Commercial banks earn Rs 30.59 billion profit in H1of FY 2025/26; Kumari Bank jumps 886.5%, Nabil leads in earnings

KATHMANDU: Nepal’s commercial banking sector posted Rs 30.59 billion in total net profit in the first six months of the current fiscal year, showing a moderate but broad-based recovery in the country’s financial system.

According to second-quarter financial statements of 20 commercial banks, the sector’s cumulative net profit reached Rs 30.59 billion by mid-January of FY 2025/26 (2082/83 BS). This represents an 11.50 percent year-on-year increase, equivalent to a rise of Rs 3.15 billion, compared to Rs 27.43 billion earned during the same period last fiscal year.

The improvement comes amid gradual stabilization in liquidity conditions, recovery in lending activity, better interest spreads, and easing pressure from earlier credit slowdowns in Nepal’s banking industry.

Kumari Bank Records Highest Growth

Kumari Bank posted the most dramatic turnaround in profitability. Its net profit surged 886.50 percent year-on-year to Rs 2.72 billion, up from just Rs 275.7 million in the same period last year. The sharp rise suggests a strong rebound in core banking income, lower provisioning burden, and improved asset quality.

Nabil Bank Becomes Most Profitable Bank

Nabil Bank emerged as the highest profit-earning commercial bank in Nepal during the review period. Its net profit rose 46.70 percent to Rs 4.75 billion, compared to Rs 3.24 billion a year earlier. Strong lending portfolio performance, diversified income streams, and operational efficiency helped the bank retain sector leadership.

Other Banks Reporting Profit Growth

Several banks also reported notable earnings expansion:

These results indicate improving credit recovery, stable deposit growth supported by remittances, and gradual normalization of lending spreads.

Eight Banks See Profit Decline

Despite overall sector growth, eight banks experienced falling profits, reflecting continued stress from high cost of funds, non-performing loan risks, and provisioning requirements.

In a significant setback, Laxmi Sunrise Bank reported a net loss of Rs 273.6 million by mid-January, reflecting heavy provisioning, restructuring adjustments, and post-merger balance sheet stress.

A Positive Turn for Nepal’s Banks: Profits Rise by Over 11%

Nepal’s commercial banks have shown a promising start to the year, with their collective profits jumping by 11.50% compared to the same period last year.

For the month of Poush in 2082, the total net profit of these banks reached a significant milestone, suggesting a slow but steady recovery in the country’s financial sector despite various economic challenges.

The star of the show this time is Kumari Bank. It witnessed an incredible profit surge of over 886%. While last year’s figures were relatively low for the bank, this year’s massive leap shows a strong comeback.

Other big names like Nepal Bank and Siddhartha Bank also performed exceptionally well, both more than doubling their profits with growth rates of 183% and 150%, respectively. Government-owned Rastriya Banijya Bank wasn’t far behind, showing a healthy 132% increase.

However, the news isn’t equally bright for everyone. While the industry as a whole is moving forward, nearly half of the banks saw their profits shrink. Big players like NIC Asia, Himalayan Bank, and Standard Chartered experienced a double-digit drop in their earnings.

The most concerning shift was seen at Laxmi Sunrise Bank, which moved from a comfortable profit last year into a loss this time around.

Overall, the data tells a story of a banking sector in transition. The growth in the total profit pool is a good sign for the economy, as it shows that many banks are finding ways to navigate high interest rates and a tough market.

For the average person, this could mean a more stable banking environment ahead, though the mixed results remind us that some institutions are still struggling to find their footing in the current climate. As the year progresses, everyone will be watching to see if this upward trend continues for the rest of the financial industry.