4th Quarter Profit Reports of Commercial Banks.

RBB tops chart with Rs 2.15b net profit
KATHMANDU, AUG 17
State-owned Rastriya Banijya Bank (RBB) has topped the chart with regard to net profit even though it is yet to wipe off its negative net worth. The bank posted a net profit of Rs 2.15 billion in fiscal year 2010-11, the highest among commercial banks.

Leading private sector banks like Nabil Bank, Standard Chartered Bank (SCB) and Agricultural Development Bank Nepal, all posted net profits of more than Rs 1 billion in the last fiscal year. Similarly, all the commercial banks witnessed a growth in profits compared to previous fiscal years.

Although the banking sector that faced a severe liquidity crunch in the last fiscal year, it did not stop them from making profit. Majority of banks that have made public their balance sheets witnessed a rise in profits in the last fiscal year compared to the previous year.

Other banks including the Bank of Kathmandu, Everest, Lumbini, KIST, Global, NMB and Laxmi Bank witnessed a rise in profit in the last fiscal year compared to the previous fiscal year. Although a liquidity crunch marked half of the previous fiscal year 2009-10, the profit growth of banks remained at just Rs 60 million.

A majority of banks are yet to make public their financial status as they are adjusting the recovery of loans until mid-August as the central bank has allowed them to adjust the recovery of the extended one-month period in the balance sheet of the last fiscal year.

However, if the financial status of the banks that have published their balance sheets is any indication of the profits of commercial banks, they have made a good profit in the last fiscal year. Sashin Joshi, CEO of NIC Bank, said that profits grew substantially in the last fiscal year but the growth rate remained low.

The central banks allowing banks to renew realty loans for one year, if the borrower pays all the outstanding interest helped banks to make profits because they were exempted from provisioning the interest and principal of such unpaid loans, he said.

According to BN Gharti, deputy general manager of KIST, profits grew as they increased the rate of commission and other fees.

Banks importing gold might also have earned good profits due to rising gold price resulting in better profits overall, he said.

Another banker who asked to remain unnamed said that banks had not reduced their spread rate despite a rise in the cost of funds which contributed to the growth in profits.

With banks struggling to recover realty loans until the end of the last fiscal year, they are expected to recover at least the interest on the loans that went to the realty sector if they produce good profits.

As of the last fiscal year, total bank deposits reached Rs 673 billion as the banks started to get deposits in the last quarter of the fiscal year and they remained in a comfortable liquidity position. The have also made significant lending in the last quarter.

Data storage

Global Bank started to store its financial data in international standard disaster recovery site operated by CAS Trading at Bhairawa from Tuesday. Bank�s board member Dhan Bahadur Sherchan inaugurated the data centre. On the occasion, Sherchan said that the bank took this move to safeguard its customer�s property. �There is high risk of earthquake and other natural disasters in Kathmandu. So we decided to store our data at Bhairawa,� he said.

BANKS >> FY 10-11 >> FY 09-10 >>

RBB >> Rs 2.15 billion >> Rs 2.01 billion

NABIL >> Rs 1.29 billion >> Rs 1.14 billion

SCBN >> RS 1.11 billion >> Rs 1.08 billion

ADBN >> Rs 1.60 billion >> Rs 1.45 billion

BoK >> Rs 605.15 million >> Rs 509.26 million

PRIME >> Rs 370.01 million >> Rs 324.98 million

LUMBINI >> Rs 389.69 million >> Rs 383.58 million

KIST >> Rs 198.13 million >> Rs 144.13 million

GLOBAL >> Rs 226.31 million >> Rs 73 million

SUNRISE >> Rs 136.08 million >> Rs 204.35 million

EVEREST >> Rs 930 million >> Rs 831.76 million

NMB >> Rs 232.68 million >> Rs 154.85 million

LAXMI >> Rs 377.58 million >> Rs 325.65 million

NIC >> Rs. 500 million >> Rs 452.71 million

Source: Kantipur