| Title : | Bank liquidity risk and performance : a case of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Rajesh Gupta, Author | | Publication Date: | 2016 | | Pagination: | 96p. | | Size: | GRP/Thesis | | Accompanying material: | 7/B | | Languages : | English | | Descriptors: | Liquidity (Economics)
| | Class number: | 658.152 | | Abstract: | Liquidity management is a common principle in banking management. It means ensuring that the bank possesses sufficient cash to satisfy unexpected cash outlets. Liquidity management is an important function of any business because it is the determinant of whether the entity will be in operation in the foreseeable future or not. However, more than enough liquidity is also harmful and thus invites profitability risk. An adequate liquidity position for one bank may not be sufficient for another. Lack of adequate liquidity is often one of the first signs that a bank is in serious financial trouble (Rose, 1999).
The performances of the financial institutions have proved to be an effective channel between savers and borrowers. A major adequate financial intermediation requires the purposeful attention of the bank management to profitability and liquidity, which are two conflicting goals of the commercial banks (Olagunju et al., 2011).
The study examines the relationship between the bank liquidity and its effect on the banks profitability. To analyze the structure and pattern of the variables. To find the relationship of return on assets, capital and reserve, and liquid assets to total assets with determinants of liquidity. Hence, this study attempts to analyze the liquidity risks and financial performance measures using credit to deposit ratio, cash, investment, total assets, cash reserve ratio, and capital adequacy ratio as the indicator to the Nepalese commercial banks. The study has selected 19 Nepalese commercial banks. The methods used for secondary data analysis included descriptive analysis, correlation analysis and regression analysis.
The major conclusion of this study is that total deposit, capital adequacy ratio, and cash reserve ratio have significantly positive impact on capital and reserve whereas non-performing loan to total loan have significantly negative with capital and reserve. Similarly, credit to deposit, deposit, cash reserve ratio and capital adequacy ratio have significantly positive with liquid assets to total assets. Likewise, total assets and investment have significantly positive with return on assets whereas negatively with non-performing loan to total loan.
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Bank liquidity risk and performance : a case of Nepalese commercial banks [printed text] / Rajesh Gupta, Author . - 2016 . - 96p. ; GRP/Thesis + 7/B. Languages : English | Descriptors: | Liquidity (Economics)
| | Class number: | 658.152 | | Abstract: | Liquidity management is a common principle in banking management. It means ensuring that the bank possesses sufficient cash to satisfy unexpected cash outlets. Liquidity management is an important function of any business because it is the determinant of whether the entity will be in operation in the foreseeable future or not. However, more than enough liquidity is also harmful and thus invites profitability risk. An adequate liquidity position for one bank may not be sufficient for another. Lack of adequate liquidity is often one of the first signs that a bank is in serious financial trouble (Rose, 1999).
The performances of the financial institutions have proved to be an effective channel between savers and borrowers. A major adequate financial intermediation requires the purposeful attention of the bank management to profitability and liquidity, which are two conflicting goals of the commercial banks (Olagunju et al., 2011).
The study examines the relationship between the bank liquidity and its effect on the banks profitability. To analyze the structure and pattern of the variables. To find the relationship of return on assets, capital and reserve, and liquid assets to total assets with determinants of liquidity. Hence, this study attempts to analyze the liquidity risks and financial performance measures using credit to deposit ratio, cash, investment, total assets, cash reserve ratio, and capital adequacy ratio as the indicator to the Nepalese commercial banks. The study has selected 19 Nepalese commercial banks. The methods used for secondary data analysis included descriptive analysis, correlation analysis and regression analysis.
The major conclusion of this study is that total deposit, capital adequacy ratio, and cash reserve ratio have significantly positive impact on capital and reserve whereas non-performing loan to total loan have significantly negative with capital and reserve. Similarly, credit to deposit, deposit, cash reserve ratio and capital adequacy ratio have significantly positive with liquid assets to total assets. Likewise, total assets and investment have significantly positive with return on assets whereas negatively with non-performing loan to total loan.
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