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Risk management and financial performance of Nepalese commercial banks / Chetan Shila Shrestha
Title : Risk management and financial performance of Nepalese commercial banks Material Type: printed text Authors: Chetan Shila Shrestha, Author Publication Date: 2018 Pagination: 98p. Size: GRP/Thesis Accompanying material: 11/B Languages : English Descriptors: Banks
Banks and banking
Risk managementKeywords: 'risk management bank management banks commercial banks Class number: 332.106 Abstract: Banks play an important role for economic development and foster economic growth by providing number of financial services. Risk management is the identification, assessment and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events (Njogo, 2012). Al-Tamimi et al. (2007) analyzed that all banks are exposed to a large number of risks such as credit, liquidity risk, foreign exchange risk, market risk and interest rate risk, among others- the risk which may create some source of threat for a bank’s survival and success. Olusanmi (2015) analyzed the importance of risk management that has become a concept and has been given more attention from practitioners in today’s competitive economic world. These cannot be underrated or overlooked as the practice of risk management minimizes financial losses to the firm.
Tabari et al. (2013) revealed that both the credit risk as well as the liquidity risk has negative impact on the performance of banks. Bank's size and bank's asset have a positive effect on the performance of banks. Athanasoglou et al. (2008) revealed credit risk, liquidity, capital adequacy ratio have negative and significant affect on the performance of conventional banks. Irungu (2013) found that there is strong positive relationship between financial performances of commercial banks with interest rate spread. Hess and francis (2004) revealed that there is inverse relationship between the cost to income ratio and bank’s profitability. Bourke (1989) investigated that debt ratios are positively related to profitability. Poudel (2012) found that non-performing loan and capital adequacy ratio have significant negative relationship with return on assets.
This study examines the risk management and financial performance of Nepalese commercial banks. The return on assets and earnings per share are the dependent variables. Non-performing loan ratio, liquidity ratio, capital adequacy ratio, debt to asset ratio, interest rate spread, cost to income ratio and bank size are the independent variables. This study is based on secondary data of 16 commercial banks for the period of 2008/09 to 2015/16, leading to a total of 128 observations. The data are collected from the Banking and Financial Statistics and Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected Nepalese commercial banks. The regression models are estimated to test the significance and importance of the risk management and financial performance of Nepalese commercial banks.
The result shows that there is a positive relationship of debt to assets ratio, interest rate spread and bank size with bank performance. It indicates that an increase in debt to assets ratio, interest rate spread and bank size leads to increase in bank performance (returns on assets and earnings per share). However, the study shows the negative relationship of non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio with bank performance. It indicates that increase in the non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio leads to decrease in bank performance. The regression results also show that beta coefficients are positive for debt to assets ratio, interest rate spread and bank size with the performance of Nepalese commercial banks. However, the beta coefficients are negative for non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio with banks performance. Yet, the coefficients are significant only for liquidity ratio, cost to income ratio, debt to asset ratio, interest rate spread and bank size at 5 percent level of significance.
Risk management and financial performance of Nepalese commercial banks [printed text] / Chetan Shila Shrestha, Author . - 2018 . - 98p. ; GRP/Thesis + 11/B.
Languages : English
Descriptors: Banks
Banks and banking
Risk managementKeywords: 'risk management bank management banks commercial banks Class number: 332.106 Abstract: Banks play an important role for economic development and foster economic growth by providing number of financial services. Risk management is the identification, assessment and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of unfortunate events (Njogo, 2012). Al-Tamimi et al. (2007) analyzed that all banks are exposed to a large number of risks such as credit, liquidity risk, foreign exchange risk, market risk and interest rate risk, among others- the risk which may create some source of threat for a bank’s survival and success. Olusanmi (2015) analyzed the importance of risk management that has become a concept and has been given more attention from practitioners in today’s competitive economic world. These cannot be underrated or overlooked as the practice of risk management minimizes financial losses to the firm.
Tabari et al. (2013) revealed that both the credit risk as well as the liquidity risk has negative impact on the performance of banks. Bank's size and bank's asset have a positive effect on the performance of banks. Athanasoglou et al. (2008) revealed credit risk, liquidity, capital adequacy ratio have negative and significant affect on the performance of conventional banks. Irungu (2013) found that there is strong positive relationship between financial performances of commercial banks with interest rate spread. Hess and francis (2004) revealed that there is inverse relationship between the cost to income ratio and bank’s profitability. Bourke (1989) investigated that debt ratios are positively related to profitability. Poudel (2012) found that non-performing loan and capital adequacy ratio have significant negative relationship with return on assets.
This study examines the risk management and financial performance of Nepalese commercial banks. The return on assets and earnings per share are the dependent variables. Non-performing loan ratio, liquidity ratio, capital adequacy ratio, debt to asset ratio, interest rate spread, cost to income ratio and bank size are the independent variables. This study is based on secondary data of 16 commercial banks for the period of 2008/09 to 2015/16, leading to a total of 128 observations. The data are collected from the Banking and Financial Statistics and Bank Supervision Report published by Nepal Rastra Bank and annual reports of the selected Nepalese commercial banks. The regression models are estimated to test the significance and importance of the risk management and financial performance of Nepalese commercial banks.
The result shows that there is a positive relationship of debt to assets ratio, interest rate spread and bank size with bank performance. It indicates that an increase in debt to assets ratio, interest rate spread and bank size leads to increase in bank performance (returns on assets and earnings per share). However, the study shows the negative relationship of non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio with bank performance. It indicates that increase in the non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio leads to decrease in bank performance. The regression results also show that beta coefficients are positive for debt to assets ratio, interest rate spread and bank size with the performance of Nepalese commercial banks. However, the beta coefficients are negative for non-performing loan ratio, liquidity ratio, capital adequacy ratio and cost to income ratio with banks performance. Yet, the coefficients are significant only for liquidity ratio, cost to income ratio, debt to asset ratio, interest rate spread and bank size at 5 percent level of significance.
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Barcode Call number Media type Location Section Status 417/D 332.106 SHR Thesis/Dissertation Uniglobe Library Social Sciences Available Risk management practices in Nepalese commercial bank / Srijana Timilsina
Title : Risk management practices in Nepalese commercial bank Material Type: printed text Authors: Srijana Timilsina, Author Publication Date: 2016 Pagination: 86p. Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Risk managementKeywords: 'risk management financial risk t, enterprise risk mananagement t, strategic risk management' Class number: 332.106 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. So, banks need to analyze the risk and appropriate methods to mitigate the risks. The relationship between risk and many variables are studied extensively in different period of time. In regards to the relationship different results are found.Banks during the course of financial intermediation are confronted with various types of financial and non-financial risks.Banking is the business of risk (Al-Tamimi & Al-Mazrooei, 2007).Risks are uncertainties that could result in adverse variations of profitability or in losses (Bessis, 2011). Some risks cannot be eliminated or transferred due to the complexity and dynamism, so banks have to undertake the risks. In fact, banking business is the risky business so it dealt with risks and gets rewarded accordingly. The objective of financial institutions is to maximize profits and shareholder value by providing different financial services by managing risks (Ahmed et al., 2011).
Risk refers to possibility that the outcome of an action or event of bank, could bring up serious adverse impacts on bank’s profitability and performance resulting either a direct loss of earnings or capital. Therefore, the risk is interchangeably with uncertainty to refer the variability of returns associated with a given asset. The objective of financial institutions is to maximize profits and shareholder value by providing different financial services by managing risks. Risk management is aimed at protecting the organization, its people, assets and profits, against consequences and more particularly to reduce the severity and variability of losses. In another words risk management is the identification, analysis and economic control of those risks which threaten the asset or earning capacity of the organization.The main purpose of this study is to analyse the risk management practices of the Nepalese commercial banks with respect to the bank specific variables
The results in the prior studies on risk management practice are mixed and unclear. Hence, this study has been conducted to get clear idea of the risk management approaches of Nepalese commercial banks. For this, the sample of 16 commercial banks with data of 11 years from 2002/03 to 2012/13 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data.
The risk measures like credit risk (CR), liquidity risk (LR) and operational risk (OR) of the banks have been used as the dependent variable. Non -performing loan ratio, capital adequacy ratio, debt equity ratio, assets management and size have been considered as independent variables. Based on the results, capital adequacy ratio, non performing loan ratio, assets management, debt assets ratio and size in Nepal are important risk variable.
The recommendation put forward by this study is that banks are suggested to decrease the non performing loan to mitigate the credit risk and liquidity risk. On the other hand this study suggests that banks should maintain the capital adequacy ratio directed by NRB, because it reduce the risks avail in the future.
The major limitation of this study is that this study has excluded some bank macroeconomic variables that might have effect on risk of the commercial banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of risk management practices.Risk management practices in Nepalese commercial bank [printed text] / Srijana Timilsina, Author . - 2016 . - 86p. ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Risk managementKeywords: 'risk management financial risk t, enterprise risk mananagement t, strategic risk management' Class number: 332.106 Abstract: During the last two decades the banking sector has experienced worldwide major transformations in its operating environment. Recently banking institutions are facing the environment that is changing rapidly and competition is increasing at local as well as international level. As a result the risk in banking sector is increasing day by day. So, banks need to analyze the risk and appropriate methods to mitigate the risks. The relationship between risk and many variables are studied extensively in different period of time. In regards to the relationship different results are found.Banks during the course of financial intermediation are confronted with various types of financial and non-financial risks.Banking is the business of risk (Al-Tamimi & Al-Mazrooei, 2007).Risks are uncertainties that could result in adverse variations of profitability or in losses (Bessis, 2011). Some risks cannot be eliminated or transferred due to the complexity and dynamism, so banks have to undertake the risks. In fact, banking business is the risky business so it dealt with risks and gets rewarded accordingly. The objective of financial institutions is to maximize profits and shareholder value by providing different financial services by managing risks (Ahmed et al., 2011).
Risk refers to possibility that the outcome of an action or event of bank, could bring up serious adverse impacts on bank’s profitability and performance resulting either a direct loss of earnings or capital. Therefore, the risk is interchangeably with uncertainty to refer the variability of returns associated with a given asset. The objective of financial institutions is to maximize profits and shareholder value by providing different financial services by managing risks. Risk management is aimed at protecting the organization, its people, assets and profits, against consequences and more particularly to reduce the severity and variability of losses. In another words risk management is the identification, analysis and economic control of those risks which threaten the asset or earning capacity of the organization.The main purpose of this study is to analyse the risk management practices of the Nepalese commercial banks with respect to the bank specific variables
The results in the prior studies on risk management practice are mixed and unclear. Hence, this study has been conducted to get clear idea of the risk management approaches of Nepalese commercial banks. For this, the sample of 16 commercial banks with data of 11 years from 2002/03 to 2012/13 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and regressions have been carried out to examine the secondary data.
The risk measures like credit risk (CR), liquidity risk (LR) and operational risk (OR) of the banks have been used as the dependent variable. Non -performing loan ratio, capital adequacy ratio, debt equity ratio, assets management and size have been considered as independent variables. Based on the results, capital adequacy ratio, non performing loan ratio, assets management, debt assets ratio and size in Nepal are important risk variable.
The recommendation put forward by this study is that banks are suggested to decrease the non performing loan to mitigate the credit risk and liquidity risk. On the other hand this study suggests that banks should maintain the capital adequacy ratio directed by NRB, because it reduce the risks avail in the future.
The major limitation of this study is that this study has excluded some bank macroeconomic variables that might have effect on risk of the commercial banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of risk management practices.Hold
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Barcode Call number Media type Location Section Status 206/D 332.106 TIM Thesis/Dissertation Uniglobe Library Social Sciences Available Risk taking behavior and performance evaluation of joint venture and non joint venture commercial banks of Nepal / Niroj Maharjan
Title : Risk taking behavior and performance evaluation of joint venture and non joint venture commercial banks of Nepal Material Type: printed text Authors: Niroj Maharjan, Author Publication Date: 2014 Pagination: 114p. Size: GRP/Thesis Accompanying material: 2/B General note: Including bibliography
Languages : English Descriptors: Banks
Banks and banking
Commercial banks
Risk taking behavior
Risk-taking (Psychology)Keywords: 'risk taking behavior banks banks and banking commercial bank nepal' Class number: 155.9 Abstract: Despite of several empirical evidences, bank’s risk taking behavior and performance evaluation issues are still unsolved in the context of Nepal. Identification of banks’ risk taking behavior and factors shaping the performance of bank is crucial for the Nepalese commercial banks. The major objective of this study is to analyze the risk taking behavior and performance evaluation of Nepalese commercial banks.
The review of literature has shown relationship between various factors such as growth of loan, investment, total assets, return on assets, gross domestic product, capital adequacy ratio and leverage. In addition, leverage, total assets, loan, investment and non-performing loan to total loan are some of the variables that are found to have significant relationship with risk taking behavior and performance of banks in various contexts. Based on the literature reviews, this study has proposed the conceptual framework identifying volume of loan, investment and return on assets and some of other variables as the most important factors that determine the risk taking behavior and performance evaluation of commercial banks in the context of Nepal.
This study is based on primary as well as secondary data. For the purpose of study 19 commercial banks which are established before 2007/08 are divided into two strata (joint venture and non-joint venture) is taken as sample. Required data of dependent variables (loan, investment, and return on assets) and independent variables (leverage, deposit, non-performing loan to total loan, net interest margin, debenture and bond, total assets, capital adequacy ratio, gross domestic product and inflation rate.) are collected from various secondary sources for the period of 2007/08 to 20011/12. Primary survey questionnaire is conducted in order to assess the opinion of bank’s risk taking behavior and performance evaluation of Nepalese commercial banks. Likewise, multiple regression analysis and correlation analysis are used to examine the relationship between bank’s risk taking behavior and performance evaluation and its determinants.
The study reveals that volume of debenture and bond, deposit and total assets are some of the variables that are found to have significant relationship with the risk taking behavior of joint venture banks in various contexts. Similarly, non-performing loan to total loan, leverage, total assets, inflation and net interest margin are some of the variables that are found to have significant relationship with the risk taking behavior of non-joint venture banks in various contexts. Net interest margin and total assets has significant relationship with performance evaluation in both joint and non-joint venture banks. Based on the study, total assets, non-performing loan tot total loan, net interest margin and deposit are the most important factors that determine the risk taking behavior of both joint and non-joint venture commercial banks of Nepal. Whereas, net interest margin is most important factor that determine the performance of Nepalese commercial banks.
Based on the primary survey result, most of the credit department employees believe that long term existence is most important factor for risk and performance management.Banks are recommended to increase their risk taking behavior and performance as much as possible for the long term existence in the Nepalese market.Likewise, the primary survey results indicate that bank’s risk taking behavior and performance evaluation is highly affected by default of credit, loan and advances, determining suitable frequency of risk taking behavior and performance appraisal and implementation of feedback program regularly as the most important methods for reducing risk and increasing the performance in Nepalese commercial banks.
The recommendation put forward by this study is that banks are suggested to invest their volume of deposit and asset in safer side with maximum return as possible for reducing risk and increasing the better performance. The major limitation of this study lies in the fact that this study has excluded some bank specific and macro-economic variables that might influence on risk taking behavior and performance evaluation of banks.The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Likewise, this study has conducted in Kathmandu valley so future studies are suggested to extend the survey outside the valley including all the department of employees.
Risk taking behavior and performance evaluation of joint venture and non joint venture commercial banks of Nepal [printed text] / Niroj Maharjan, Author . - 2014 . - 114p. ; GRP/Thesis + 2/B.
Including bibliography
Languages : English
Descriptors: Banks
Banks and banking
Commercial banks
Risk taking behavior
Risk-taking (Psychology)Keywords: 'risk taking behavior banks banks and banking commercial bank nepal' Class number: 155.9 Abstract: Despite of several empirical evidences, bank’s risk taking behavior and performance evaluation issues are still unsolved in the context of Nepal. Identification of banks’ risk taking behavior and factors shaping the performance of bank is crucial for the Nepalese commercial banks. The major objective of this study is to analyze the risk taking behavior and performance evaluation of Nepalese commercial banks.
The review of literature has shown relationship between various factors such as growth of loan, investment, total assets, return on assets, gross domestic product, capital adequacy ratio and leverage. In addition, leverage, total assets, loan, investment and non-performing loan to total loan are some of the variables that are found to have significant relationship with risk taking behavior and performance of banks in various contexts. Based on the literature reviews, this study has proposed the conceptual framework identifying volume of loan, investment and return on assets and some of other variables as the most important factors that determine the risk taking behavior and performance evaluation of commercial banks in the context of Nepal.
This study is based on primary as well as secondary data. For the purpose of study 19 commercial banks which are established before 2007/08 are divided into two strata (joint venture and non-joint venture) is taken as sample. Required data of dependent variables (loan, investment, and return on assets) and independent variables (leverage, deposit, non-performing loan to total loan, net interest margin, debenture and bond, total assets, capital adequacy ratio, gross domestic product and inflation rate.) are collected from various secondary sources for the period of 2007/08 to 20011/12. Primary survey questionnaire is conducted in order to assess the opinion of bank’s risk taking behavior and performance evaluation of Nepalese commercial banks. Likewise, multiple regression analysis and correlation analysis are used to examine the relationship between bank’s risk taking behavior and performance evaluation and its determinants.
The study reveals that volume of debenture and bond, deposit and total assets are some of the variables that are found to have significant relationship with the risk taking behavior of joint venture banks in various contexts. Similarly, non-performing loan to total loan, leverage, total assets, inflation and net interest margin are some of the variables that are found to have significant relationship with the risk taking behavior of non-joint venture banks in various contexts. Net interest margin and total assets has significant relationship with performance evaluation in both joint and non-joint venture banks. Based on the study, total assets, non-performing loan tot total loan, net interest margin and deposit are the most important factors that determine the risk taking behavior of both joint and non-joint venture commercial banks of Nepal. Whereas, net interest margin is most important factor that determine the performance of Nepalese commercial banks.
Based on the primary survey result, most of the credit department employees believe that long term existence is most important factor for risk and performance management.Banks are recommended to increase their risk taking behavior and performance as much as possible for the long term existence in the Nepalese market.Likewise, the primary survey results indicate that bank’s risk taking behavior and performance evaluation is highly affected by default of credit, loan and advances, determining suitable frequency of risk taking behavior and performance appraisal and implementation of feedback program regularly as the most important methods for reducing risk and increasing the performance in Nepalese commercial banks.
The recommendation put forward by this study is that banks are suggested to invest their volume of deposit and asset in safer side with maximum return as possible for reducing risk and increasing the better performance. The major limitation of this study lies in the fact that this study has excluded some bank specific and macro-economic variables that might influence on risk taking behavior and performance evaluation of banks.The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Likewise, this study has conducted in Kathmandu valley so future studies are suggested to extend the survey outside the valley including all the department of employees.
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Barcode Call number Media type Location Section Status 50/D 155.9 MAH Thesis/Dissertation Uniglobe Library Philosophy & Psychology Available Service quality, customer's satisfaction and customers' loyalty in commercial banks / Manju Maharjan
Title : Service quality, customer's satisfaction and customers' loyalty in commercial banks Material Type: printed text Authors: Manju Maharjan, Author Publication Date: 2014 Pagination: 69p. Size: GRP/Thesis Accompanying material: 3/B General note: Includes bibliographies Languages : English Descriptors: Customer satisfaction
Banks
Banks and banking
Commercial banks
Customer services
Service qualityKeywords: 'service quality and customer satisfaction customers Nepal commercial banks banks' Class number: 658.812 Service quality, customer's satisfaction and customers' loyalty in commercial banks [printed text] / Manju Maharjan, Author . - 2014 . - 69p. ; GRP/Thesis + 3/B.
Includes bibliographies
Languages : EnglishHold
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Barcode Call number Media type Location Section Status 45/D 658.812 MAH Books Uniglobe Library Technology Available The effect of ownership structure and corporate governance on performance of Nepalese banks / Anshu Manandhar
Title : The effect of ownership structure and corporate governance on performance of Nepalese banks Material Type: printed text Authors: Anshu Manandhar, Author Publication Date: 2015 Pagination: 87p Size: GRP/Thesis Accompanying material: 5/B General note: Including bibilography Languages : English Descriptors: Banks
Banks and banking
Corporate governanceKeywords: 'corporate governance corporations finance banks banks and banking commercial banks Nepal' Class number: 658.42 Abstract: Researchers over the last four decades believe that there is a connection between ownership structure and bank performance. There are many studies published to examine this relationship. The relationship between ownership structure and performance are studied extensively by several researchers. In regards to the relationship between ownership structure and profitability, researchers found different results. Some of the scholars state that, there is a country where ownership structure of banks affects positively to the profitability. Meanwhile, other researchers indicate the nonlinear negative or positive relationship of ownership structure and bank profitability
Corporate governance is a system by which companies are directed and controlled. Corporate governance is a way in which supplier of finance ensure themselves of getting return on their investment. Corporate governance is concerned with the ways and means by which the directors of the company are made responsible to its shareholders. Many companies have failed because of increasing corporate lootings. There is a doubt whether existing regulatory framework is adequate to deal with corporate fraud. Thus, in recent years, corporate governance has assumed a greater significance. This study on corporate governance and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone sweeping changes and is emerging as a major sector of the economy.
The results in the prior studies on the effect of ownership structure, corporate governance on bank performance are mixed and unclear. Hence, this study has been conducted to get clear idea of effect of ownership structure, corporate governance on performance of Nepalese bank. For this, the sample of 21 commercial banks with data of 7 years from 2005/06 to 20012/13 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and ordinary least square regressions have been carried out to examine the secondary data.
The performance measures like Return on Equity (ROE), Return on Assets (ROA) and Tobin’s Q of the banks have been used as the dependent variable while ownership structure variables like institutional ownership, concentrated ownership, government ownership, foreign ownership and other ownership likewise, corporate governance variables such as board size, bank age, debt ratio and liquidity ratio have been considered as independent variables. Based on the results, independent variables like concentrated ownership, government ownership, foreign ownership, other ownership bank age and debt ratio and board size of the banks in Nepal are important ownership structure and corporate governance variables in order of their relative importance that enhances the performance of the banks. To be more specific, institutional ownership, concentrated ownership, foreign ownership and bank age are the independent variables that tend to influence the performance in positive manner. It implies that increase in any of these variables is likely to augment the performance of the banks. In contrast, more number of board members tends to deteriorate the performance. Moreover, higher percentage of government ownership, more share holdings by general public, and higher debt financing tends to the poor performance of bank. Concentrated ownership, foreign ownership, government ownership, other ownership, bank age, board size and debt ratio are found to have significant relation with bank performance. Institutional ownership and liquidity ratio are found to be insignificant in predicting the performance of the banks.
The recommendation put forward by this study is that banks are suggested to increase the proportion of foreign ownership and institutional ownership to have better performance. On the other hand, it is recommended to reduce the number of board members, use of more debt financing, more percentage of government and general public share holdings in order to have better performance of the banks. The major limitation of this study lies in the fact that this study has excluded some bank specific variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Furthermore, the future studies can select larger sample and more number of observation years for the study that could lead to much more valid prediction regarding effect of ownership structure and corporate governance variables on performance of the banks. Moreover, this study has only used secondary data. So, the future studies can be done by using both primary and secondary data.The effect of ownership structure and corporate governance on performance of Nepalese banks [printed text] / Anshu Manandhar, Author . - 2015 . - 87p ; GRP/Thesis + 5/B.
Including bibilography
Languages : English
Descriptors: Banks
Banks and banking
Corporate governanceKeywords: 'corporate governance corporations finance banks banks and banking commercial banks Nepal' Class number: 658.42 Abstract: Researchers over the last four decades believe that there is a connection between ownership structure and bank performance. There are many studies published to examine this relationship. The relationship between ownership structure and performance are studied extensively by several researchers. In regards to the relationship between ownership structure and profitability, researchers found different results. Some of the scholars state that, there is a country where ownership structure of banks affects positively to the profitability. Meanwhile, other researchers indicate the nonlinear negative or positive relationship of ownership structure and bank profitability
Corporate governance is a system by which companies are directed and controlled. Corporate governance is a way in which supplier of finance ensure themselves of getting return on their investment. Corporate governance is concerned with the ways and means by which the directors of the company are made responsible to its shareholders. Many companies have failed because of increasing corporate lootings. There is a doubt whether existing regulatory framework is adequate to deal with corporate fraud. Thus, in recent years, corporate governance has assumed a greater significance. This study on corporate governance and bank performance has been undertaken for Nepalese banks because Nepalese banking sector has gone sweeping changes and is emerging as a major sector of the economy.
The results in the prior studies on the effect of ownership structure, corporate governance on bank performance are mixed and unclear. Hence, this study has been conducted to get clear idea of effect of ownership structure, corporate governance on performance of Nepalese bank. For this, the sample of 21 commercial banks with data of 7 years from 2005/06 to 20012/13 has been taken. Data has been collected from various secondary sources like annual reports of sample banks and consolidated financial reports prepared by Nepal Rastra Bank. Descriptive statistics, portfolio analysis, correlation analysis, and ordinary least square regressions have been carried out to examine the secondary data.
The performance measures like Return on Equity (ROE), Return on Assets (ROA) and Tobin’s Q of the banks have been used as the dependent variable while ownership structure variables like institutional ownership, concentrated ownership, government ownership, foreign ownership and other ownership likewise, corporate governance variables such as board size, bank age, debt ratio and liquidity ratio have been considered as independent variables. Based on the results, independent variables like concentrated ownership, government ownership, foreign ownership, other ownership bank age and debt ratio and board size of the banks in Nepal are important ownership structure and corporate governance variables in order of their relative importance that enhances the performance of the banks. To be more specific, institutional ownership, concentrated ownership, foreign ownership and bank age are the independent variables that tend to influence the performance in positive manner. It implies that increase in any of these variables is likely to augment the performance of the banks. In contrast, more number of board members tends to deteriorate the performance. Moreover, higher percentage of government ownership, more share holdings by general public, and higher debt financing tends to the poor performance of bank. Concentrated ownership, foreign ownership, government ownership, other ownership, bank age, board size and debt ratio are found to have significant relation with bank performance. Institutional ownership and liquidity ratio are found to be insignificant in predicting the performance of the banks.
The recommendation put forward by this study is that banks are suggested to increase the proportion of foreign ownership and institutional ownership to have better performance. On the other hand, it is recommended to reduce the number of board members, use of more debt financing, more percentage of government and general public share holdings in order to have better performance of the banks. The major limitation of this study lies in the fact that this study has excluded some bank specific variables that might influence on performance evaluation of banks. The study remains enough ground for future researcher in the same topic. The future studies can be carried out by selecting other financial institutions like development banks, public banks and finance companies to grab the wider view of banks’ risk taking behavior and performance evaluation. Furthermore, the future studies can select larger sample and more number of observation years for the study that could lead to much more valid prediction regarding effect of ownership structure and corporate governance variables on performance of the banks. Moreover, this study has only used secondary data. So, the future studies can be done by using both primary and secondary data.Hold
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Barcode Call number Media type Location Section Status 88/D 658.42 MAN Thesis/Dissertation Uniglobe Library Technology Available The effect of taxation of dividend Policy: a case of Nepalese commercial banks / Subash Neupane
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