Title :	Loan loss provision practices of Nepalese commercial banks
Material Type:	printed text
Authors:	Sajana Dangol, Author
Publication Date:	2013
Pagination:	88p.
Size:	GRP/Thesis
Accompanying material:	1/B
General note:	Including bibliography
Languages :	English
Descriptors:	Banks Banks and banking Commercial banks Loan loss provision Loans Nepal Sajana Dangol
Keywords:	'sajana Dangol  nepal  loans  loan loss  banks  banking  management  financial institutions  commercial banks'
Class number:	332.12
Abstract:	Loan loss provisions ensure level of protection for expected credit losses. The intention of a loan loss provision is the anticipation of the loan's expected losses by adjusting the book value of the loan. Loan loss provisions reflect not only the probability of default, but also the amount the lender can recover in case of default. This study investigates the determinants of loan loss provisions of commercial banks in Nepal with respect to firm specific and macroeconomic variables. The specific objectives of this study were to analyze the relationship and impact of credit quality, earnings, capital adequacy ratio, bank size and GDP on loan loss provision. The research was based on primary and secondary data. The methods used for secondary data analysis included descriptive statistics, and analysis by forming portfolios and regression analysis. The methods used for primary data analysis included percentage frequency distribution, mean scores and standard deviation of responses to Likert scale items. The major conclusion of this study is that nonperforming loans, growth of loan, earnings before tax and provision, capital adequacy ratio and total assets explain loan loss provision in the context of Nepal. The determinants of LLP are not equally applicable for all types of ownership of banks. Some determinants like CAR and TA are common to all banks while other determinants like NPL, LAR, GL, ROA, EBTPTA, ME and GDP are not equally significant for all banks. The results also indicate strong role of capital adequacy ratio and nonperforming loan to explain loan loss provision except for state owned banks. However, total assets also has consistent significant negative with loan loss provision in all case. This study also concluded that provisioning tends to be low when there is rapid growth in loan. This study also concluded that banks have provisioning for loan loss by setting aside extra buffers in high earning years and banks use loan loss provisions to smooth income over the period.

Loan loss provision practices of Nepalese commercial banks [printed text] / Sajana Dangol, Author . - 2013 . - 88p. ; GRP/Thesis + 1/B.
Including bibliography
Languages : English

Descriptors:	Banks Banks and banking Commercial banks Loan loss provision Loans Nepal Sajana Dangol
Keywords:	'sajana Dangol  nepal  loans  loan loss  banks  banking  management  financial institutions  commercial banks'
Class number:	332.12
Abstract:	Loan loss provisions ensure level of protection for expected credit losses. The intention of a loan loss provision is the anticipation of the loan's expected losses by adjusting the book value of the loan. Loan loss provisions reflect not only the probability of default, but also the amount the lender can recover in case of default. This study investigates the determinants of loan loss provisions of commercial banks in Nepal with respect to firm specific and macroeconomic variables. The specific objectives of this study were to analyze the relationship and impact of credit quality, earnings, capital adequacy ratio, bank size and GDP on loan loss provision. The research was based on primary and secondary data. The methods used for secondary data analysis included descriptive statistics, and analysis by forming portfolios and regression analysis. The methods used for primary data analysis included percentage frequency distribution, mean scores and standard deviation of responses to Likert scale items. The major conclusion of this study is that nonperforming loans, growth of loan, earnings before tax and provision, capital adequacy ratio and total assets explain loan loss provision in the context of Nepal. The determinants of LLP are not equally applicable for all types of ownership of banks. Some determinants like CAR and TA are common to all banks while other determinants like NPL, LAR, GL, ROA, EBTPTA, ME and GDP are not equally significant for all banks. The results also indicate strong role of capital adequacy ratio and nonperforming loan to explain loan loss provision except for state owned banks. However, total assets also has consistent significant negative with loan loss provision in all case. This study also concluded that provisioning tends to be low when there is rapid growth in loan. This study also concluded that banks have provisioning for loan loss by setting aside extra buffers in high earning years and banks use loan loss provisions to smooth income over the period.