Title :	Perceived service quality, customer loyalty and bank performance of commercial banking in Nepal
Material Type:	printed text
Authors:	Sona Shrestha, Author
Publication Date:	2016
Pagination:	70p.
Size:	GRP/Thesis
Accompanying material:	4/B
General note:	Including bibliography
Languages :	English
Descriptors:	Customer satisfaction Banks Banks and banking Customer services Service quality
Keywords:	'service quality and customer satisfaction  customers  Nepal  commercial banks  banks'
Class number:	658.812
Abstract:	Service quality is one of the critical success factors that influence the service sectors especially in banks. A bank can differentiate itself from competitors by providing quality services at promised time. Service quality is one of the most attractive areas for the studies for the last few decades in banking sector. Mudie and Pirrie (2006) identified some features of services for banking industry. These services are intangible in nature and cannot assure the quality because it cannot be counted, measured, tested, verified and inventoried in. There is simultaneous production and consumption of the services. Customers are important stakeholders in organizations and their satisfaction is a priority to management. Customer satisfaction has been a subject of great concern to organizations (Blumberg et al., 2005). The customers were more satisfied with the second generation joint venture banks where they has to spend less time waiting and also where the employees behavior was good (Gautam, 2004). Similarly, Koirala and Shrestha (2012) concluded that all the service quality dimensions like tangibility, reliability, responsiveness, assurance and empathy are important for forming service quality and customer satisfaction of commercial banks in Nepal. Rijal (2006) revealed that different branches of the similar banks have adapted different strategy and few of the banks have followed more than one strategy at the same time. The majority of commercial banks are offering different types of services to their customers through different branches established at different geographical locations. The study has aimed to examine the effect of service quality and customer loyalty on the performance of Nepalese commercial banks. The specific objectives are: to analyze the level of service quality provided by commercial banks in Nepal, to examine the effect of factors service quality to the customer loyalty, to examine the effect of factors service quality to the banking performance, to find out the relationship between customer loyalty and bank performance and to investigate the quality of services based on five quality factors; assurance, reliability, assurance, responsiveness, tangibility, and empathy. This study is based on primary data from 160 respondents of 16 banks. This study employed descriptive and causal comparative research designs to deal with the determinants and fundamental issues associated with service quality, customer loyalty and bank performance of Nepalese commercial banks. The result revealed that satisfaction is positively related to return on assets and return on equity. This indicates that higher the customer satisfaction higher would be the return on equity and return on assets. The result also revealed that reliability is positively related to ROE and ROA indicating that increased reliability in the banking services increases the bank performance as measured by return on equity and return on assets. Assurance is also positively related to return on equity and return on assets. It indicates that increased assurance in banking services increases the return on assets and return on equity. Tangibility is positively related to return on assets and return on equity which indicates that improved tangibility in banking services help to increase the overall performance of the banks measured by ROE and ROA. The result also showed that beta coefficient is positive for customer satisfaction with return on assets, which clearly indicate that increased customer satisfaction increases the return on assets (ROA). The significant positive beta coefficient for tangibility indicates that improved tangibility of the banking services increases the bank performance as indicated by ROA. Beta coefficient for satisfaction is positive with return on equity and it is significant at five percent level, which indicates that increased level of satisfaction to the customer increase the return on equity. Beta coefficient for reliability is positive with ROE indicating that improved reliability of the banking services increase the return on equity of the banks. Likewise, responsiveness is found to be positive with return on equity and it is found to be significant at five percent. The result also revealed that beta coefficient is positive for reliability with customer loyalty and is significant at five percent indicating that improved reliability increases the customer loyalty towards banks services. The major conclusion of this study is that there is positive impact of satisfaction, reliability, assurance, tangibility, empathy, responsibility and loyalty on bank performance. Improved reliability, assurance, tangibility, empathy, and improved responsibility in the organization’s services have positive impact on return on assets (ROA). This study suggested that banks willing to increase bank performance through customer loyalty should improve reliability, assurance, tangibility, empathy and responsibility.

Perceived service quality, customer loyalty and bank performance of commercial banking in Nepal [printed text] / Sona Shrestha, Author . - 2016 . - 70p. ; GRP/Thesis + 4/B.
Including bibliography

Languages : English

Descriptors:	Customer satisfaction Banks Banks and banking Customer services Service quality
Keywords:	'service quality and customer satisfaction  customers  Nepal  commercial banks  banks'
Class number:	658.812
Abstract:	Service quality is one of the critical success factors that influence the service sectors especially in banks. A bank can differentiate itself from competitors by providing quality services at promised time. Service quality is one of the most attractive areas for the studies for the last few decades in banking sector. Mudie and Pirrie (2006) identified some features of services for banking industry. These services are intangible in nature and cannot assure the quality because it cannot be counted, measured, tested, verified and inventoried in. There is simultaneous production and consumption of the services. Customers are important stakeholders in organizations and their satisfaction is a priority to management. Customer satisfaction has been a subject of great concern to organizations (Blumberg et al., 2005). The customers were more satisfied with the second generation joint venture banks where they has to spend less time waiting and also where the employees behavior was good (Gautam, 2004). Similarly, Koirala and Shrestha (2012) concluded that all the service quality dimensions like tangibility, reliability, responsiveness, assurance and empathy are important for forming service quality and customer satisfaction of commercial banks in Nepal. Rijal (2006) revealed that different branches of the similar banks have adapted different strategy and few of the banks have followed more than one strategy at the same time. The majority of commercial banks are offering different types of services to their customers through different branches established at different geographical locations. The study has aimed to examine the effect of service quality and customer loyalty on the performance of Nepalese commercial banks. The specific objectives are: to analyze the level of service quality provided by commercial banks in Nepal, to examine the effect of factors service quality to the customer loyalty, to examine the effect of factors service quality to the banking performance, to find out the relationship between customer loyalty and bank performance and to investigate the quality of services based on five quality factors; assurance, reliability, assurance, responsiveness, tangibility, and empathy. This study is based on primary data from 160 respondents of 16 banks. This study employed descriptive and causal comparative research designs to deal with the determinants and fundamental issues associated with service quality, customer loyalty and bank performance of Nepalese commercial banks. The result revealed that satisfaction is positively related to return on assets and return on equity. This indicates that higher the customer satisfaction higher would be the return on equity and return on assets. The result also revealed that reliability is positively related to ROE and ROA indicating that increased reliability in the banking services increases the bank performance as measured by return on equity and return on assets. Assurance is also positively related to return on equity and return on assets. It indicates that increased assurance in banking services increases the return on assets and return on equity. Tangibility is positively related to return on assets and return on equity which indicates that improved tangibility in banking services help to increase the overall performance of the banks measured by ROE and ROA. The result also showed that beta coefficient is positive for customer satisfaction with return on assets, which clearly indicate that increased customer satisfaction increases the return on assets (ROA). The significant positive beta coefficient for tangibility indicates that improved tangibility of the banking services increases the bank performance as indicated by ROA. Beta coefficient for satisfaction is positive with return on equity and it is significant at five percent level, which indicates that increased level of satisfaction to the customer increase the return on equity. Beta coefficient for reliability is positive with ROE indicating that improved reliability of the banking services increase the return on equity of the banks. Likewise, responsiveness is found to be positive with return on equity and it is found to be significant at five percent. The result also revealed that beta coefficient is positive for reliability with customer loyalty and is significant at five percent indicating that improved reliability increases the customer loyalty towards banks services. The major conclusion of this study is that there is positive impact of satisfaction, reliability, assurance, tangibility, empathy, responsibility and loyalty on bank performance. Improved reliability, assurance, tangibility, empathy, and improved responsibility in the organization’s services have positive impact on return on assets (ROA). This study suggested that banks willing to increase bank performance through customer loyalty should improve reliability, assurance, tangibility, empathy and responsibility.