Kathmandu. In the last fiscal year 2018-83, the net profit of development banks has increased by 64 percent. The improvement in the management of bad loans, reduction in provisioning expenses and increase in net interest, fees and commission income have led to a significant improvement in the profitability of development banks.
According to the unrevised financial details made public by 16 development banks, they have earned a net profit of Rs 9.33 billion in the fiscal year 2082/83. In the previous fiscal year 2081/82, the profit was Rs 5.67 billion. Among the 17 development banks in Nepal, Karnali Development Bank is under the management of Nepal Rastra Bank after it was declared problematic.
Last year, Garima Bikas Bank made the highest profit. The bank earned a net profit of Rs 1.68 billion. Similarly, Muktinath Bikas Bank earned Rs 1.51 billion, Sine Resunga Bikas Bank and Jyoti Bikas Bank earned Rs 1 billion.
The eight development banks of the national level have earned a net profit of Rs 8.65 billion. However, the situation of all development banks is not the same. Narayani Bikas Bank has become the only development bank with a loss of Rs 5.37 crore last year.
Distributable profit limited to 5.67 billion
}
Although the net profit of the banks reached Rs 9.33 billion, the distributable profit of the banks stood at Rs 5.67 billion. The decrease in distributable profit has decreased due to the increase in the outstanding interest collection, credit risk and the risk related to non-banking assets as per the regulatory provisions.
Garima Bikas Bank is also in the first position in terms of distributable profit. The distributable profit of the bank has reached Rs 1.21 billion. Similarly, Muktinath Bikas Bank earned a net profit of Rs 1.51 billion but distributable profit stood at Rs 670 million. Last year, the distributable profit of Corporate, Salapa, Sindhu and Narayani Bikas Bank was negative, according to the financial statement.
Impact of economic slowdown and recovery problems
}
The development banks have said that the slowdown in economic activity, the recovery of loans weakened due to the campaign of loan non-repayment and the Genji movement have put pressure on the financial situation. At the same time, political instability and increasing competition in financial markets have also added challenges to the operation of banks, according to the managerial analysis.
