June 8, 2021 | Investopaper
The return of equity (ROE) of commercial banks has declined due to the Corona epidemic. ROE is the return on investment received by the shareholder. ROE has declined due to poor business conditions in the Corona epidemic. Compared to Chaitra end of the last fiscal year, the average ROE of banks decreased by 0.59 percentage points in the corresponding period of the current fiscal year.
The average ROE of banks was 14.40 percent until the end of Chaitra of the last fiscal year. ROE has fallen to 13.54 percent in the corresponding period of this fiscal year. During this period, ROE of 13 banks have declined.
Meanwhile, net profit increased by 13.50 percent as of end of Chaitra of the current fiscal year compared to the same period of the previous year. Commercial banks have earned a net profit of Rs 50.74 billion as of Chaitra end, 2077 BS. The profit of banks was Rs. 44.70 billion in the corresponding period of the previous year.
Despite the increase in profits, the ROE has declined due to increase in paid-up capital of banks. During this period, the paid up capital of banks increased by 16.45 percent to Rs. 540 billion.