| Title : | Determinants of loan quality and earnings per share of Nepalese commercial bank | | Material Type: | printed text | | Authors: | Roma Lamsal, Author | | Publication Date: | 2018 | | Pagination: | 109p. | | Size: | GRP/Thesis | | Accompanying material: | 12/B | | Languages : | English | | Descriptors: | Loan quality
| | Class number: | 330 | | Abstract: | The average non-performing loan is highest for ADBL (6.49 percent) and lowest for SANIMA (0.21 percent). The average earnings per share is highest for RBB (Rs. 147.2) and lowest for CBL (Rs.6.36). The average bank liquidity is highest for NBBL (63.21 percent) and lowest for SBL (23.95 percent). The average cost inefficiency is highest for HBL (26.75 percent) and lowest for SANIMA (1.05 percent). The average capitalization is highest for ADBL (22.59 percent) and lowest for RBB (-0.26 percent). The average diversification is highest for PBL (11.88 percent) and lowest for CIVIL (-4.11 percent). The average size is highest for RBB (Rs. 196.23) and lowest for CIVIL (Rs.5.02).The average profitability is highest for RBB (119.96 percent) and lowest for CBL (16.81percent).
The descriptive statistics indicates that the average non-performing loan, average earnings per share, average bank liquidity, average cost inefficiency, average capitalization, average diversification, average size and average profitability is 2.11 percent, Rs. 35.13, 32.32 percent, 3.64 percent, 12.43 percent, 4.12 percent, Rs. 48.86 and 29.72 percent respectively.
From the correlation matrix analysis, it is found that bank liquidity and capitalization are negatively correlated to non-performing loan. Whereas, cost inefficiency, diversification, profitability and size are positively correlated to non-performing loan. The correlation analysis shows that the EPS is found to have negative relation with capitalization while bank liquidity, cost inefficiency, diversification, profitability and size have positive relation with earnings per share.
The regression results shows that cost inefficiency, diversification, profitability and size have positive impact on non-performing loans. The results indicate that higher the cost inefficiency, higher would be the non-performing loan. Similarly, the result indicates that higher the diversification, higher would be the non-performing loan Moreover, the result indicates that higher the profitability, higher would be the non-performing loan. Similarly, the result indicates that the higher the size, higher would be the non-performing loan. However, the coefficients are not significant for cost inefficiency, diversification and profitability and are significant for size. Table 4.11 shows that the beta coefficients are negative for bank liquidity and capitalization. This indicates that lower the bank liquidity, higher will be the non-performing loan. It indicates that lower the capitalization, higher will be the non-performing loan.
The result shows that the beta coefficients are positive for bank liquidity, cost inefficiency, size and profitability. The result indicates that higher the bank liquidity, higher would be the earnings per share. Similarly, the results indicate that higher the cost inefficiency, higher would be the earnings per share. Moreover, the result indicates that higher the size of the banks, higher would be the earnings per share. Likewise, the result indicates that higher the profitability, higher would be the earnings per share. However, the coefficients are not significant for bank liquidity, cost inefficiency and profitability and the coefficients are significant for size. Table 4.12 shows that the beta coefficients are negative for capitalization and diversification. The result indicates that lower the capitalization, higher would be the earnings per share. Similarly, the result indicates that lower the diversification, higher would be the earnings per share. However, the coefficients are significant for capitalization where the coefficients are not significant for diversification.
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Determinants of loan quality and earnings per share of Nepalese commercial bank [printed text] / Roma Lamsal, Author . - 2018 . - 109p. ; GRP/Thesis + 12/B. Languages : English | Descriptors: | Loan quality
| | Class number: | 330 | | Abstract: | The average non-performing loan is highest for ADBL (6.49 percent) and lowest for SANIMA (0.21 percent). The average earnings per share is highest for RBB (Rs. 147.2) and lowest for CBL (Rs.6.36). The average bank liquidity is highest for NBBL (63.21 percent) and lowest for SBL (23.95 percent). The average cost inefficiency is highest for HBL (26.75 percent) and lowest for SANIMA (1.05 percent). The average capitalization is highest for ADBL (22.59 percent) and lowest for RBB (-0.26 percent). The average diversification is highest for PBL (11.88 percent) and lowest for CIVIL (-4.11 percent). The average size is highest for RBB (Rs. 196.23) and lowest for CIVIL (Rs.5.02).The average profitability is highest for RBB (119.96 percent) and lowest for CBL (16.81percent).
The descriptive statistics indicates that the average non-performing loan, average earnings per share, average bank liquidity, average cost inefficiency, average capitalization, average diversification, average size and average profitability is 2.11 percent, Rs. 35.13, 32.32 percent, 3.64 percent, 12.43 percent, 4.12 percent, Rs. 48.86 and 29.72 percent respectively.
From the correlation matrix analysis, it is found that bank liquidity and capitalization are negatively correlated to non-performing loan. Whereas, cost inefficiency, diversification, profitability and size are positively correlated to non-performing loan. The correlation analysis shows that the EPS is found to have negative relation with capitalization while bank liquidity, cost inefficiency, diversification, profitability and size have positive relation with earnings per share.
The regression results shows that cost inefficiency, diversification, profitability and size have positive impact on non-performing loans. The results indicate that higher the cost inefficiency, higher would be the non-performing loan. Similarly, the result indicates that higher the diversification, higher would be the non-performing loan Moreover, the result indicates that higher the profitability, higher would be the non-performing loan. Similarly, the result indicates that the higher the size, higher would be the non-performing loan. However, the coefficients are not significant for cost inefficiency, diversification and profitability and are significant for size. Table 4.11 shows that the beta coefficients are negative for bank liquidity and capitalization. This indicates that lower the bank liquidity, higher will be the non-performing loan. It indicates that lower the capitalization, higher will be the non-performing loan.
The result shows that the beta coefficients are positive for bank liquidity, cost inefficiency, size and profitability. The result indicates that higher the bank liquidity, higher would be the earnings per share. Similarly, the results indicate that higher the cost inefficiency, higher would be the earnings per share. Moreover, the result indicates that higher the size of the banks, higher would be the earnings per share. Likewise, the result indicates that higher the profitability, higher would be the earnings per share. However, the coefficients are not significant for bank liquidity, cost inefficiency and profitability and the coefficients are significant for size. Table 4.12 shows that the beta coefficients are negative for capitalization and diversification. The result indicates that lower the capitalization, higher would be the earnings per share. Similarly, the result indicates that lower the diversification, higher would be the earnings per share. However, the coefficients are significant for capitalization where the coefficients are not significant for diversification.
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