Ownership concentration and bank performance of commercial banks of Nepal / Anushuya Dahal 

Public ISBD Title : Ownership concentration and bank performance of commercial banks of Nepal Material Type: printed text Authors: Anushuya Dahal, Author Publication Date: 2017 Pagination: 105p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Banks are a sensitive breed of financial institutions that take people’s money and invest in productive sectors. Depositors do not oversee their investment practices and banks practically enjoy a trust and fellowship from the society. Therefore, regulators, economists as well as market community are disproportionately sensitive towards banks performance (Rahman & Maruf, 2013). Ownership concentration shows the level of dispersion in a certain ownership category among banks, which, when studied should give the effect of most dominant group (Pedersen & Thomsen, 1999). Ownership composition shows the nature of the owners. Both of these two variables contain important information regarding a bank’s performance. A firm ownership structure can be defined along two main dimensions. First, the degree of ownership concentration: firms may differ because their ownership is more or less dispersed. Second, the nature of owners, given the same degree of concentration, two firms may differ if the government holds a majority of the stake in one of them; similarly, a stock firm with dispersed ownership is different from a mutual firm (Iannotta, et al. 2007). Many studies have been undertaken to study the impact of ownership concentration in developed countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between ownership concentration and bank performance in selected Nepalese commercial banks. Ownership concentration and structure are considered as important factors that affect a firm’s health. If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership concentration and structure to predict the probability of default. Empirical studies on the relationship between the firm’s ownership concentration and performance have produced mixed results. Ownership concentration is one of the main dimensions of corporate governance and is widely seen to be determined by country-level corporate governance characteristics such as development of the stock market and the nature of state intervention and regulation (Porta, et al., 1998). Themajor objective of this study is toexamine the impact of ownership concentration, ownership structure and other bank specific factors on the financial performance of commercial banks of Nepal. The specific objectives of the study are (a) To analyze the structure and pattern of return on assets, net interest margin, ownership concentration, debt ratio and bank size. (b) To examine the effect of ownership concentration and ownership structure on the performance of commercial banks of Nepal. (c) To find out the effect of bank specific control factors such as debt ratio, bank size and bank age on the performance of commercial banks of Nepal. (d) To determine the most influential concentration factors affecting the performance of commercial in banks. The study is based on pooled cross-sectional data of 21 commercial banks for the period of 2008/09 to 2014/15 leading to a total of 147 observations. The data are collected from Banking and Financial Statistics published by Nepal Rastra Bank and annual reports of the selected commercial banks. The dependent variables are return on assets and net interest margin whereas the independent variable are ownership concentration, ownership structure and bank specific control variables. Ownership concentration is measured using two variables and they are: summation of percentage of shares held by top five shareholders and large ownership defined is at least one owner with shareholdings greater than 25%. Likewise, ownership structure has been categorized as foreign ownership, private ownership and government ownership. Descriptive research design and causal comparative research design has been employed in order to analyze the impact of ownership concentration on performance of commercial banks in Nepal. The study reveals that ownership concentration is positively related to bank performance. It indicates that an increase in ownership concentration leads to increases in return on assets and net interest margin. Likewise, the study found that debt ratio is negatively related to the bank performance, it indicates that higher the debt ratio, lower would be the performance of the banks. Similarly, bank age is positively related to bank performance. It indicates that older the bank, higher the bank performance would be. The regression results show that beta coefficients for ownership concentration is positive. However, the coefficients are not significant. Likewise, results show that there is a negative and significant beta coefficient of private ownership with return on assets at 5 percent level of significance. Therefore, this study concludes that ownership concentration has no impact on performance of the Nepalese commercial banks rather ownership structure affects the performance. Ownership concentration and bank performance of commercial banks of Nepal [printed text] / Anushuya Dahal, Author . - 2017 . - 105p. ; GRP/Thesis + 8/B. Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Banks are a sensitive breed of financial institutions that take people’s money and invest in productive sectors. Depositors do not oversee their investment practices and banks practically enjoy a trust and fellowship from the society. Therefore, regulators, economists as well as market community are disproportionately sensitive towards banks performance (Rahman & Maruf, 2013). Ownership concentration shows the level of dispersion in a certain ownership category among banks, which, when studied should give the effect of most dominant group (Pedersen & Thomsen, 1999). Ownership composition shows the nature of the owners. Both of these two variables contain important information regarding a bank’s performance. A firm ownership structure can be defined along two main dimensions. First, the degree of ownership concentration: firms may differ because their ownership is more or less dispersed. Second, the nature of owners, given the same degree of concentration, two firms may differ if the government holds a majority of the stake in one of them; similarly, a stock firm with dispersed ownership is different from a mutual firm (Iannotta, et al. 2007). Many studies have been undertaken to study the impact of ownership concentration in developed countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between ownership concentration and bank performance in selected Nepalese commercial banks. Ownership concentration and structure are considered as important factors that affect a firm’s health. If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership concentration and structure to predict the probability of default. Empirical studies on the relationship between the firm’s ownership concentration and performance have produced mixed results. Ownership concentration is one of the main dimensions of corporate governance and is widely seen to be determined by country-level corporate governance characteristics such as development of the stock market and the nature of state intervention and regulation (Porta, et al., 1998). Themajor objective of this study is toexamine the impact of ownership concentration, ownership structure and other bank specific factors on the financial performance of commercial banks of Nepal. The specific objectives of the study are (a) To analyze the structure and pattern of return on assets, net interest margin, ownership concentration, debt ratio and bank size. (b) To examine the effect of ownership concentration and ownership structure on the performance of commercial banks of Nepal. (c) To find out the effect of bank specific control factors such as debt ratio, bank size and bank age on the performance of commercial banks of Nepal. (d) To determine the most influential concentration factors affecting the performance of commercial in banks. The study is based on pooled cross-sectional data of 21 commercial banks for the period of 2008/09 to 2014/15 leading to a total of 147 observations. The data are collected from Banking and Financial Statistics published by Nepal Rastra Bank and annual reports of the selected commercial banks. The dependent variables are return on assets and net interest margin whereas the independent variable are ownership concentration, ownership structure and bank specific control variables. Ownership concentration is measured using two variables and they are: summation of percentage of shares held by top five shareholders and large ownership defined is at least one owner with shareholdings greater than 25%. Likewise, ownership structure has been categorized as foreign ownership, private ownership and government ownership. Descriptive research design and causal comparative research design has been employed in order to analyze the impact of ownership concentration on performance of commercial banks in Nepal. The study reveals that ownership concentration is positively related to bank performance. It indicates that an increase in ownership concentration leads to increases in return on assets and net interest margin. Likewise, the study found that debt ratio is negatively related to the bank performance, it indicates that higher the debt ratio, lower would be the performance of the banks. Similarly, bank age is positively related to bank performance. It indicates that older the bank, higher the bank performance would be. The regression results show that beta coefficients for ownership concentration is positive. However, the coefficients are not significant. Likewise, results show that there is a negative and significant beta coefficient of private ownership with return on assets at 5 percent level of significance. Therefore, this study concludes that ownership concentration has no impact on performance of the Nepalese commercial banks rather ownership structure affects the performance.

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Ownership structure and bank performance: a case of Nepalese commercial banks / Sabitri Pant 

Public ISBD Title : Ownership structure and bank performance: a case of Nepalese commercial banks Material Type: printed text Authors: Sabitri Pant, Author Publication Date: 2017 Pagination: 114p. Size: GRP/Thesis Accompanying material: 9/B Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: The financial sector is very crucial to the economic development of the nation. Banks play crucial role in the financial sector especially when it comes to developing economies where the capital market is not strong enough.Therefore, regulators, economists as well as market community are disproportionately sensitive towards banks performance (Rahman & Maruf, 2013).The ownership structure is not only defined by the distribution of equity with regard to votes and capital, but also by the identity of the equity owners.A firm ownership structure can be defined along two main dimensions. First, the degree of ownership concentration: firms may differ because their ownership is more or less dispersed. Second, the nature of owners, given the same degree of concentration, two firms may differ if the government holds a majority of the stake in one of them; similarly, a stock firm with dispersed ownership is different from a mutual firm (Iannotta, et al. 2007). Ownership structure of any company has been a serious agenda for corporate governance and that of performance of a firm. Thus, who owns the firm’s equity and how does ownership affect firm value has been an interesting topic to investigate. Many studies have been undertaken to study the impact of ownership structure in developed countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between ownership structureand bank performance in selected Nepalese commercial banks. Ownership structure andconcentration are considered as important factors that affect a firm’s health.If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership structureand concentration to predict the probability of default. Empirical studies on the relationship between the firm’s ownership structure and performance have produced mixed results. Ownership structure is one of the main dimensions of corporate governance and is widely seen to be determined by country-level corporate governance characteristics such as development of the stock market and the nature of state intervention and regulation (Porta, et al., 1998). The major objective of this study is to assess the relationship of ownership structure on the performance of commercial banks in Nepal.The study is based on pooled cross-sectional data of 21 commercial banks for the period of 2009/10 to 2014/15 leading to a total of 126 observations. The data are collected from Banking and Financial Statistics published by Nepal Rastra Bank and annual reports of the selected commercial banks. The dependent variables are Tobin’s Q andreturn on assets whereas the independent variable are ownership concentration, ownership structure and bank specific control variables. Ownership concentration is measured using two variables and they are: summation of percentage of shares held by top five shareholders and large ownership defined is at least one owner with shareholdings greater than 10%. Likewise, ownership structure has been categorized as foreign ownership anddomestic ownership. Descriptive research design and causal comparative research design has been employed in order to analyze the impact of ownership structure on performance of commercial banks in Nepal. The result shows that average Tobin’s Q is highest for SCBL.ADBL has the highest average return on assets among the selected commercial banks throughout the study period. Similarly,the average concentrated ownershipis highest for SCBL (76.73 percentage),the average total asset is highest for NABIL (Rs.75 in Billion), and the average debt to equity ratio is highest for NIC Asia (91.96 times).The descriptive statistics shows that ROA ranges from 0.05 percent to a maximum of 4.41 percent, leading to an average ROA of 1.64 percent while the Tobin’s Q ranges from 0.53 times to 2.06 times, leading to an average of 1.23 times. Likewise, Ownership concentration varies from 8.36 percent to 77.25 percent, leading to an average of 41.05 percent. Foreign ownership ranges from 0 percent to 75 percent, leading to an average of 11.09 percent. The average domestic ownership of the selected banks during the study period is noticed to be 88.91percent with a minimum of 25 percent and a maximum of 100 percent. Likewise, bank size ranges from Rs. 22.70 billion to Rs.25.48 billons, leading to an average of Rs.24.26 billion. Bank age varies from 2 years to 47 years, leading to an average of 15.64 years. The average debt to equity ratio is noticed to be 9.79 times with a minimum of 3.44 times to a maximum of 19.16 times. The correlation analysis shows that Tobin's Q is positively correlated to five largest shareholders (CON5), foreign ownership, bank size, age of bank and debt equity ratio. This indicates that higher the ownership concentration, foreign ownership, bank size, bank age and debt to equity ratio, higher would be the Tobin’s Q. However, domestic ownership is negatively correlated to Tobin’s Q. This indicates that higher the domestic ownership, lower would be the Tobin’s Q. Result also shows that return on assets (ROA) is positively correlated to five largest shareholders (CON5), foreign ownership, bank size and bank age. This indicates that higher ownership concentration, foreign ownership, bank size and bank age, higher would be return on assets. However, domestic ownership and debt equity ratio are negatively correlated to return on assets. This indicates that higher the domestic ownership and debt equity ratio, lower would be the return on assets. The regression results show that a beta coefficient for ownership concentration is positive with performance (Tobin's Q and ROA). However, the coefficients are not significant, which indicates that ownership concentration has nothing to do with profitability of the Nepalese commercial banks. Likewise, beta coefficient for foreign ownership is positive and significant with performance. This indicates that banks with foreign ownership are more able to obtain higher performance than that of domestic counterparts. Similarly, the beta coefficient of domestic ownership is negative and significant with performance, which indicates that the bank with domestic ownership would result poor performance. The regression results also show that beta coefficients are negative and significant for debt ratio, it indicate that higher the debt ratio, lower would be the bank performance. Likewise, the beta coefficient for bank age and bank size is positive with performance. Therefore, study concludes that ownership concentration has no impact on profitability of the Nepalese commercial banks rather the profitability is affected by the ownership structure. Foreign ownership has positive and significant impact on bank performance. However, domestic ownership has negative impact on banks performance. Ownership structure and bank performance: a case of Nepalese commercial banks [printed text] / Sabitri Pant, Author . - 2017 . - 114p. ; GRP/Thesis + 9/B. Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: The financial sector is very crucial to the economic development of the nation. Banks play crucial role in the financial sector especially when it comes to developing economies where the capital market is not strong enough.Therefore, regulators, economists as well as market community are disproportionately sensitive towards banks performance (Rahman & Maruf, 2013).The ownership structure is not only defined by the distribution of equity with regard to votes and capital, but also by the identity of the equity owners.A firm ownership structure can be defined along two main dimensions. First, the degree of ownership concentration: firms may differ because their ownership is more or less dispersed. Second, the nature of owners, given the same degree of concentration, two firms may differ if the government holds a majority of the stake in one of them; similarly, a stock firm with dispersed ownership is different from a mutual firm (Iannotta, et al. 2007). Ownership structure of any company has been a serious agenda for corporate governance and that of performance of a firm. Thus, who owns the firm’s equity and how does ownership affect firm value has been an interesting topic to investigate. Many studies have been undertaken to study the impact of ownership structure in developed countries but in Nepal there are few studies which have been conducted on this issue. This study investigates the relationship between ownership structureand bank performance in selected Nepalese commercial banks. Ownership structure andconcentration are considered as important factors that affect a firm’s health.If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership structureand concentration to predict the probability of default. Empirical studies on the relationship between the firm’s ownership structure and performance have produced mixed results. Ownership structure is one of the main dimensions of corporate governance and is widely seen to be determined by country-level corporate governance characteristics such as development of the stock market and the nature of state intervention and regulation (Porta, et al., 1998). The major objective of this study is to assess the relationship of ownership structure on the performance of commercial banks in Nepal.The study is based on pooled cross-sectional data of 21 commercial banks for the period of 2009/10 to 2014/15 leading to a total of 126 observations. The data are collected from Banking and Financial Statistics published by Nepal Rastra Bank and annual reports of the selected commercial banks. The dependent variables are Tobin’s Q andreturn on assets whereas the independent variable are ownership concentration, ownership structure and bank specific control variables. Ownership concentration is measured using two variables and they are: summation of percentage of shares held by top five shareholders and large ownership defined is at least one owner with shareholdings greater than 10%. Likewise, ownership structure has been categorized as foreign ownership anddomestic ownership. Descriptive research design and causal comparative research design has been employed in order to analyze the impact of ownership structure on performance of commercial banks in Nepal. The result shows that average Tobin’s Q is highest for SCBL.ADBL has the highest average return on assets among the selected commercial banks throughout the study period. Similarly,the average concentrated ownershipis highest for SCBL (76.73 percentage),the average total asset is highest for NABIL (Rs.75 in Billion), and the average debt to equity ratio is highest for NIC Asia (91.96 times).The descriptive statistics shows that ROA ranges from 0.05 percent to a maximum of 4.41 percent, leading to an average ROA of 1.64 percent while the Tobin’s Q ranges from 0.53 times to 2.06 times, leading to an average of 1.23 times. Likewise, Ownership concentration varies from 8.36 percent to 77.25 percent, leading to an average of 41.05 percent. Foreign ownership ranges from 0 percent to 75 percent, leading to an average of 11.09 percent. The average domestic ownership of the selected banks during the study period is noticed to be 88.91percent with a minimum of 25 percent and a maximum of 100 percent. Likewise, bank size ranges from Rs. 22.70 billion to Rs.25.48 billons, leading to an average of Rs.24.26 billion. Bank age varies from 2 years to 47 years, leading to an average of 15.64 years. The average debt to equity ratio is noticed to be 9.79 times with a minimum of 3.44 times to a maximum of 19.16 times. The correlation analysis shows that Tobin's Q is positively correlated to five largest shareholders (CON5), foreign ownership, bank size, age of bank and debt equity ratio. This indicates that higher the ownership concentration, foreign ownership, bank size, bank age and debt to equity ratio, higher would be the Tobin’s Q. However, domestic ownership is negatively correlated to Tobin’s Q. This indicates that higher the domestic ownership, lower would be the Tobin’s Q. Result also shows that return on assets (ROA) is positively correlated to five largest shareholders (CON5), foreign ownership, bank size and bank age. This indicates that higher ownership concentration, foreign ownership, bank size and bank age, higher would be return on assets. However, domestic ownership and debt equity ratio are negatively correlated to return on assets. This indicates that higher the domestic ownership and debt equity ratio, lower would be the return on assets. The regression results show that a beta coefficient for ownership concentration is positive with performance (Tobin's Q and ROA). However, the coefficients are not significant, which indicates that ownership concentration has nothing to do with profitability of the Nepalese commercial banks. Likewise, beta coefficient for foreign ownership is positive and significant with performance. This indicates that banks with foreign ownership are more able to obtain higher performance than that of domestic counterparts. Similarly, the beta coefficient of domestic ownership is negative and significant with performance, which indicates that the bank with domestic ownership would result poor performance. The regression results also show that beta coefficients are negative and significant for debt ratio, it indicate that higher the debt ratio, lower would be the bank performance. Likewise, the beta coefficient for bank age and bank size is positive with performance. Therefore, study concludes that ownership concentration has no impact on profitability of the Nepalese commercial banks rather the profitability is affected by the ownership structure. Foreign ownership has positive and significant impact on bank performance. However, domestic ownership has negative impact on banks performance.

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Ownership structure and firm Profitability in Nepalese banking sector / Shaubhagyavati Kumari Rana 

Public ISBD Title : Ownership structure and firm Profitability in Nepalese banking sector Material Type: printed text Authors: Shaubhagyavati Kumari Rana, Author Publication Date: 2016 Pagination: 94p. Size: GRP/Thesis Accompanying material: 7/B Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Bank’s profitability is the ability of a bank to generate revenue in excess of cost, in relation to the bank’s capital base. Profitability is of important information in economic decision makings and it has been always used by investors, managers and financial analyzers as guide of dividend payment, tool for measuring management efficiency and instrument for predicting and evaluating decision makings (Saghafi and Aghaei, 1994). The effect of ownership structure and performance is an important issue in the literature of finance theory. Ownership concentration may improve performance by decreasing monitoring costs(Shleifer and Vishny, 1997). However, it may also work in the opposite direction. There is a possibility that large shareholders use their control rights to achieve private benefits.Ownership structure and concentration are considered as important factors that affect a firm’s health. If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership concentration and structure to predict the probability of default. The selection of ownership such as foreign, local, public, private, state, etc. is important in the context of non-bank firms but becomes crucial in the context of a bank (Boubakriet al., 2005). However, it is an essential element for the development of a healthy banking system in developing countries (Lang and So, 2002). Changes in ownership structures without a supporting regulatory and supervisory body in place are likely to lead to a banking crisis. The issue of ownership structure is of particular interest for the banking industry as several factors interact and alter governance, such as the quality of bank regulation and supervision and the opacity of bank assets. The major objective of the study is to reveal the empirical relationship between the ownership structure and bank’s profitability. However, the specific objectives are: to identify the most important indicators of the ownership structure and bank specific, investigate the effect of each indicator (government ownership, foreign ownership, private ownership, liquid ratio, bank size, bank age, and financial leverage) on the bank’s profitability as well as to identify the most influential variables of ownership structure and bank specific to explain the profitability of commercial banks of Nepal. The study results show that there is positive relationship of foreign ownershipwith Nepalese commercial banks profit in term of return of assets, return on equity and net interest margin. It indicates higher proportion of foreign ownership, higher would be Nepalese commercials banks profit. Similarly, increase in proportion of private ownershipwill increase the banks’ return on equity and net interest margin. However, higher the proportion of government ownership, lower will be the profit of Nepalese commercial banks. The study also concludes that the liquid ratio, bank size, bank age and financial leverage are statically significant factors that determine the profitability of commercial banks in Nepal. Banks with higher liquid ratio are more likely to earn return on assets. Larger banks are able to earn stable profitability in term of return on assets, return on equity and net interest margin. Bank age has positive and significant impact on return on assets and net interest margin. Similarly, financial leverage is also statistically significant factors that determine the return on equity, net interest margin and return on assets. However, the result did not support the significant effect of liquid ratio and size on return on assets and return on equity. Ownership structure and firm Profitability in Nepalese banking sector [printed text] / Shaubhagyavati Kumari Rana, Author . - 2016 . - 94p. ; GRP/Thesis + 7/B. Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Bank’s profitability is the ability of a bank to generate revenue in excess of cost, in relation to the bank’s capital base. Profitability is of important information in economic decision makings and it has been always used by investors, managers and financial analyzers as guide of dividend payment, tool for measuring management efficiency and instrument for predicting and evaluating decision makings (Saghafi and Aghaei, 1994). The effect of ownership structure and performance is an important issue in the literature of finance theory. Ownership concentration may improve performance by decreasing monitoring costs(Shleifer and Vishny, 1997). However, it may also work in the opposite direction. There is a possibility that large shareholders use their control rights to achieve private benefits.Ownership structure and concentration are considered as important factors that affect a firm’s health. If the ownership structure and concentration affects a firm’s health, then it is possible to use the ownership concentration and structure to predict the probability of default. The selection of ownership such as foreign, local, public, private, state, etc. is important in the context of non-bank firms but becomes crucial in the context of a bank (Boubakriet al., 2005). However, it is an essential element for the development of a healthy banking system in developing countries (Lang and So, 2002). Changes in ownership structures without a supporting regulatory and supervisory body in place are likely to lead to a banking crisis. The issue of ownership structure is of particular interest for the banking industry as several factors interact and alter governance, such as the quality of bank regulation and supervision and the opacity of bank assets. The major objective of the study is to reveal the empirical relationship between the ownership structure and bank’s profitability. However, the specific objectives are: to identify the most important indicators of the ownership structure and bank specific, investigate the effect of each indicator (government ownership, foreign ownership, private ownership, liquid ratio, bank size, bank age, and financial leverage) on the bank’s profitability as well as to identify the most influential variables of ownership structure and bank specific to explain the profitability of commercial banks of Nepal. The study results show that there is positive relationship of foreign ownershipwith Nepalese commercial banks profit in term of return of assets, return on equity and net interest margin. It indicates higher proportion of foreign ownership, higher would be Nepalese commercials banks profit. Similarly, increase in proportion of private ownershipwill increase the banks’ return on equity and net interest margin. However, higher the proportion of government ownership, lower will be the profit of Nepalese commercial banks. The study also concludes that the liquid ratio, bank size, bank age and financial leverage are statically significant factors that determine the profitability of commercial banks in Nepal. Banks with higher liquid ratio are more likely to earn return on assets. Larger banks are able to earn stable profitability in term of return on assets, return on equity and net interest margin. Bank age has positive and significant impact on return on assets and net interest margin. Similarly, financial leverage is also statistically significant factors that determine the return on equity, net interest margin and return on assets. However, the result did not support the significant effect of liquid ratio and size on return on assets and return on equity.

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Ownership structure, risk and performance in Nepalese banking industries / Bhawana Ojha 

Public ISBD Title : Ownership structure, risk and performance in Nepalese banking industries Material Type: printed text Authors: Bhawana Ojha, Author Publication Date: 2015 Pagination: 109p. Size: GRP/Thesis Accompanying material: 6/B Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. The choice of ownership is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The relationship between ownership structure, risk and performance are studied extensively in different period of time. In regards to the relationship between ownership structure, risk and profitability, different results are found. Some of the studies state that, there is a country where ownership structure of banks affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of ownership structure and bank profitability. In the same way, some says that ownership is negatively related with risk. However, other says that it has significant positive relation with the level of risk involved in the banks. Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on ownership structure, risk and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of ownership structure and some bank specific variables on risk and performance of Nepalese banks. The results in the prior studies on ownership structure, risk and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the ownership structure, risk and performance of Nepalese commercial banks. For this, the sample of 20 commercial banks with data of 7 years from 2008 to 2004 has been taken. Data has been collected from various secondary sources like annual reports of viii sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data. The performance measures like Return on Equity (ROE), Return on Assets (ROA) of the banks have been used as the dependent variable while Nonperforming loan (NPL) has been used as a measure of risk taking behavior. Ownership structure variables like government ownership, foreign ownership and private ownership, and bank specific variables like size, loan, liquidity, deposit and capital ratios have been considered as independent variables. Based on the results, foreign ownership, private ownership, capital and loans in Nepal are important ownership structure and bank specific variables in order of their relative importance that enhances the performance of the banks. To be more specific, foreign ownership, private ownership, capital and deposit are the independent variables that tend to influence the performance in positive manner. It implies that increase in any of these variables is likely to augment the performance of the banks. However, more use of private ownership, size, loan, liquidity, deposit and capital ratios in Nepal reduces the risk in commercial banking industry. The recommendation put forward by this study is that banks are suggested to increase the proportion of foreign ownership and private ownership to have better performance. On the other hand, it is recommended to reduce the foreign and government ownership to reduce the risk (NPL) in the banks. The size and the loan ratio should be smaller to increase the performance on the banks. To minimize the risk, banks are suggested to hold highly liquid fund. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on risk 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. Ownership structure, risk and performance in Nepalese banking industries [printed text] / Bhawana Ojha, Author . - 2015 . - 109p. ; GRP/Thesis + 6/B. Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Both external and domestic factors have affected its structure and performance. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. The choice of ownership is crucial in the context of a bank. However, it is an essential element for the development of a healthy banking system in developing countries. The relationship between ownership structure, risk and performance are studied extensively in different period of time. In regards to the relationship between ownership structure, risk and profitability, different results are found. Some of the studies state that, there is a country where ownership structure of banks affects positively to the profitability. Meanwhile, other studies indicate the nonlinear negative or positive relationship of ownership structure and bank profitability. In the same way, some says that ownership is negatively related with risk. However, other says that it has significant positive relation with the level of risk involved in the banks. Profitability is the major reason behind the existence of any business and same thing applies in the banking sector also. Banks are also guided by the profit maximization principle. Banks always look for the ways to increase their financial performance and minimize the risk associated with that increased performance. Hence, for that different activities are taken into consideration. To maximize the performance and minimize the risk a set of activities such as increasing the size or total assets, decreasing loan, increasing deposits, liquidity and capital are taken under their consideration. This study on ownership structure, risk and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone through broad changes and is emerging as a major sector of the economy. Thus, this study aims to analyze the effect of ownership structure and some bank specific variables on risk and performance of Nepalese banks. The results in the prior studies on ownership structure, risk and performance of banks are mixed and unclear. Hence, this study has been conducted to get clear idea of the ownership structure, risk and performance of Nepalese commercial banks. For this, the sample of 20 commercial banks with data of 7 years from 2008 to 2004 has been taken. Data has been collected from various secondary sources like annual reports of viii sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data. The performance measures like Return on Equity (ROE), Return on Assets (ROA) of the banks have been used as the dependent variable while Nonperforming loan (NPL) has been used as a measure of risk taking behavior. Ownership structure variables like government ownership, foreign ownership and private ownership, and bank specific variables like size, loan, liquidity, deposit and capital ratios have been considered as independent variables. Based on the results, foreign ownership, private ownership, capital and loans in Nepal are important ownership structure and bank specific variables in order of their relative importance that enhances the performance of the banks. To be more specific, foreign ownership, private ownership, capital and deposit are the independent variables that tend to influence the performance in positive manner. It implies that increase in any of these variables is likely to augment the performance of the banks. However, more use of private ownership, size, loan, liquidity, deposit and capital ratios in Nepal reduces the risk in commercial banking industry. The recommendation put forward by this study is that banks are suggested to increase the proportion of foreign ownership and private ownership to have better performance. On the other hand, it is recommended to reduce the foreign and government ownership to reduce the risk (NPL) in the banks. The size and the loan ratio should be smaller to increase the performance on the banks. To minimize the risk, banks are suggested to hold highly liquid fund. The major limitation of this study is that this study has excluded some bank macroeconomic variables that might influence on risk 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.

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Ownership structure, risk and performance in Nepalese commercial banks / Bindu Pantha 

Public ISBD Title : Ownership structure, risk and performance in Nepalese commercial banks Material Type: printed text Authors: Bindu Pantha, Author Publication Date: 2017 Pagination: 115p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Banking institutions are considered as the life blood of any economy. A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities. In the process of taking deposits into lending, the interest rate is discovered by paying lower interest rate to depositors and receiving higher interest rate from borrowers in order to retain profitability. Afirmownershipstructurecanbedefinedalongtwomaindimensions.First,thedegreeofownershipconcentration:firmsmaydifferbecausetheirownershipismoreorlessdispersed.Second,thenatureoftheowners:giventhesamedegreeofconcentration,twofirmsmaydifferifthegovernmentholdsamajoritystakeinoneofthem;similarly,astockfirmwithdispersedownershipisdifferentfromamutualfirm.Profitability is of important information in economic decision makings and it has been always used by investors, managers and financial analysers as guide of dividend payment, tool for measuring management efficiency and instrument for predicting and evaluating decision makings (Saghafi and Aghaei, 1994).The selection of ownership such as foreign, local, public, private, state, etc. is important in the context of non-bank firms but becomes crucial in the context of a bank(Boubakri et al., 2005). However, it is an essential element for the development of a healthy banking system in developing countries(Lang and So, 2002). Changes in ownership structures without a supporting regulatory and supervisory body in place are likely to lead to a banking crisis. The major objective of this research is to determine the relationship between the ownership structure, risk and performance in the Nepalese banking industry. The study is based on secondary data of 24 commercial banks with 120 observations for the period of 2010/11 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial bank. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals relationship between the ownership structure, risk and performance in the Nepalese banking industry. The result of the study shows that foreign ownership, private ownership, liquidity, bank size, deposit and bank age are positively related to net interest margin However, the leverage and government ownership are negatively related to net interest margin. The credit risk is positively related to government ownership, firm size, leverage and bank age. However, credit risk is negatively related to private ownership, foreign ownership, deposit and liquidity. The result also indicates that the beta coefficients are positive for foreign ownership, liquidity ratio, financial leverage ratio, bank size and bank age. A positive relation between bank age and return on equity has been found. The beta coefficients are negative for the government ownership, private ownership and deposit. The result of the study reveals that the beta coefficients are negative for government ownership and deposit. The beta coefficients are positive for liquidity management ratio, bank age, bank size and financial leverage ratio, foreign ownership and private ownership. The table shows that the beta coefficients are positive for government ownership and foreign ownership. The beta coefficients are negative for private ownership, liquidity management ratio, bank age, bank size, financial leverage ratio and deposit. Similarly, the beta coefficients for bank size are negative. The study shows that foreign ownership and bank age have positive impact on profitability of commercial banks in Nepal. However, government ownership and leverage have negative impact on the profitability of commercial banks. The study also shows that government ownership, firm size, leverage and bank age have positive and significant impact on credit risk of commercial banks in Nepal. The study further reveals that private ownership, foreign ownership, deposit and liquidity have negative impact on credit risk of banks. The study concludes that government ownership, foreign ownership, liquid ratio, bank size and deposit are the major factors affecting the profitability of commercial banks in Nepal. Similarly, government ownership, bank age, private ownership and financial leverage are the major variables determining the credit risk of Nepalese commercial banks. Ownership structure, risk and performance in Nepalese commercial banks [printed text] / Bindu Pantha, Author . - 2017 . - 115p. ; GRP/Thesis + 8/B. Languages : English Descriptors: Stock ownership Class number: 658.152 Abstract: Banking institutions are considered as the life blood of any economy. A bank is a financial institution and a financial intermediary that accepts deposits and channels those deposits into lending activities. In the process of taking deposits into lending, the interest rate is discovered by paying lower interest rate to depositors and receiving higher interest rate from borrowers in order to retain profitability. Afirmownershipstructurecanbedefinedalongtwomaindimensions.First,thedegreeofownershipconcentration:firmsmaydifferbecausetheirownershipismoreorlessdispersed.Second,thenatureoftheowners:giventhesamedegreeofconcentration,twofirmsmaydifferifthegovernmentholdsamajoritystakeinoneofthem;similarly,astockfirmwithdispersedownershipisdifferentfromamutualfirm.Profitability is of important information in economic decision makings and it has been always used by investors, managers and financial analysers as guide of dividend payment, tool for measuring management efficiency and instrument for predicting and evaluating decision makings (Saghafi and Aghaei, 1994).The selection of ownership such as foreign, local, public, private, state, etc. is important in the context of non-bank firms but becomes crucial in the context of a bank(Boubakri et al., 2005). However, it is an essential element for the development of a healthy banking system in developing countries(Lang and So, 2002). Changes in ownership structures without a supporting regulatory and supervisory body in place are likely to lead to a banking crisis. The major objective of this research is to determine the relationship between the ownership structure, risk and performance in the Nepalese banking industry. The study is based on secondary data of 24 commercial banks with 120 observations for the period of 2010/11 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial bank. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals relationship between the ownership structure, risk and performance in the Nepalese banking industry. The result of the study shows that foreign ownership, private ownership, liquidity, bank size, deposit and bank age are positively related to net interest margin However, the leverage and government ownership are negatively related to net interest margin. The credit risk is positively related to government ownership, firm size, leverage and bank age. However, credit risk is negatively related to private ownership, foreign ownership, deposit and liquidity. The result also indicates that the beta coefficients are positive for foreign ownership, liquidity ratio, financial leverage ratio, bank size and bank age. A positive relation between bank age and return on equity has been found. The beta coefficients are negative for the government ownership, private ownership and deposit. The result of the study reveals that the beta coefficients are negative for government ownership and deposit. The beta coefficients are positive for liquidity management ratio, bank age, bank size and financial leverage ratio, foreign ownership and private ownership. The table shows that the beta coefficients are positive for government ownership and foreign ownership. The beta coefficients are negative for private ownership, liquidity management ratio, bank age, bank size, financial leverage ratio and deposit. Similarly, the beta coefficients for bank size are negative. The study shows that foreign ownership and bank age have positive impact on profitability of commercial banks in Nepal. However, government ownership and leverage have negative impact on the profitability of commercial banks. The study also shows that government ownership, firm size, leverage and bank age have positive and significant impact on credit risk of commercial banks in Nepal. The study further reveals that private ownership, foreign ownership, deposit and liquidity have negative impact on credit risk of banks. The study concludes that government ownership, foreign ownership, liquid ratio, bank size and deposit are the major factors affecting the profitability of commercial banks in Nepal. Similarly, government ownership, bank age, private ownership and financial leverage are the major variables determining the credit risk of Nepalese commercial banks.

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Ownership structure, risk and performance in Nepalese commercial banks / Bhim Prasad Koirala 

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