2025 Mid-Year Banking Report Card Winners & Losers

The mid-July 2025 (Asadh 2082) report from Nepal Rastra Bank paints a very telling picture of Nepal’s commercial banking sector. Some banks have performed strongly with robust capital buffers, prudent lending, and excellent liquidity, while others continue to face challenges with high non-performing loans (NPLs) and weaker capital adequacy. On the winning side, Standard Chartered Bank Nepal remains a clear leader, posting the highest Capital Adequacy Ratio (17.82%), exceptionally strong net liquidity (46.33%), and a very low NPL ratio (1.47%), showing it is one of the most conservative and safest banks. Everest Bank is another strong performer, holding the lowest NPL ratio in the sector (0.38%) while maintaining healthy solvency and moderate CD ratios, making it highly attractive for investors seeking stable dividends. Global IME Bank, with the largest total capital fund (Rs. 68.18 billion) and deposits over Rs. 575 billion, continues to dominate in size and market presence, while Agriculture Development Bank (ADBL) has distinguished itself in development-focused lending, channeling 28.55% to agriculture and 24.64% to MCSMEs, far above regulatory requirements, cementing its role in supporting Nepal’s productive economy.

On the losing side, Rastriya Banijya Bank (RBB) is struggling with a relatively low CAR of 11.84%, a conservative but under-utilized CD ratio of 62.27%, and weaker performance in sectoral diversification. Nepal Bank Limited, while slightly better in CAR (13.06%), is weighed down by rising NPLs (4.47%), limiting its growth and dividend potential. Prabhu Bank shows worrying signs with high NPLs (4.96%), a thinner liquidity buffer, and an aggressive lending stance, creating risks for both depositors and investors. Similarly, NIC Asia Bank, known for its aggressive growth model, has one of the highest spread rates (6.28%) but also faces higher NPLs, highlighting the risks of rapid loan expansion.

Overall, the 2025 mid-year data shows a widening gap between strong and weak banks. Conservative banks with higher capital adequacy and strong liquidity like Standard Chartered, Everest, and Global IME are attracting greater investor and depositor trust, while aggressive lenders with asset quality concerns like NIC Asia and Prabhu face rising scrutiny. For investors, this report card highlights the importance of watching NPL ratios, CAR levels, and liquidity buffers when assessing banking stocks and deposit safety.