Along with net profit, their average ROE also climbed to 9.11 percent during the period. In the corresponding period of the last FY, their ROE stood at 7.93 percent.
In the past, the ROE of banks was continuously declining, however, the first quarter reports indicate of improvement in the current FY as their net profit has increased the quarter. Moreover, the banks estimate of growth in net profit in second quarter as well.
Once the banks start investing piled up excess liquidity, their profit will further increase. Right now, the excess liquidity in the banks has raised their cost of fund which has constricted their income.
In the last few years, the dividend distribution rate of commercial banks is continuously declining while their ROE also falling.
In the last eight years, the ROE has fallen from 14.04 percent in FY 2073/74 to 9.37 percent in FY 2080/81.
Among the banks, Standard Chartered Bank has the highest ROE of 16.1 percent followed by SBI Bank with 16.04 percent, Prime Bank 15.97 percent, Everest Bank 51.91 percent and NMB Bank with ROE of 15.91 percent.
Meanwhile, Agriculture Development Bank has negative ROE, NIC Asia has 1.45 percent, Citizens Bank has 3.54 percent and Siddhartha Bank has 5.38 percent ROE.
