| Title : | Effect of deposits volume on lending behavior of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Srijana Poudel, Author | | Publication Date: | 2018 | | Pagination: | 96p. | | Size: | GRP/Thesis | | Accompanying material: | 11/B | | Languages : | English | | Descriptors: | Business - Mathematical models
| | Class number: | 332 | | Abstract: | The study of lending behavior has captured the attention of finance scholars since the middle of the last century. Deposit volume is a very crucial issue in the modern corporate business environment. Few studies have been carried out to examine the effect of deposit volume on bank's lending behavior. In regards to the effect of deposit volume on bank's lending behavior the results are not unanimous.
This study attempts to examine the effect of deposit volume on bank's lending behaviorof Nepalese commercial banks. The study also identifies the practitioner’s preference towards loan and advances and total loan to total asset. The study is based on secondary data of 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. Data and information have been collected from Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the effect of deposit volume on bank's lending behaviorof Nepalese commercial banks.
The analysis of structure and pattern of loan and advances shows that average loan and advances is highest for NIBL (Rs. 48.48 billion) and lowest for NCCBL (Rs. 13.22 billion). It has been found that the average loans and advances of commercial banks computed across the year is in increasing trend. The average total loan to total asset is highest for SIBL (72.60 percent) and lowest for SCBNL (43.66 percent). It has been found that the average total loan to total asset of commercial banks computed across the year is in increasing trend. The deposit is highest for highest for NBBL (99.53 percent) and lowest for NMBL (73.24 percent). It has been found that the average deposit of commercial banks computed across the year is in increasing trend. The average cash reserve ratio is highest for SUBL (27.77 percent) and lowest for HBL (6.95 percent). It has been found that the average cash reserve ratio of commercial banks computed across the year is in increasing trend. CBIL has highest average interest rate (11.38 percent) and SCBNL has lowest average interest rate (6.62 percent). It has been found that the average interest rate of commercial banks computed across the year is in decreasing trend.
The average solvency ratio is highest for EBL (92.95 percent) and lowest for NMBL (88.98 percent). It has been found that the average solvency ratio of commercial banks computed across the year is in decreasing trend. The average bank size is highest for NIBL (Rs. 74.08 billion) and lowest for NCCBL (Rs. 19.88 billion). It has been found that the average bank size of commercial banks computed across the year is in increasing trend. The average inflation rate is 8.89 percent with a standard deviation of 1.48 percent during the study period 2007/08 to 2015/16. It has been found that the inflation rate is neither in decreasing nor in increasing trend, it is in stagnant trend for the study period. The analysis also reveals that the average deposit is 86.16 percent, interest rate is 9.68 percent, cash reserve ratio is 12.58 percent, solvency ratio is 91.01percent, bank size is Rs. 40.18 billion, foreign ownership is 0.38 percent and inflation is 8.89 percent,loan and advances is Rs. 25.53 billion,total loan to total asset is 64.84 for selected commercial banks.
The correlation analysis also shows that there is positive relationship of solvency ratio with loan advances. It means that higher the solvency ratio, higher would be the loan advances. The bank size is positively related to loan advances. It indicates that bigger the bank size, higher would be the loan advances. On the other hand, there is positive relationship between loan advances and foreign ownership. It means that higher the foreign ownership, higher would be the loan advances. However, inflation has negative relationship with loan advances. It indicates that higher the inflation, lower would be the loan advances. The result shows that deposit is positively correlated to total loan to total assets. This indicates that higher the deposit, higher would be the total loan to total assets. However, cash reserve ratio has negative relationship with total loan to total assets. This indicates that higher the cash reserve ratio, lower would be the total loan to total assets. The interest rate has positive relationship with total loan to total assets. It reveals that higher the interest rate, higher would be the total loan to total assets. The results also show that there is negative relationship of solvency ratio with total loan to total assets. It means that higher the solvency ratio, lower would be the total loan to total assets. Similarly, bank size is positively related to loan advances. It indicates that bigger the bank size, higher would be the loan advances. There is negative relationship between total loan to total assets and foreign ownership. It means that higher the foreign ownership, lower would be the total loan to total assets. The inflation has negative relationship with total loan to total assets. It indicates that higher the inflation, lower would be the total loan to total asset.
The regression result shows that beta coefficients for deposit are positive and significant with loan advances. This indicates that higher the deposit, higher would be the loan and advances. The regression result shows that beta coefficients for cash reserve ratio are negative and significant with loan advances. This indicates that cash reserve ratio has negative impact on theloan and advances. Additionally, the beta coefficients for interest rate are positive and significant with loan advances. It reveals that interest rate has positive impact on loan and advances. The beta coefficients for solvency ratio are positive with loan and advances. The result denotes that solvency ratio has positive impact on loan and advances. Similarly, the beta coefficients for bank size are positive and significant with loan and advances. It reveals that bank size has positive impact on loan and advances. However, the beta coefficients for foreign ownership are negative and significant with loan and advances. It indicates that foreign ownership has negative impact on loan and advances. On the other hand, the beta coefficients for inflation are negative with total loans to total assets. It reveals that inflation has negative impact on total loans to total assets. The regression result shows that beta coefficients for deposit are positive and significant with total loans to total assets. This indicates that deposit has positive impact on total loans to total assets. On the other hand, the beta coefficients for cash reserve ratio are negative with total loans to total assets. This indicates that cash reserve ratio has negative impact on total loans to total assets. Additionally, the beta coefficients for interest rate are positive and significant with total loans to total assets. It reveals that interest rate has positive impact on total loans to total assets. Likewise, the beta coefficients for solvency ratio are negative with total loans to total assets. The result denotes that solvency ratio has negative impact on total loans to total assets. Similarly, the beta coefficients for bank size are positive with total loans to total assets. It reveals that bank size has positive impact on total loans to total assets. However, the beta coefficient for foreign ownership is negative with total loans to total assets. It indicates that foreign has negative impact on total loans to total assets. On the other hand, the beta coefficients for inflation are negative with total loans to total assets. It reveals that inflation has negative impact on total loans to total assets.
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Effect of deposits volume on lending behavior of Nepalese commercial banks [printed text] / Srijana Poudel, Author . - 2018 . - 96p. ; GRP/Thesis + 11/B. Languages : English | Descriptors: | Business - Mathematical models
| | Class number: | 332 | | Abstract: | The study of lending behavior has captured the attention of finance scholars since the middle of the last century. Deposit volume is a very crucial issue in the modern corporate business environment. Few studies have been carried out to examine the effect of deposit volume on bank's lending behavior. In regards to the effect of deposit volume on bank's lending behavior the results are not unanimous.
This study attempts to examine the effect of deposit volume on bank's lending behaviorof Nepalese commercial banks. The study also identifies the practitioner’s preference towards loan and advances and total loan to total asset. The study is based on secondary data of 16 commercial banks with 144 observations for the period of 2007/08 to 2015/16. Data and information have been collected from Banking and Financial Statistics of NRB and annual reports of the selected commercial banks. The research design adopted in this study is descriptive and causal comparative research design as it deals with the effect of deposit volume on bank's lending behaviorof Nepalese commercial banks.
The analysis of structure and pattern of loan and advances shows that average loan and advances is highest for NIBL (Rs. 48.48 billion) and lowest for NCCBL (Rs. 13.22 billion). It has been found that the average loans and advances of commercial banks computed across the year is in increasing trend. The average total loan to total asset is highest for SIBL (72.60 percent) and lowest for SCBNL (43.66 percent). It has been found that the average total loan to total asset of commercial banks computed across the year is in increasing trend. The deposit is highest for highest for NBBL (99.53 percent) and lowest for NMBL (73.24 percent). It has been found that the average deposit of commercial banks computed across the year is in increasing trend. The average cash reserve ratio is highest for SUBL (27.77 percent) and lowest for HBL (6.95 percent). It has been found that the average cash reserve ratio of commercial banks computed across the year is in increasing trend. CBIL has highest average interest rate (11.38 percent) and SCBNL has lowest average interest rate (6.62 percent). It has been found that the average interest rate of commercial banks computed across the year is in decreasing trend.
The average solvency ratio is highest for EBL (92.95 percent) and lowest for NMBL (88.98 percent). It has been found that the average solvency ratio of commercial banks computed across the year is in decreasing trend. The average bank size is highest for NIBL (Rs. 74.08 billion) and lowest for NCCBL (Rs. 19.88 billion). It has been found that the average bank size of commercial banks computed across the year is in increasing trend. The average inflation rate is 8.89 percent with a standard deviation of 1.48 percent during the study period 2007/08 to 2015/16. It has been found that the inflation rate is neither in decreasing nor in increasing trend, it is in stagnant trend for the study period. The analysis also reveals that the average deposit is 86.16 percent, interest rate is 9.68 percent, cash reserve ratio is 12.58 percent, solvency ratio is 91.01percent, bank size is Rs. 40.18 billion, foreign ownership is 0.38 percent and inflation is 8.89 percent,loan and advances is Rs. 25.53 billion,total loan to total asset is 64.84 for selected commercial banks.
The correlation analysis also shows that there is positive relationship of solvency ratio with loan advances. It means that higher the solvency ratio, higher would be the loan advances. The bank size is positively related to loan advances. It indicates that bigger the bank size, higher would be the loan advances. On the other hand, there is positive relationship between loan advances and foreign ownership. It means that higher the foreign ownership, higher would be the loan advances. However, inflation has negative relationship with loan advances. It indicates that higher the inflation, lower would be the loan advances. The result shows that deposit is positively correlated to total loan to total assets. This indicates that higher the deposit, higher would be the total loan to total assets. However, cash reserve ratio has negative relationship with total loan to total assets. This indicates that higher the cash reserve ratio, lower would be the total loan to total assets. The interest rate has positive relationship with total loan to total assets. It reveals that higher the interest rate, higher would be the total loan to total assets. The results also show that there is negative relationship of solvency ratio with total loan to total assets. It means that higher the solvency ratio, lower would be the total loan to total assets. Similarly, bank size is positively related to loan advances. It indicates that bigger the bank size, higher would be the loan advances. There is negative relationship between total loan to total assets and foreign ownership. It means that higher the foreign ownership, lower would be the total loan to total assets. The inflation has negative relationship with total loan to total assets. It indicates that higher the inflation, lower would be the total loan to total asset.
The regression result shows that beta coefficients for deposit are positive and significant with loan advances. This indicates that higher the deposit, higher would be the loan and advances. The regression result shows that beta coefficients for cash reserve ratio are negative and significant with loan advances. This indicates that cash reserve ratio has negative impact on theloan and advances. Additionally, the beta coefficients for interest rate are positive and significant with loan advances. It reveals that interest rate has positive impact on loan and advances. The beta coefficients for solvency ratio are positive with loan and advances. The result denotes that solvency ratio has positive impact on loan and advances. Similarly, the beta coefficients for bank size are positive and significant with loan and advances. It reveals that bank size has positive impact on loan and advances. However, the beta coefficients for foreign ownership are negative and significant with loan and advances. It indicates that foreign ownership has negative impact on loan and advances. On the other hand, the beta coefficients for inflation are negative with total loans to total assets. It reveals that inflation has negative impact on total loans to total assets. The regression result shows that beta coefficients for deposit are positive and significant with total loans to total assets. This indicates that deposit has positive impact on total loans to total assets. On the other hand, the beta coefficients for cash reserve ratio are negative with total loans to total assets. This indicates that cash reserve ratio has negative impact on total loans to total assets. Additionally, the beta coefficients for interest rate are positive and significant with total loans to total assets. It reveals that interest rate has positive impact on total loans to total assets. Likewise, the beta coefficients for solvency ratio are negative with total loans to total assets. The result denotes that solvency ratio has negative impact on total loans to total assets. Similarly, the beta coefficients for bank size are positive with total loans to total assets. It reveals that bank size has positive impact on total loans to total assets. However, the beta coefficient for foreign ownership is negative with total loans to total assets. It indicates that foreign has negative impact on total loans to total assets. On the other hand, the beta coefficients for inflation are negative with total loans to total assets. It reveals that inflation has negative impact on total loans to total assets.
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