Welcome to the Uniglobe Library
From this page you can:
Home |
Author details
Author Bishal Khanal |
Available item(s) by this author
Refine your search Apply to external sources
Bank specific and macroeconomic factors affecting profitability and stock return of Nepalese commercial banks / Bishal Khanal
Title : Bank specific and macroeconomic factors affecting profitability and stock return of Nepalese commercial banks Material Type: printed text Authors: Bishal Khanal, Author Publication Date: 2016 Pagination: 109p. Size: GRP/Thesis Accompanying material: 8/B Languages : English Abstract: Banking industry is important for an economic activity. Banks contribute to the allocation of funds from people who deposit money and those who need funds for their business activity and thus support the economic growth of a country. Therefore, the assessment on bank profitability and stock return is important because of its importance to financial stability and economic growth. Bank profitability is an important ingredient of financial development through firm performance to macroeconomic stability. Stock market has drawn much more attention in the academic literature. There is ongoing research on stock return but the topic is much debatable in itself. Different models have been developed to explain the relationship between risk and return on stock. There is an accepted norm in finance that bank specific variables and macroeconomic variables explain the behavior of stock returns. They provide a useful mechanism to raise capital fund which enhances corporate efficiency, innovation and provides a valuable source of capital for long term economic development.
Most of the empirical work investigates the relationship between profitability and stock return with bank specific variables and macroeconomic variables mostly in the developed economy. However such studies are lacking in the developing economy. Therefore, this study tries to investigate the relationship between the profitability and stock return with bank specific variables and macroeconomic variables evidence from Nepalese commercial banks.
The major objective of the study is to analyze the factors affecting the profitability and stock return of Nepalese commercial banks with respect to bank specific and macroeconomic variablesand to make recommendations for management decision making and policy objectives.The study is based on secondary data of 14 commercial banks with 182 observations for the period of 2002/03 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with the effect of bank specific and macroeconomic factors on profitability and stock return of Nepalese commercial banks.
The average return on assets is highest for NABL (2.79 percent) and lowest for LUMBL (0.54 percent). The average return on equity is highest for NABL (35.31 percent) and lowest for MACHBL (8.09 percent). The average stock return is highest for MACHBL (35.91 percent) and lowest for HIBL (8.09 percent). The result shows that the average dividend per share is highest for SCHBL (Rs. 90.44) and lowest for LUMBL (Rs. 3.43). The average total assets are highest for NABL (Rs. 48.54 billion) and lowest for LUMBL (Rs. 9.19 billion).The average capital adequacy ratio is highest for LXBL (16.12 percent) and lowest for NBBL (4.62 percent). The average non performing loan is highest for NBBL (14.90 percent) and lowest for LXBL (0.64 percent). The inflation rate is highest in year 2008/09 (11.08 percent) and lowest in year 2003/04 (2.84 percent). The GDP growth rate is highest in year 2007/08 (6.10 percent) and lowest in year 2005/06 (3.36 percent).
The descriptive analysis shows that the average ROA, ROE and SR of selected Nepalese commercial banks is 1.37 percent, 21.71 percent, and 20.84 percent respectively. Similarly, the descriptive result shows that the average dividend per share, total assets, capital adequacy ratio, non performing loan, gross domestic product and inflation is Rs.25.50 per share, Rs. 27.50 billion, 11.92 percent, 4.00 percent, 4.26 percent, 2.20 percent and 7.87 percent respectively.
The study shows that dividend per share, capital adequacy ratio, gross domestic product, inflation and firm size are positively related to return on assets and return on equity whereas non-performing loan is negatively related to both return on assets and return on equity. Likewise, the study shows that dividend per share, capital adequacy ratio, gross domestic product and firm size are positively related to stock return whereas non performing loan and inflation are negatively related to stock return.
The regression analysis shows that dividend per share, capital adequacy ratio, gross domestic product, inflation and firm size have significant and positive impact on return on assets whereas non performing loan has negative but significant impact on return on assets. The regression result also shows that dividend per share and capital adequacy ratios have positive and significant impact on return on equity. Likewise, the result also shows that non performing loan has negative and significant impact on return on equity. But firm size, gross domestic product and inflation have positive and insignificant impact on return on equity. Similarly, the regression result shows that firm size and capital adequacy ratio have positive and significant impact on stock return whereas inflation has negative and significant impact on stock return. Dividend per share and gross domestic product have positive and insignificant impact on stock return but non performing loan has negative and insignificant impact on stock return..
Bank specific and macroeconomic factors affecting profitability and stock return of Nepalese commercial banks [printed text] / Bishal Khanal, Author . - 2016 . - 109p. ; GRP/Thesis + 8/B.
Languages : English
Abstract: Banking industry is important for an economic activity. Banks contribute to the allocation of funds from people who deposit money and those who need funds for their business activity and thus support the economic growth of a country. Therefore, the assessment on bank profitability and stock return is important because of its importance to financial stability and economic growth. Bank profitability is an important ingredient of financial development through firm performance to macroeconomic stability. Stock market has drawn much more attention in the academic literature. There is ongoing research on stock return but the topic is much debatable in itself. Different models have been developed to explain the relationship between risk and return on stock. There is an accepted norm in finance that bank specific variables and macroeconomic variables explain the behavior of stock returns. They provide a useful mechanism to raise capital fund which enhances corporate efficiency, innovation and provides a valuable source of capital for long term economic development.
Most of the empirical work investigates the relationship between profitability and stock return with bank specific variables and macroeconomic variables mostly in the developed economy. However such studies are lacking in the developing economy. Therefore, this study tries to investigate the relationship between the profitability and stock return with bank specific variables and macroeconomic variables evidence from Nepalese commercial banks.
The major objective of the study is to analyze the factors affecting the profitability and stock return of Nepalese commercial banks with respect to bank specific and macroeconomic variablesand to make recommendations for management decision making and policy objectives.The study is based on secondary data of 14 commercial banks with 182 observations for the period of 2002/03 to 2014/15. The main source of data include various issues of Banking and Financial Statistics, Quarterly Economic Bulletin, Bank Supervision Report published by Nepal Rastra Bank and Annual Reports of selected commercial banks. The pooled cross sectional data analysis has been undertaken in the study. The research design adopted in this study is descriptive and causal comparative research design as it deals with the effect of bank specific and macroeconomic factors on profitability and stock return of Nepalese commercial banks.
The average return on assets is highest for NABL (2.79 percent) and lowest for LUMBL (0.54 percent). The average return on equity is highest for NABL (35.31 percent) and lowest for MACHBL (8.09 percent). The average stock return is highest for MACHBL (35.91 percent) and lowest for HIBL (8.09 percent). The result shows that the average dividend per share is highest for SCHBL (Rs. 90.44) and lowest for LUMBL (Rs. 3.43). The average total assets are highest for NABL (Rs. 48.54 billion) and lowest for LUMBL (Rs. 9.19 billion).The average capital adequacy ratio is highest for LXBL (16.12 percent) and lowest for NBBL (4.62 percent). The average non performing loan is highest for NBBL (14.90 percent) and lowest for LXBL (0.64 percent). The inflation rate is highest in year 2008/09 (11.08 percent) and lowest in year 2003/04 (2.84 percent). The GDP growth rate is highest in year 2007/08 (6.10 percent) and lowest in year 2005/06 (3.36 percent).
The descriptive analysis shows that the average ROA, ROE and SR of selected Nepalese commercial banks is 1.37 percent, 21.71 percent, and 20.84 percent respectively. Similarly, the descriptive result shows that the average dividend per share, total assets, capital adequacy ratio, non performing loan, gross domestic product and inflation is Rs.25.50 per share, Rs. 27.50 billion, 11.92 percent, 4.00 percent, 4.26 percent, 2.20 percent and 7.87 percent respectively.
The study shows that dividend per share, capital adequacy ratio, gross domestic product, inflation and firm size are positively related to return on assets and return on equity whereas non-performing loan is negatively related to both return on assets and return on equity. Likewise, the study shows that dividend per share, capital adequacy ratio, gross domestic product and firm size are positively related to stock return whereas non performing loan and inflation are negatively related to stock return.
The regression analysis shows that dividend per share, capital adequacy ratio, gross domestic product, inflation and firm size have significant and positive impact on return on assets whereas non performing loan has negative but significant impact on return on assets. The regression result also shows that dividend per share and capital adequacy ratios have positive and significant impact on return on equity. Likewise, the result also shows that non performing loan has negative and significant impact on return on equity. But firm size, gross domestic product and inflation have positive and insignificant impact on return on equity. Similarly, the regression result shows that firm size and capital adequacy ratio have positive and significant impact on stock return whereas inflation has negative and significant impact on stock return. Dividend per share and gross domestic product have positive and insignificant impact on stock return but non performing loan has negative and insignificant impact on stock return..
Hold
Place a hold on this item
Copies
Barcode Call number Media type Location Section Status 267/D KHA Thesis/Dissertation Uniglobe Library Social Sciences Available