Kathmandu. In the first six months of the current fiscal year, the return on investment (ROE) of commercial banks is 8.25 percent.

There has been a slight improvement in ROE compared to the same period last year. The average ROE of the bank was 8.02 percent as of mid-January last year. It increased by 0.23 percentage points.

Of the 20 commercial banks in operation, one bank has negative ROE while 11 banks have a single digit ROE. Out of 20 banks, the ROE of 10 banks has increased while the ROE of 10 banks has decreased.

Prabhu Bank Ltd, Himalayan Bank Ltd, Prabhu Bank Ltd, Nepal Investment Mega Bank Ltd, Agricultural Development Bank Ltd, Citizens Bank and NEEC Asia Bank decreased 0.13 per cent, 3.32 per cent, Himalayan Bank 1.32 per cent, Prabhu Bank 2.45 per cent, Prabhu Bank 2.45 per cent, and Prabhu Bank 2.45 per cent.

Nabil Bank’s ROE increased by 3.51 percentage points to 14.54 percent as of mid-January. NEEC Asia Bank has the lowest share of 0.90 percent. Kumari Bank has ROE of 13.72 percent, Prime Bank 12.09 percent, Sanima Bank 12.01 percent and Machhapuchchhre Bank 10.52 percent.

Similarly, Nepal SBI Bank has 9.91 percent, Global IME Bank 9.75 percent, Siddhartha Bank 8.55 percent and Rastriya Banijya Bank 6.67 percent.

As the bank’s ROE is decreasing, the shareholders of the bank have started selling their stakes.

In the last few years, with the bank’s ROE in the single digits, the old bankers have reduced their stake and some bankers have started exiting the banking sector.

Promoter shareholders have started exiting the banking sector due to the decline in returns. At present, the ROE of the bank is low, the bad loans of the banks are increasing, the loan flow is low, the loans are not being repaid on time, and the obstacles of various criminal groups are increasing in the collection of loans.

Bankers say that the bank’s investment in the bank has not been able to give good returns in the last few years.