Kathmandu. In the last fiscal year 2082/83, the profit of the national level development bank has improved significantly. According to the financial details released by the banks for the fourth quarter, seven national level development banks have earned a profit of Rs 7.14 billion in the last fiscal year.

The profit of the banks increased by 81.46 percent in a single year. In the previous fiscal year 2081/82, the profit of the seven national level development banks was only Rs 3.93 billion.  The increase in profit was due to improvement in loan recovery of banks and reduction in impairment charges for risk management.

With improvement in bad loans and improved asset quality, banks’ impairment charges have been reversed, leading to a significant increase in net profit.  According to the prevailing system of financial management, banks and financial institutions have to release a certain amount of money from their profit and loss account as a provision for managing potential credit risk.

Since such an amount is counted as an expense, the bank’s immediate profit decreases. However, once the risk of a risky loan is recovered or the risk of potential loss is reduced, the bank may reverse the amount that is not required from the previously allocated provisions. In this way, the profit of the bank has increased.

In the last fiscal year, Garima Bikas Bank was the highest profiter. The bank earned a net profit of Rs 1.68 billion. The bank had posted a net profit of Rs 1,2476,000 in the previous FY. At the same time, the profit of the bank increased by 35.34 percent.

Similarly, Sine Resunga Development Bank has earned a net profit of Rs 1.18 billion in the last FY. The bank had posted a net profit of Rs 64.56 crore in the previous FY. The profit of the bank increased by 82.97 percent.

Jyoti Bikas Bank has earned a net profit of Rs 1.59 billion in the last FY. The bank had posted a net profit of Rs 10.02 crore in the previous fiscal year. The profit of the bank increased by 905.75 percent in a year.

Kamana Sewa Bikas Bank has earned a net profit of Rs 89.41 crore in the last FY. The bank had posted a net profit of Rs 66.97 crore in the previous FY. The profit of the bank increased by 33.51 percent.

In the last fiscal year, the bank earned a net profit of Rs 88.99 crore. The bank had posted a net profit of Rs 60.66 crore in the previous FY. The profit of the bank increased by 46.69 percent.

Lumbini Bikas Bank has earned a net profit of Rs 85.10 crore in the last FY. The bank had posted a net profit of Rs 24.11 crore in the previous fiscal year. The profit of the bank increased by 252.96 percent in the last one year.

Similarly, Mahalaxmi Bikas Bank has earned a net profit of Rs 62.99 crore in the last FY. The bank had posted a net profit of Rs 42.43 crore in the previous fiscal year. The profit of the bank increased by 48.46 percent.

Which bank has set aside how much for impairment charge?

Lumbini Bikas Bank’s impairment charge has decreased compared to the previous fiscal year. In the last fiscal year, the bank has set aside Rs 13.50 crore for impairment charge. The bank has been able to reduce such charges by 82.66 percent compared to the previous year. Due to which the profit of the bank has improved. Last year, the bank had set aside Rs 77.87 crore for such charges.

Similarly, the impairment charge of Jyoti Bikas Bank has also been reversed. The net profit of the bank has also increased. The bank’s impairment charge has been revised to Rs 30.12 crore from Rs 87.85 crore in the previous FY.

Garima Bikas Bank has also seen improvement in its profit due to improvement in loan recovery and risk management.  In the last fiscal year, the bank has set aside an impairment charge of Rs. 4.90 crores. This charge has decreased compared to the previous fiscal year. In the previous fiscal year, the bank had set aside Rs 64.70 crore for such charges.

Mahalaxmi Bikas Bank has set aside Rs 31.56 crore for impairment charge. The bank’s charge has also decreased compared to the previous year. In the previous fiscal year, the bank had set aside Rs 51.73 crore for such charge.

Similarly, the impairment charge of Kamana Sewa Bikas Bank has also been reduced. The bank’s impairment charge has been reduced to Rs 13.65 crore from Rs 41.81 crore as of mid-July last year.

Similarly, the provisioning÷impairment charge of Shangrila Development Bank has come down to Rs 9.13 crore from Rs 34.54 crore in the previous FY. This seems to have helped in increasing the profitability of the bank.

Shine Resunga Development Bank’s loan impairment charge has decreased from Rs 950.4 million to Rs 20.79 crore.