Development Banks Extend Their Losses
Nepal's Development Banks sub-index fell 4.32% on April 5, 2026, losing 259.55 points to close at 5,738.12. This accelerates the sector's April 1 decline of 3.18%, and two major names — Narayani Development Bank (NABBC) and Saptakoshi Development Bank (SAPDBL) — both hit lower circuits, underscoring the severe distress in the sector.
Development Bank Sector Data — April 5, 2026
| Metric | Value |
|---|---|
| DevBank Sub-Index Close | 5,738.12 |
| Point Change | -259.55 |
| Percentage Change | -4.32% |
Circuit Lower Stocks
NABBC (Narayani Development Bank)
- Closing Price: Rs 1,183.5
- Previous Close: Rs 1,315
- Change: -Rs 131.5 (-10.00%)
- Volume: 33,459 shares
- Open: Rs 1,288.7 | High: Rs 1,313 | Low: Rs 1,183.5
SAPDBL (Saptakoshi Development Bank)
- Closing Price: Rs 855.6
- Previous Close: Rs 950.6
- Change: -Rs 95.0 (-9.99%)
- Volume: 49,630 shares
- Open: Rs 931.6 | High: Rs 931.6 | Low: Rs 855.6
CORBL (Corporate Development Bank)
- Closing Price: Rs 1,649
- Previous Close: Rs 1,805
- Change: -Rs 156 (-8.64%)
- Volume: 10,988 shares
Why Are Development Banks in Crisis?
The Development Banks sector is experiencing one of its sharpest short-term corrections in recent memory. The drivers are multi-layered:
- Policy threat amplification: Development banks fear capital market policy changes could affect their ability to raise capital through rights issues or restrict dividend payouts — both key to their business model.
- NRB merger pressure: NRB's ongoing push for development bank mergers creates existential uncertainty. NABBC, having issued right shares (visible in NEPSE data), faces additional uncertainty around its capital structure.
- Credit quality concerns: Rising NPL ratios among smaller development banks are drawing investor scrutiny. In a risk-off environment, any bank with above-average NPL is sold first.
- Low liquidity: Development bank stocks have smaller floats than commercial banks — panic exits by even modest-sized holders can drive stocks to circuit.
Context: NABBC's Right Share History
Notably, NABBC had recently issued right shares (visible in NEPSE's right share data). Newly allotted shareholders receiving shares at discounted prices sometimes immediately sell on the market, adding supply pressure. This could be a contributing factor to NABBC's sharp circuit-level decline.
Investor Outlook for Development Banks
Development banks are the highest-risk sub-sector within Nepal's banking universe. For investors:
- Avoid speculative buying at circuit lows — development banks can stay depressed for extended periods
- Focus on banks with NPL below 4%, CAR above 12%, and no pending merger disputes
- Corporate Development Bank (CORBL), despite falling 8.64%, has a relatively stronger franchise — monitor as a potential quality play after stabilisation
- Two-session combined losses of 7-8% in this sector warrant cautious positioning until policy clarity emerges