ROE Of Banks Falls To 10.76 Percent

August 22, 2023 | Investopaper

Return on Equity (ROE) is a key financial metric that provides insight into a company’s profitability and efficiency in utilizing shareholder equity to generate earnings. It is a crucial metric for investors, shareholders, and regulators. It helps investors gauge the profitability of their investments in commercial banks and assess the banks’ ability to generate returns on the funds provided by shareholders. A high ROE generally suggests effective management and strategic decisions, which can lead to increased investor confidence and potential stock price growth.

In the last fiscal year 2079/80, the average return of equity (ROE) of commercial banks has declined to 10.76 percent as compared to 11.05 percent of the previous fiscal year. Standard Chartered Bank Nepal secured the first rank with an ROE of 17.49 percent, showcasing its ability to generate substantial profits relative to its shareholder equity. NIC Asia Bank closely followed with an ROE of 15.69 percent, and Sanima Bank claimed the third position with an ROE of 13.52 percent.

The table below presents the Return On Equity (ROE) of commercial banks operating in Nepal.

Return On Equity (ROE) Of Commercial Banks In Nepal

In %

Rank	Commercial Banks	FY 2079/80	FY 2078/79
1	Standard Chartered Bank Nepal	17.49	12.44
2	NIC Asia Bank	15.69	16.97
3	Sanima Bank	13.52	12.38
4	Everest Bank	13.31	10.88
5	Nabil Bank	12.96	8.03
6	Siddhartha Bank	12.53	13.44
7	Global IME Bank	12.36	12.98
8	Nepal SBI Bank	12.1	9.57
9	NMB Bank	11.92	12.25
10	Machhapuchchhre Bank	11.34	11.64
11	Citizens Bank	10.39	9.83
12	Nepal Bank	9.33	8.24
13	Himalayan Bank	9.11	9.99
14	Rastriya Banijya Bank	9.1	13.14
15	Agricultural Development Bank	9.06	6.67
16	Prabhu Bank	8.38	9.93
17	Prime Commercial Bank	7.96	10.32
18	Nepal Investment Mega Bank	7.38	10.49
19	Laxmi Sunrise Bank	6.01	10.37
20	Kumari Bank	5.31	11.45

	Average	10.76	11.05