansion
Several major banks registered robust double-digit growth:
Laxmi Sunrise Bank: Up 89.98% to Rs 7.79 billion
NMB Bank: Up 86% to Rs 3.02 billion
Prime Bank: Up 77.78% to Rs 9.80 billion
Everest Bank: Up 72.82% to Rs 3.67 billion
Rastriya Banijya Bank: Up 67.11% to Rs 6.92 billion
Himalayan Bank: Up 65.45% to Rs 2.95 billion
Prabhu Bank: Up 63.69% to Rs 5.96 billion
Sanima Bank: Up 55.25% to Rs 2.96 billion
Nabil Bank: Up 48.38% to Rs 16.26 billion
Larger institutions like Nabil, Global IME, and Kumari Bank continue to retain strong absolute loan volumes, reinforcing their deep exposure in capital-market collateral lending.
Moderate Yet Steady Growth in Many Banks
NRB’s report highlights moderate growth among mid-sized banks:
Kumari Bank: Up 36.29% to Rs 10.54 billion
Nepal Investment Mega Bank (NIMB): Up 23.32% to Rs 3.80 billion
Citizens Bank: Up 18.74% to Rs 6.61 billion
Nepal SBI: Up 17% to Rs 530 million
Global IME Bank: Up 17% to Rs 12.56 billion
Siddhartha Bank: Up 15.75% to Rs 8.95 billion
These institutions have expanded gradually, balancing capital-market exposure with portfolio risk.
Two Banks Reduce Share-Backed Lending
Only two banks recorded a decline in their margin lending:
NIC Asia Bank: Down 16.07%, to Rs 2.47 billion
Nepal Bank Limited: Down 3.61%, to Rs 7.26 billion
Market watchers say NIC Asia’s sharper reduction reflects its continued caution due to earlier regulatory scrutiny over aggressive retail lending.
Capital Market Exposure Crosses Rs 1 Kharba Mark
With Rs 121.58 billion funneled into share collateral loans, commercial banks have surpassed the Rs 1 kharba threshold—indicating high liquidity movement into the equity market despite slow index performance.
Financial experts suggest that while relaxed NRB regulations have boosted loan availability, the stock market’s muted response shows persistent investor skepticism, concerns over corporate earnings, and weak macroeconomic signals.
The coming months will determine whether increased capital inflow translates into market recovery or merely deepens banking sector exposure without corresponding market performance.
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