Signs of Improvement in Bank Asset Quality as Non-Performing Loans Shift in Second Quarter

Kathmandu. Signs of improvement have appeared in the assets of banks. The financial report for the second quarter of the fiscal year 2082/83 released by the banks indicates such a trend.

According to the details, the non-performing loans (NPLs) of 10 banks have decreased compared to the previous quarter. Analysts suggest that this situation indicates the banking sector's lending is moving towards improvement, especially after NPLs had been increasing across most banks previously.

However, as the NPL rate increased significantly for some banks during this period, the average (not weighted average) of such loans across banks appears to have risen. This rate, which was 4.66 percent on average in Ashoj, has now reached 4.85 percent.

During the same period, 10 banks had an NPL ratio above 5 percent, while the remaining 10 banks had a ratio below that threshold.

• What is the status of each bank?

The banks that succeeded in reducing their non-performing loans compared to the first quarter include Nabil Bank, Global IME Bank, Siddhartha Bank, Everest Bank, NMB Bank, Kumari Bank, Nepal Bank, Agriculture Development Bank, Sanima Bank, and Nepal SBI Bank.

Nabil Bank reduced its NPL from 4.31 percent at the end of Ashoj to 4.25 percent. Similarly, Global IME reduced it from 4.98 to 4.91 percent, Everest from 0.74 to 0.68 percent, NMB from 4.58 to 4.56 percent, and Kumari from 6.98 percent to 6.92 percent.

Furthermore, Nepal Bank reduced its NPL from 5.49 to 5.34 percent, Agriculture Development Bank from 4.78 percent to 4.65 percent, Sanima Bank from 3.91 percent to 3.63 percent, and Nepal SBI Bank maintained its NPL at 2.64 percent from 3.01 percent.

However, the non-performing loans of the remaining 10 banks have increased further. NIC Asia Bank's NPL increased from 6.99 to 4.74 percent (Note: The text shows a decrease here despite the preceding sentence stating an increase, but the numbers are transcribed as given), Himalayan Bank's from 7.39 to 7.96 percent, Prabhu Bank's from 5.78 to 7.94 percent, and Nepal Investment Bank's from 6.63 percent to 7.90 percent.

Similarly, Rastriya Banijya Bank's NPL increased from 3.83 percent to 4.36 percent, Prime Commercial Bank's from 5.86 to 6.38 percent, Laxmi Sunrise Bank's from 5.42 percent to 5.50 percent, Machhapuchhre Bank's from 4.13 percent to 4.25 percent, and Standard Chartered Bank's NPL reached 1.88 percent from 1.71 percent, as mentioned in the respective bank reports.