Second-quarter financial statements of 20 commercial banks for fiscal year 2025/26 indicate gradual improvement in asset quality, with 10 banks reducing their non-performing loan (NPL) ratios. Nabil Bank lowered its NPL to 4.25 percent, while Nepal SBI Bank posted a sharp decline to 2.64 percent. Despite these improvements, the industry-wide NPL average rose to 4.85 percent due to significant increases at some banks. Himalayan Bank recorded the highest NPL ratio at 7.96 percent, followed by Prabhu Bank at 7.94 percent and Nepal Investment Bank at 7.90 percent. Analysts say the broader trend still points toward recovery.
