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Determinants of capital adequacy of Nepalese commercial banks / Manisha Baral
Title : Determinants of capital adequacy of Nepalese commercial banks Material Type: printed text Authors: Manisha Baral, Author Publication Date: 2016 Pagination: 79p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: capital adequacy bank capital financial performance' Class number: 332.120 Determinants of capital adequacy of Nepalese commercial banks [printed text] / Manisha Baral, Author . - 2016 . - 79p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: capital adequacy bank capital financial performance' Class number: 332.120 Hold
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Barcode Call number Media type Location Section Status 156/D 332.120 BAR Thesis/Dissertation Uniglobe Library Social Sciences Available Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks / Asmita Budhathoki
Title : Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks Material Type: printed text Authors: Asmita Budhathoki, Author Publication Date: 2017 Pagination: 99p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Capital adequacy
Credit riskKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Abstract: The economic development and prosperity come from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Credit risk is the current and prospective risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract with the banks or otherwise to perform as agreed. Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013).
This study attempts to analyze the effect of credit risk and capital adequacy on profitability of Nepalese commercial banks. This study is based on the secondary data of 16 commercial banks of Nepal for the time period of 2007/08 to 2015/16, leading to a total of 144 observations. Data and information have been collected from the Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected commercial banks. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between credit risk and capital adequacy with the profitability of Nepalese commercial banks.
The result reveals that average return on assets is highest for NBBL (5.62 percent) and lowest for SUNBL (0.88 percent). The average earnings per share is highest for NABIL (Rs. 83.21 per share) and lowest for MBL (Rs. 10.87 per share). The average loan loss provision ratio is highest for ADBL (14.19 times) and lowest for SCBL (1.49 times). The average capital adequacy is highest for ADBL (16.35 percent) and lowest for MBL (10.74 percent). The average leverage ratio is highest for EBL (12.78 times) and lowest for ADBL (6.28 times). The average non-performing loan ratio is highest for NBBL (9.47 percent) and lowest for SCBL (0.61 percent). The average credit to deposit ratio is highest for ADBL (105.50 percent) and lowest for SCBL (50.86 percent). NABIL has the highest average bank size (Rs.86.22 billion) and KBL has the lowest (Rs. 25.81 billion). Annual inflation rate is highest in the year 2009/10 (12.6 percent) and lowest in the year 2007/08 (6.7 percent). Annual GDP growth rate is highest in the year 2007/08 (6.10 percent) and lowest in the year 2015/16 (0.77 percent). The descriptive statistics for selected commercial bank shows that the average return on assets ratio is 1.89 percent, average earning per share is Rs. 38.16 per share, average loan loss provision is 3.71times, average capital adequacy ratio is 12.21percent, average non-performing loan ratio is 2.41 percent, average leverage ratio is 9.88 percent, average credit to deposit ratio is 78.58 percent, average bank size is Rs 43.79 billion, average inflation is 9.18 percent and average GDP growth is 4.13 percent.
The study shows that the capital adequacy ratio is positively related to return on assets (ROA) and earnings per share (EPS). It indicates that increase in capital adequacy ratio leads to increase in ROA and EPS. The study also shows that bank size and inflation are positively related to ROA and EPS. It indicates that higher the bank size and inflation, higher would be the ROA and EPS of Nepalese commercial banks. However, the result shows that loan loss provision and non-performing loan have a negative relationship with ROA and EPS. This indicates that increase in loan loss provision and non-performing loan leads to decrease in ROA and EPS. Likewise, the study reveals that leverage, credit to deposit ratio, and GDP are negatively related to the ROA and EPS. This indicates that increase in leverage, credit to deposit ratio, and GDP leads to decrease in ROA and EPS. The regression results also show that beta coefficients are positive for leverage, bank size and GDP for ROA and EPS whereas beta coefficients are negative for non-performing loans and credit to deposit ratio. However, the coefficients are significant only for bank size at 5 percent level.
Effect of credit risk and capital adequacy on profitability of Nepalese commercial banks [printed text] / Asmita Budhathoki, Author . - 2017 . - 99p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Capital adequacy
Credit riskKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Abstract: The economic development and prosperity come from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Credit risk is the current and prospective risk to earnings or capital arising from an obligor’s failure to meet the terms of any contract with the banks or otherwise to perform as agreed. Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013).
This study attempts to analyze the effect of credit risk and capital adequacy on profitability of Nepalese commercial banks. This study is based on the secondary data of 16 commercial banks of Nepal for the time period of 2007/08 to 2015/16, leading to a total of 144 observations. Data and information have been collected from the Banking and Financial Statistics, Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected commercial banks. This study has employed descriptive research design and casual comparative research design as it deals with the relationship between credit risk and capital adequacy with the profitability of Nepalese commercial banks.
The result reveals that average return on assets is highest for NBBL (5.62 percent) and lowest for SUNBL (0.88 percent). The average earnings per share is highest for NABIL (Rs. 83.21 per share) and lowest for MBL (Rs. 10.87 per share). The average loan loss provision ratio is highest for ADBL (14.19 times) and lowest for SCBL (1.49 times). The average capital adequacy is highest for ADBL (16.35 percent) and lowest for MBL (10.74 percent). The average leverage ratio is highest for EBL (12.78 times) and lowest for ADBL (6.28 times). The average non-performing loan ratio is highest for NBBL (9.47 percent) and lowest for SCBL (0.61 percent). The average credit to deposit ratio is highest for ADBL (105.50 percent) and lowest for SCBL (50.86 percent). NABIL has the highest average bank size (Rs.86.22 billion) and KBL has the lowest (Rs. 25.81 billion). Annual inflation rate is highest in the year 2009/10 (12.6 percent) and lowest in the year 2007/08 (6.7 percent). Annual GDP growth rate is highest in the year 2007/08 (6.10 percent) and lowest in the year 2015/16 (0.77 percent). The descriptive statistics for selected commercial bank shows that the average return on assets ratio is 1.89 percent, average earning per share is Rs. 38.16 per share, average loan loss provision is 3.71times, average capital adequacy ratio is 12.21percent, average non-performing loan ratio is 2.41 percent, average leverage ratio is 9.88 percent, average credit to deposit ratio is 78.58 percent, average bank size is Rs 43.79 billion, average inflation is 9.18 percent and average GDP growth is 4.13 percent.
The study shows that the capital adequacy ratio is positively related to return on assets (ROA) and earnings per share (EPS). It indicates that increase in capital adequacy ratio leads to increase in ROA and EPS. The study also shows that bank size and inflation are positively related to ROA and EPS. It indicates that higher the bank size and inflation, higher would be the ROA and EPS of Nepalese commercial banks. However, the result shows that loan loss provision and non-performing loan have a negative relationship with ROA and EPS. This indicates that increase in loan loss provision and non-performing loan leads to decrease in ROA and EPS. Likewise, the study reveals that leverage, credit to deposit ratio, and GDP are negatively related to the ROA and EPS. This indicates that increase in leverage, credit to deposit ratio, and GDP leads to decrease in ROA and EPS. The regression results also show that beta coefficients are positive for leverage, bank size and GDP for ROA and EPS whereas beta coefficients are negative for non-performing loans and credit to deposit ratio. However, the coefficients are significant only for bank size at 5 percent level.
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Barcode Call number Media type Location Section Status 407/D 332.120 BUD Thesis/Dissertation Uniglobe Library Social Sciences Available Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks / Anjana Kumari Chaudhary
Title : Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks Material Type: printed text Authors: Anjana Kumari Chaudhary, Author Publication Date: 2017 Pagination: 101p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Capital adequacy Keywords: capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Commercial banking is one of the important factor of Nepalese economy. Commercial banks are the main pillar of the financial system in Nepal. It makes the flow of resources for the rest of the character of the economy. Finance is life blood of the trade, commerce and are the vanes in the circulation of the funds in economy. Growth of any country depends upon the strong banking and financial system. As most of the economic depression are the result of the banking system failure. The importance of the banking sectors is immense in the progress and richness of any state. The economic development and prosperity comes from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Bank is a backbone of all the industries, because every transaction where money is involved, the bank is the main pillar of funding (Haque& Tariq, 2012).
Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013). Jinghan (2010) asserts that banks need a high degree of liquidity in their assets portfolio. The bank must hold a sufficient large proportion of its assets the form of cash and liquid assets for the purpose enhancing customers’ confidence and corporate performance (profitability). According to Christian et al. (2008), capital adequacy measures provide significant information regarding a firm's returns; while a few of the individual variables representing asset quality and earnings are informative. Size and growth and loan exposure measures do not appear to have any significant explanatory power when examining returns.
Higher capital improves banks’ ability to create liquidity. Liquidity creation exposes banks to risk, the more liquidity is created, the greater are the likelihood and severity of losses associated with having to dispose of illiquid assets to meet the liquidity demands of customers (Diamond and Dybvig 1983). Recent contributions suggest that bank capital may impede this liquidity creation process because bank capital diminishes the financial fragility that facilitates the liquidity creation process (Diamond and Rajan, 2000, 2001). According to the theory of financial intermediation, an important role of banks in the economy is to provide liquidity by funding long-term, illiquid assets with short-term, liquid liabilities. Through this function, banks create liquidity as they hold illiquid assets and provide cash and demand deposits to the rest of the economy.
This study attempts to explore the effect of capital adequacy requirements on liquidity of selected commercial banks in context of Nepal. This study is based on the secondary data for 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. The data and information are collected from various issues of Banking and Financial Statistics, Bank Supervision Report published by NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as this study examines the impact of capital adequacy ratio, leverage ratio, deposits, equity to total assets, bank size and total debt to total assets ratio on liquidity of Nepalese commercial banks.
The result shows that average loan to deposit ratio is highest for CBIL (2.90 percent) and lowest for SUBL (83.80 percent). The average liquid assets to total deposit ratio is highest for NMBBL (78.93 rupees) and lowest for HBL (9.74 rupees). The average capital adequacy ratio is highest for NMBBL (16.86 percent) and lowest for NIBL (10.38 percent). Similarly, leverage ratio is highest for EBL (13.75 percent) and lowest for NBBL (6.82 percent). The average deposits is highest for NABIL (Rs.63.77 billion) and lowest for CBILRs.16.75 billion). Likewise, average equity to total assets ratio is highest for SUBL (11.62 percent) and lowest forEBL (7.93 percent). The average bank size is highest for NIBL (RS.129.78 billion) and lowest for NCCBL (RS.30.23billion) and average total debt to total assets ratio is highest for EBL (92.52 percent) and lowest for NBBL (87.06 percent).
The descriptive statistics for selected commercial bank shows that the average loan to deposit ratio, liquid assets to total deposit ratio, capital adequacy ratio, leverage ratio, deposits, equity to total assets ratio, bank size and total debt to total assets are77.47 percent, 19.08 rupees, 12.10 percent, 10.21 percent, Rs.34.35 billion, 9.20 percent, Rs.39.59 billion and 90.59 percent.
The study shows that the capital adequacy and equity to total assets ratio are positively related to a loan to deposit ratio and liquid assets to total deposits ratio. It indicates that increase in capital adequacy and equity to total assets ratio leads to increase in loan to deposit ratio and liquid assets to total deposits ratio. However, the result shows that leverage, deposits ratio, size and total debt to total assets ratio have a negative relationship with loan to deposit ratio and liquid assets to total deposits ratio. This indicates that increase leverage, deposits ratio, size and total debt to total assets ratio leads to decrease in loan to deposit ratio and liquid assets to total deposits ratio. The regression results also show that beta coefficients are positive for capital adequacy and equity to total assets ratio for loan to deposit ratio and liquid assets to total deposits ratio whereas beta coefficients are negative for leverage, deposits ratio, size and total debt to total assets ratio. However, coefficients are significant only for leverage and deposits ratio at 5 percent level of significance.
Effect of the capital adequacy requirements on liquidity of Nepalese commercial banks [printed text] / Anjana Kumari Chaudhary, Author . - 2017 . - 101p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Capital adequacy Keywords: capital adequacy bank capital financial performance' Class number: 332.120 Abstract: Commercial banking is one of the important factor of Nepalese economy. Commercial banks are the main pillar of the financial system in Nepal. It makes the flow of resources for the rest of the character of the economy. Finance is life blood of the trade, commerce and are the vanes in the circulation of the funds in economy. Growth of any country depends upon the strong banking and financial system. As most of the economic depression are the result of the banking system failure. The importance of the banking sectors is immense in the progress and richness of any state. The economic development and prosperity comes from the well-developed and perfect banking system. Strong banking system plays important role in efficient allocation and utilization of credit. Bank is a backbone of all the industries, because every transaction where money is involved, the bank is the main pillar of funding (Haque& Tariq, 2012).
Capital adequacy ratio is one of the most significant current issues in banking which evaluate the amount of a bank’s efficiency and stability. Capital adequacy generally affects all entities. But as a term, it is most often used in discussing the position of firms in the financial section of the economy, and precisely, whether firms have sufficient capital to cover the risks that they confront (Abba, 2013). Jinghan (2010) asserts that banks need a high degree of liquidity in their assets portfolio. The bank must hold a sufficient large proportion of its assets the form of cash and liquid assets for the purpose enhancing customers’ confidence and corporate performance (profitability). According to Christian et al. (2008), capital adequacy measures provide significant information regarding a firm's returns; while a few of the individual variables representing asset quality and earnings are informative. Size and growth and loan exposure measures do not appear to have any significant explanatory power when examining returns.
Higher capital improves banks’ ability to create liquidity. Liquidity creation exposes banks to risk, the more liquidity is created, the greater are the likelihood and severity of losses associated with having to dispose of illiquid assets to meet the liquidity demands of customers (Diamond and Dybvig 1983). Recent contributions suggest that bank capital may impede this liquidity creation process because bank capital diminishes the financial fragility that facilitates the liquidity creation process (Diamond and Rajan, 2000, 2001). According to the theory of financial intermediation, an important role of banks in the economy is to provide liquidity by funding long-term, illiquid assets with short-term, liquid liabilities. Through this function, banks create liquidity as they hold illiquid assets and provide cash and demand deposits to the rest of the economy.
This study attempts to explore the effect of capital adequacy requirements on liquidity of selected commercial banks in context of Nepal. This study is based on the secondary data for 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. The data and information are collected from various issues of Banking and Financial Statistics, Bank Supervision Report published by NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as this study examines the impact of capital adequacy ratio, leverage ratio, deposits, equity to total assets, bank size and total debt to total assets ratio on liquidity of Nepalese commercial banks.
The result shows that average loan to deposit ratio is highest for CBIL (2.90 percent) and lowest for SUBL (83.80 percent). The average liquid assets to total deposit ratio is highest for NMBBL (78.93 rupees) and lowest for HBL (9.74 rupees). The average capital adequacy ratio is highest for NMBBL (16.86 percent) and lowest for NIBL (10.38 percent). Similarly, leverage ratio is highest for EBL (13.75 percent) and lowest for NBBL (6.82 percent). The average deposits is highest for NABIL (Rs.63.77 billion) and lowest for CBILRs.16.75 billion). Likewise, average equity to total assets ratio is highest for SUBL (11.62 percent) and lowest forEBL (7.93 percent). The average bank size is highest for NIBL (RS.129.78 billion) and lowest for NCCBL (RS.30.23billion) and average total debt to total assets ratio is highest for EBL (92.52 percent) and lowest for NBBL (87.06 percent).
The descriptive statistics for selected commercial bank shows that the average loan to deposit ratio, liquid assets to total deposit ratio, capital adequacy ratio, leverage ratio, deposits, equity to total assets ratio, bank size and total debt to total assets are77.47 percent, 19.08 rupees, 12.10 percent, 10.21 percent, Rs.34.35 billion, 9.20 percent, Rs.39.59 billion and 90.59 percent.
The study shows that the capital adequacy and equity to total assets ratio are positively related to a loan to deposit ratio and liquid assets to total deposits ratio. It indicates that increase in capital adequacy and equity to total assets ratio leads to increase in loan to deposit ratio and liquid assets to total deposits ratio. However, the result shows that leverage, deposits ratio, size and total debt to total assets ratio have a negative relationship with loan to deposit ratio and liquid assets to total deposits ratio. This indicates that increase leverage, deposits ratio, size and total debt to total assets ratio leads to decrease in loan to deposit ratio and liquid assets to total deposits ratio. The regression results also show that beta coefficients are positive for capital adequacy and equity to total assets ratio for loan to deposit ratio and liquid assets to total deposits ratio whereas beta coefficients are negative for leverage, deposits ratio, size and total debt to total assets ratio. However, coefficients are significant only for leverage and deposits ratio at 5 percent level of significance.
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Barcode Call number Media type Location Section Status 399/D 332.120 CHA Books Uniglobe Library Social Sciences Available The impact of capital adequacy and credit risk on performance of Nepalese commercial banks / Kohinoor Thapaliya
Title : The impact of capital adequacy and credit risk on performance of Nepalese commercial banks Material Type: printed text Authors: Kohinoor Thapaliya, Author Publication Date: 2015 Pagination: 85p. Size: GRP/Thesis Accompanying material: 4/B General note: Including bibilography Languages : English Descriptors: Bank capital
Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 The impact of capital adequacy and credit risk on performance of Nepalese commercial banks [printed text] / Kohinoor Thapaliya, Author . - 2015 . - 85p. ; GRP/Thesis + 4/B.
Including bibilography
Languages : English
Descriptors: Bank capital
Banks
Banks and banking
Capital adequacy
Commercial banksKeywords: 'capital adequacy capital adequacy bank capital financial performance' Class number: 332.120 Hold
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Copies
Barcode Call number Media type Location Section Status 135/D 332.120 THA Thesis/Dissertation Uniglobe Library Social Sciences Available