| Title : | Performance measurement of Nepalese commercial banks | | Material Type: | printed text | | Authors: | Rajesh Sudedi, Author | | Publication Date: | 2013 | | Pagination: | 78p. | | Size: | GRP/Thesis | | Accompanying material: | 1/B | | General note: | Includes bibliographies | | Languages : | English | | Descriptors: | Accounting
Human resources development
Performance appraisal
Personnel management
| | Keywords: | 'performance measurement of Nepalese personnel management accounting performance' | | Class number: | 658.3125 | | Abstract: | Performance measurement in banking is a study of relationship among the various financial factors in a business as disclosed by a single set of statements and a study of trend of these factors as shown in a series of statement. By establishing a strategic relationship between the items of a balance sheet and income statement and operative data, the financial analysis unveil the managing and significance of such items.The proposed study could be used by managers and researchers to examine and understand the changes in performance measurement systems in banks and to facilitate the effective adoption and implementation of performance measurement systems in financial systems.
The general objective of this study was to compare the financial performance of different ownership structured commercial banks in Nepal based on their financial characteristics and identify the determinants of performance exposed by the financial ratios.
Present study focused on the limitation as a descriptive financial analysis to describe, measure, compare, and classifies the financial situations of Nepalese commercial banks. The more important part of this study was to apply an econometric multivariate regression model to test the significance of variables on performance of Nepalese commercial banks where financial ratios are used to examine bank performance on the CAMEL framework such as capital adequacy, asset quality, management, earnings and liquidity using secondary and primary data.
Analyzing the first model, the result revealed moderate negative correlation between dependent variable (ROA) and independent variable non-performing loan (-.513), a weak negative relationship between return on Assets and interest expenses to loan (-.370), A strong moderate relation between return on assets (ROA) and net interest margin (+.556), a weak negative relation between return on assets and credit to deposit ratio (-.145).
On the second part of the analysis, the result on ROE shows that there is strong explanatory power in the whole regression setting. This is predicted because the explanatory power of this model is explained about 67 variation in the dependent variable is explained by independent variables.Hence, we found non-performing loan, and management efficiency ratios, are negatively related with return on equity, but credit deposit ratios is positively related and significant to return on equity.Thus we accepted there is a significant relationship between credit to deposit ratios and return on equity.
Based on return on assets, NABIL was found first in comparison with other joint venture banks. Similarly, based on ROE, Standard Chartered Bank was found first in comparison with Joint venture banks. Among domestic bank Kumari bank was found sound because it ranked first in terms of capital adequacy ratio, non-performing loan and credit to deposit ratio.
A part from the result of quantitative approach, the qualitative analysis in this study indicates that return on assets and return on equity of Nepalese commercial bank is sufficient therefore it is predicted that majority of respondents think that ROA and ROE will help or enhance the value for the sustainability of the bank.It is found that Majority of respondents strongly agreed that ROA and NIM both equally important for determining the financial measures for banks.It further agreed that performance measurement should be linked to customer value creation and their satisfaction.
As there is negative relationship between return on assets and non-performing loan, the Nepalese commercial banks willing to increase return on assets should decrease non-performing loan , if the non-performing loan goes on increasing the bank will not able to increase return on assets. Similarly, there is positive relationship between return on assets and capital adequacy ratio, the Nepalese commercial bank should increase capital adequacy base.The study also revealed that interest expenses to total loan ratio and return on equity are negatively related, the banks are strongly recommended todecrease interest expenses from total loan in order to increase return on equity.
In sum up, the major findings of this study can add value to the existing literature. It may help decision makers at bank to focus on major banking activities that may increase the bank ranking and financial performance position with other competitive banks. This may also help management of commercial bank in creating appropriate financial strategies for attaining the estimated financial performance.
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Performance measurement of Nepalese commercial banks [printed text] / Rajesh Sudedi, Author . - 2013 . - 78p. ; GRP/Thesis + 1/B. Includes bibliographies Languages : English | Descriptors: | Accounting
Human resources development
Performance appraisal
Personnel management
| | Keywords: | 'performance measurement of Nepalese personnel management accounting performance' | | Class number: | 658.3125 | | Abstract: | Performance measurement in banking is a study of relationship among the various financial factors in a business as disclosed by a single set of statements and a study of trend of these factors as shown in a series of statement. By establishing a strategic relationship between the items of a balance sheet and income statement and operative data, the financial analysis unveil the managing and significance of such items.The proposed study could be used by managers and researchers to examine and understand the changes in performance measurement systems in banks and to facilitate the effective adoption and implementation of performance measurement systems in financial systems.
The general objective of this study was to compare the financial performance of different ownership structured commercial banks in Nepal based on their financial characteristics and identify the determinants of performance exposed by the financial ratios.
Present study focused on the limitation as a descriptive financial analysis to describe, measure, compare, and classifies the financial situations of Nepalese commercial banks. The more important part of this study was to apply an econometric multivariate regression model to test the significance of variables on performance of Nepalese commercial banks where financial ratios are used to examine bank performance on the CAMEL framework such as capital adequacy, asset quality, management, earnings and liquidity using secondary and primary data.
Analyzing the first model, the result revealed moderate negative correlation between dependent variable (ROA) and independent variable non-performing loan (-.513), a weak negative relationship between return on Assets and interest expenses to loan (-.370), A strong moderate relation between return on assets (ROA) and net interest margin (+.556), a weak negative relation between return on assets and credit to deposit ratio (-.145).
On the second part of the analysis, the result on ROE shows that there is strong explanatory power in the whole regression setting. This is predicted because the explanatory power of this model is explained about 67 variation in the dependent variable is explained by independent variables.Hence, we found non-performing loan, and management efficiency ratios, are negatively related with return on equity, but credit deposit ratios is positively related and significant to return on equity.Thus we accepted there is a significant relationship between credit to deposit ratios and return on equity.
Based on return on assets, NABIL was found first in comparison with other joint venture banks. Similarly, based on ROE, Standard Chartered Bank was found first in comparison with Joint venture banks. Among domestic bank Kumari bank was found sound because it ranked first in terms of capital adequacy ratio, non-performing loan and credit to deposit ratio.
A part from the result of quantitative approach, the qualitative analysis in this study indicates that return on assets and return on equity of Nepalese commercial bank is sufficient therefore it is predicted that majority of respondents think that ROA and ROE will help or enhance the value for the sustainability of the bank.It is found that Majority of respondents strongly agreed that ROA and NIM both equally important for determining the financial measures for banks.It further agreed that performance measurement should be linked to customer value creation and their satisfaction.
As there is negative relationship between return on assets and non-performing loan, the Nepalese commercial banks willing to increase return on assets should decrease non-performing loan , if the non-performing loan goes on increasing the bank will not able to increase return on assets. Similarly, there is positive relationship between return on assets and capital adequacy ratio, the Nepalese commercial bank should increase capital adequacy base.The study also revealed that interest expenses to total loan ratio and return on equity are negatively related, the banks are strongly recommended todecrease interest expenses from total loan in order to increase return on equity.
In sum up, the major findings of this study can add value to the existing literature. It may help decision makers at bank to focus on major banking activities that may increase the bank ranking and financial performance position with other competitive banks. This may also help management of commercial bank in creating appropriate financial strategies for attaining the estimated financial performance.
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