| 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.
|
|
Refine your search Apply to external sourcesOwnership structure, risk and performance in Nepalese commercial banks / Bindu Pantha
