Because of the Corona pandemic, commercial banks’ return on equity (ROE) has decreased. The return on investment received by the shareholder is referred to as ROE. Because of the unfavorable business environment in the Corona pandemic, ROE has decreased. The average ROE of banks declined by 0.59 percentage points in the current fiscal year compared to the end of the previous fiscal year.
Until the end of Chaitra in the previous fiscal year, the average ROE of banks was 14.40 percent. In the same period of this fiscal year, ROE fell to 13.54 percent. During this time, the ROE of 13 banks has fallen.
Meanwhile, net profit climbed by 13.50 percent as of the end of Chaitra of the current fiscal year when compared to the same period last year. As of Chaitra end, 2077 BS, commercial banks had a net profit of Rs 50.74 billion. Bank profit was Rs. 44.70 billion in the previous year’s similar period.
Despite a rise in profits, the ROE has decreased due to an increase in bank paid-up capital. During this time, banks’ paid-up capital increased by 16.45 percent to Rs. 540 billion.