| Title : | Explanatory power of bank specific variables and macroeconomic variables as determinants of bank performance: evidence from Nepalese banking sector | | Material Type: | printed text | | Authors: | Padam Shrestha, Author | | Publication Date: | 2015 | | Pagination: | 89p. | | Size: | GRP/Thesis | | Accompanying material: | 5/B | | General note: | Including bibilography | | Languages : | English | | Descriptors: | Macroeconomics
| | Keywords: | 'macroeconomics economic policy banks banks and banking nepal' | | Class number: | 332.632 | | Abstract: | The banking sector has been undergoing a complex, but comprehensive phase of restructuring, with a view to make it sound, efficient, and at the same time it is forging its links firmly with the real sector for promotion of savings, investment and growth. The study examines the determinants of bank profitability in Nepal. These determinants have been categorized into internal factors which are bank-specific characteristics and external factors which are macroeconomic factors. A panel data of 16 commercial banks in Nepal was analyzed over a period of 2003-2013, using a generalized least squares technique to estimate fixed effect regression models. Three key measures of profitability (dependent variables) analysed in this study comprised of Return on Asset (ROA), Return on Equity (ROE) and Net Interest Margin (NIM). Bank-specific factors, which were incorporated into the regression models were capital adequacy ratio, assets quality ratio, management efficiency ratio andliquidity ratio. In addition, macroeconomic factors captured in the regression models included inflation, Gross Domestic Products growth rate (GDP).
The results for the ROA model indicate that capital adequacy, management efficiency, andliquidity were positively related to bank profitability while asset quality is negatively significant to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability in case of ROA. Similarly, the results for the ROE model indicate that capital adequacy, management efficiency, andliquidity were positively related to bank profitability while asset quality is negatively correlated to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability. However, capital adequacy ratio is positively significant to bank performance in case of ROE. The results for the NIM model indicate that capital adequacy and management efficiency were positively related to bank profitability while asset quality and liquidity is negatively correlated to bank profitability. However, management efficiency was positively significant and liquidity was negatively significant to bank profitability. Moreover, inflationwas negatively correlated GDP growth rate was positively correlated to bank profitability in case of NIM. |
Explanatory power of bank specific variables and macroeconomic variables as determinants of bank performance: evidence from Nepalese banking sector [printed text] / Padam Shrestha, Author . - 2015 . - 89p. ; GRP/Thesis + 5/B. Including bibilography Languages : English | Descriptors: | Macroeconomics
| | Keywords: | 'macroeconomics economic policy banks banks and banking nepal' | | Class number: | 332.632 | | Abstract: | The banking sector has been undergoing a complex, but comprehensive phase of restructuring, with a view to make it sound, efficient, and at the same time it is forging its links firmly with the real sector for promotion of savings, investment and growth. The study examines the determinants of bank profitability in Nepal. These determinants have been categorized into internal factors which are bank-specific characteristics and external factors which are macroeconomic factors. A panel data of 16 commercial banks in Nepal was analyzed over a period of 2003-2013, using a generalized least squares technique to estimate fixed effect regression models. Three key measures of profitability (dependent variables) analysed in this study comprised of Return on Asset (ROA), Return on Equity (ROE) and Net Interest Margin (NIM). Bank-specific factors, which were incorporated into the regression models were capital adequacy ratio, assets quality ratio, management efficiency ratio andliquidity ratio. In addition, macroeconomic factors captured in the regression models included inflation, Gross Domestic Products growth rate (GDP).
The results for the ROA model indicate that capital adequacy, management efficiency, andliquidity were positively related to bank profitability while asset quality is negatively significant to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability in case of ROA. Similarly, the results for the ROE model indicate that capital adequacy, management efficiency, andliquidity were positively related to bank profitability while asset quality is negatively correlated to bank profitability. Moreover, inflation and GDP were positively significant to bank profitability. However, capital adequacy ratio is positively significant to bank performance in case of ROE. The results for the NIM model indicate that capital adequacy and management efficiency were positively related to bank profitability while asset quality and liquidity is negatively correlated to bank profitability. However, management efficiency was positively significant and liquidity was negatively significant to bank profitability. Moreover, inflationwas negatively correlated GDP growth rate was positively correlated to bank profitability in case of NIM. |
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Explanatory power of bank specific variables and macroeconomic variables as determinants of bank performance: evidence from Nepalese banking sector 
