Kathmandu. In the first three months of the current fiscal year, the return on investment (ROE) of commercial banks has been limited to an average of 6.40 percent. The return on equity (ROE) of commercial banks, which are considered the backbone of the financial system, has been continuously declining.

According to the financial statements of the first quarter of the current financial year, the ROE of the banks has decreased by an average of 2.81 percent compared to the previous financial year. In the first quarter of the last fiscal year, the average ROE of commercial banks was 9.21 percent. According to the quarterly report, the ROE of most commercial banks has fallen to single digits, while the ROE of one bank is negative.

Citizens Bank has a negative ROE of 3.79 percent during this period. In the last fiscal year, the bank’s ROE was 3.59 percent. Similarly, the Agricultural Development Bank is not in a position to give any return to its investors. In the first quarter of the last FY, the bank’s net profit was 2.01 percent.

During this period, the ROE of three commercial banks is below 1 percent. During this period, the return on investment of Himalayan Bank, Rastriya Banijya Bank and Nepal Investment Mega Bank has fallen below 1 percent.

As of the first quarter of the current FY, NIC Asia Bank’s ROE stood at 1.62 percent. The bank’s ROE has increased slightly compared to the previous financial year. In the last fiscal year, the bank’s return was 1.43 percent.

Prime Bank and Everest Bank were among the banks with the highest ROE in the first quarter of the current fiscal year. These banks have the potential to give 14 percent returns to their investors. Similarly, Standard Chartered Bank Nepal Bank has more than 12 percent ROE.

NMB Bank and Kumari Bank have a return potential of 11 percent. Global IME Bank and Nabil Bank have the potential to provide 10 percent return to their investors.

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