Kathmandu. In the last fiscal year 2081/82, the bad loans of Narayani Development Bank have increased by about 50 percent. In the last financial year, the bank’s bad loans reached 50.97 percent.
According to the bank’TAG_OPEN_div_34 s financial statements, the bank’s bad loans stood at 47 per cent in the previous fiscal year 2080/81. In the last fiscal year, the bank had a loss of Rs 25.16 million. The bank’s losses have also increased compared to the previous fiscal year. In the previous fiscal year, the bank had a loss of Rs 17.8million. According to the bank’s financial statements, the financial condition of the bank is deteriorating every year.
Most of the money earned by the bank has been set aside for the provision of the loan due to the high bad loan ratio of the bank. As a result, the bank’s profit in the last financial year has also been in loss. In the last financial year, yes bank has set aside 79.55 percent in ‘Total Loan Loss Provision to Total NPL’ to manage bad loans. In the previous fiscal year, the bank had provided 76.68 percent of the loan.
Similarly, yes bank has set aside 35.32 percent for ‘Total Loan Loss Provision to Total Loan’. TAG_OPEN_div_30 The bank had allocated 40.55 percent of such provisions in the previous fiscal year. During this period, the bank collected deposits of Rs 449.675 million and invested Rs 199.689 million in loans.
TAG_OPEN_div_28 The bank has invested 16.22 per cent at a base rate till mid-June of the last fiscal year. In the previous fiscal year, the bank’s share was 16.24 percent. The bank has fixed the interest spread between deposits and loans at 4.50 percent. In the last fiscal year, the bank’s earnings per share was negative at Rs 9.59. Similarly, the net worth per share is Rs 27.15.
The bank’s net interest income has also been in curring losses during this period. During this period, the bank’s net interest income stood at Rs 299,000. During this period, the operating profit of the bank has also been at a loss. During this period, the bank’s operating profit was Rs 3 million 81 thousand.
Relationship sources say TAG_OPEN_div_24 that the growth of bad loans is high due to weak valuation of loan investment given by banks . Bad loans seem to be on the rise due to development banks disbursing loans without adequately examining the feasibility of the project, the source of income of the customers, the quality of the collateral, etc. at the time of lending.
Similarly, in the last few year TAG_OPEN_div_22 s, due to the slowdown in the construction, industry, trade and real estate sectors in Nepal, customers who have taken loans have not been able to pay installments. Development banks have invested more loans in residential and land-house mortgages. However, bad loans have increased as the customers have not been able to repay the loan due to the decrease in land purchase and purchase.
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