| Title : | Risk taking behavior and performance evaluation of joint venture and non joint venture commercial banks of Nepal | | Material Type: | printed text | | Authors: | Niroj Maharjan, Author | | Publication Date: | 2014 | | Pagination: | 114p. | | Size: | GRP/Thesis | | Accompanying material: | 2/B | | General note: | Including bibliography
| | Languages : | English | | Descriptors: | Banks
Banks and banking
Commercial banks
Risk taking behavior
Risk-taking (Psychology)
| | Keywords: | 'risk taking behavior banks banks and banking commercial bank nepal' | | Class number: | 155.9 | | Abstract: | Despite of several empirical evidences, bank’s risk taking behavior and performance evaluation issues are still unsolved in the context of Nepal. Identification of banks’ risk taking behavior and factors shaping the performance of bank is crucial for the Nepalese commercial banks. The major objective of this study is to analyze the risk taking behavior and performance evaluation of Nepalese commercial banks.
The review of literature has shown relationship between various factors such as growth of loan, investment, total assets, return on assets, gross domestic product, capital adequacy ratio and leverage. In addition, leverage, total assets, loan, investment and non-performing loan to total loan are some of the variables that are found to have significant relationship with risk taking behavior and performance of banks in various contexts. Based on the literature reviews, this study has proposed the conceptual framework identifying volume of loan, investment and return on assets and some of other variables as the most important factors that determine the risk taking behavior and performance evaluation of commercial banks in the context of Nepal.
This study is based on primary as well as secondary data. For the purpose of study 19 commercial banks which are established before 2007/08 are divided into two strata (joint venture and non-joint venture) is taken as sample. Required data of dependent variables (loan, investment, and return on assets) and independent variables (leverage, deposit, non-performing loan to total loan, net interest margin, debenture and bond, total assets, capital adequacy ratio, gross domestic product and inflation rate.) are collected from various secondary sources for the period of 2007/08 to 20011/12. Primary survey questionnaire is conducted in order to assess the opinion of bank’s risk taking behavior and performance evaluation of Nepalese commercial banks. Likewise, multiple regression analysis and correlation analysis are used to examine the relationship between bank’s risk taking behavior and performance evaluation and its determinants.
The study reveals that volume of debenture and bond, deposit and total assets are some of the variables that are found to have significant relationship with the risk taking behavior of joint venture banks in various contexts. Similarly, non-performing loan to total loan, leverage, total assets, inflation and net interest margin are some of the variables that are found to have significant relationship with the risk taking behavior of non-joint venture banks in various contexts. Net interest margin and total assets has significant relationship with performance evaluation in both joint and non-joint venture banks. Based on the study, total assets, non-performing loan tot total loan, net interest margin and deposit are the most important factors that determine the risk taking behavior of both joint and non-joint venture commercial banks of Nepal. Whereas, net interest margin is most important factor that determine the performance of Nepalese commercial banks.
Based on the primary survey result, most of the credit department employees believe that long term existence is most important factor for risk and performance management.Banks are recommended to increase their risk taking behavior and performance as much as possible for the long term existence in the Nepalese market.Likewise, the primary survey results indicate that bank’s risk taking behavior and performance evaluation is highly affected by default of credit, loan and advances, determining suitable frequency of risk taking behavior and performance appraisal and implementation of feedback program regularly as the most important methods for reducing risk and increasing the performance in Nepalese commercial banks.
The recommendation put forward by this study is that banks are suggested to invest their volume of deposit and asset in safer side with maximum return as possible for reducing risk and increasing the better performance. The major limitation of this study lies in the fact that this study has excluded some bank specific and macro-economic variables that might influence on risk taking behavior and performance evaluation of banks.The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Likewise, this study has conducted in Kathmandu valley so future studies are suggested to extend the survey outside the valley including all the department of employees.
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Risk taking behavior and performance evaluation of joint venture and non joint venture commercial banks of Nepal [printed text] / Niroj Maharjan, Author . - 2014 . - 114p. ; GRP/Thesis + 2/B. Including bibliography
Languages : English | Descriptors: | Banks
Banks and banking
Commercial banks
Risk taking behavior
Risk-taking (Psychology)
| | Keywords: | 'risk taking behavior banks banks and banking commercial bank nepal' | | Class number: | 155.9 | | Abstract: | Despite of several empirical evidences, bank’s risk taking behavior and performance evaluation issues are still unsolved in the context of Nepal. Identification of banks’ risk taking behavior and factors shaping the performance of bank is crucial for the Nepalese commercial banks. The major objective of this study is to analyze the risk taking behavior and performance evaluation of Nepalese commercial banks.
The review of literature has shown relationship between various factors such as growth of loan, investment, total assets, return on assets, gross domestic product, capital adequacy ratio and leverage. In addition, leverage, total assets, loan, investment and non-performing loan to total loan are some of the variables that are found to have significant relationship with risk taking behavior and performance of banks in various contexts. Based on the literature reviews, this study has proposed the conceptual framework identifying volume of loan, investment and return on assets and some of other variables as the most important factors that determine the risk taking behavior and performance evaluation of commercial banks in the context of Nepal.
This study is based on primary as well as secondary data. For the purpose of study 19 commercial banks which are established before 2007/08 are divided into two strata (joint venture and non-joint venture) is taken as sample. Required data of dependent variables (loan, investment, and return on assets) and independent variables (leverage, deposit, non-performing loan to total loan, net interest margin, debenture and bond, total assets, capital adequacy ratio, gross domestic product and inflation rate.) are collected from various secondary sources for the period of 2007/08 to 20011/12. Primary survey questionnaire is conducted in order to assess the opinion of bank’s risk taking behavior and performance evaluation of Nepalese commercial banks. Likewise, multiple regression analysis and correlation analysis are used to examine the relationship between bank’s risk taking behavior and performance evaluation and its determinants.
The study reveals that volume of debenture and bond, deposit and total assets are some of the variables that are found to have significant relationship with the risk taking behavior of joint venture banks in various contexts. Similarly, non-performing loan to total loan, leverage, total assets, inflation and net interest margin are some of the variables that are found to have significant relationship with the risk taking behavior of non-joint venture banks in various contexts. Net interest margin and total assets has significant relationship with performance evaluation in both joint and non-joint venture banks. Based on the study, total assets, non-performing loan tot total loan, net interest margin and deposit are the most important factors that determine the risk taking behavior of both joint and non-joint venture commercial banks of Nepal. Whereas, net interest margin is most important factor that determine the performance of Nepalese commercial banks.
Based on the primary survey result, most of the credit department employees believe that long term existence is most important factor for risk and performance management.Banks are recommended to increase their risk taking behavior and performance as much as possible for the long term existence in the Nepalese market.Likewise, the primary survey results indicate that bank’s risk taking behavior and performance evaluation is highly affected by default of credit, loan and advances, determining suitable frequency of risk taking behavior and performance appraisal and implementation of feedback program regularly as the most important methods for reducing risk and increasing the performance in Nepalese commercial banks.
The recommendation put forward by this study is that banks are suggested to invest their volume of deposit and asset in safer side with maximum return as possible for reducing risk and increasing the better performance. The major limitation of this study lies in the fact that this study has excluded some bank specific and macro-economic variables that might influence on risk taking behavior and performance evaluation of banks.The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Likewise, this study has conducted in Kathmandu valley so future studies are suggested to extend the survey outside the valley including all the department of employees.
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