Intellectual capital and measures of corporate performance: a study of commercial banks of Nepal / Sunita Shrestha 

Public ISBD Title : Intellectual capital and measures of corporate performance: a study of commercial banks of Nepal Material Type: printed text Authors: Sunita Shrestha, Author Publication Date: 2016 Pagination: 113p. Size: GRP/Thesis Accompanying material: 7/B Languages : English Descriptors: Intellectual capital Class number: 658.4063 Abstract: Intellectual capital has recently been receiving increased attention from both academic communities and practitioners, and is identified as an important strategic asset which provides sustainability and yields better performance. It also gives rise to the view that the organizations which possess skilled, creative, and distinctive knowledgeable employees along with supportive organizational structures and systems, and maintains cordial customer relations contribute in achieving superior organizational position. Hence, it is important to understand to what extent intellectual capital is efficiently utilized by specific sectors in creating value for organizations (Kamath, 2014). Whereas, banking sector is a knowledge intensive sector (Mavridis, 2004). It is an ideal sector for research on intellectual capital. Acting as a financial intermediary that channels funds needed by business and household sectors, banks provide essential service in stimulating economic growth. This study aims to develop, establish, and empirically validate the intellectual capital scale in the commercial banking sector, in the context of emerging economies like Nepal. This study sheds light on the corporate performance of commercial banks in Nepal from the perspective of intellectual capital performance. The main purpose of the study is to investigate the effect of intellectual capital and its component (value added intellectual coefficient, human capital efficiency, structural capital efficiency and capital employed efficiency) on the measures of corporate performance. This study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted to undertake fact-finding operation searching for adequate information about the impact of intellectual capital components and other variables on the corporate performance of commercial banks of Nepal. This study is based on the panel data which are gathered from 22 commercial banks in Nepal. The main sources of data are supervision reports of Nepal Rastra Bank and various Annual Reports of selected commercial banks. The data are collected for value added intellectual coefficient, human capital efficiency, structural capital efficiency, capital employed efficiency, physical capital, firm size, return on assets, return on equity, assets turnover, Tobin’s Q, and market-to-book value. These data are collected for the period 2007/08- 2013/14 leading to a total number of 143 observations. The result shows that the average value added intellectual coefficient and human capital efficiency is highest for PCBL and lowest for CENCBL. The average structural capital efficiency is highest for NSBI and lowest for EBL. The average capital employed efficiency is highest for NIBL and lowest for CENCBL. The average physical is highest for MBL and lowest for SCBL. The average firm size is highest for NIBL and lowest for LUMBL. The average return on assets is highest for NBBL and lowest for CIVBL. The average return on equity is highest for NBBL and lowest for CENCBL. The average assets turnover is highest for NBBL and lowest for CENCBL. The average tobin’s q is highest for SCBL and lowest for SUNBL. The average market value is highest for SCBL and lowest for NBBL. The study reveals that the value added intellectual coefficient, human capital efficiency, and capital employed efficiency are positively related with ROA, ROE, ATO, Tobin’s Q and MBV. It implies increase in the intellectual capital component like value added intellectual coefficient, human capital efficiency, and capital employed efficiency leads to increase in corporate performance. Further, it has been found that structural capital efficiency and physical capital is negatively related with corporate performance indicating that increase in structural capital efficiency and physical capital leads to decrease corporate performance of the banks. The regression resultsshow that beta coefficients for intellectual capital components are positive with banks productivity (ATO) indicating increase in the intellectual capital components leads to increase in banks’ productivity. The regression result also shows that beta coefficient for structural capital efficiency has negative relationship with return on assets (ROA). The regression result reveals that value added intellectual coefficient, human capital efficiency and capital employed efficiency have positive relationship with banks profitability. This indicates that increase in human capital efficiency and capital employed efficiency leads to increase in banks profitability. The results also depicted that intellectual capital components, capital employed efficiency, has positive and significant impact on market value of the banks indicating higher the capital employed efficiency, higher would be the market value of the banks. Likewise, the study reveals that intellectual capital components have positive impact on Tobin’s Q. However, the relationship is not significant. Similarly, results show that structural capital efficiency has negative and significant impact on return on assets. Intellectual capital and measures of corporate performance: a study of commercial banks of Nepal [printed text] / Sunita Shrestha, Author . - 2016 . - 113p. ; GRP/Thesis + 7/B. Languages : English Descriptors: Intellectual capital Class number: 658.4063 Abstract: Intellectual capital has recently been receiving increased attention from both academic communities and practitioners, and is identified as an important strategic asset which provides sustainability and yields better performance. It also gives rise to the view that the organizations which possess skilled, creative, and distinctive knowledgeable employees along with supportive organizational structures and systems, and maintains cordial customer relations contribute in achieving superior organizational position. Hence, it is important to understand to what extent intellectual capital is efficiently utilized by specific sectors in creating value for organizations (Kamath, 2014). Whereas, banking sector is a knowledge intensive sector (Mavridis, 2004). It is an ideal sector for research on intellectual capital. Acting as a financial intermediary that channels funds needed by business and household sectors, banks provide essential service in stimulating economic growth. This study aims to develop, establish, and empirically validate the intellectual capital scale in the commercial banking sector, in the context of emerging economies like Nepal. This study sheds light on the corporate performance of commercial banks in Nepal from the perspective of intellectual capital performance. The main purpose of the study is to investigate the effect of intellectual capital and its component (value added intellectual coefficient, human capital efficiency, structural capital efficiency and capital employed efficiency) on the measures of corporate performance. This study is based on descriptive and causal-comparative research designs. The descriptive research design has been adopted to undertake fact-finding operation searching for adequate information about the impact of intellectual capital components and other variables on the corporate performance of commercial banks of Nepal. This study is based on the panel data which are gathered from 22 commercial banks in Nepal. The main sources of data are supervision reports of Nepal Rastra Bank and various Annual Reports of selected commercial banks. The data are collected for value added intellectual coefficient, human capital efficiency, structural capital efficiency, capital employed efficiency, physical capital, firm size, return on assets, return on equity, assets turnover, Tobin’s Q, and market-to-book value. These data are collected for the period 2007/08- 2013/14 leading to a total number of 143 observations. The result shows that the average value added intellectual coefficient and human capital efficiency is highest for PCBL and lowest for CENCBL. The average structural capital efficiency is highest for NSBI and lowest for EBL. The average capital employed efficiency is highest for NIBL and lowest for CENCBL. The average physical is highest for MBL and lowest for SCBL. The average firm size is highest for NIBL and lowest for LUMBL. The average return on assets is highest for NBBL and lowest for CIVBL. The average return on equity is highest for NBBL and lowest for CENCBL. The average assets turnover is highest for NBBL and lowest for CENCBL. The average tobin’s q is highest for SCBL and lowest for SUNBL. The average market value is highest for SCBL and lowest for NBBL. The study reveals that the value added intellectual coefficient, human capital efficiency, and capital employed efficiency are positively related with ROA, ROE, ATO, Tobin’s Q and MBV. It implies increase in the intellectual capital component like value added intellectual coefficient, human capital efficiency, and capital employed efficiency leads to increase in corporate performance. Further, it has been found that structural capital efficiency and physical capital is negatively related with corporate performance indicating that increase in structural capital efficiency and physical capital leads to decrease corporate performance of the banks. The regression resultsshow that beta coefficients for intellectual capital components are positive with banks productivity (ATO) indicating increase in the intellectual capital components leads to increase in banks’ productivity. The regression result also shows that beta coefficient for structural capital efficiency has negative relationship with return on assets (ROA). The regression result reveals that value added intellectual coefficient, human capital efficiency and capital employed efficiency have positive relationship with banks profitability. This indicates that increase in human capital efficiency and capital employed efficiency leads to increase in banks profitability. The results also depicted that intellectual capital components, capital employed efficiency, has positive and significant impact on market value of the banks indicating higher the capital employed efficiency, higher would be the market value of the banks. Likewise, the study reveals that intellectual capital components have positive impact on Tobin’s Q. However, the relationship is not significant. Similarly, results show that structural capital efficiency has negative and significant impact on return on assets.

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The relationship between firm's financial performance and stock return of Nepalese commercial banks / Sunita Shrestha 

Public ISBD Title : The relationship between firm's financial performance and stock return of Nepalese commercial banks Material Type: printed text Authors: Sunita Shrestha, Author Publication Date: 2017 Pagination: 113p. Size: GRP/Thesis Accompanying material: 9/B Languages : English Class number: 338.604 Abstract: The investment on stock has become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the stock return. The financial performance of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investors,which plays a significant role to gain reliable and consistent return by selecting winning portfolio. This study attempts to examine the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 144 observations for the period of 2007/08 to 2014/15. Data and informationhave been collected form Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The result shows that average market price per share is highest for SCBNL (Rs. 3285) and lowest for SUBL (Rs. 215.50). The average stock return is highest for NBBL (27.01 percent) and lowest for SCBNL (-5.70 percent). The average excess return is highest for NBBL (23.56 percent) and lowest for SCBNL (-9.14 percent). The average return on assets is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NIBL (4.46 percent) and lowest for NCCBL (0.93 percent). The average earning yield is highest for NBBL (16 percent) and lowest for MBL (2.02 percent). The average price earnings ratio is highest for MBL (79.29 times) and lowest for NBBL (8.11 times). The average book to market ratio is highest for NCCBL (0.49 times) and lowest for SCBNL (0.10 times). The average assets debt to equity ratio is highest for NSBIBL (14.18 times) and lowest for NBBL (1.36 times). The average profit after tax is highest for NABIL (Rs. 1591.01 million) and lowest for MBL (Rs. 204.26 million). The descriptive statistics for selected commercial bank shows that the average market price per share, stock return, excess return, dividend yield, earning yield, price earnings ratio book to market ratio, debt to equity ratio and profit after taxare Rs. 915.87, 7.90 percent, 4.45 percent, 1.89 percent, 2.58 percent, 5.14 percent, 28.06 times, 0.30 times, 9.91 times and Rs. 653.12 millionrespectively. The correlation matrix shows that return on assets, dividend yield, earning yield, price earnings ratio, debt to equity ratio and profit after tax are positively related to market price per share,while book to market ratio is negatively related to market price per share. The result states that return on assets has positive relationship with stock return and excess return. However, dividend yield and earning yield have negative relationship with stock return and excess return. On the other hand, price earnings ratio is positively related to stock return and excess return, whereas book to market ratio is negatively related to stock return and excess return. Furthermore, the debt to equity ratio and profit after tax are positively correlated to stock return and excess return. The regression analysis reveals that return on assets and price earnings ratiohave positive impact on market price per share. This indicates that higher return on assets and price earnings ratio, higher would be the market price per share. However, book to market ratio has negative impact on market price per share. This reveals that higher the book to market ratio, lower would be the market price per share. On the other hand, profit after tax has positive impact on market price per share. This states that higher the profit after tax, higher would be the market price per share. The study also shows that price earnings ratio has positive impact on stock return and excess return. This reveals that higher the price earnings ratio, higher would be the stock return and excess return. However, book to market ratio has negative impact on stock return and excess return. This states that higher the book to market ratio, lower would be the stock return and excess return. On the other hand, the profit after tax has positive impact on stock return and excess return. This denotes that higher the profit after tax, higher would be the stock return and excess return. The study also reveals that price earnings ratio, book to market ratio and profit after tax are major determinants of stock return in Nepalese commercial banks. The relationship between firm's financial performance and stock return of Nepalese commercial banks [printed text] / Sunita Shrestha, Author . - 2017 . - 113p. ; GRP/Thesis + 9/B. Languages : English Class number: 338.604 Abstract: The investment on stock has become one of the quite attractive option of both existing and potential investors. It is not only demanded by the high class investors, but also has attracted the interest of small investors. The high rate of return pushes the investors to invest in stocks, but many of them do not have much knowledge about its operations and factors affecting to stock return’s fluctuations. There are various internal and external factors that influence the stock return. The financial performance of companies are most essential internal factors that the investors use in making decisions whether to invest in stock or not? It can give visibility to investors,which plays a significant role to gain reliable and consistent return by selecting winning portfolio. This study attempts to examine the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The study is based on secondary data of 18 commercial banks with 144 observations for the period of 2007/08 to 2014/15. Data and informationhave been collected form Nepal Stock Exchange, Security Exchange Board of Nepal, Banking and Financial Statistics of NRB and annual reports of the selected commercial banks.The research design adopted in this study is descriptive and causal comparative research design as it deals with the relationship between firm’s financial performance and stock return of Nepalese commercial banks. The result shows that average market price per share is highest for SCBNL (Rs. 3285) and lowest for SUBL (Rs. 215.50). The average stock return is highest for NBBL (27.01 percent) and lowest for SCBNL (-5.70 percent). The average excess return is highest for NBBL (23.56 percent) and lowest for SCBNL (-9.14 percent). The average return on assets is highest for NBBL (5.04 percent) and lowest for MBL (0.71 percent). The average dividend yield is highest for NIBL (4.46 percent) and lowest for NCCBL (0.93 percent). The average earning yield is highest for NBBL (16 percent) and lowest for MBL (2.02 percent). The average price earnings ratio is highest for MBL (79.29 times) and lowest for NBBL (8.11 times). The average book to market ratio is highest for NCCBL (0.49 times) and lowest for SCBNL (0.10 times). The average assets debt to equity ratio is highest for NSBIBL (14.18 times) and lowest for NBBL (1.36 times). The average profit after tax is highest for NABIL (Rs. 1591.01 million) and lowest for MBL (Rs. 204.26 million). The descriptive statistics for selected commercial bank shows that the average market price per share, stock return, excess return, dividend yield, earning yield, price earnings ratio book to market ratio, debt to equity ratio and profit after taxare Rs. 915.87, 7.90 percent, 4.45 percent, 1.89 percent, 2.58 percent, 5.14 percent, 28.06 times, 0.30 times, 9.91 times and Rs. 653.12 millionrespectively. The correlation matrix shows that return on assets, dividend yield, earning yield, price earnings ratio, debt to equity ratio and profit after tax are positively related to market price per share,while book to market ratio is negatively related to market price per share. The result states that return on assets has positive relationship with stock return and excess return. However, dividend yield and earning yield have negative relationship with stock return and excess return. On the other hand, price earnings ratio is positively related to stock return and excess return, whereas book to market ratio is negatively related to stock return and excess return. Furthermore, the debt to equity ratio and profit after tax are positively correlated to stock return and excess return. The regression analysis reveals that return on assets and price earnings ratiohave positive impact on market price per share. This indicates that higher return on assets and price earnings ratio, higher would be the market price per share. However, book to market ratio has negative impact on market price per share. This reveals that higher the book to market ratio, lower would be the market price per share. On the other hand, profit after tax has positive impact on market price per share. This states that higher the profit after tax, higher would be the market price per share. The study also shows that price earnings ratio has positive impact on stock return and excess return. This reveals that higher the price earnings ratio, higher would be the stock return and excess return. However, book to market ratio has negative impact on stock return and excess return. This states that higher the book to market ratio, lower would be the stock return and excess return. On the other hand, the profit after tax has positive impact on stock return and excess return. This denotes that higher the profit after tax, higher would be the stock return and excess return. The study also reveals that price earnings ratio, book to market ratio and profit after tax are major determinants of stock return in Nepalese commercial banks.

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