August 10: The profit figure of commercial banks has increased significantly in last fiscal year compared to the previous FY. Analysing the published annual financial reports of 14 commercial banks till August 9, the net profit of these banks has increased by 49 percent . Out of 28 commercial banks in the country, the remaining 14 have yet to publish their annual financial reports.

The commercial banks releasing annual financial report earned combinely Rs 14.70 billion in the FY 2015/16 compared to Rs 9.86 billion in FY 2014/15. The last year's earthquake and border blockade created difficult scenario in the country that resulted in less demand of loans and piling up of investment grade liquidity. Nevertheless, the profit of the banks increased sharply defying negative predictions.

The last year's earthquake and border blockade affected adversely in financial sector. Nepal Rastra Bank has provided facilities to commercial banks such as categorisation of bad debts, loans re-categorisation and res-structuring and expansion of grace period to tackle such problems. Following the policy subsidies provided by the central bank, the profits of commercial banks were not affected.

Among the commercial banks, Nepal Investment Bank earned the highest net profit of Rs 2.55 billion in last FY. The bank's profit increased by 30 percent compared to previous FY. Similarly, Global IME registered net profit of Rs 1.38 billion in the period increasing by 44.36 percent. In previous FY, the bank's profit was Rs 960.6 million. Similarly, the other six banks overlapped the profit of Rs 1 billion whereas the profit of remaining six banks was under Rs 1billion. Though Janata Bank made highest profit in terms of percentage, the profit earned by the bank is less in amount. On the basis of paid-up capital, the net profit of all banks has increased except the Prabhu Bank.

The data shows that Nepal Investment Bank ranked the first in terms of total deposits collection and flow of loans. The bank's total deposits increased to Rs 100.8 billion and the flow of loans of Rs 87 billion. In contrast, Janata Bank ranked the lowest in both categories by collecting total deposits of Rs 24.6 billion. The bank's loan totaled Rs 20.47 billion during the review period. Similarly, Sanima Bank ranked top in terms of percentage. The net interest income of Sanima Bank reached Rs 1.72 billion rising by 51.21 percent in the last FY compared to the previous FY. Meanwhile, the net interest income of other banks also increased significantly.

As per the data, Sanima Bank also leads the line in terms of having lowest bad debts with 0.2 percent. Prabhu Bank, meanwhile, has highest bad debt rate of 8.38 percent crossing the five percent limit set by NRB.