Welcome to the Uniglobe Library
From this page you can:
| Home |
Descriptors
Refine your search Apply to external sourcesEffect 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.
Hold
Place a hold on this item
Copies
Barcode Call number Media type Location Section Status 407/D 332.120 BUD Thesis/Dissertation Uniglobe Library Social Sciences Available
Title : Influence of bank-specific and macroeconomic variables on credit risk: a case of Nepalese commercial banks Material Type: printed text Authors: Binay Bam, Author Publication Date: 2015 Pagination: 73p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Bank specific
Banks
Banks and banking
Credit risk
MacroeconomicsKeywords: 'macroeconomics economic policy banks banks and banking nepal Class number: 332.632 Influence of bank-specific and macroeconomic variables on credit risk: a case of Nepalese commercial banks [printed text] / Binay Bam, Author . - 2015 . - 73p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Bank specific
Banks
Banks and banking
Credit risk
MacroeconomicsKeywords: 'macroeconomics economic policy banks banks and banking nepal Class number: 332.632 Hold
Place a hold on this item
Copies
Barcode Call number Media type Location Section Status 108/D 332.632 BAM Thesis/Dissertation Uniglobe Library Social Sciences Available
Title : The determinants of credit risk in Nepalese banking industry Material Type: printed text Authors: Sher Bahadur Darai, Author Publication Date: 2017 Pagination: 98p. Size: GRP/Thesis Accompanying material: 7/B Languages : English Descriptors: Credit risk Class number: 332.7 Abstract: The credit risk in commercial banks has been on the limelight with regards to problems facing global financial institutions. A look around on the causes of global financial crisis, the Euro zone crisis and the fall of world greatest institutions such as Enron boils down to the question of how best is credit risk being managed. The magnitude of the financial crisis clearly demonstrates how critical commercial banks have been interconnected to the world economy (Angello & Sousa, 2012). A commercial bank exists not only to accept deposit but also to grant credit facilities, therefore inevitably exposed to credit risk. Credit risk is by far the most significant risk faced by banks and the success of their business depends upon accurate measurement and efficient management of this risk to a greater extent than any other risk (Giesecke, 2004)
Credit risk plays a vital role in banking business, so bankers and regulators try to make their own model to increase their loan portfolio quality. Among the several risk in bank, credit risk is primary cause of bank failure (Bhattacharya & Roy, 2008). It has found that effective Credit Risk Management (CRM) is essential for banking in order to minimize credit losses (Santomero, 1997).Credit risk management is indeed a very difficult and complex task in the financial industry because of the unpredictable mature of macroeconomic factors coupled with the various microeconomics variables which are peculiar to the banking industry or specific to a particular bank (Garr, 2013).
The major objective of the study is to examine the determinants of credit risk in context Nepalese commercial banks. The specific objective s of this study are: a) to examine the structure and pattern of risk weighted exposure, impaired loans and loan loss Provision of Nepalese commercial banks, b) to examine the structure and pattern of selected bank specific and macroeconomic factors of Nepalese commercial banks, c) To find out the relation of selected bank specific and macroeconomic factors with credit risk of Nepalese commercial banks, d) to analyze the most important factors affecting credit risk of Nepalese commercial.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing credit risk of the commercial banks in the context of Nepal. This study is based on the secondary data which are gathered for 20 commercial banks in Nepal. The main sources of the data are Annual Supervision Report and Economic Bulletin published by Nepal Rastra Bank and annual report of selected commercial banks. The data are collected on risk weighted exposure, impaired loans, loan loss provision, bank size, capital adequacy ratio, operational inefficiency, gross domestic product (GDP), money supply and inflation rate. Cross sectional data are used in this study where 20 commercial banks out of 30 in Nepal are included over the period of 2007/08 to 2013/14.
The result shows bank size, money supply and inflation rate is positively related to risk weighted exposure. It means that increase in bank size, money supply and inflation rate leads to increases in risk weighted exposure. Capital adequacy ratio is negatively related to risk weighted exposure indicating that increase in capital adequacy ratio leads to decrease in risk weighted exposure. Likewise, GDP growth rate is also negatively related to risk weighted exposure. Operational inefficiency is positively related to loan loss provision which indicates that higher the operational inefficiency higher would be the loan loss provision. There is negative correlation between bank size, capital adequacy ratio, GDP growth rate and inflation rate with loan loss provision. It means that increase in bank size, capital adequacy ratio, GDP growth rate and inflation rate leads to increase loan loss provision. The result reveals that the beta coefficient is positive for bank size with risk weighted exposure. However, beta coefficient is negative for bank size with impaired loan and loan loss provision. The result indicates that larger the bank size higher would be the risk weighted exposure. The result reveals the negative beta coefficient for capital adequacy ratio with risk weighted exposure, impaired loan and loan loss provision. The capital adequacy ratio is significant at 5 percent level. The result hence indicates that higher the capital adequacy ratio lower would be the risk weighted exposure, impaired loan and loan loss provision. The result found positive beta coefficient for operational inefficiency with risk weighted exposure, impaired loan and loan loss provision. The operational inefficiency is significant at 1 percent level of significance. The result hence indicates that higher the operational inefficiency higher would be the risk weighted exposure, impaired loan and loan loss provision. Positive relation between money supply and risk weighted exposure and impaired loan has been observed which indicates higher the money supply higher would be the risk weighted exposure and impaired loan. However, beta coefficient for money supply is negative with loan loss provision which indicates that higher the money supply lower would be the loan loss provision.
The determinants of credit risk in Nepalese banking industry [printed text] / Sher Bahadur Darai, Author . - 2017 . - 98p. ; GRP/Thesis + 7/B.
Languages : English
Descriptors: Credit risk Class number: 332.7 Abstract: The credit risk in commercial banks has been on the limelight with regards to problems facing global financial institutions. A look around on the causes of global financial crisis, the Euro zone crisis and the fall of world greatest institutions such as Enron boils down to the question of how best is credit risk being managed. The magnitude of the financial crisis clearly demonstrates how critical commercial banks have been interconnected to the world economy (Angello & Sousa, 2012). A commercial bank exists not only to accept deposit but also to grant credit facilities, therefore inevitably exposed to credit risk. Credit risk is by far the most significant risk faced by banks and the success of their business depends upon accurate measurement and efficient management of this risk to a greater extent than any other risk (Giesecke, 2004)
Credit risk plays a vital role in banking business, so bankers and regulators try to make their own model to increase their loan portfolio quality. Among the several risk in bank, credit risk is primary cause of bank failure (Bhattacharya & Roy, 2008). It has found that effective Credit Risk Management (CRM) is essential for banking in order to minimize credit losses (Santomero, 1997).Credit risk management is indeed a very difficult and complex task in the financial industry because of the unpredictable mature of macroeconomic factors coupled with the various microeconomics variables which are peculiar to the banking industry or specific to a particular bank (Garr, 2013).
The major objective of the study is to examine the determinants of credit risk in context Nepalese commercial banks. The specific objective s of this study are: a) to examine the structure and pattern of risk weighted exposure, impaired loans and loan loss Provision of Nepalese commercial banks, b) to examine the structure and pattern of selected bank specific and macroeconomic factors of Nepalese commercial banks, c) To find out the relation of selected bank specific and macroeconomic factors with credit risk of Nepalese commercial banks, d) to analyze the most important factors affecting credit risk of Nepalese commercial.
This study has employed descriptive research design and causal comparative research design to deal with issues associated with factors influencing credit risk of the commercial banks in the context of Nepal. This study is based on the secondary data which are gathered for 20 commercial banks in Nepal. The main sources of the data are Annual Supervision Report and Economic Bulletin published by Nepal Rastra Bank and annual report of selected commercial banks. The data are collected on risk weighted exposure, impaired loans, loan loss provision, bank size, capital adequacy ratio, operational inefficiency, gross domestic product (GDP), money supply and inflation rate. Cross sectional data are used in this study where 20 commercial banks out of 30 in Nepal are included over the period of 2007/08 to 2013/14.
The result shows bank size, money supply and inflation rate is positively related to risk weighted exposure. It means that increase in bank size, money supply and inflation rate leads to increases in risk weighted exposure. Capital adequacy ratio is negatively related to risk weighted exposure indicating that increase in capital adequacy ratio leads to decrease in risk weighted exposure. Likewise, GDP growth rate is also negatively related to risk weighted exposure. Operational inefficiency is positively related to loan loss provision which indicates that higher the operational inefficiency higher would be the loan loss provision. There is negative correlation between bank size, capital adequacy ratio, GDP growth rate and inflation rate with loan loss provision. It means that increase in bank size, capital adequacy ratio, GDP growth rate and inflation rate leads to increase loan loss provision. The result reveals that the beta coefficient is positive for bank size with risk weighted exposure. However, beta coefficient is negative for bank size with impaired loan and loan loss provision. The result indicates that larger the bank size higher would be the risk weighted exposure. The result reveals the negative beta coefficient for capital adequacy ratio with risk weighted exposure, impaired loan and loan loss provision. The capital adequacy ratio is significant at 5 percent level. The result hence indicates that higher the capital adequacy ratio lower would be the risk weighted exposure, impaired loan and loan loss provision. The result found positive beta coefficient for operational inefficiency with risk weighted exposure, impaired loan and loan loss provision. The operational inefficiency is significant at 1 percent level of significance. The result hence indicates that higher the operational inefficiency higher would be the risk weighted exposure, impaired loan and loan loss provision. Positive relation between money supply and risk weighted exposure and impaired loan has been observed which indicates higher the money supply higher would be the risk weighted exposure and impaired loan. However, beta coefficient for money supply is negative with loan loss provision which indicates that higher the money supply lower would be the loan loss provision.
Hold
Place a hold on this item
Copies
Barcode Call number Media type Location Section Status 378/D 332.7 DAR Thesis/Dissertation Uniglobe Library Social Sciences Available
