The NEPSE Journal
Market commentary, data deep-dives, and trading notes from the NEPSE Trading desk.
As of July 2025, ADBL (28.55%) is the undisputed leader in agriculture financing, followed by private banks like Prabhu, Global IME, NIC Asia, NMB, Citizens, and Prime, all exceeding the 11% threshold. In contrast, Nepal Bank, RBB, and Standard Chartered lag far behind, underscoring the difference between development-focused vs traditional commercial banking strategies.
As of July 2025, state-owned banks (Nepal Bank, RBB, ADBL) report much lower NPL ratios (all below 1%) compared to many private banks, some of which have NPLs above 5–6%. This marks a reversal of traditional perceptions, with government banks showing stronger credit discipline while private banks face rising risks from aggressive lending.
Rising NPLs are a growing threat to Nepal’s banking stability, with the sector average now at 3.66%. While top performers like Everest, ADBL, and Standard Chartered remain stable, several private banks with higher NPLs face risks to profitability, liquidity, and investor confidence. Unless provisioning is strengthened and loan recovery improves, Nepal’s banking sector could face long-term stability challenges.
The Net NPL ratio is a more accurate reflection of a bank’s financial health than gross NPL, because it shows the uncovered portion of bad loans after provisioning. As of mid-July 2025, banks like Everest, Nepal SBI, and Standard Chartered stand out with extremely low Net NPLs, proving they are well-prepared for credit risks. High Net NPL banks, however, remain exposed and vulnerable, highlighting where investors and depositors need to be cautious.
As of mid-July 2025, the banks with the lowest NPL ratios in Nepal are Everest Bank (0.38%), ADBL (0.42%), Nepal Bank (0.79%), RBB (0.88%), and Standard Chartered (1.47%). These institutions demonstrate strong asset quality, effective recovery mechanisms, and lower credit risk, making them more stable and attractive for both depositors and investors.
As of Asadh 2082, NIC Asia (7.04%), Prabhu (6.67%), and Laxmi Sunrise (6.49%) are among the most stressed banks in terms of NPLs, while Nepal Bank, RBB, and ADBL also struggle with above-average bad loans. The sector average stands at 3.66%, highlighting that many banks are above safe thresholds. Standard Chartered, Nabil, and Everest Bank show comparatively better control over loan quality.
As of mid-July 2025, government banks (NBL 10.05%, RBB 9.46%, ADBL 11.93%) show higher base rates compared to several private banks such as Himalayan (8.31%), NIC Asia (8.87%), and Citizens (8.94%). This indicates that government banks remain costlier credit providers, while private banks leverage efficiency and competitiveness to attract borrowers.
As of Asadh 2082, NIC Asia Bank (3.99%) leads in spread rates, followed by Siddhartha, NMB, Machhapuchhre, and Prabhu Bank, all exceeding the sector average of 3.66%. This indicates stronger profitability margins for these banks. Meanwhile, NIMB, Standard Chartered, and Everest Bank operate with leaner spreads, balancing competitiveness with profitability.
The base rate matters because it is the foundation of lending rates in Nepal. For borrowers, it determines loan affordability, and for investors, it signals how competitive and profitable a bank might be. As of mid-July 2025, Nepal’s average base rate is 5.99%, with RBB (4.78%) and Standard Chartered (4.96%) offering the lowest lending costs, while banks like NIC Asia (7.04%) and Himalayan (6.57%) operate at higher ends.
As of mid-July 2025, NIC Asia Bank leads with the highest spread rate of 3.99%, followed by NMB, Machhapuchhre, and Prabhu in the 3.7–3.8% range. On the other hand, Nepal Investment Mega Bank (3.01%) and Standard Chartered (3.53%) operate on thinner margins. Overall, the sector’s average spread stands at 3.66%, reflecting stable profitability trends.