Kathmandu -Commercial banks are burdened by rising non-performing loans (NPLs) with the sluggish economy. 

The fourth quarterly report of the last fiscal year shows a significant increase in NPLs among 20 commercial banks.

Despite some improvement in profits through increased loan recovery, banks have been unable to expand new lending, negatively affecting their balance sheets. The NPL ratio of many banks has risen sharply, up to 7 percent. 

Although banks have shown net profits by reducing impairment charges, the fourth-quarter financial reports of most banks remain disappointing.

The NPLs ratio of Himalayan Bank has risen to a staggering 7.28 percent, marking the highest among banks, that is a significant jump from 4.98 percent in the previous fiscal year, indicating a substantial portion of the bank’s loan portfolio is now at high risk.

NIC Asia Bank has also seen its NPLs nearly double, surging to 6.28 percent in the review period, from 3.45 percent fiscal year 2023-24, suggesting a majority of its loan recoveries are failing. 

Similarly, Global IME Bank’s NPLs has increased from 4.17 percent to 4.87 percent. Prabhu Bank’s NPL rose from 4.94 percent to 4.96 percent, and Nepal SBI Bank's went from 1.96 percent to 3.35 percent.

NMB Bank's NPL also edged up from 3.4 percent to 3.72 percent.

Kumari Bank’s NPLs has also worsened, increasing from 5.95 percent in 2023-24 to 6.42 percent in 2024-25. Siddhartha Bank's NPL ratio rose from 2.17 percent to 2.62 percent, and Citizens Bank saw an increase from 4.1 percent to 4.94 percent.

Nepal Bank is facing a similar situation, with its NPL rising from 4.33 per cent to 4.47 percent. 

Likewise, Prime Bank’ S Npls  increased from 4.65 percent to 5.56 percent, Nepal Investment Bank’s from 4.91 percent to 5.85 percent, and Sanima Bank’s from 1.72 percent to 3.01 percent.

In contrast, a few banks have successfully reduced their bad debt compared to the previous year. Agricultural Development Bank, Rastriya Banijya Bank, Nabil Bank, Everest Bank, Standard Chartered Bank, Laxmi Sunrise Bank, and Machhapuchchhre Bank have all improved their loan portfolios.

It is now crucial for banks to implement strategic measures to improve the quality of their loan portfolios, strengthen risk management, and recover their defaulting loans.

NPLs of 20 Commercial Banks :